At COP28 in Dubai, Carbon Brief’s Anika Patel spoke with Prof Zou Ji, CEO and president of the Energy Foundation China, to discuss China’s approach to its energy transition.
This wide-ranging interview covers China’s stance on fossil fuels, issues-based alliances and energy efficiency pledges at COP28, pathways to the country growing its renewable power generation and what China has learned from Germany’s energy transition. It is transcribed in full below, following a summary of key quotes.
Energy Foundation China is a professional grantmaking organisation dedicated to China’s sustainable energy development. Prof Zou has years of experience in economics, energy, environment, climate change, and policymaking, having previously served as a deputy director general of China’s National Center for Climate Change Strategy and International Cooperation, under the government’s national development and reform commission (NDRC).
He was also a key member of the Chinese climate negotiation team leading up to the Paris Agreement, and has been a lead author for several assessment reports of the Intergovernmental Panel on Climate Change.
- On why China did not join the pledge to triple renewables and double efficiency: “[Before COP28] we have not seen [it laid out] very clearly which year should be the base year [from which tripling renewables should be calculated]. Should it be 2020? Should it be 2022? This might seem to be technical but, [in] the past two years, global development of renewables, especially in China, [have been significantly boosted, and so]…the difference in targets might be very significant.”
- On signing pledges at COP: “If you look at the whole history of the COP…I do not [remember] China joining any alliances. I have never seen that…As a party, China [is only concerned with] official procedures, waiting for a legal framework of the UNFCCC or the Paris Agreement.”
- On China’s commitment to decarbonisation: “If you look back at history, there have been very few cases that show China [first making] and then [giving up] a commitment. This is not the political culture in China.”
- On China’s electricity consumption: “For low-income level groups, although their income has not grown very much, their consumption preferences and mindsets – especially for younger generations of consumers – mean they are more willing to use electricity [than previous generations].”
- On comparisons of China to the EU and US: “There is a structural [difference] compared to the [energy mix] in Europe and the US. The majority of energy use [in China] has been for industrial production, rather than for residential [use]…In China, the average power consumption per capita is around 6,000 kilowatt-hours (kWh), compared to 8,000kWh in Europe and over 12,000kWh in the US.”
- On energy efficiency: “Physically, I think China has become better and better [in terms of] its efficiency, but, economically, this cannot produce as high a value-add as Europe and the US in monetary terms.”
- On fossil fuel phaseout: “I would like to see…[China] very quickly enlarging its renewable capacity. Only if [there is] adequate capacity and generation of renewables can this lead to a real phasing out or phasing down of fossil fuels.”
- On ensuring more renewables uptake: “We have raised the share of renewable power generation from seven, eight, nine per cent to today’s 16%. This is progress, but it is not quick enough or large enough. We want to push the grid companies…to do more and do it faster.”
- On the power of distributed renewables: “We should also consider…creat[ing] another, totally new power system. This would be a sort of nexus of a centralised and decentralised grid system…If [the central grid] is having difficulties [increasing renewable generation], and if these are very challenging to overcome, then let’s [shift] to a lot of microgrids.”
- On distributed renewables growth: “Today, the share of distributed [renewables] is still lower than centralised renewables. But the incremental [distributed] renewables growth has become higher than growth of centralised renewables in the past year or two, and I would assume this will remain a trend in the future.”
- On substituting fossil fuels with renewables: “Relying only on solar and the wind [means] you need not rely on imported oil or gas. And so, gradually, you will de-link your energy use from coal [and] from fossil fuels.”
- On the need for CCUS: “In some sectors, like, for example, iron and steel, cement, chemicals and petrochemicals, we do need carbon capture, utilisation and storage (CCUS), because it is very difficult to phase out coal or carbon dioxide [completely].”
- On CCUS in the power sector: “I have mixed feelings about CCUS for the power sector. I have an ideal vision that we can reach real zero emissions in these sectors through a more developed grid system, with more connectivity across provinces or regions and the use of AI technology.”
Carbon Brief: Could you give an overview of what your expectations are for COP28?
