Report on China’s Role in the Global Green Transition and Sustainable Development Goals

Introduction: A Dual Role in Achieving Global Sustainability

China’s position in the global effort to achieve the Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action), is uniquely complex. The nation is concurrently the world’s largest emitter of greenhouse gases, responsible for over 30% of the global total, and the foremost producer of green technology. This dual status makes China’s strategic decisions critical for the global energy transition. As of 2024, China’s dominance in manufacturing is essential for global access to clean energy technologies.

• Solar Modules: 92% of global manufacturing.
• Wind Turbines: 82% of global manufacturing.

Given that energy consumption accounts for 90% of global emissions, China’s market leadership directly impacts the world’s capacity to meet climate and energy targets.

National Commitments and Progress Towards SDG 7 and SDG 13

Decarbonization Targets

In 2020, China announced ambitious national goals aligned with SDG 13, committing to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. While not yet codified into law, these objectives are supported by regulatory frameworks such as the “Action Plan for Carbon Emission Peaking Before 2030.” A central component of this strategy is to increase the share of non-fossil fuels in primary energy consumption.

1. Target of 20% by 2025 (achieved share in 2024 was 19.8%).
2. Target of 25% by 2030.
3. Target of 80% by 2060.

Solar and wind power are designated to meet the majority of this increasing demand, positioning China to significantly advance SDG 7 both domestically and globally.

Analysis of Production Capacity and Global Supply

An assessment based on the International Energy Agency’s (IEA) Net Zero Emissions (NZE) 2050 scenario indicates that China possesses sufficient production capacity to facilitate its own energy transition and support global requirements. However, a significant regional imbalance exists; China is surpassing the required installation rate for its own net-zero trajectory, while the rest of the world is lagging. If China maintains current production levels and exports surplus capacity, it could supply:

• Approximately 80% of the solar equipment needed by the rest of the world.
• Over 50% of the wind turbines needed by the rest of the world.

This analysis suggests that China’s manufacturing capability is not a bottleneck for achieving global SDG 7 targets. In fact, the primary challenge is one of overcapacity relative to current global demand.

Economic and Infrastructural Challenges to Sustainable Growth

Industrial Overcapacity and Economic Impact (SDG 8 & SDG 9)

Since 2023, China’s solar industry has faced significant overcapacity, leading to adverse economic outcomes that challenge progress on SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure). Key issues include:

• A sharp decline in export prices despite rising volumes.
• Irrational domestic market practices, including below-cost bidding.
• A 200% fall in the operating income of solar manufacturers from 2022 to 2024.
• A corresponding 40% average reduction in capital expenditure by these firms.

Furthermore, the repeal of the fixed feed-in tariff for renewable power in 2025 is expected to cool domestic installation rates, potentially leading to market consolidation.

The Critical Deficit in Power Grid Infrastructure (SDG 9 & SDG 11)

Despite unprecedented installation of renewable energy capacity (900 GW from 2020-2024), China has struggled to effectively utilize this power and meet its energy and carbon intensity reduction targets. This discrepancy undermines the goals of SDG 7 and SDG 13 and is primarily caused by systemic underinvestment in power grid infrastructure, a key component of SDG 9 and SDG 11 (Sustainable Cities and Communities).

• Investment in power generation has surged since 2020, while investment in the power grid has remained stagnant.
• This has led to widespread underutilisation and curtailment of renewable power, with rates exceeding 30% in some western provinces.
• The grid lacks sufficient capacity for inter-regional transmission and power load management.
• Energy storage capacity remains minimal compared to the stock of renewables, limiting grid flexibility and reliability.

Strategic Recommendations for Aligning Economic and Climate Goals

Pivoting Investment to Resilient Infrastructure

To overcome current challenges, China must strategically shift its investment focus from expanding renewable manufacturing capacity to upgrading and building out its power infrastructure. This pivot would create new momentum for sustainable growth and ensure the effective use of existing clean energy assets.

1. Enhance National Power Grid Investment: China must significantly increase investment in its power grid to improve transmission capacity, particularly from renewable-rich western regions to eastern demand centers. This is crucial for reducing curtailment and integrating clean energy.
2. Expand Energy Storage Capacity: Setting ambitious targets for energy storage is necessary to support grid stability, manage the intermittency of renewables, and improve the economic viability of clean energy projects.
3. Capitalize on Global Infrastructure Demand: As nations worldwide upgrade their grids to accommodate more renewables, China can leverage its manufacturing strength to export electrical equipment. This presents a new, less politically sensitive trade opportunity that supports SDG 17 (Partnerships for the Goals).

