Backgrounder: Understanding China’s 1+N Announcements
By Hengrui Liu
On Oct 24, the Central Committee of the Communist Party of China (CPC) and the State Council jointly issued the “Working Guidance For Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy” ( The “1” Policy). This policy design document represents an all-of-government-and-society approach and should be interpreted as top level guidance. Significantly, it was issued by both the CPC central committee and the State Council, giving it greater political authority. Two days later, the State Council issued “Action Plan for Carbon Peaking Before 2030” (The first “N” policy). The “N” refers to concrete action plans on each sector, including energy, industry, transport, urban, rural, etc.
The two policy documents set major climate targets from the 14th Five-year Plan (FYP) to 2060 in China. By 2025, CO2 emissions per unit of GDP will be lowered by 18% from the 2020 level, and the share of non-fossil energy consumption will have reached around 20%. By 2030, CO2 emissions per unit of GDP is to be reduced by over 65% from the 2005 level, with the share of non-fossil energy consumption reaching around 25%. In these two documents, for the first time, China states its long-term target of achieving the share of non-fossil energy consumption over 80% by 2060. Although not mentioned in the documents, it is widely believed the carbon emissions from the remaining 20% will be captured by carbon sequestration and storage (CCS).
Domestic implications
The “1+N” policy will catalyze a comprehensive socioeconomic reform in China as it influences its energy consumption, industrial structure, transportation system, technology innovation, land-use, and legislation. Both documents prioritize the energy conservation strategy for carbon peaking before 2030. The aim of the document is to signal that green and low-carbon industries will be promoted going forward and energy-intensive industries will be regulated or curtailed. China has stated its intention to limit coal consumption during the 14th FYP (2021-2025), phase down coal consumption during the 15th FYP (2026-2030), and plateau oil consumption before 2030. However, concrete actions to achieve these targets remain to be determined.
One of the significant details from the two official documents is that they reconfirm the Chinese central goverments’ commitment to couple government subsidies and other support for energy technology innovation while at the same time reaffirming the need for market reforms. References to utilizing “market strength” in the documents signal the pressing need to reform pricing and other regulations that shape energy markets, including the electricity market, coal market, oil and gas market, and other resource markets. Moreover, the two documents state that existing laws and policies that are incompatible with carbon peaking and neutrality goals will be adjusted. In their stead, a specific law on carbon neutrality will be formulated.
Importantly, each level of CPC committees and level of government will be held responsible for achieving the objectives of carbon peaking and carbon neutrality. As it is written in the “1” policy, “outstanding regions, organizations, and individuals will be rewarded and commended, and regions and departments that fail to meet climate targets will be criticized,” indicating the seriousness and determination of the Chinese government to an all-of-government approach.
Global implications
China’s “1+N” policies can be expected to influence global trade in carbon intensive products. The policy documents state explicitly that the Chinese government will accelerate the establishment of a green trade system. The new trade system will increase the share of China’s exports of green products that are high-quality, high value-added, and technologically advanced products in China’s export mix while limiting exports of energy-intensive and emission-intensive products. China hopes to build its export base to favor low-carbon products, energy efficiency services, and environmental services.
In Climate Policy Lab’s previous studies, we have found that Chinese financial institutions have supported the construction of coal power plants abroad since the early 2000s. These carbon-intensive supports have continued in China’s Belt and Road Initiative, which has been widely criticized for making it more difficult to combat climate change. China appears to be addressing this issue in its “1+N” policies by stating it will promote a green transformation in Belt and Road investment and deepen “exchanges and cooperation with other countries on environmental-friendly technology, equipment, services, and infrastructure construction.”
Challenges
It remains to be seen how China can achieve economic growth and carbon emission reductions simultaneously. Historically, China’s economy has relied on an economic development model that is based on high energy consumption and high pollution emitting industries. The proposed green transition will need to replace hundreds of thousands of carbon intensive construction and heavy industry jobs with green jobs that command higher salaries. Many carbon intensive, heavy industry jobs are located in the inner provinces, while new green jobs are often created in coastal provinces, potentially increasing the income and development disparity. It remains unclear how China’s central planning authorities will address such imbalances.
Globally, China’s ambitions of green trade and green BRI could not be achieved on its own. Cooperation with other nations would be imperative to the success of above two goals. China should work with the U.S, second largest emitter, India, the third largest emitter, as well as EU, Japan, and Russia on green trade, green technology, and market-oriented emission reductions. The world is watching the Glasgow climate summit carefully for signs that new, more ambitious cooperation could emerge, but so far, announcements by all sides have been limited by domestic political factors. Hopefully, moving forward more leadership will be forthcoming. ∎
Hengrui Liu is a predoctoral research fellow at The Fletcher School, Tufts University.