IN BRIEF:

The Paris climate goals require rapid decarbonization of the global power generation sector. To achieve this goal, it is critical to redirect international development finance away from fossil fuel toward renewable energy technologies. We find that East Asian national DFIs have committed to finance a new generation of coal power plants. However, China’s new domestic decarbonization goal, if extended to its overseas finance, will be enormously valuable in reducing future carbon emissions from recipient countries.

SUMMARY:

Global power generation must rapidly decarbonize by mid-century to meet the goal of stabilizing global warming below 2C. To meet this objective, multilateral development banks (MDBs) have gradually reduced fossil fuel and increased renewable energy financing. Meanwhile, globally active national development finance institutions (DFIs) from Japan and South Korea have continued to finance overseas coal plants. Less is known about the increasingly active Chinese DFIs. Here, we construct a new dataset of China’s policy banks’ overseas power generation financing and compare their technology choices and impact on generation capacity with MDBs and Japanese and South Korean DFIs. We find that Chinese DFI power financing since 2000 has dramatically increased, surpassing other East Asian national DFIs and the major MDBs’ collective public sector power financing in 2013. As most Chinese DFI financing is currently in coal, decarbonization of their power investments will be critical in reducing future carbon emissions from recipient countries.

To address severe air pollution, the Chinese government plans to replace most residential coal stoves in northern China with clean heating devices by 2021. Coal stove replacement started in the “Beijing-Tianjin-Hebei (BTH)” region and is expanding throughout northern China. Removing coal stoves reduces air pollutant emissions and hence is beneficial for both air quality and public health, as well as offering greenhouse gas mitigation co-benefits. However, there is little discussion of the economic costs of various clean heating technologies. In this study, we estimate total annual costs (TAC, annualized capital costs plus annual operating costs) for rural households, across cities/counties in the BTH region, to replace their coal stoves with several prevalent clean options—air-source heat pumpswith fan coils (ASHPwF), electric resistance heaters with thermal storage (RHwTS),
natural gas heaters (NGH), and clean coal briquettes with improved stoves (CCIS). We find: 1) Without subsidies, CCIS have the lowest TAC of all clean options. TAC of unsubsidized CCIS approximately doubles TAC of raw coal with improved stoves (RCIS), while unsubsidized electric/gas heaters cost 3–5 times more than RCIS. Thus, it is important for governments to financially support households' replacement of their coal stoves with clean heaters to facilitatewidespread adoption. 2)With subsidies, CCIS have the lowest TAC in all regions except Beijing. In Beijing, generous subsides make ASHPwF—themost energy-efficient option—have the lowest TAC. In Tianjin, TAC of subsidized ASHPwF are slightly higher than CCIS and NGH. Throughout Hebei, except for a few severely cold northern counties where gas prices are high, subsidized NGH have lower TAC than ASHPwF and RHwTS. 3) Cost competitiveness of ASHPwF increases as heat demand increases, (e.g., higher desired indoor temperatures, larger home sizes, etc.) indicating that ASHP are good options for households with larger home sizes and commercial buildings. 4) Substantial potential exists to reduce heating expenses by improving building energy efficiency particularly in severely cold regions. 5) Cost advantages of NGH vary sharply with gas prices.

We analyze the spatial and technological distribution of China’s overseas electric power investments around the world, and the pollution intensity of Chinese coal fired power plants relative to those held by non-Chinese entities. We find that Chinese firms hold approximately $115 billion USD in electric power assets globally, with an average of 73% ownership stake in a total capacity of 81 GW. Chinese power investments span the globe but are largely found in developing countries, particularly in Asia and Latin America. The vast majority of Chinese investment goes to coal (24.5 GW), gas (20.5 GW) and hydropower (18.1 GW), while the share of wind (7.2 GW) and solar (3.1 GW) is relatively small but may be rising. The energy mix of Chinese overseas investment is similar to the existing world portfolio. Within the coal sector, between 2011 and 2017, the majority of Chinese greenfield investment in coal used supercritical technologies (58 percent) while only 34 percent of non-Chinese coal plants built during this period were supercritical.