Zou Ji: It might be a little early to make a judgement [on] what outcomes this COP can reach, but we do know what the key issues here are…[The] global stocktake (GST) is the core issue for this COP as it is the first time it has taken place since the Paris Agreement …But for the GST there are different levels [at which we need] to understand [the process and]…its outcome. Number one, [in terms of] the scope of GST, what should we take stock [of]? Many colleagues, especially colleagues from Europe and maybe also from the US – I mean industrialised countries – would like to concentrate more on mitigation…We still have a significant gap…[to fill] to achieve the 1.5C target. The gap [is] there, and we need to enhance our ambition to close the gap. So this is a major concern…in the GST.
But meanwhile, we see some other parties, [such as] the so-called [like-minded] developing country [LMDC] group… the Alliance of Small Island States and Least Developed Countries group, [which are] mainly located in Africa. [These groups] are very keen to [address] the gap in financial support for capacity building and technology transfer, in short, means of implementation.
And there has been, since [COP26 in] Glasgow, I think, a very specific financial issue: the loss and damage fund. Together with some general financial issues like developed countries mobilis[ing] $100bn each year by 2023, this will continue to be a concern. But…we also have other issues, more specific issues like the tripling of renewables and doubling efficiency and… [procedure-related] issues like transparency. [There are] a lot of issues!
Before COP we have seen…official statements from Europe, from the US and also from China – especially the joint Sunnylands statement – [which is] relevant to China-US cooperation in COP28 and…can [give us] some very initial expectations on the outcome.
[Taking the GST as an example], I would assume there will be a political decision by all the parties [to say] they recognise the significant gap for achieving well-below 2C, [following] the Paris Agreement language. But [there is an] even larger gap for 1.5C. This should be one [thing] we could expect [to see appear in the final text], but certainly I think there must be some tough negotiations on the scope of the GST: especially [on if we] should include…issues [such as] adaptation, financial support to developing countries, technology transfer, capacity building, etc…The negotiations will be very tough, but it is a long debate.
[Another issue to watch is the] tripling renewables and doubling efficiency [pledge]. I would say [that the issue has received]…endorsement from the G20 and the Sunnylands statement. But in those two statements…we have not seen [it laid out] very clearly which year should be the base year. Should it be 2020? Should it be 2022? This might seem to be technical but, [in] the past two years, global development of renewables, especially in China, [have been significantly boosted]… So [depending on which year is picked as the base year,] the difference in targets might be very significant.
And then it is packaged together with [a more defined] target…[to] not only [focus on the] tripling [of renewables] but also [to focus on] the total amount of the capacity of renewables…11,000GW [gigawatts] has been proposed. If this is the case, [meaning that] the base year is 2020…then, [from some negotiators’ perspectives] this might be a different understanding of the definition of the target from the one [proposed] before the COP. And then, this may lead to some parties hesitat[ing] to make an official commitment on that. I know you might be very interested in China’s position on that issue.
CB: You read my mind.
ZJ: I would try to understand it in this way. If you look at the whole history of the COP…I do not [remember] China joining any alliances [Prof Zou here means issue-based alliances or pledges]. I have never seen that. That means that[,]…as a party, China only focuses on official procedures, waiting for a legal framework of the UNFCCC or the Paris Agreement. And if you look at different initiatives, [such as the] climate ambition alliance, [global] renewables alliance, etc – for the moment, they have not readied a legal framework. So now…[the pledges are] informal, without official or legal commitments. So, I cannot find evidence [of China joining informal alliances in this way].
Certainly I do not have any assessments whether China should…or should not [join the pledge to triple renewable energy and double energy efficiency]. But this is the history…of China’s engagement in UNFCCC, the Paris Agreement [and] the Kyoto Protocol…If China makes [such] a commitment, this would be somewhat surprising [from a historical perspective].