Conclusion

By redirecting investment from renewable energy generation to power grid infrastructure and energy storage, China can address the economic downturn caused by manufacturing overcapacity. This strategic shift will not only stimulate its domestic economy in line with SDG 8 but also unlock the full potential of its renewable energy assets, keeping the country on track to meet its ambitious net-zero targets under SDG 13. Furthermore, it can alleviate international trade tensions and position China as a key partner in building the resilient global infrastructure required for a sustainable future.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses several issues that are directly and indirectly connected to a number of Sustainable Development Goals. The primary focus on renewable energy, climate change mitigation, and industrial production links the text to the following SDGs:

• SDG 7: Affordable and Clean Energy: The core of the article revolves around the transition to renewable energy sources like solar and wind power, China’s capacity to produce this technology, and the infrastructure needed to support it.
• SDG 13: Climate Action: The article is framed around the global green transition and efforts to achieve net-zero emissions. It explicitly mentions China’s climate goals, such as peaking emissions by 2030 and achieving carbon neutrality by 2060, which are central to SDG 13.
• SDG 9: Industry, Innovation, and Infrastructure: The text details China’s massive manufacturing capacity for green technologies (solar modules, wind turbines) and highlights the critical need for investment in and upgrading of power grid infrastructure to support the energy transition.
• SDG 8: Decent Work and Economic Growth: The article touches upon the economic implications of the green transition, including the overcapacity in manufacturing, falling profitability for solar manufacturers, and the potential for investment in power infrastructure to create new economic growth.
• SDG 17: Partnerships for the Goals: The article discusses China’s role as a global supplier of green technology, its export volumes, and the geopolitical implications of its market dominance, which relates to global trade and technology transfer.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s discussion of energy, climate policy, and industrial strategy, several specific SDG targets can be identified:

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article directly addresses this by citing China’s goals “to raise the share of energy consumption generated from non-fossil fuel sources to 20 percent by 2025, 25 percent by 2030 and 80 percent by 2060.”
   • Target 7.3: By 2030, double the global rate of improvement in energy efficiency. This is referenced when the article mentions China’s failure “to reduce energy and carbon intensity by 13.5 percent and 18 percent… as called for in the government’s 14th Five Year Plan.”
   • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article discusses China’s role in supplying the world with renewable technology and highlights the need to “ramp up investment in its national power grid.”

2. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article explicitly mentions China’s national policies, including its commitment to “achieve an emissions peak by 2030 and carbon neutrality by 2060” and the publication of the “Action Plan for Carbon Emission Peaking Before 2030.”

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable… and greater adoption of clean and environmentally sound technologies. The article’s focus on China’s role as the “world’s largest producer of green technology” and the discussion on the “lack of infrastructure for renewable projects” and the need for investment in the power grid directly relate to this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several quantitative and qualitative indicators that can be used to measure progress towards the identified targets:

1. Indicators for SDG 7

   • Renewable energy share (Indicator 7.2.1): The article provides specific data points: China’s share of non-fossil fuel energy was “19.8 percent in 2024,” with targets of “20 percent by 2025” and “25 percent by 2030.”
   • Energy intensity (Indicator 7.3.1): The article mentions a specific national target from China’s 14th Five Year Plan to “reduce energy… intensity by 13.5 percent.”
   • Investment in infrastructure: The article provides figures on power grid investment, which “increasing to 608 billion renminbi in 2024 from 528 billion renminbi in 2023.”

2. Indicators for SDG 13

   • Greenhouse gas emissions (related to Indicator 13.2.2): The article states China is the “world’s largest greenhouse gas emitter – over 30 percent of the global total.” It also mentions China’s goals for an “emissions peak by 2030 and carbon neutrality by 2060.”
   • Carbon intensity reduction: A specific target is mentioned from the 14th Five Year Plan to reduce “carbon intensity by… 18 percent.”

3. Indicators for SDG 9

   • Manufacturing capacity for green technology: The article provides precise figures on China’s market dominance, stating it manufactures “92 percent of the world’s solar modules and 82 percent of wind turbines as of 2024.”
   • Renewable energy curtailment rate: The article implies this as a key performance indicator for infrastructure effectiveness, noting that in some provinces, “the curtailment rate can reach over 30 percent because of insufficient grid capacity.”

4. Summary Table of SDGs, Targets, and Indicators

Source: bruegel.org