A police officer on an empty street in Shanghai during a Covid-19 lockdown in June
Covid-19 lockdowns have slowed China’s economy, with a 44% drop in the number of construction projects started during the second quarter © Hector Retamal/AFP/Getty Images

China’s carbon emissions fell almost 8 per cent in the April-to-June quarter compared with the same period last year, the sharpest decline in the past decade, according to climate research service Carbon Brief.

The fall in emissions reflects a dramatic slowing in Chinese economic growth caused by large-scale coronavirus lockdowns and a crisis in the heavily indebted property sector. It was the fourth consecutive quarter in which emissions have fallen in China, the world’s biggest emitter.

Lauri Myllyvirta, an analyst at the Helsinki-based Centre for Research on Energy and Clean Air, which compiled the data for Carbon Brief, said there had been a drop of 44 per cent in the number of construction projects started and a 33 per cent fall in those completed during the second quarter.

“The [emissions] reduction was driven by falls in steel and cement output due to the real estate slump, [a] fall in transport oil consumption caused by Covid-19 control measures, slow electricity consumption growth and strong increases in renewable power generation,” Myllyvirta said.

Steel is heavily used in construction and the steel sector is China’s second-largest carbon-emitting industry, after power generation.

The most recent fall of a similar magnitude was in the first three months of 2020, when emissions declined 7 per cent as Covid lockdowns disrupted the Chinese economy during the first stage of the pandemic.

The economy is now also being dragged down by spiralling debt in the property sector following last year’s default of developer Evergrande.

Since then, several other developers have defaulted. Cement production for the second quarter fell 18 per cent year on year, according to the Centre for Research on Energy and Clean Air. During the same period, the Chinese economy as a whole expanded just 0.4 per cent, official data showed.

An unprecedented heatwave and drought have caused further disruption in the current quarter. In August, China’s south-western Sichuan province, which relies heavily on hydropower, was forced to instruct industrial power users to halt production after tributary rivers ran dry.

With hydropower generation far below normal levels, analysts have predicted China will turn to coal to increase electricity supplies, despite the inevitable impact on emissions. Beijing has previously vowed to reach peak CO₂ emissions by 2030.

China had been attempting to boost coal power capacity, approving 21 gigawatts in new projects in the first six months of the year, the largest amount since 2016, Myllyvirta said.

He added that there were signs coal power generation was unable to keep up with demand in August because of previous energy policies that made it too expensive.

“Sichuan’s [coal-fired] thermal power plants were reportedly generating at 70 per cent of full capacity at a time when the [power] shortage was at its worst, a situation where 100 per cent would be expected,” Myllyvirta said.

“This indicates that high fuel prices and regulated electricity prices, which make thermal power generation unprofitable, are a part of the problem.”

Additional reporting by William Langley in Hong Kong

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