[Secondly,] maybe this reflects the difference of political systems and…policymaking in different political regimes or cities, especially between China and Europe and the United States. As you know, in Europe and the US you have election[-based] regimes or systems – every four or five years you will elect a different parliament, a different cabinet, a different president or a different prime minister, etc. Their term might be short or it might be long, depending on the results of the election. That means that there is no guarantee for one party or for one policymaker to stay in power for a long time. It might be two terms, it might be three terms. But in China, the political assumption is [that] the communist party will be in power forever. [No-one would assume that] next year, or next term, we will have another party leading the country.
My observation is [that] Chinese policymakers are very cautious [about] making commitments, not only because of concerns around the challenges and difficulty of achieving this commitment. They would say: “If I make the commitment, this should be something I must [achieve].” [This is] because they make the decision or commitment for a single party. No matter [which] generation of leader [made the commitment], the commitment comes from the same party…So that partially [explains] why China seems to be very careful to make even a long-term commitment.
Just to take a very immediate example, the US made a commitment on the Kyoto Protocol during the Clinton administration, but only [on behalf of] the White House. When [power] turned to the Bush administration in the early 2000s, the Bush administration said [they] will not submit that proposal to congress, because [they] knew it would not be approved…And then [eventually] the US gave up [trying] to ratify the Kyoto Protocol.
This is the first case, and unfortunately, we see another case in the Trump administration. The Obama administration…signed the Paris Agreement. But…[then] Trump became president and Trump said the US will withdraw from the Paris Agreement. And this [type of turbulence] is something, in fact, I take for granted, given [my] understanding of the US political system. But this is not the case in China.
Thirdly, it might be a matter of political culture. For the Chinese, normally, [as I said]…if they make a commitment, the commitment…is something they must [achieve]. Normally they will not…just make the commitment to ‘talk [big]’ and then, after several years, give up or ‘forget’ [about it]. Normally, China will remember [its] commitments and will achieve [them], [on the] basis of trust. So, China puts very high [importance] on achieving these commitments, [which] leads to some difficulties for the Chinese government to make commitments. If you look back at history, there have been very few cases that show China [first making] and then [giving up] a commitment. This is not the political culture in China. But this is my understanding, not a standardised or official interpretation!
CB: I was having a conversation with another academic earlier today, and they offered an additional explanation – that recent economic troubles might be an added factor increasing caution towards committing to targets in China. Would you agree with that?
ZJ: It’s not easy to simply answer yes or no, agree or disagree. But I would say yes. The uncertainty of growth in the past years, especially since the pandemic, seems to [have made] things a little bit…complicated, especially in terms of carbon intensity.
In past years, the [economic] growth rate has become lower and lower – even lower than expectations. But carbon emissions continue to increase. Several years ago, the common understanding was that if the growth rate stays at a very high level, the economy will grow over time, and then emissions will grow over time. But this time, we saw that growth was very slow, but emissions continued to grow. But I would like to try to look at this in more detail, to identify the driving force behind [this]. Why have we had a lower growth rate in the past year, but carbon emissions, coal use and also energy use have continued to grow?
[In this case], we had better look at energy use per capita, and especially electricity use per capita. Although the growth rate is very low, the base amount of power use per capita was also very low in the past. For low-income level groups, although their income has not grown very much, their consumption preferences and mindsets, especially for younger generations of consumers, mean they are more willing to use electricity…Just look at the energy use performance of low-income groups in rural areas.
In urban areas, blue collar [workers] have better living conditions – they have air conditioners, better heating [and can access better options for] travel. Although their income level continues to be very low, their consumption behaviour has changed over time…Everybody [now] has a mobile phone and connection to the internet…They saw [examples of how to live a better life] from people in the middle income [band]. They saw this from advertisements, from movies, from TV programmes, etc…Compared to their fathers’ generation, [who had a] similar income level, their pursuit of a higher quality of life [could be a reason why] today [they] have a higher level of energy consumption. This is one interpretation [of the data], but it can be proven by many pieces of evidence.
Another [interpretation] is if you look at China’s mix of energy use, in terms of total amount and in terms of per capita, there is a structural [difference] compared to the [energy mix] in Europe and the US. The majority of energy use [in China] has been for industrial production, rather than for residential [use]. And given what I just mentioned, [in terms of] the change of consumption behaviour…[The effects are] marginal [if] they increase their consumption of energy. In China, the average power consumption per capita is around 6,000 kilowatt-hours (kWh), compared to 8,000kWh in Europe and over 12,000kWh in the US.
