The country has come up with a 'dual circulation' economic manifesto.
China’s journey towards carbon neutrality by 2060 can complement energy security as well as economic goals, according to consultancy firm Wood Mackenzie.
Due to a fractured global trading system, China has come up with “dual circulation”, an economic manifesto focused on increasing secure supply chains, expanding the domestic market, and enhancing export competitiveness. Concurrently, on the back of global climate change movement pressure as well as a worsening local pollution dilemma, China has revealed its ambition to be carbon free by 2060 last year.
“When President Xi Jinping announced the country’s carbon neutrality goal...he was giving notice of the complete transformation of its economy and how it produces, transports, and consumes energy,” Wood Mackenzie's research director Miaoru Huang commented. “This transformation or ‘dual circulation’ is the pivot point to China’s balancing act on its climate change goals, energy security concerns and economic ambitions.”
According to Wood Mackenzie, China’s dependence on oil imports would exceed 80% by 2030 on its current pace, whilst half of its natural gas supply would be imported. Though, the ongoing carbon neutrality goal would diminish the country’s oil demand by 50% by 2030, compared with Wood Mackenzie’s base case — which stated that demand would be almost eliminated by 2050.
“For China to meet its carbon-neutral goal, it will need a 75% increase in electricity demand, compared to Wood Mackenzie’s base case, to replace fossil fuels,” the consultancy firm added, noting that doing so would require at least a $6.4t investment in new power generation capacity.
Growth would mainly be driven by solar, wind, and storage energy sources, but nuclear power would also play a part.
