China, Climate and COP26

The 2021 United Nations Climate Change Conference (COP26) is the 26th United Nations Climate Change conference that is being held in Glasgow, Scotland, United Kingdom, between October 31 and November 12, 2021.

The COP26 summit will bring parties together to accelerate action towards the goals of the Paris Agreement, an international treaty on climate change that was established in 2015, and the objective of the UN Framework Convention on Climate Change to achieve the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system.

The conference is the first time in five years that parties are expected to commit to enhanced pledges towards mitigating climate change. In our latest Q&A with Kathlyn Collins, Head of ESG, we explore China’s pledges, progress toward Carbon Neutrality and implication for investors.

China released its new climate commitments ahead of the COP26 summit—what are the key takeaways?

China released a new action plan on how to peak its carbon emissions by 2030. By saying that it would peak emissions before 2030, it is an upgrade on the previous pledge of “peaking of carbon dioxide emissions around 2030 and making best efforts to peak early.” The new action plan sets out policy measures and targets for peaking emissions. The country also reiterated that it will cap fossil fuel use during 2025-2030.

There was one commitment that was slightly more aggressive than its prior commitment—to get to 25% non-fossil energy by 2030 (vs the prior 20%). In 2020, non-fossil fuels stood at only 15.9%. The country plans to get to more than 80% by 2060, so that’s about a total flip of the types of energy mix that China has to do.

The action plan also noted that China would not finance new coal power schemes overseas, which is big because China was the largest funder of some of these projects. One day before COP26, Xi Jinping also addressed leaders by pointing out China’s priorities of climate change mitigation and energy security.