CB: Does that have an implication for why China talks about energy intensity, whereas Europe and the US talk about energy efficiency?
ZJ: Yes. In China, the general indicator is energy intensity per unit of GDP. But when you talk about energy efficiency, what is the indicator? You have physical indicators, for example, energy use per tonne of iron, steel, ammonia or cement. This is one way to measure efficiency. Another way is just to [calculate it] per unit of GDP, which shows the major sources of money in your economy. Physically, I think China has become better and better [in terms of] its efficiency, but economically this cannot produce as high a value-add as Europe and the US in monetary terms. So that changes things, especially given two [factors]. One is the lower and lower GDP growth rate, which makes carbon intensity higher. Another is the chang[ing] foreign exchange situation in recent years. The raising of interest rates by the US Federal Reserve makes US dollars more expensive, increasing foreign exchange rates which then enlarges the monetary GDP gap, making Chinese GDP [in dollar terms] fall and carbon intensity rise.
So, there are several variables [affecting this decision], but we should also not ignore the real improvements to efficiency [in China], measured by physical indicators. I saw slightly slower progress in efficiency improvements, but maybe those are the matter of measurement.
CB: That’s always the fun fine print. Going back to the scope of the GST at COP28, how would you interpret China’s position on the ideal language around fossil fuels?
ZJ: I retired from the delegation eight years ago, so [I can’t say for sure] about the ideal language! But, maybe we can revisit the language from the Sunnylands statement. There is a specific paragraph talking about recognising the global tripling of renewables and the doubling of efficiency…[which is] then followed by several phrases mentioning that China and the US should accelerate the deployment of renewables…to substitute fossil fuels, including coal, oil and gas. So, if I were in the delegation, I should look at fossil fuels as a whole. Certainly, we should accelerate the process to phase down or phase out fossil fuels.
I mean, in China, it is mainly the matter of coal. But in Europe and the US, it is mainly the matter of oil and gas. According to an International Energy Agency (IEA) report, in the past decade, the whole world moved very slowly to phase out coal, oil and gas. In China, the majority issue is coal, but in Europe we saw some positive but very small changes when you look at the share of fossil fuels – [particularly] oil and gas. Same in the US.
So, what about the pace of phasing out or phasing down coal, oil or gas? Different countries have different agendas here. So maybe fossil fuels should be covered for every country. [But] I would like to see…[China] very quickly enlarging its renewable capacity. Only if [there is] adequate capacity and generation of renewables can this lead to a real phasing out or phasing down of fossil fuels. In this sense, I think these are the same story for all the countries, for Europe, for the US and also for China.
CB: We published analysis recently saying that fossil fuels in China might enter a structural decline next year because of China’s renewable build out. However, as we all know, there are challenges facing the grid, I think not only with intermittency but also with developing market mechanisms. How optimistic are you that China will be able to overcome these constraints in the power grid and make renewable energy more widely consumed?
ZJ: This is a very good question. There are several ways to figure out the transmission issue to support broader and deeper use of renewables. Number one, as you know, we have a very unbalanced geographical distribution of renewables. Northern and north-western China has very rich renewable resources, especially solar and wind power. But the most dense centres of energy use are located in the eastern and southern part of China. This requires that we generate renewable power and then transmit [it] from northern and western China to eastern, southern and south-eastern China. This will require a very long-distance transmission grid, [covering] two-, three- or even four thousand kilometres. [That comes at] a very high expense, [creating a] high cost for transmission.
Normally, we have a very rough estimate that [transmission will cost] around 0.1 yuan per kilowatt-hour for every thousand kilometres. So how do we overcome [these higher costs]? One way is to optimise the distribution and allocation of remote renewable resources. For example, [we could] transmit [power] from the closest places, [such as transmitting power from] Inner Mongolia province…to the eastern part [of China]. This is one way. China now has [developed] an ultra-high voltage [UHV] transmission system, which enables long-distance transmission, and we rely on that technology. We have had some engineering pilots [for UHV transmission in place] already, from Qinghai province to Henan province…[and] from Baihetan in Sichuan province to Jiangsu province. There are several [other] transmission grids under construction.
