Sustainability and New Ways of Doing Business: The Key Message from COP22
COP22, the UN conference on climate change, has sent strong signals to countries expressing their scepticism about climate change, indirectly referring to the USA’s looming threat of withdrawing from the Paris Agreement. While it is very important to prevent the USA from doing so, China needs to accelerate its effort to reduce its carbon footprint, which continues to increase despite the country’s heavy investment in renewable energy. The Chinese government’s decision to reduce China’s reliance in new coal-fired power plants is expected to help going forward.
Global CO2 emissions from the consumption of oil continue to rise
Globally, CO2 emissions from the consumption of coal increased 15.0% (period growth) between 2010 and 2015;
Source: Euromonitor International from Energy Information Administration of the US Government, International Energy Agency
- China and the USA are the two leading countries in terms of contribution to the global CO2 emissions from the consumption of coal;
- While the USA has made positive strides in reducing its CO2 emissions from the consumption of coal, down by 265,416 thousand tonnes between 2010 and 2015, the situation has worsened for China during the same period;
The USA makes positive strides in reducing its carbon footprint
The share of solar, wind and other energy in the energy mix has increased from 22.0% in 2010 to 28.0% in 2015, while the share of coal has decreased from 24.0% to 19.0% during the same period;
- There are a number of incentives in place to boost investments in renewable energy including the US government’s 40.0% tax credit to companies investing in wind and solar power. To this end, a number of companies have taken up the opportunity to shift to renewables, which also helped to improve their green credentials before their consumers;
- Walmart is the largest generator of solar power, installing 105-megawatt solar panels on the roofs of 327 stores and distribution centres, said to be enough to power 200,000 homes.
- Google’s aim is to derive all its power from renewable sources, thus investing in wind power, solar power and biofuel. Up until 2016, the company has committed to purchase 2.5 gigawatts of renewable sources and invested US$2.5 billion in renewable energy sources.
- Furthermore, the country has been able to increase its share of natural gas in the energy mix, thanks to the shale revolution, which made it possible to extract natural gas found within shale formations.
- Despite the improvements in its carbon footprint, the USA is the world’s second largest polluter in terms of CO2 emissions after China. It is very important that the USA does not pull out of the Paris Agreement and carries on with its impressive strides in reducing its carbon footprint.
China invests heavily in renewable energy but CO2 emissions from coal continue to rise
China is the world’s largest producer and consumer of coal. In April 2016, the government announced a reduction in new coal-fired power plants, while the government increased investment in renewable energy;
- In 2015, China is estimated to have invested US$103 billion in renewable energy, double that invested by either the USA or Europe.
- Between 2010 and 2015, production of energy from solar and wind increased by 213%, although it was still only 1.3% of the total energy supply in 2015. According to China’s Renewable Energy Industries Association, solar energy production increased by 28.0% in the first half of 2016. This trend is set to continue and China will consolidate its position as the leader in renewable energy generation;
- Nevertheless, China’s CO2 emissions from the consumption of coal was the highest in the world in 2015 and has been increasing since 2010. The country’s reliance on coal as an energy source is a key challenge in curbing CO2 emissions, but the government’s announcement to reduce its reliance in new coal-fired power plants is expected to generate positive results in the future.
For more information, please refer to the strategy briefing ‘Sustainability and the New Normal for Natural Resources’