• Dusan Mijailovic

China's recent five-year plan calls for a change in investment away from coal and towards green tech



China, which has long pursued rapid industrial development facing negative environmental implications, will unveil its latest five-year plan this week with the aim of becoming the global pioneer in "low-carbon tech for a carbon-constrained world," according to China analysts.


According to Isabel Hilton, founder of China Dialogue, a nonprofit news organisation, the change is likely to entail an accelerated pullback from its position as a major financier of new coal-fired power plants at home and abroad.


China is also the world's leading emitter of greenhouse gases, accounting for about 28% of overall global emissions.


According to Li Shuo, a senior policy advisor for Greenpeace East Asia, China's 2021-2025 economic and social development plan would affirm a clear signal to Chinese industry to step away from fossil fuels, and would definitely result in national emissions starting to decline within five years.


In a country that normally sets targets it can achieve or over-achieve, major industries this year must deliver plans on how they will cut emissions in line with China's commitment last year to become "carbon neutral" by 2060, Li said.


But shifting rapidly from a focus on dirty industry to greener tech is a challenge everywhere - and China is no exception, said Dimitri de Boer of the China office of ClientEarth, an environmental law charity.


He outlined a "very active tug of war" between China's environment and energy authorities, with doubts about the future of nearly 37 gigawatts (GW) of coal-fired power capacity approved in 2020.


According to foreign researchers, this, along with the 38GW of new coal power capacity put into operation in 2020 and other projects in the works, is enough to power all of Germany.


Nonetheless, De Boer noted "promising signals" that China wants to decarbonise, especially its questionable overseas investments, with an announcement possible before the UN's COP26 climate negotiations, which are now scheduled for November in Glasgow.


Bernice Lee, the founding director of the Hoffmann Centre for Sustainable Resource Economy at Chatham House, said the growing negative attention China is receiving for funding coal power expansion across the world is prompting a rethink.


The Chinese model for development spending abroad "is under re-evaluation", she said, with scientists saying use of coal for energy must rapidly end to prevent the worst impacts of climate change.


Many projects in the Belt and Road Initiative, a Chinese-backed infrastructure development push throughout almost 70 countries, have earned no new funding since 2019, she added, citing substantial investment on coal plants as an example.


However, Andrew Norton, director of the International Institute for Environment and Development (IIED) in London, said China has yet to offer a "comprehensive plan" for greening its overseas investments.


The predicted green change in China's new five-year strategy, due out Friday, according to Yunnan Chen, a development finance researcher at the London-based Overseas Development Institute, is motivated in part by the country's need to appear to be doing the right thing both at home and abroad.


"There's really a desire for legitimacy. That's a constant theme," she told a separate online event on Monday run by IIED.


Focusing on the environment is also "no longer seen as part of a Western imperialist agenda", Sam Geall, acting head of China Dialogue, said during the same event.


China has framed its coming green push around the idea of achieving an "ecological civilisation" - a term now part of the title of a major planned international biodiversity summit China is scheduled to host later this year, he said.


With strong public demand to combat China's choking air pollution, analysts predict that certain green policies would be successful at home and alleviate social pressure that the government perceives as a threat.


They added that China sees the green investment in renewable energy, electric cars, and battery storage as an opportunity to take the lead in a growing global market.


As the Asian economic powerhouse tries to identify the technology of the future, it wants "to be a supplier of low-carbon tech for a carbon-constrained world", said Hilton of China Dialogue.


"Whatever the policy is in the next three to four years, it's not going to look at all like it did three years ago," she added.