China’s sunset on wind and solar subsidies could impact climate change efforts: IFFRAS

International Forum for Rights and Security (IFFRAS) – a Canada based think tank – has reported that the renewables’ expansion that has been in full flow in China can see a reversal. In 2021, China finally ended many subsidies on solar and wind energy. This will discourage the use of cleaner sources of energy and adversely impact the fight against climate change, said IFFRAS.

Already, despite a commitment to be carbon neutral by 2060, a recovering economy has led to record use of coal and natural gas demand, roiling markets worldwide for these commodities.

China has been the largest emitter of the greenhouse gases (GHG)(40% of global share) followed by the United States of America(25% share). The Asian giant is also the largest consumer of energy. The burgeoning population of the country is putting more pressure on the policymakers to amend policies and guidelines so that their growing energy needs are fulfilled. The expanding middle class has its own aspirations that are tied to energy consumption.

The think tank finds the reason behind this change. According to it, the solar and wind power sources do not provide a solid or regular supply of electricity. This means, fossil fuels remain inalienable for China. This also brings about a paradox. Energy derived from fossil fuels 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 degree Celsius from pre-Industrial Revolution days.

IFFRAS says that in the past, China’s subsidy policy was mostly to cover excessive installation and production costs of renewable energy – including solar energy and wind energy. Now the new solar power and wind power projects from the Central Government of China will not get budgetary support for subsidies. This will have effect from August 1, 2021.

The Finance Ministry in China already has a subsidy payment backlog that has exceeded $62 billion in 2021 and this needs some urgent correction. But the removal of subsidies from the solar and wind sector would mean that the non-fossil fuel energy share will be difficult to achieve for the country. The think tank says that the withdrawal of subsidies will lead to reduced consumption of wind and solar energy and put massive pressure on fossil fuels that will lead to more carbon emissions.