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Welcome to Carbon Brief’s China weekly digest.
We handpick and explain the most important climate and energy stories from China over the past seven days.
This is an online version of Carbon Brief’s weekly China Briefing email newsletter. Subscribe for free here.
Snapshot
China has intensified its clampdown on cryptocurrency mining in a bid to curb rising demand for energy and coal. This week, one region proposed tough penalties on companies engaging in crypto operations – shortly after it had launched a dedicated platform for the public to report on such activities.
Various Chinese media outlets have run headlines hailing that the launch of the national emissions trading scheme (ETS) is “in countdown”. Final-stage tests of the programme are underway and the first group of companies are ready to buy and sell, according to reports.
Meanwhile, China’s state economic planner has ordered all regions to accelerate the development of energy-saving, “green” data centres – buildings that house powerful computers and servers. The authority demanded that those centres cut their energy use. One province has planned a new facility under the sea to solve the problem.
Key developments
Crackdown on crypto mining escalates under energy-control targets
WHAT: The government of Inner Mongolia, a key bitcoin hub, has stepped up its efforts to stamp out crypto mining. On Tuesday, the northern region “dealt a heavy blow” to relevant businesses by proposing heavy punishments for crypto operators, reported state news agency Xinhua. It came after the local officials had set up a platform to encourage the public to inform on crypto-related activities, said state-affiliated China Times.
WHERE: Inner Mongolia has been the country’s crypto centre, accounting for around 8% of all bitcoin mining worldwide, a previous CNBC report said. In February, the region had drafted plans to end all cryptocurrency operations. Local officials expected the heightened clampdown to help them hit their mandatory “dual-control” goals – objectives for energy consumption and energy intensity – for the 14th five-year plan period, according to two official notices (here and here).
WHO: China’s vice premier Liu He also instructed a “crackdown on bitcoin mining and trading activities” on Friday, reported Reuters. Liu’s order aimed to ensure economic stability – rather than emissions reduction – a government statement said.
HOW: Crypto mining is a process that sees “miners” using specialised computer equipment to solve complicated puzzles to obtain cryptocurrencies, such as bitcoin. An expert told China’s National Business Daily (NBD) that the mining tasks are designed to get harder and harder and, therefore, will require more computer processing power and more electricity. Around 5% of the carbon emissions from the nation’s power sector comes from bitcoin mining, added NBD. Newsweek reported that, without regulations, China’s crypto energy consumption would peak in 2024 at 297 terawatt hours (TWh), generating 131m tonnes of CO2.
WHY IT MATTERS: Some 75% of the world’s bitcoin mining was done in China, CNBC reported in April, citing a study. The research found that China could “end up exceeding its emissions reduction targets” due to the “carbon-intensive” activity, CNBC wrote. Bloomberg said in a report yesterday that the strengthened crypto crackdown was triggered partially by concerns that the trade could lead to “illicit” coal mining. Last month, a coal mine accident left 21 people trapped in Xinjiang, another crypto hub. The accident had been linked to power supply for crypto server farms, Bloomberg said.
ETS undergoes ‘trial runs’ to ensure successful launch
WHAT: Authorities have started “trial runs” of the trading platform for the national ETS to ensure the scheme’s successful launch, reported state-run newspaper China Daily. Meanwhile, the first batch of participating organisations – 2,225 in total – have completed their registration and are ready to trade, according to state-run China Energy News.
WHERE: The task of developing the national ETS has been shared by two regions: Shanghai and Hubei Province. The Shanghai Environment and Energy Exchange (SEEE) built the trading platform and is hosting its trial runs. Trading companies registered via the Hubei Carbon Emission Trading Centre (CETC), which built the registry platform and now supervises the administrative process.
WHEN: According to the plan, the national ETS will start trading by the end of June. The timeline was set by Huang Runqiu, head of the Ministry of Ecology and Environment (MEE), in February.
WHO: Lai Xiaoming, chairman of the SEEE, said on Saturday that more than 30 companies had joined the trial runs which would last for “some more weeks”, China Daily reported. His speech came after Li Gao, director-general of the Department of Climate Change of the MEE, inspected the national ETS’s progress in Shanghai and Hubei last week, according to official releases (here and here). Yesterday, Liu Youbin, MEE’s spokesperson, announced that all regional MEE authorities had “largely completed” the emission allocation works.
