China firms must cut CO2 intensity by 2.7pc/yr

OREANDA-NEWS. February 20, 2015. Chinese companies have to cut their emissions intensity by up to 2.7pc/yr if the country is to deliver the level of action required to keep global warming below 2°C, says think-tank Ecofys.

The emissions intensity — greenhouse gas (GHG) emissions per unit of output — of the electricity sector must fall by about 8pc/yr for China to fully decarbonise its power supply by mid-century, Ecofys said.

To achieve this, companies will have to implement a combination of management and behavioural changes, boost energy efficiency and increase their use of renewable energy, according to Ecofys It's Time to Peak report, published on 17 February.

Firms can also reduce their GHG footprint by using more secondary raw materials, improving their waste management and cutting their travel related emissions, suggests the study, which was commissioned by the World Wide Fund for Nature's China division.

The emissions intensity cuts, when taking into account economic growth projections for the country, will result in a peak in corporate emissions in China before 2030, the study said.

China's successful pursuit of a low GHG emissions pathway is critical to keep the world on track to prevent a more than 2°C temperature rise, given that the is the world's largest GHG emitter, responsible for about 25 pc of global emissions.

China and the US — responsible for over 45pc of global GHG emissions — in a joint statement last year pledged separate measures to curb emissions within the next couple of decades. China committed to peak emissions by 2030 and to meet at least 20pc of its primary energy demand from fossil-free sources.

China's corporate sector will be pivotal in meeting this pledge, because it emits around half of the country's GHG emissions and must deliver the technology solutions needed to facilitate a transition to a low-carbon economy, the report said.

The report cites increasing evidence that companies that implement GHG reduction strategies are better off financially compared with those continuing with business as usual.

Around two-thirds of the improvements required to bring China on a deep decarbonisation pathway come from investments that have a positive economic return or only slight to moderate economic costs over time, global consultancy firm McKinsey's China's Green Revolution study said.

But Ecofys warns that China's window of opportunity is closing rapidly. "China is still in the middle of rapidly expanding its capital stock in commercial buildings, power plants and industrial facilities. Given the lifetime of such capital stock additions, it is essential to embark on the decarbonisation pathway better sooner than later," it said.