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China’s growing CO2 emissions due to investments in construction, not just exports

Constructing buildings, power-plants, roads is what drives the substantial increase in China’s CO2 emission growth, a new study finds.

Fast growing capital investments in infrastructure projects have led to the expansion of the construction industry and its energy and CO2 intensive supply chain including steel and cement production. As a result of this transformation of China’s economy, more and more CO2 is released per unit of gross domestic product recently – a reversion of a long-term trend.

Previously China’s greenhouse gas emission growth was driven by rising consumption and exports. Today this emission growth is offset by emission savings from efficiency increases. This now is thwarted by the building of infrastructure – which is even more important as it dictates tomorrow’s emissions, the international team of researchers concludes.

“Up to 2002 there has been a race between consumption growth and efficiency gains,” says Jan C. Minx from the Potsdam Institute for Climate Impact Research (PIK) and the Technical University of Berlin, Germany, lead author of the study. “However, the recent rise in emissions is completely due to the massive structural change of China’s economy. Emissions grow faster and faster, because CO2 intensive sectors linked to the building of infrastructure have become more and more dominant. China has developed into a ‘carbonizing dragon’.”

Just recently, China became the world’s largest consumer of energy and emitter of CO2, overtaking the US. Emissions almost tripled between 1992 and 2007. By far the biggest part of this increase happened between 2002 and 2007. The average annual CO2 emission growth alone in this period is of similar magnitude than the total CO2 emissions in the UK. Exports show the fastest CO2 emission growth. However, in absolute terms, capital investments and the construction industry are prime, after exports had briefly taken the lead.

There are other important drivers. Urbanization for instance is a more important driver of emissions from household consumption than the sheer growth of population or even the decreasing household size, according to the study. When people move from the countryside to the city, this goes with lifestyle changes. Urban dwellers for instance tend to seek gas heating and electricity. They also depend more upon a transport infrastructure to get to their workplace. All of this implies a higher per capita carbon footprint.

The study uses a so-called structural decomposition analysis. Structural decomposition analysis allows to assign changes in emission over time to a set of drivers such as consumption growth, efficiency gains or structural change. The study highlights the challenges of assigning emission changes unambiguously to drivers when this growth is rapid. However, the study uses a very careful approach in this assignment by taking the average of all possible decompositions.

“The energy and carbon intensive nature of capital investment might be hard to avoid as China is an emerging economy building up its infrastructure,” says Giovanni Baiocchi from the University of East Anglia, UK. “The high levels of CO2 emissions from capital investment might therefore only be of temporary nature.” However, it is crucial that China now invests in the right kind of infrastructure to limit the growth of CO2 emissions that causes global warming.” The type of infrastructure put in place today will also largely determine future mitigation costs,” Baiocchi says. The study therefore emphasizes that putting a low carbon infrastructure in place in China as well as other emerging and developing economies from the beginning is a key global challenge for entering low emission pathways.

Article: Jan C. Minx, Giovanni Baiocchi, Glen P. Peters, Christopher L. Weber, Dabo Guan, Klaus Hubacek: A “Carbonizing Dragon”: China’s Fast Growing CO2 Emissions Revisited, Environmental Science and Technology, DOI: 10.1021/es201497mk

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Mareike Schodder | PIK Potsdam
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