China Reports First Sustained Drop in Carbon Emissions as Clean Energy Investment Surges
In a significant shift, China has reported its first sustained drop in carbon emissions, bucking previous temporary declines. This comes as the country ramps up its commitment to clean energy, investing heavily and seeing increased recognition of climate change's importance.
China's carbon output dipped while power demand rose, thanks to a rapid expansion of renewable capacity. Last year, clean power met 84% of new global electricity demand, with renewables exceeding demand growth in the first half of 2025. China's dominance in solar and wind manufacturing has led to challenges for Western manufacturers, with some shutting plants due to reduced prices.
President Xi Jinping announced a target to cut China's carbon footprint by 7-10% over the next decade. In 2024, China committed $625bn to clean energy, making it the single largest investor in the transition and responsible for nearly a third of all global funding. Chinese investors are increasingly acknowledging the financial materiality of climate change, with 73% of domestic institutions recognizing its importance.
International institutions are also investing in China's renewable energy sector. Schroders Capital Infrastructure raised €100m for a China Renewable Energy Strategy. China's surge in renewable capacity is likely to accelerate a sharp fall in global fossil fuel demand from 2030 onwards.
China's sustained drop in carbon emissions and increased investment in clean energy signal a significant shift in the global fight against climate change. With nearly a third of current global emissions, China's actions have a substantial impact on global trends. The country's dominance in renewable manufacturing and international investment in its renewable sector further underscore its pivotal role in the transition to clean energy.
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