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Thursday, December 2, 2021

As the economy is hit by the real estate downturn, China’s emissions have fallen

Since the blockade last year, China’s carbon dioxide emissions have fallen for the first time. This is the latest sign that the downturn in the real estate industry and energy shortages have hit industrial demand in the world’s second largest economy.

According to data released by Carbon Brief, a climate research and news service, emissions fell by about 0.5% in the three months to the end of September.

“reason [for the decline] Lauri Myllyvirta, an analyst at the Center for Energy and Clean Air Research, an independent research institute, said: Headquartered in Helsinki.

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However, Myllyvirta also believes that the latest drop in emissions from the world’s largest polluter “may mark a turning point and an early peak in China’s emissions”-a few years earlier than Beijing’s 2030 target.

With Chinese factories, construction and heavy industries coming back to life in the pandemic stimulus spending wave last year, emissions in the third quarter of this year saw the largest increase in a decade.

At the beginning of 2020, China’s industrial activities were stopped due to the first coronavirus crisis in Wuhan, resulting in a significant drop in emissions.

China’s real estate industry, which is estimated to account for more than one-third of overall economic activity, has been hit by the liquidity crisis. A group of debt-laden developers—including Evergrande, which has a debt of $300 billion—is on the verge of bankruptcy, raising concerns about systemic risks and economic contagion.

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Beijing is relaxing credit controls to prevent the industry from collapsing. Despite this, there are few signs that such measures will stimulate the continued recovery of industries such as steel and cement. Carbon Brief data also shows that the downward trend will only become steeper in the last quarter.

Emissions trends also reflect the decline in China’s coal consumption in recent months as commodity prices hit record highs and supply shortages.

Severe energy shortages have led to power rationing in parts of the country, including the industrial zone in the northeast and high-tech manufacturing bases in the south.

“One thing to note is whether those industries where demand is still strong will increase production to make up for the lost time once power rationing is relaxed,” Myllyvirta said.

The country’s per capita emissions are about half that of the United States. But as a factory that accounts for about 30% of global greenhouse gas emissions, Beijing’s emission reduction plan is seen as crucial in winning the fight against climate change.

When the data was released, there was a fierce international debate on China’s role in tackling climate change. President Xi Jinping has set a goal of achieving carbon neutrality by 2060. The task is arduous, and fossil fuels account for 85% of the country’s energy structure.

At the UN COP26 summit in Glasgow this month, both China and India were severely criticized for weakening efforts to end coal power and fossil fuel subsidies. Critics, including the US government, are urging Beijing to speed up its actions.

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