Lauri Myllvirta: Is China a global climate leader?

Senior fellow at the Asia Society Policy Institute's China Climate Hub, Lauri Myllyvirta, delivers a deep dive on China’s climate picture.

You can listen to the podcast here!

Xlinks have sponsored this series of Solving for Climate.

Hannah: The world is using so much electricity at the moment and AI is an energy-hungry beast which is likely to grow. Which is why Xlinks is striving to meet that growing demand with renewables. Xlinks mission is to build towards the global grid. The idea is that the sun is always shining and the wind is always blowing somewhere. So they want to connect centres of abundant supply to areas of high demand, diversifying energy supplies. To find out more, you can follow their journey on LinkedIn by searching Xlinks. Capital X, lowercase links.

SFX

Hannah: Hello and welcome to Solving for Climate, a podcast where we chat to scientists and innovators developing solutions to climate change. I'm data scientist Dr. Hannah Ritchie. Normally I'd have entrepreneur Rob Stewart presenting alongside me, but he can't join us today.

On today's podcast, we're doing a deep dive on China. Joining us is senior fellow at the Asia Society Policy Institute's China Climate Hub, Lauri Myllyvirta. Lauri is also the co-founder for the Center for Research on Energy and Clean Air.

As a data scientist, I'll be asking whether the use of fossil fuels comes at odds with their renewable credentials.

So before we start, maybe it's worth a little debrief on where China is on its emissions and climate and energy. So what will be probably not a surprise to anyone is that China is the world's largest carbon emitter today. Historically, if we look at emissions over our entire history, the US is a bigger contributor than China. But based on emissions today, China is by far the biggest emitter and emits around a third of the world's greenhouse gas emissions.

So if we're to tackle climate change, China is a huge chunk of that. And what China does, whether it's increasing emissions, peaking emissions, reducing emissions, has a massive impact on our global trajectory of where we are on climate. Now China is often framed as this kind of weird paradox where it's going really, really hard on renewables, it's going really, really hard on electric vehicles and ditching petrol cars, but at the same time, it's opening new coal plants and still burning lots of coal.

And for many people that forms this kind of paradox in their head where on the one hand it seems they're taking climate change very seriously and on the other emissions from coal have still been increasing. So that's a big part of the conversation that we'll unpack with Lauri and I actually can't think of a better person to speak to on this because he's really someone that looks really, really closely at the data and has been following it for a very long time.

Lauri, welcome to Solving for Climate.

Lauri: Thanks so much Hannah, great to be here.

Hannah: In the intro I gave a little bit of a debrief on China's carbon emissions and how much it emits and how that's part of the global total. But maybe to start you could give us the kind of headline pitch on where China is in its transition to a low carbon economy and how things have changed in the last decade.

Lauri: For sure. So, well, first of all, China's been responsible for about 90 % of the global emissions growth over the past decade since the Paris Agreement was negotiated. Another way of putting that is global emissions would have already peaked, or at least plateaued if it wasn't for emissions growth in China. So that's how crucial what happens in China is for the global emission trends.

The picture is, I'm sure, confusing to a lot of people, but so China has astonishing growth in clean energy, but at the same time, energy demand growth has been so high and from a high base that emissions have actually been going up faster in the past few years than they did before that. But in the past one and half years since early 2024, emissions have started to plateau. And the reason for that is that finally clean energy is growing at a rate that is meeting the need for new energy production. And it has meant installing a mind blowing amount of solar power, especially in the past few years. Also wind, nuclear starting to come through.

China's annual growth in electricity demand is to the tune of two Great Britains per year.

Hannah: So could you give some sense of how much solar or wind they're adding relative to other parts of the world? Like these numbers seem pretty incredible.

Lauri: Absolutely. So yeah, China's been adding a half, a bit more than a half of all the wind and solar in the world. And now China's installing or has been installing recently more wind and solar annually than the whole world did a few years ago.

Hannah: So the speed and scale of this rollout of renewables is pretty incredible. Would you consider China a global leader on climate?

Lauri: That's a huge debate. I think I would say that China is a global leader in deploying clean energy. But because there's also a lot of structural factors that promote fossil fuels, a lot of active promotion of fossil fuels, coal-fired power plants, oil production, all kinds of heavy industry.

And there is continued growth in in the capacity of some of those industries and overall emissions have only stabilized, that's still not enough to make a claim for leadership on climate. And that's also been the conclusion of China's policymakers. There have been recurring debates before important speeches and policy documents about whether China should declare itself as a leader. And they've always so far concluded that they can call themselves an important contributor and so on, but stopped short of saying, we are a leader.

Hannah: I'm going to give you huge amounts of power. If you could change one or two things about China's approach to climate change, what would they be?

Lauri: That is…

Hannah: Too much power!

