Climate policy of China

The climate policy of the People's Republic of China has a massive impact on global climate change, as China is the largest emitter of greenhouse gases in the world. Chinese plans to abide by carbon emission reduction goals involves peaking greenhouse gas emissions before 2030, and achieving carbon neutrality before 2060. Due to the buildup of solar power and the burning of coal, Chinese energy policy is closely related to its climate policy. There is also policy to adapt to climate change. Ding Xuexiang represented China at the 2023 United Nations Climate Change Conference in 2023, and may be influential in setting climate policy.
Chinese domestic policy is largely decided at a local or provincial level, with some guidance being provided by the national government. As such, policies meant to regulate businesses are usually enforced by city or provincial governments. Business has a clear relation to China's policy as well, as the country's focus on economic growth has shaped its energy needs and population demographics towards urban consumption, and has opened the country up to international markets since the 1970s. Since then, China has had to find balance between economic growth and counteracting climate change, which some claim that they lean towards the former.
There is a debate surrounding China's economic responsibilities in terms of climate change mitigation and efforts to mitigate climate change within China. In 2006, China surpassed the United States as the country with the highest total carbon dioxide emissions rate. As climate change is a crisis that affects the world at large, China has made international collaborations through the Paris Agreement and the Kyoto Protocol. Additionally, China's status as a world superpower has created unique relationships with other world superpowers, such as the United States. This, naturally, extends to their roles in action against the climate crisis, and thus developments in American climate policies stand to shape China's as well.

Actors and institutions

In 2018, China established the Ministry of Ecology and Environment. A number of environmental policy functions were merged from other ministries into the MEE, including MEP functions, climate policy previously under the NDRC, and a number of environmental policy functions previously under the Ministry of Water Resources and the State Oceanic Administration. Pollutant and carbon emissions trading programs were also placed within the MEE's jurisdiction. In 2021, Ministry of Ecology and Environment published a White Paper on "Responding to Climate Change: China's Policies and Actions".
Beginning with a joint statement on the Kyoto Protocol in Bali in December 2007, Chinese non-governmental organizations, in cooperation with international NGOs, assumed a more prominent role in efforts to mitigate climate change within China. NGO activity in China is restricted by government controls.
The Institute of Public and Environmental Affairs is attempting to persuade large GHG emitters, such as steelmakers in Hubei, to publish their emission figures.

Greenhouse gas emissions

Its commitment to reducing its greenhouse gas emissions has been a major force in decreasing the global cost of wind and solar power, in turn helping the use of renewable energy to rise globally.

Policy in relation to economic growth

Keeping emissions growth at less than GDP growth

Considering that energy consumption in most developed countries has usually grown faster than GDP during the early stages of industrialization, it is to China's credit that while its GDP has grown by 9.5% per year over the last 27 years, its emissions have increased by only about 5.4% per year, meaning that its carbon intensity has decreased during that time.
Between 2000 and 2020, China's CO₂ emissions increased from approximately 3,385 million tonnes to around 10,065 Mt, reflecting an average annual growth rate of about 5.4%. This means that while the economy expanded rapidly, the corresponding rise in CO₂ emissions was comparatively moderate, resulting in a decrease in carbon intensity. Despite this progress, China's carbon intensity remains relatively high compared to other nations. In 2024, China reduced its carbon intensity by 3.4% due to a significant increase in renewable energy capacity; however, this fell short of the annual target of a 3.9% reduction. The country aims to cut carbon intensity by 18% between 2021 and 2025, striving to peak CO₂ emissions before 2030. However, China has only achieved an 8% reduction from 2020 to 2024, making the 2025 goal challenging to attain.
China has implemented various policies to further reduce carbon intensity and promote sustainable development. These include setting targets to peak CO₂ emissions before 2030 and achieve carbon neutrality before 2060. The country has also invested heavily in renewable energy sources, becoming a global leader in solar and wind energy production. Additionally, China has established a national carbon trading scheme to incentivize emissions reductions across various industries.
In summary, while China's CO₂ emissions have grown alongside its rapid economic development, the growth rate of these emissions has been lower than that of GDP, leading to a decrease in carbon intensity. Continued efforts to implement and strengthen policies aimed at reducing emissions are crucial for China to achieve its long-term climate goals.

The toll on GDP

A federal financial auditing project—the 'Green GDP' -- has focused on the economic losses incurred by pollution. The project began in 2004 to incorporate the externalities of previously unaccounted-for environmental costs, but soon produced results that were much worse than anticipated. The program stopped in 2007. The findings, published in 2006, revealed that environmental pollution in 2004 led to economic losses amounting to 511.8 billion yuan, equivalent to 3.05% of the nation's GDP. However, these figures only partially captured the full extent of environmental costs, as they primarily accounted for pollution-related damages and omitted aspects like resource depletion and ecological degradation. Consequently, independent estimates suggested that the actual economic toll could range between 8% and 12% of GDP, highlighting the significant impact of environmental factors on China's economic growth.
Despite the project's initial insights, it faced challenges, including methodological disputes and resistance from local governments concerned about the implications for economic performance metrics. These obstacles led to the discontinuation of the Green GDP initiative in 2007. The prevailing result from such Green GDP efforts has been that efforts to reduce environmental damage have come at too high a cost to economic growth. Some see this result as indication that China's values lie more in sustaining economic growth than in reducing resource depletion and negative environmental ramifications.

Emissions trading

China also has a policy of forestry carbon credits. Forestry carbon credits are based on the measurement of forest growth, which is converted into carbon emission reduction measurements by government ecological and forestry offices. Owners of forests receive carbon tickets which are tradeable securities.

Criticisms towards emission trading schemes

Emission trading schemes have drawn concern regarding the effectiveness of the market strategy itself as an effective counter-measure to climate changes, as well as the parameters set within the policy that affects its potency as a solution to climate change.
Annie Leonard cites unstable economic origins and unfair, unregulated systems around emissions shares that invite corruption as reasons to be critical of ETSs. More specific to China's implementation, others that are more open to the market as a solution have still found similar issues in China's decentralized approach to climate policy which has enabled hasty free allowances to large polluters and prioritizing economic growth, which have led to an over-supply of allowances. Such issues could undermine their effectiveness as solutions to climate change. In 2016, some researchers went as far as to describe the ETSs in China as "substantially far from well-functioning systems."
In addition various studies have demonstrated transparency and regulatory consistency as major weaknesses in China's ETS implementations. Scholars point out that unclear measurement, reporting, and verification protocols across different provinces have resulted in inconsistencies and unreliable data reporting, further exacerbating problems of oversupply and undermining the scheme's intended environmental impacts. Furthermore, regional governments' competing economic incentives often lead to lenient emissions caps, creating a biased policy landscape that weakens overall emissions reduction goals. For instance, In their analysis, Zhang et al. identified considerable variability in allowance allocation strategies across provinces, noting how lack of harmonization has caused disparities in market effectiveness and fairness. They emphasized that without a standardized national framework addressing these discrepancies, the long-term viability of China's ETS remains questionable. The authors argued for enhanced governance, stronger institutional oversight, and clearer accountability measures to mitigate these systemic flaws. Similarly, Lo and Cong critiqued the decentralized enforcement mechanisms inherent in China's policy framework, indicating that regional autonomy in ETS management contributes significantly to regulatory loopholes and enforcement challenges. They recommend increased centralization or at least stronger national coordination mechanisms to ensure consistency and adherence to environmental objectives, thus boosting market credibility and functional efficiency.