Black carbon (BC) mitigation can reduce adverse environmental impacts on climate, air quality, human health, and water resource availability. To facilitate the identification of mitigation priorities, we use a state-of-thescience global chemistry-climate coupled model (AM3), with additional tagged BC tracers representing regional (East Asia, South Asia, Europe and North America) and sectoral (land transport, residential, industry) anthropogenic BC emissions to identify sources with the largest impacts on air quality, human health and glacial deposition. We find that within each tagged region, domestic emissions dominate BC surface concentrations and associated premature mortality (generally over 90%), as well as BC deposition on glaciers (∼40–95% across glaciers). BC emissions occurring within each tagged source region contribute roughly 1–2 orders of magnitude more to their domestic BC concentrations, premature mortality, and BC deposition on regional glaciers than that caused by the same quantity of BC emitted from foreign regions. At the sectoral level, the South Asian residential sector contributes ∼60% of BC associated premature mortality in South Asia and ∼40–60% of total BC deposited on southern Tibetan glaciers. Our findings imply that BC mitigation within a source region, particularly from East and South Asian residential sectors, will bring the largest reductions in BC associated air pollution, premature mortality, and glacial deposition.

Under the Paris Agreement, China committed to peak its carbon dioxide emissions on or before 2030. Substituting natural gas for coal may facilitate it meeting this commitment. However, three major challenges may obstruct progress towards desired climate benefits from natural gas. 1) A fundamental price dilemma disincentivizing a coal-to-gas end-use energy transition: low city-gate gas prices discourage an increase in gas supplies while high end-use gas prices impede an increase in gas demand. 2) Insufficient and constrained access to natural gas infrastructure hinders connections between gas supplies and end-users, and obstructs a balance in seasonal supply and demand. 3) Methane leakage from the natural gas industry compromises the direct greenhouse gas emission reductions from combustion. To address these challenges, government and industry must work together to facilitate natural gas market reform, increase investment in natural gas infrastructure, and control methane emissions.

Electrification with decarbonized electricity is a central strategy for carbon mitigation. End-use electrification can also reduce air pollutant emissions from the demand sectors, which brings public health co-benefits. Here we focus on electrification strategies for China, a country committed to both reducing air pollution and peaking carbon emissions before 2030. Considering both coal-intensive and decarbonized power system scenarios for 2030, we assess the air quality, health and climate co-benefits of various end-use electrification scenarios for the vehicle and residential sectors relative to a non-electrified coal-intensive business-as-usual scenario (BAU). Based on an integrated assessment using the regional air pollution model WRF-Chem and epidemiological concentration–response relationships, we find that coal-intensive electrification (75% coal) does not reduce carbon emissions, but can bring significant air quality and health benefits (41,000–57,000 avoided deaths in China annually). In comparison, switching to a half decarbonized power supply (∼50% coal) for electrification of the transport and/or residential sectors leads to a 14–16% reduction in carbon emissions compared to BAU, as well as greater air quality and health co-benefits (55,000–69,000 avoided deaths in China annually) than coal intensive electrification. Furthermore, depending on which end-use sector is electrified, we find different regional distributions of air quality and health benefits. While electrifying the transport sector improves air quality throughout eastern China, electrifying the residential sector brings most benefits to the North China Plain region in winter where coal-based heating contributes substantially to air pollution.

Both energy production and consumption can simultaneously affect regional air quality, local water stress and the global climate. Identifying the air quality–carbon–water interactions due to both energy sources and end-uses is important for capturing potential co-benefits while avoiding unintended consequences when designing sustainable energy transition pathways. Here, we examine the air quality–carbon–water interdependencies of China’s six major natural gas sources and three end-use gasfor-coal substitution strategies in 2020. We find that replacing coal with gas sources other than coal-based synthetic natural gas (SNG) generally offers national air quality–carbon–water co-benefits. However, SNG achieves air quality benefits while increasing carbon emissions and water demand, particularly in regions that already suffer from high per capita carbon emissions and severe water scarcity. Depending on end-uses, non-SNG gas-for-coal substitution results in enormous variations in air quality, carbon and water improvements, with notable air quality–carbon synergies but air quality–water trade-offs. This indicates that more attention is needed to determine in which end-uses natural gas should be deployed to achieve the desired environmental improvements. Assessing air quality–carbon–water impacts across local, regional and global administrative levels is crucial for designing and balancing the co-benefits of sustainable energy development and deployment policies at all scales.