Another bottleneck is the capacity of the grid to absorb renewables. To my knowledge, in the past few years, we have made some progress, but this has been very limited. We have raised the share of renewable power generation from seven, eight, nine percent to today’s 16%. This is progress, but it is not quick enough or large enough. We want to push the grid companies – State Grid and Southern Grid – to do more and do it faster.
What we want to push [can be] compared to a benchmark [set by the] German grid. As you may know, Germany’s grid is one of the most advanced grids in the world, in terms of featuring a higher share of renewable generation – it can have up to 40% or even 50% of generated power come from solar and wind power. But what I’m thinking about now is if China can catch up and fill the gap between its grid and the German grid.
I’ve heard a lot of different opinions from power experts, [which] I will not go into detail here – it is too technical! But one long-term consideration to overcome…is the higher and higher marginal cost of raising the share of renewables in the German grid. This means [progress] to further enlarge the share of renewables in their grid has become slower. If this is the case for Germany today, this might also be the case for China tomorrow. That means that there might be some physical limitations [to having a higher share of renewables] in the current power system and the grid system.
But certainly the first step for China should be to close the gap between its current performance and Germany’s performance. Beyond that, a 40-50% [renewables] share is not enough for carbon neutrality or for [meeting the target of] 1.5C. We want to have more. What is the way out? We should also consider… creat[ing] another, totally new power system. This would be a sort of nexus of centralised and decentralised grid systems…If [the central grid] is having difficulties [increasing renewable generation], and if these are very challenging to overcome, then let’s [shift] to a lot of microgrids, together with a distribution grid, which would act as a lower level of the grid.
[To do this] you need to figure out a lot of technological issues, including [the use of] transformers and changing the [grid] system. To allow [for] more and more distributed renewables, it should not be necessary [for them] to be connected to the centralised grid system. [Instead, microgrids] should just have to connect with each other, with [households] having their own rooftop solar [panels] which are connected with each other using AI technology, etc. And if they do that, then most of [China’s] electricity [will be] generated by distributed renewables. That way, we [can] rely on the centralised grid less and less.
This might be one way to figure out today’s bottleneck, and Energy Foundation China is exploring a pilot [to trial this]. The solution is mainly applicable to rural areas…households… and also SMEs outside the central mega-cities…This might serve as the power source [that will cover] the increase in our power demand in the future. We can stop [the go-to solution being to rely on] coal or other fossil fuels, and instead from the very beginning [demand would be met through] renewables. So that is something I’m thinking about.
CB: That’s a really interesting possibility. I’m a bit of a pessimist, so an immediate question that comes to mind is that we have seen how important energy security and stability is to the general political system in China. If we have this decentralised system, would that cause nervousness among some government stakeholders?
ZJ: I would say that a distributed power system would help to raise the degree of energy security.
CB: Is that because it would be complementary to a central system, not replacing a central system?
ZJ: At the very earliest stages of the development, it would be complementary, but beyond 2030, the share of distributed renewables in the overall renewables system will become higher and higher. Today, the share of distributed [renewables] are still lower than centralised renewables. But the incremental renewables growth has become higher than growth of centralised renewables in the past year or two, and I would assume this will remain a trend in the future. Some of the obstacles to developing centralised renewables, in terms of technology, in terms of institutions, etc, means that distributed renewables have some comparative advantages [which are currently] being formed. [Renewables are] lower cost and [grant] higher energy security, relying only on solar and the wind [means] you need not rely on imported oil or gas. And so gradually, you will de-link your energy use from coal [and] fossil fuels.
… But certainly, we are in the very early stages [of] developing [such a system]. I believe, in China, all stakeholders – including government, business, academia, and NGOs like us — wish to make a collective effort to make that happen.
