Opinion | China could make two small changes that don’t cost the Earth to phase out coal
- A study has found that the central government’s policy framework is already suitable for facilitating a rapid curbing of coal market development, but the incentive structure for local governments and state-owned enterprises needs to be improved
Few of the many challenges of tackling climate change are more important in the short term yet as seemingly impenetrable as China’s slow-moving phasing out of coal. In 2020, China commissioned more than five times the coal-fired electricity capacity of the rest of the world combined.
This has led many international observers to wonder: why do societies continue to invest in coal plants that stand to be written off within a decade? It also begs the question: is there a reasonable, politically sensitive intervention capable of substantially altering the course and quickly, in a manner that benefits both China and the world?
Instead, the incentive structure for local governments and state-owned enterprises needs to be improved substantially to comply with central government policies. The problem is not so much the central policy regime itself but the perverse incentives of key actors operating within it.