China needs to manage its coal-dominated power system to curb carbon emissions, as well as to address local environmental priorities such as air pollution and water stress. Here we examine three province-level scenarios for 2030 that represent various electricity demand and low-carbon infrastructure development pathways. For each scenario, we optimize coal power generation strategies to minimize the sum of national total coal power generation cost, inter-regional transmission cost and air pollution and water costs. We consider existing environmental regulations on coal power plants, as well as varying prices for air pollutant emissions and water to monetize the environmental costs. Comparing 2030 to 2015, we find lower CO2 emissions only in the scenarios with substantial renewable generation or low projected electricity demand. Meanwhile, in all three 2030 scenarios, we observe lower air pollution and water impacts than were recorded in 2015 when current regulations and prices for air pollutant emissions and water are imposed on coal power plants. Increasing the price of air pollutant emissions or water alone can lead to a tradeoff between these two objectives, mainly driven by differences between air pollution-oriented and water-oriented transmission system designs that influence where coal power plants will be built and retired.

To increase energy security and reduce emissions of air pollutants and CO₂from coal use, China is attempting to duplicate the rapid development of shale gas that has taken place in the United States. This work builds a framework to estimate the lifecycle greenhouse gas (GHG) emissions from China’s shale gas system and compares them with GHG emissions from coal used in the power, residential, and industrial sectors. We find the mean lifecycle carbon footprint of shale gas is about 30–50% lower than that of coal in all sectors under both 20 year and 100 year global warming potentials (GWP₂₀ and GWP₁₀₀). However, primarily due to large uncertainties in methane leakage, the upper bound estimate of the lifecycle carbon footprint of shale gas in China could be approximately 15–60% higher than that of coal across sectors under GWP₂₀. To ensure net GHG emission reductions when switching from coal to shale gas, we estimate the breakeven methane leakage rates to be approximately 6.0%, 7.7%, and 4.2% in the power, residential, and industrial sectors, respectively, under GWP₂₀. We find shale gas in China has a good chance of delivering air quality and climate cobenefits, particularly when used in the residential sector, with proper methane leakage control.

Black carbon (BC) aerosol strongly absorbs solar radiation, which warms climate. However, accurate estimation of BC’s climate effect is limited by the uncertainties of its spatiotemporal distribution, especially over remote oceanic areas. The HIAPER Pole-to-Pole Observation (HIPPO) program from 2009 to 2011 intercepted multiple snapshots of BC profiles over Pacific in various seasons, and revealed a 2 to 5 times overestimate of BC by current global models. In this study, we compared the measurements from aircraft campaigns and satellites, and found a robust association between BC concentrations and satellite-retrieved CO, tropospheric NO2, and aerosol optical depth (AOD) (R2>0.8). This establishes a basis to construct a satellite-based column BC approximation (sBC*) over remote oceans. The inferred sBC* shows that Asian outflows in spring bring much more BC aerosols to the midPacific than those occurring in other seasons. In addition, inter-annual variability of sBC* is seen over the Northern Pacific, with abundances varying consistently with the springtime Pacific/North American (PNA) index. Our sBC* dataset infers a widespread overestimation of BC loadings and BC Direct Radiative Forcing by current models over North Pacific, which further suggests that large uncertainties exist on aerosol-climate interactions over other remote oceanic areas beyond Pacific.

China is the world's top carbon emitter and suffers from severe air pollution. We examine near-term air quality and CO2 co-benefits of various current sector-based policies in China. Using a 2015 base case, we evaluate the potential benefits of four sectoral mitigation strategies. All scenarios include a 20% increase in conventional air pollution controls as well as the following sector-specific fuel switching or technology upgrade strategies. Power sector (POW): 80% replacement of small coal power plants with larger more efficient ones; Industry sector (IND): 10% improvement in energy efficiency; Transport sector (TRA): replacement of high emitters with average vehicle fleet emissions; and Residential sector (RES): replacement of 20% of coal-based stoves with stoves using liquefied petroleum gas (LPG). Conducting an integrated assessment using the regional air pollution model WRFChem, we find that the IND scenario reduces national air-pollution-related deaths the most of the four scenarios examined (27,000, 24,000, 13,000 and 23,000 deaths reduced annually in IND, POW, TRA and RES, respectively). In addition, the IND scenario reduces CO2 emissions more than 8 times as much as any other scenario (440, 53, 0 and 52 Mt CO2 reduced in IND, POW, TRA and RES, respectively). We also examine the benefits of an industrial efficiency improvement of just 5%. We find the resulting air quality and health benefits are still among the largest of the sectoral scenarios, while the carbon mitigation benefits remain more than 3 times larger than any other scenario. Our analysis hence highlights the importance of even modest industrial energy efficiency improvements and air pollution control technology upgrades for air quality, health and climate benefits in China.