Lauri: …a great question. Well, so China has the target in place of being carbon neutral before 2060, which is great. It's broadly in line with what the Paris Agreement requires. But…

Hannah: Just, could you just, what does carbon neutral mean? Is that the same as net zero?

Lauri: Yeah, so you need to be taking at least as much carbon away from the atmosphere as you're releasing. China’s targeting that before 2060. But the big question is how are they going to get there? Is there going to be a long plateau of emissions and then supposedly very rapid reductions, let's say after 2040 or whatnot? There's no way a global carbon budget can accommodate that.

The really key thing right now is specifying the trajectory that China is going to take to carbon neutrality. The other big thing is currently China is very good at building the clean stuff, but there's still not even much control of how much dirty stuff gets built, let alone a clear plan for starting to close that down. And that's what really needs to start happening.

Hannah: Whenever I give the figures on how much clean energy is growing and I hint that maybe China's emissions could be about to peak soon, it's very hard to say like this is going to be the peak, but they could be peaking soon. The pushback I always get is, yeah, but China's building like lots and lots of new coal plants and there's no way that emissions can peak if they're still building new coal plants now. So are they still building new coal plants and why are they doing that?

Lauri: Absolutely. And coal-fired power plant construction also accelerated in the past few years. So in 2020, 2021, there was a panic about capacity sufficiency and demand fluctuates a lot. Demand has started to fluctuate more in China because there have been massive scorching heat waves.

And that has meant that a lot of people have installed air conditioning, have started to use their air conditioning more. At the same time, of course, all the wind and solar, so variable renewables coming online also mean that there is a need for the power system to be much more flexible and to have more flexible capacity. That's where the drive for more coal-fired power plants is coming from.

The conclusion or the perceived need for more coal-fired power plants is because China's power grid is running in very inflexible way.

Hannah: So I think in the UK for example, we're familiar with gas being our kind of filler in the energy system, right? So we have lots of renewables, but obviously they're not working all the time. So when the wind's not blowing and the sun's not shining, we can turn on these peaker gas plants that can ramp up and down very, quickly. And what you're saying is that increasingly China will need to do this, rather than choosing gas, they're mostly choosing coal and that gives them the flexibility to balance solar and wind on the energy system.

Lauri: Well in fact it’s, it's all of the above. So coal-fired power plants are supposed to do that. China’s also building a lot of gas-fired power plants. And there's a lot of electricity storage being built, both pumped hydro and grid-connected batteries. And then the transmission system is being improved to run in a more flexible way. So it's really four different solutions being pursued at the same time. And that really, I think that reflects the mentality of the policymakers that they're much more concerned about addressing a problem effectively than doing it efficiently. So I think a lot of market economies have a bias for building just as little as you can get away with. And China has the opposite bias of building so much that you can be absolutely certain that the problem goes away. And if there's some waste along the way, you don't worry about that too much.

Hannah: So I think a big part of this story is that China's electricity demand is growing so quickly it's almost hard for it to keep up even though it's building huge amounts of new power. But one of the arguments I sometimes hear is that electricity demand and this thirst for energy in China is only high or is predominantly rising so quickly because it's producing all this stuff for the rest of the world. So actually the low carbon technologies that we all love are actually not that great and this is why electricity demand is so high and why emissions in China are rising so much. Is there some truth to this? Like how much do these manufacturing of these low carbon technologies feed into its overall energy demand?

Lauri: That's a great thing to point out because I think overall the export specifically for key low-carbon technologies, solar, wind, batteries, electric vehicles - the export of those technologies or the production of those technologies for exports is responsible for around 1 % of China's emissions. So that's the thing. That one refrain that I assume will resonate with you, Hannah, because you do amazing work with numbers and putting numbers out there is that everything's big in China, but you really have to tell the big bigs from the small bigs. And when we're talking about the pie of China's emissions, low-carbon technology production is a small big.

Hannah: Is there other parts of China's energy system or economy where it's lagging behind on climate?

Lauri: In terms of climate is that China's efforts have very much focused on the energy sector. Emissions reporting outside of the energy sector has been lagging. China just put out numbers for 2021 emissions at the end of last year. So that's a very long lag in reporting and that's an improvement in terms of policies and targets to actually address those emissions. There's even less to show.

Hannah: One, you do a lot of reporting on China. Where do you get your data from? And two, should we trust the data that comes from China? Whenever I talk about China, people are like, yeah, those are just made up numbers because no one actually knows. How transparent is the data coming from China and how confident are you are in the numbers that you present?

Lauri: You should never trust numbers just because there are numbers. And in that sense, China's statistics certainly are not perfect, but they are much better than those for some other emerging economies. The thing that is really peculiar, specific to China, is that there are so many quantitative targets that are set by especially the central government. And the weight that is placed on meeting those targets. So the incentives for manipulating statistics are much bigger than in most places where statistics are just a super boring thing that is put out on a government website and very few people ever look at.

