What is going on in China with sustainability?

– China and the US produce a sizable chunk of greenhouse emissions in the world. China is making efforts towards carbon neutrality.

Given the sheer size of China, what is happening with their sustainability efforts matters at least as much as in the US. Here is an excerpt from this article from Aberdeen Standard Investments:

President Xi Jinping announced his country’s historic goal via a video link at the United Nations General Assembly in New York last September. Carbon neutrality means China would have to remove as much carbon from the atmosphere as it emits.

The announcement was a big deal because China, one the world’s worst polluters, is also an economy that’s on track to overtake the US as the largest. Things are changing because policymakers recognized that years of economic growth driven by heavy industry and fixed-asset investment had taken a serious toll on the environment.

And here’s an excerpt capturing the challenges that China faces:

Meanwhile, the outlook for fossil fuels is less positive. Fossil fuels are expected to account for only 20% of China’s energy mix by 2060, down from 85% in 2019, according to a Sanford C. Bernstein forecast. Fossil fuel companies will need to manage the transition to a low- or net-zero-carbon economy. This will create risks, as well as opportunities.

Most of this reduction in fossil fuel consumption will come from transport and power – China has made big bets on electric vehicles (EVs) in addition to renewable energy. There are opportunities for investors here as well, including those among the makers of batteries that power EVs. The pace of change will only accelerate as the technology improves and the associated costs fall.

What’s more, as China seeks to upgrade its national electricity grid, there are investment opportunities in those companies that help the grid become ‘smart’ – providing it with the flexibility and capacity to deal with the growing contribution of wind and solar energy.