- Joint Program Report
China’s recently-adopted targets for developing renewable electricity—wind, solar, and biomass—would require expansion on an unprecedented scale in China and relative to existing global installations. An important question is how far this deployment will go toward achieving China’s low carbon development goals, which include a carbon intensity reduction target of 40–45% relative to 2005 and a non-fossil primary energy target of 15% by 2020. During the period from 2010 to 2020, we find that current renewable electricity targets result in significant additional renewable energy installation and a reduction in cumulative CO2 emissions of 1.2% relative to a no policy baseline. After 2020, the role of renewables is sensitive to both economic growth and technology cost assumptions. Importantly, we find that CO2 emissions reductions due to increased renewables are offset in each year by emissions increases in non-covered sectors through 2050. By increasing reliance on renewable energy sources in the electricity sector, fossil fuel demand in the power sector falls, resulting in lower fossil fuel prices, which in turn leads to greater demand for these fuels in unconstrained sectors. We consider sensitivity to renewable electricity cost after 2020 and find that if cost falls due to policy or other reasons, renewable electricity share increases and results in slightly higher economic growth through 2050. However, regardless of the cost assumption, projected CO2 emissions reductions are very modest under a policy that only targets the supply side in the electricity sector. A policy approach that covers all sectors and allows flexibility to reduce CO2 at lowest cost—such as an emissions trading system—will prevent this emissions leakage and ensure targeted reductions in CO2 emissions are achieved over the long term.