Hannah: And the incentive to underreport would be to make it look like you're doing better on climate. But what would be the incentive to overreport? Because it suggests that your energy output or your financial returns or activity levels are higher than they are. And from an economic perspective, that looks good.

Lauri: Yeah, so for example, at the same time that there was the scare about coal power capacity, there was actually a big reason for the electricity shortages was that not enough coal was being produced because the government had been squeezing prices to coal mines and so they didn't want to produce. And so then instead of fixing the economic incentives, there were administrative targets of you're going to increase production so and so much, and you're going to make long term contracts at this price with this many power plants to produce the stuff. And then what happened was that lot of mines started shipping very substandard coal. And they stopped, for example, washing the coal to have it weigh more but just be lower quality stuff. And that just meant that both coal production and consumption got over reported.

Hannah: China has been very innovative on renewable energy. It's driven down massive declines in solar prices and battery prices. It's now doing extremely well in electric vehicles. What's been the driver or the motivation for this innovation? Is it climate? Is China just really concerned about climate change and feels that this is what we need to do? Or are there other reasons for this drive?

Lauri: Climate is a part of it. China is obviously vulnerable to climate change. In fact, one of the most vulnerable countries in the world because of impacts on water resources, food security, but there are also other really important drivers. In the last decade, one really important one was air pollution. So that was the overriding concern in terms of producing emissions, getting rid of the horrendous air pollution episodes that were happening across much of China.

Energy security is one. And then very clearly Xi Jinping himself and the broader policymaking circle have identified the clean energy technologies as one essential strategic area where you want to have competitiveness and leadership. We estimate that last year the clean energy economy delivered more than 10 % of China's total GDP for the first time.

Hannah: I think people would have, for many countries, some sense of what public discussion on climate change is like in that country. I think many people would assume they just have no idea based on information from China what public discussion is like, what public opinion is like. If you were to be in China, would there be people on TV saying we need to address climate change like you might get in the UK or the US? And if you were to ask the average person on the street in China, what do you think about climate change? What type of response would you get?

Lauri: Climate change is certainly covered on TV. Mainly, the main thing would be when there are big speeches by Xi Jinping where it's mentioned or he's attending an important event. And there's also, there's a lot of coverage publicizing positive developments, clean energy and so on. How much climate change is featured when reporting on natural catastrophes, floods and so on varies quite a bit. When people are asked in surveys, Chinese people have one of the highest levels of concern when they're simply asked about climate change. I think I would characterize it as broad but not super deep support for climate action.

Lauri: But it's not the same kind of intense concern that you had about air pollution 10 years ago. It's a very techno-optimistic approach. It's clean energy, clean technology is very clearly a part of the vision.

Hannah: We're going to innovate our way out of this.

Lauri: Yeah, and also simply it's just become a part of the vision of what does a modernized, competitive, attractive China look like.

sfx

XLinks have sponsored this series of Solving for Climate.

Hannah: So XLinks have this big project, and I've had it on my radar for some time, the Morocco to UK Power Project. The plan is to transport renewable energy from sunny Morocco to the dreary UK. In June, the UK government decided not to go ahead with a contract for difference for the project. And there's a but incoming. But Xlinks are still looking at other delivery options. And they're also doing feasibility work on separate projects which could benefit other parts of Europe. To find out more, you can follow their journey on LinkedIn by searching Xlinks, capital X, lowercase links.

sfx

Hannah: So one of the areas that China's been doing extremely well on is car manufacturing, specifically electric car manufacturing. So last year, more than half of new cars in China were electric and it now has a very large export market. And companies like BYD, they're producing these really, really good electric cars for $10,000, which is unheard of in the West. How are China able to produce these fantastic technologies so cheaply?

Lauri: A big part of it is it's been a systematic two-decade effort and there have been multiple incentives that have been more or less appropriate for the phase of development of the industry. So, for example, restrictions on registering new internal combustion engine vehicles. So it's a matter of scale, it's a matter of leadership and innovation, for example, in batteries and then subsidies. So what is China doing differently?

One really key part of what China is doing is having systematic state investment in industries that are identified as strategic. So most of the reduction is real innovation scaling up.

Hannah: And from a human rights perspective in these supply chains, there's lots of campaigns that suggest forced labour, often predominantly from the Uyghur community. How does China respond to those accusations or allegations? And is forced labour, or very, very cheap labour, the reason why China can produce these technologies so cheaply?

Lauri: So yeah, first of all, how does China respond? By being extremely aggravated and offended by even suspicion of anything like that. And that has certainly made proper audits and inspections and everything like that really hard or impossible. So that limits how much we know about it. And all of that is, of course, a reason for concern. But in terms of cost reduction these are not labor intensive industries. It seems to be more like a social obligation for companies to participate in these programs.

