China’s removal of renewable energy subsidy will affect fight against climate change

China’s decision to remove subsidies from the renewable energy tools will discourage the use of cleaner sources of energy and adversely impact the fight against climate change, reported Canada-based thinktank, International Forum for Rights and Security (IFFRAS).

China, the largest emitter of greenhouse gases, is also the largest user of energy and amid this, the country’s growing population is putting pressure on Beijing to amend plans to fulfil its ever-growing energy needs.

Solar and wind power sources do not provide a solid supply of electricity and dependence on fossil fuels is necessary for China. However, fossil fuel-derived energy has been the major cause of the problem of climate change and its increased consumption will become a hurdle in the Paris Agreement’s objective to keep the global temperature well below 2.

For China to achieve its carbon neutrality goals, energy transition from coal to renewables is required but the subsidy removal on renewable energy will further increase the use of fossil fuels, a major cause of pollution.

According to the thinktank, China’s subsidy policy was mostly to cover excessive installation and production costs of renewable energy but the country has decided to do away with subsidies to the new solar power projects and wind projects from the Central government budget with effect from August 1, 2021.

Doing so would also enable the Finance Ministry in China to correct its subsidy payment backlog, which had exceeded 400 billion yuan (USD 62.64 billion) in 2021.

However, with the removal of subsidies, the non-fossil fuel energy share will be difficult to achieve. Withdrawal of subsidies will lead to less consumption of wind and solar energy and put extra pressure on fossil fuels and the coal consumption will continue to rise leading to more carbon emissions.

China’s 14th five-year plan aims to achieve carbon neutrality by 2060 and the decision on subsidy removal will discourage people from using cleaner sources of energy. The National Energy Administration in 2021 stated, “China will enhance the role of coal as a bottom-line supplier in energy security”, reported the thinktank.


Tags: China, Climate Change, Energy Subsidy, GHGs, IFFRAS
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