At the General Debate of the 75^th Session of the United Nations General Assembly, China, the world’s largest emitter of carbon dioxide, made a bold statement about its plans for tackling carbon emissions: aiming to have CO2 emissions peak before 2030 and achieving carbon neutrality before 2060.

What's Carbon Neutrality?

Carbon neutrality is the balance between emitting carbon and absorbing carbon emissions from the atmosphere in carbon sinks. Generally speaking, there exists two ways to achieve this: reduction and compensation. For example, we can reduce energy consumption and emission-producing activities, improve energy efficiency, and replace traditional energy with renewables.

Opportunities and Challenges

Since China relies on fossil fuels for around 85% of power production with coal at 60%, the energy sector has the biggest role to play to achieve its goal. It’s estimated that China needs to reduce fossil fuels consumption from the 85% of total energy mix to 25% to reach carbon neutrality. However, grid operators have few incentives to buy renewables, highlighting the urgency of power market reform.

On the other hand, China’s pledge on expediting its carbon neutral commitment will have significant “spillover” opportunities for the global energy landscape and emission reductions. For example, solar panels prices all around the world have decreased due to China’s high demand for solar energy.

How do you think the challenges and opportunities regarding China’s carbon neutrality pledge? Look forward to hearing your comments and thoughts.