WHY IT MATTERS: It has taken China 10 years to develop the national ETS since the State Council, the country’s administrative authority, submitted the first proposal in 2010. People’s Daily, the mouthpiece of China’s Communist Party, described the scheme as a “major initiative” for China to “control and reduce greenhouse gas emissions via market mechanisms”. But an article on China Dialogue, co-written by Kevin Rudd and Alistair Ritchie, stressed that the national ETS would need “high-level political support to succeed”. It stated that such support could ensure that the programme would “achieve its potential to play a key role” in China achieving its climate goals. Look out in the coming weeks for Carbon Brief’s in-depth analysis of the national ETS.
Other news
DATA CENTRES: The province of Hainan said on Monday that it had begun work on a data centre under the sea – a move set to slash the large amount of power normally required to cool such a facility – reported Reuters. On the same day, the state economic planner instructed all regions to improve the energy efficiency and reduce the energy consumption of their data centres in a new national innovation scheme, an official notice read.
CO2 EMISSIONS: China’s CO2 emissions per unit of GDP, or carbon intensity, saw a 1% year-on-year decrease in 2020, according to Beijing’s state broadcaster CCTV. The official channel quoted the latest statistics from the MEE. It said that last year’s figure was a 18.8% drop compared to the country’s carbon intensity in 2015, exceeding its original target of 18% – which was set by the 13th five-year plan.
UK-CHINA COOPERATION: Danae Dholakia, a British diplomat in Beijing, said she believed that the UK would not be able to “independently” tackle climate change challenges “if it doesn’t cooperate with China”. Dholakia made the comments during an interview with Chinese financial publication 21st Century Business Herald. She added the upcoming biodiversity-focused COP15 in Kunming and COP26 in Glasgow would give the two nations “unique opportunities” to establish a “deeper partnership”.
THUNBERG’S TWEET: Greta Thunberg has responded to a column carried by China Daily, which commented on her weight, reported Sky News. The article mocked Thunberg’s figure by saying that her carbon emissions “are actually not small”, judging from “the result of her growth”, according to VICE. The Swedish climate campaigner responded by tweeting that being “fat-shamed” by Chinese state media was a “pretty weird experience”. Earlier this month, China Briefing explained the circumstances behind why Thunberg has been criticised in China.
SEA LEVELS: The MEE announced that the sea levels along China’s coastal areas are rising at a rate of about 3.4mm per year, The Paper, a Shanghai-based outlet, reported. In an annual ecological report, the MEE noted that, over the past 10 years, China’s coastal sea levels have remained “high”, compared to a 40-year average.
CARBON FINANCE: Zhejiang has become the first Chinese province to launch financial measures to help companies peak carbon emissions and reach “carbon neutrality”, reported Zhejiang Daily, the region’s official newspaper. Among other goals, the provincial government has pledged to increase its “green loans” by 400bn yuan (£44bn) by the end of 2021, the report says.
Extra reading
New science
Coal fly ash is a major carbon flux in the Chang Jiang (Yangtze River) basin
Proceedings of the National Academy of Sciences
A “very large amount” of coal fly ash – the solid waste from burning coal – is making its way into China’s Yangtze River, a new study says. The paper says fly ash now makes up between 37% and 72% of the fossilised organic carbon flux in the waterway – along which about one-fifth of the world’s coal consumption occurs. Two of the co-authors from the California Institute of Technology tell Carbon Brief that coal burning affects the carbon cycle “over multiple timescales” and fly ash is “often neglected”. They note that the study measured the release rate of human-sourced carbon into the long-term cycle, providing a new angle to track carbon emissions.
Increasing heat risk in China’s urban agglomerations
Environmental Research Letters
According to new research, the future heat risks in China’s major city clusters would be “many times” current levels under high emission-population pathways. In comparison, the same risks would “remain similar” to present levels under low emission-population scenarios, the researchers note. The paper says that five highly urbanised regions in China may face three to 13 “heat danger days” – those with temperatures higher than 41C – every year between 2041 to 2060. The number of such days is forecast to surge to eight to 67 between 2081 and 2100, if emissions are very high. Prof Zeng Gang, one of the paper’s authors, tells Carbon Brief that climate change research needs to give more attention to health and the economy. He hopes “there would be more focus on the effects of the climate extremes caused by global warming”.
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