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29 the national bureau of asian research nbr special report #47 | november 2014 LI ZHIDONG is a Professor in the Department of Management and Information System Science at Nagaoka University of Technology in Japan. He can be reached at . Peak Coal in China: Rethinking the Unimaginable Li Zhidong EXECUTIVE SUMMARY This essay explores the prospects for peak coal demand in China and details implications for public policy. MAIN ARGUMENT Coal is the dominant form of energy used in China, but its role in the country’s overall energy mix has been progressively reduced since 2011. A number of factors have contributed to this slowing growth in demand—including major shifts in China’s economy, rising levels of energy efficiency, and the continuing substitution of coal with other fuels—and policy and market evidence suggests that these trends will continue to check new growth. Yet how and to what extent China will be able to reshape its use of coal has been the subject of great debate. A number of prominent studies conducted by different Chinese and international organizations show that China’s coal demand will peak in the near future, but these studies diverge significantly in their assessments of when and at what level. A comprehensive reassessment of the market, technological, and policy factors that shape our understanding of when peak demand will occur suggests that China’s coal use is very likely to peak before 2020, yet achieving this goal will require ongoing leadership from industry and policy. POLICY IMPLICATIONS • Without a clear estimate of when China will reach peak coal demand, it is difficult to make an objective evaluation of China’s strategies and actions toward addressing energy-related issues such as reducing air pollution and lowering carbon dioxide (CO2) emissions. A clearer understanding is critical for strengthening public policy and requires revisiting common assumptions. • In order to make the peaking of coal and reduction of CO2 emissions feasible, more comprehensive strategies should be adopted by stakeholders in China. These include the promotion of greater energy efficiency, the deployment of alternative fuels, and the imposition of a carbon tax. • A joint effort by China and the United States is imperative for addressing global climate change. The most important objective in the near future is that each country should move forward with ambitious long-term targets for reducing CO2 emissions and secure approval for these plans. 31 PEAK COAL IN CHINA u LI T he possibility that China will reach peak coal demand is attracting worldwide attention. Currently, China is the largest consumer, producer, and importer of coal. The country is also the world’s largest emitter of carbon dioxide (CO2), and a number of studies have noted that by energy source coal is the country’s largest driver of CO2 emissions (accounting for about 80% of total emissions).1 Yet as policymakers and industry leaders seek to reshape China’s economic development model and also address environmental concerns, there are signs that efforts to reshape the use of coal are taking effect and limiting new demand. According to preliminary statistics, in 2013 coal consumption in China increased by only 1.9% from the previous year, and the ratio of coal in primary energy consumption dropped by 0.9 points to 65.7%.2 Meanwhile, the government is aiming to lower the coal ratio in the country’s energy mix in 2014 and to control (and ultimately reduce) total coal consumption as soon as possible. How and to what extent China will be able to reshape its use of coal has been the subject of great debate, with critical implications for the energy and environmental outlooks for both China and the Asia-Pacific. A number of prominent studies conducted by different Chinese and international organizations show that China’s coal demand will peak in the near future, but these studies diverge significantly in their assessments of when and at what level. To date, recent predictions have ranged from a period between 2015 and 2030 and at the level of 3.9–4.8 billion tons, an unbelievably broad range.3 Without greater certainty about our expectations for developments in China, it is difficult to assess whether the country is on track to meet its national-level energy policy goals. Similarly, such unclear expectations also complicate our ability to evaluate to what extent moving forward on addressing urgent environmental concerns requires greater attention among leading representatives from industry, policy, and research. To explore these issues, this essay assesses the prospects...

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Additional Information

ISBN
9781939131362
Related ISBN
9781939131362
MARC Record
OCLC
903314494
Pages
76
Launched on MUSE
2015-02-12
Language
English
Open Access
No
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