Carbon intensity in China’s recent history – Politics matters a lot in achieving both prosperity and sustainability

The link between carbon dioxide (CO2) emissions and prosperity (GDP) has made global climate change a divisive issue to tackle. In an ideal world, we would be able to maintain development and economic growth whilst also mitigating our global CO2 emissions. This environmental-economic balance has made ‘carbon intensity’ an important metric. Carbon intensity measures the quantity of CO2 emitted per unit of GDP and is measured in kgCO2/GDP per year. A low carbon intensity indicates low CO2 emissions relative to the size of the economy. To reconcile increasing material well-being with a smaller environmental impact we need carbon intensity to fall.

Overall, we have been making progress in reducing our carbon intensity at the global level. In the chart below, we see our carbon intensity (in kgCOper int-$). Our global intensity peaked in 1951, and has since been on a gradual downward trend. This reduction in intensity has been driven by both high income and transitioning economies, with many countries across Europe and North America peaking prior to 1951 and low to middle income nations peaking later in the 20th century. We can see that since around 1980, China’s carbon intensity has declined by more than 50% through more efficient technology adoption and improved industrial practices.

We do, however, see a major disruption in China’s pathway: what happened to China’s carbon intensity over the 1950-1980 period? How did it almost triple, and reach twice the global average in only a few years?

Before we try to explain this volatility, it’s important to return to those two distinct (although often linked) variables: CO2 emissions and GDP. Looked at another way, carbon intensity is a measure of the relative difference between these two variables. For example, if a country’s GDP temporarily falls, it is possible to see an increase in intensity, even if COemissions remain the same. This is because GDP has dropped relative to CO2.

The Great Leap Forward (1958-1962)

Over the period of 1958-1962, we see a major spike in China’s carbon intensity; this coincides with the country’s ‘Great Leap Forward’ period. The Great Leap Forward was the second of China’s Five Year Plans—a series of social and economic development initiatives. But what Mao intended to be, well, a great leap forward instead marked a period of disaster, destroying all economic progress made during its first five year plan and leading to the greatest famine in modern history.1 Over this five-year period, China’s GDP and its population’s living standards failed to improve while its carbon emissions grew by 71%. This rapid increase in CO2 emissions relative to poor GDP growth caused the dramatic spike in carbon intensity we see in the graph above.

Why did China’s CO2 emissions grow so quickly, despite poor economic growth? Put simply, it had to do with unrealistic ambitions. Chairman Mao had a vision for China: he called for a rapid catch-up with the West in industrial production. The gap was to be closed through iron and steel production. At the time, however, China had neither the technology nor the production facilities or expertise to achieve Mao’s over-ambitious targets. Thousands of small-scale furnaces were setup across the country in response to Mao’s call for increased production. Local woods were felled to fuel the furnaces, and production was fed by scrap metal of pots, pans and furniture.2

Iron and steelmaking are highly energy-intensive processes; a rapid transition from agricultural society to industrial economy alone would have been enough to drive an increase in China’s CO2 emissions. But this spike was intensified by poor technology. In an analysis of the energy use and CO2 emissions from steel production, Prince et al (2002) note that small open hearth furnaces (especially those fueled by scrap metals) can have an energy intensity five times higher than standard practices.3 Not only were Mao’s targets unmet, but poor technology and expertise also meant that large amounts of end-material were wasted. Feng et al (2009), who performed a detailed analysis of changes in CO2, GDP, population and energy intensity over China’s history, note that in 1958, 11 million tonnes of iron steel were produced, with 3 million discarded as unfit for use.4 This waste of materials, labor, and investment caused a large rise in CO2 emissions, with poor economic payback.

By 1959-60, the combination of economic downturn and a series of natural disasters drove China into, arguably, history’s most devastating famine period. Over four years, it is estimated that between 15 and 33 million people died as a result of the famine. China’s industrial and economic downfall during the 1960-1962 period caused CO2 emissions to fall, resulting in a decline in carbon intensity from its 1960 peak.

The Cultural Revolution (1966-1975)

In the few years following the Great leap Forward (1963-65), China began to recover from its famine period, with grain outputs returning to their pre-famine levels. There was also some recovery in China’s economy, with GDP increasing by 40% from the low point of the economic downturn. A slower increase in CO2 emissions of only 9% led to a small decline in its carbon intensity.5

Soon after famine recovery, China’s Cultural Revolution was launched. This period was marked by comparably low GDP growth rates (less than four percent per year), and continued poverty across rural regions. Despite slow GDP growth, China’s CO2 emissions continued to rise through industrial output. This caused an increase in carbon intensity, although less intense than during the extreme episode of the Great Leap Forward campaign. The continued increase in carbon intensity finally stabilised at the end of the Cultural Revolution (1975-78), producing a second peak in China’s long-term trend.

The Economic Reform (1979-onward)

Following Mao’s death in 1976, China underwent a brief period of transition with strong GDP growth. The growth rate of CO2 emissions dropped while GDP grew 30% over the following 3-4 years, resulting in a decline in carbon intensity.

Economic reform (the decentralization of agriculture, introduction of free markets and foreign investment, and promotion of private entrepreneurship) in 1979 led to an unprecedented period of economic growth (with an annual growth rate of about 10%) and increased CO2 emissions (increasing by one billion tonnes from 1979-1990).6 Living standards greatly improved and the share of the Chinese population living in extreme poverty declined from 88% in 1981 to almost 0% today. During this period, China’s technology and industrial sector underwent rapid modernisation. This led to significant improvements in energy efficiency, productivity, and a continued decline in carbon intensity.

While we most typically associate CO2 intensity with the uptake of efficient practice or technological innovation, the complex inter-connectivity of political stability, support, economic structure, and effective national industries means that carbon intensity can sometimes show dramatic fluctuation during periods of political turbulence. Technological solutions alone are not enough—political stability and reasonable policies are also essential in achieving the twin goals of larger prosperity and smaller environmental impact.