Hannah: So it could be happening, or could probably say it probably is happening, but the fact -

Lauri: There's no question that the programs are happening. It's just a huge disagreement about how they should be categorized, whether it's modern-day slavery or whether it's a social program that benefits everyone, as the Chinese government would like it to be seen.

Hannah: And then to zoom out a bit, China is producing really good products very cheaply. It's really dominating in the refining in particular of many of the minerals we need for batteries or solar panels or wind turbines. How do you view the geopolitical risk for other countries? There's lots of debates at the moment. Countries are putting on pretty high tariffs, which in some sense you could say that protects domestic industries and energy security in those countries but comes at the cost that then you or I need to pay more for an electric vehicle when we have a cheaper one from China, right? How do you view the balance of that geopolitical risk and making clean energy cheap, right, which is we also want?

Lauri: So of course it's a concern when any supply chain is 90 % concentrated in one country. Besides active trade measures, just any kind of disruptions to that supply can be problematic. So China itself has been very systematic in making sure that they have control of the IP and the supply chains and the materials needed for the strategic technologies, including energy that they use themselves. So in that sense, China shouldn't have much to complain if other countries decide to do the same. The problem though, is that just slapping very high tariffs on stuff isn't magically going to result in manufacturing being built somewhere. So especially with the way that the Trump administration has been doing it.

And so you're not going to build a factory, let alone an entire industrial ecosystem on Wednesday. And then on Monday, you hear that the tariffs are gone. So there needs to be an industrial policy that tries to diversify, that tries to bring on a new supply that could be supported by tariffs. But so the aim should be to get more supply into the world.

I estimated that in 2024, China's exports of solar and batteries and electric vehicles and wind power resulted in a 1 % reduction in the emissions, annual emissions outside of China. And we need emissions to go down several percent per year. So that just means that most of the supply that we need hasn't been built yet. So other countries that want to see more diversified supply, they should be focused on making sure that a substantial part of that future supply is elsewhere than in China.

Hannah: Lauri, thank you very much for that deep dive. I'm sure we could have gone on for another hour easily. But yeah, thank you very much for joining us and sharing Thank you so much.

Lauri: Great talking to you, Hannah.

Hannah: What China does really, really matters for the global trajectory of climate. The change in our trajectory since the Paris Agreement has mostly been shaped by emissions and warming from China. So this transition is super, super important. I think what he got across again just very, very strongly is this kind of paradox where China's just building clean power at really, really incredible rates.

But it's electricity demand is also growing at quite staggering rates. He framed it as two Great Britain's amounts of electricity per year. So that's just really, really unbelievable growth. And the fact that clean energy is keeping up with that, or just about keeping up with that, is also pretty incredible. And I think it's hard to get our head around the perspective of how much is going on.

So I had done a bit of research into China's trends and motivations and stuff before, or I read papers and other people's analysis of this. So I had already had a pretty good idea that China wasn't just doing this because of climate, right? Like really the biggest motivation for this initially was the tackling air pollution. And actually if you look at the reduction in levels of air pollution in China in the last decade, they've been really, really staggering, right? Like in some of the big cities, levels have fallen by two-thirds or more. So I think people, when people think about Beijing, they think about this really, really polluted city, because I think there’s this vision we had of Beijing maybe 15 years ago, and to be clear, levels of pollution there are still high and well above WHO standards, but they've fallen really, really dramatically and that has huge benefits for the population there. So I had some sense that they were other drivers and not just climate, but I also thought his analysis of how people in China think about climate change is interesting.

Maybe people think that was a bit of a stupid question to ask, like, what do people in China think about climate change? But I think most of us just don't really have a good perspective on that. One of the big drivers of electricity demand in the past few years in particular has been an increase in air conditioning. And that's just going to increase in the future because the world is going to continue to get warmer for quite a long time. I think what's really important to highlight is that many of us are benefiting from the investments that China has made, right?

What's really key about these technologies and, I always talk about learning curves, what's really key is that the more of the stuff we build, generally the cheaper it gets, and that's been the trend for a long time, which means that China building huge amounts of this stuff today or five years ago has really contributed to the price declines that the rest of the world can benefit from.

But thank you for listening to our fourth season of Solving for Climate. If you're looking for transcripts of today's episode, you can find them on our Substack in the podcast description.

Goodbye.

sfx

Xlinks have sponsored this series of Solving for Climate.

Hannah: Xlinks have quite an impressive team, led by a board that includes Sir Dave Lewis, former Tesco CEO, ex-Rolls-Royce chairman Sir Ian Davis, and founder of ACWA Power, Paddy Padmanathan. And to top it all off, Time Magazine recognised Xlinks as a world-top green tech company in their 2025 rankings. I hope they stuck that on their LinkedIn. To find out more, you can follow their journey on LinkedIn by searching Xlinks, capital X, lowercase links.