China is the world’s top carbon emitter and suffers from severe air pollution. It has recently made commitments to improve air quality and to peak its CO2 emissions by 2030. We examine one strategy that can potentially address both issues—utilizing long-distance electricity transmission to bring renewable power to the polluted eastern provinces. Based on an integrated assessment using state-of-the-science atmospheric modeling and recent epidemiological evidence, we find that transmitting a hybrid of renewable (60%) and coal power (40%) (Hybrid-by-wire) reduces 16% more national air-pollution-associated deaths and decreases three times more carbon emissions than transmitting only coal-based electricity. Moreover, although we find that transmitting coal power (Coal-by-Wire, CbW) is slightly more effective at reducing air pollution impacts than replacing old coal power plants with newer cleaner ones in the east (Coal-by-Rail, CbR) (CbW achieves a 6% greater reduction in national total air-pollution-related mortalities than CbR), both coal scenarios have approximately the same carbon emissions. We thus demonstrate that coordinating transmission planning with renewable energy deployment is critical to maximize both local air quality benefits and global climate benefits.

Facing severe air pollution and growing dependence on natural gas imports, the Chinese government plans to increase coal-based synthetic natural gas (SNG) production. Although displacement of coal with SNG benefits air quality, it increases CO2 emissions. Due to variations in air pollutant and CO2 emission factors and energy efficiencies across sectors, coal replacement with SNG results in varying degrees of air quality benefits and climate penalties. We estimate air quality, human health, and climate impacts of SNG substitution strategies in 2020. Using all production of SNG in the residential sector results in an annual decrease of ∼32,000 (20,000 to 41,000) outdoor-air-pollutionassociated premature deaths, with ranges determined by the low and high estimates of the health risks. If changes in indoor/household air pollution were also included, the decrease would be far larger. SNG deployment in the residential sector results in nearly 10 and 60 times greater reduction in premature mortality than if it is deployed in the industrial or power sectors, respectively. Due to inefficiencies in current household coal use, utilization of SNG in the residential sector results in only 20 to 30% of the carbon penalty compared with using it in the industrial or power sectors. Even if carbon capture and storage is used in SNG production with today’s technology, SNG emits 22 to 40% more CO2 than the same amount of conventional gas. Among the SNG deployment strategies we evaluate, allocating currently planned SNG to households provides the largest air quality and health benefits with the smallest carbon penalties

Nitrous oxide (N2O) is an important greenhouse gas and ozone depleting substance. Previous projections of agricultural N2O (the dominant anthropogenic source)show emissions changing in tandem, or at a faster rate than changes in nitrogen (N) consumption. However, recent studies suggest that the carbon dioxide (CO2) fertilization effect may increase plant N uptake, which could decrease soil N losses and dampen increases in N2O. To evaluate this hypothesis at a global scale, we use a process-based land model with a coupled carbon-nitrogen cycle to examine how changes in climatic factors, land-use, and N application rates could affect agricultural N2O emissions by 2050. Assuming little improvement in N use efficiency (NUE), the model projects a 24%–31% increase in global agricultural N2O emissions by 2040–2050 depending on the climate scenario—a relatively moderate increase compared to the projected increases in N inputs(42%–44%) and previously published emissions projections(38%–75%). This occurs largely because the CO2 fertilization effect enhances plant N uptake in several regions, which subsequently dampens N2O emissions. And yet, improvements in NUE could still deliver important environmental benefits by 2050: equivalent to 10 Pg CO2 equivalent and 0.6 Tg ozone depletion potential.

To limit mean global warming to 2 °C, a goal supported by more than 100 countries, it will likely be necessary to reduce emissions not only of greenhouse gases but also of air pollutants with high radiative forcing (RF), particularly black carbon (BC). Although several recent research papers have attempted to quantify the effects of BC on climate, not all these analyses have incorporated all the mechanisms that contribute to its RF (including the effects of BC on cloud albedo, cloud coverage, and snow and ice albedo, and the optical consequences of aerosol mixing) and have reported their results in different units and with different ranges of uncertainty. Here we attempt to reconcile their results and present them in uniform units that include the same forcing factors. We use the best estimate of effective RF obtained from these results to analyze the benefits of mitigating BC emissions for achieving a specific equilibrium temperature target. For a 500 ppm CO2e (3.1Wm−2) effective RF target in 2100, which would offer about a 50% chance of limiting equilibrium warming to 2.5 °C above preindustrial temperatures, we estimate that failing to reduce carbonaceous aerosol emissions from contained combustion would require CO2 emission cuts about 8 years (range of 1–15 years) earlier than would be necessary with full mitigation of these emissions.