​China drops key environmental target as coronavirus hits growth

As well as forgoing a numerical target for economic growth, the coronavirus pandemic has forced China to drop a second key measurement on energy conservation that is used to mark progress in the battle against climate change.

China will strive for “a further drop in energy consumption per unit of GDP,” Premier Li Keqiang told the annual National People’s Congress in Beijing on Friday. But he left off the percentage decrease that’s expected and which has guided policy since 2014.

The omission coincided with a report from China’s top economic planning agency, the National Development and Reform Commission, that said energy efficiency improved only 2.6 per cent last year, missing the three per cent target spelled out by Li at the national legislature in 2019. And for the year ahead, the NDRC warned that relatively more energy will be needed to sustain activity, as “the impact of the epidemic on economic growth is likely to be greater than the impact on total energy consumption.”

Dropping the target shows that “economic considerations clearly trumped all other issues, including environmental protection,” said Li Shuo, senior global policy adviser at Greenpeace in Beijing.

Other commentators were more circumspect. Jonathan Luan, an analyst at BloombergNEF in Beijing, said it demonstrates a “willingness to be prudent and conservative amid the virus hit” that won’t undermine China’s desire to reduce energy consumption and develop efficiency in the sector.

China had pledged to cut its energy intensity by 15 per cent from 2016 to 2020, in a bid to reduce pollution and fight global warming. It was largely on track to meet those goals in the first three years. However, by the end of 2019, before the coronavirus hit, the measure had dropped by just over 13 per cent, according to the NDRC.

China fell just short of its target last year as slowing economic growth led policy makers to roll back restrictions on industry, slow the transition from coal, and slash subsidies for cleaner energy.

By other measures, including carbon emissions per unit of economic growth, China has exceeded its international commitments. But the risk is that “COVID-19 could turn things upside down,” said Greenpeace’s Li.

© 2020 Bloomberg L.P.

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