CB: Absolutely. I’m aware that it is very late, so I’ll leave with one last question. In two scenarios – first of all, where there is more distributed energy and a kind of constellation of these microgrids that you described, and then, secondly, in a future where perhaps, there’s a more centralised system but ever-increasing renewable capacity, do you see a role in both of these scenarios for CCUS?
ZJ: Carbon capture, utilisation and storage (CCUS) is still very controversial, among researchers and stakeholders. Especially in the power sector. But it is my understanding that in some sectors, like, for example, iron and steel, cement, chemicals and petrochemicals, we do need CCUS, because it is very difficult to phase out coal or carbon dioxide [completely]. I mean, even with the technology [coming down the pipeline], there [will still have to] be some [CO2] emissions.
Although you might be able to minimise the emission of CO2 in those fields, you cannot phase them out, only down. In [order to] achieve carbon neutrality, you have to capture those carbon emissions from those sectors. So we need CCUS for those specific sectors and technologies.
But for the power sector, I have mixed feelings about this. I have an ideal vision that, maybe, we can reach real zero emissions in these sectors through a more developed grid system, with more connectivity across provinces or regions and the use of AI technology to connect microgrids, for example, and let them trade with each other to complement each other’s peak and valley loads. This is one way out for the power sector, together with a more developed energy storage system, in the upstream, midstream and downstream ends of the power system.
My instinct is we should go in that direction [for the power sector]. We should not rely on coal for stabilising the grid system or for stabilising the whole power system. I know the mainstream thinking is we should rely on coal as the baseload for stabilising the power system. But I have a slightly different idea, that through more developed connectivity of the grid, more smart grids, together with very strong grid energy storage…If this is successful, then we would not need so much CCUS in the power sector.
I can share that the current mainstream academic understanding [is that], even though China will reach its [2060] carbon neutrality target, it will continue to have to maintain 600 gigawatts of coal-fired power plants capacity. These are the sort of estimations [we’re working with now], for the capacity [needed] to serve as the baseload to stabilise the power sector.
Maybe I’m too [optimistic] – I believe we may need some [coal] capacity there, as a backup in case of disaster, like Germany did right after the Ukraine war, when they opened several coal-fired power plants. But this doesn’t necessarily mean [that the government] will rebound the use of coal. Its function will just be as the backup.
The post The Carbon Brief Interview: Prof Zou Ji appeared first on Carbon Brief.
In 2026, the dangers of fossil fuel dependence have been laid bare like never before. The illegal invasion of Iran has brought pain and destruction to millions across the Middle East and triggered a global energy crisis impacting us all. Communities in the Pacific have been hit especially hard by rising fuel prices, and Australians have seen their cost-of-living woes deepen.
Such moments of crisis and upheaval can lead to positive transformation. But only when leaders act with courage and foresight.
There is no clearer statement of a government’s plans and priorities for the nation than its budget — how it plans to raise money, and what services, communities, and industries it will invest in.
As we count down the days to the 2026-27 Federal Budget, will the Albanese Government deliver a budget for our times? One that starts breaking the shackles of fossil fuels, accelerates the shift to clean energy, protects nature, and sees us work together with other countries towards a safer future for all? Or one that doubles down on coal and gas, locks in more climate chaos, and keeps us beholden to the whims of tyrants and billionaires.
Here’s what we think the moment demands, and what we’ll be looking out for when Treasurer Jim Chalmers steps up to the dispatch box on 12 May.
1. Stop fuelling the fire
2. Make big polluters pay
3. Support everyone to be part of the solution
4. Build the industries of the future
5. Build community resilience
6. Be a better neighbour
7. Protect nature
1. Stop fuelling the fire
In mid-April, Pacific governments and civil society met to redouble their efforts towards a Fossil Fuel Free Pacific. Moving beyond coal, oil and gas is fundamental to limiting warming to 1.5°C — a survival line for vulnerable communities and ecosystems. And as our Head of Pacific, Shiva Gounden, explained, it is “also a path of liberation that frees us from expensive, extractive and polluting fossil fuel imports and uplifts our communities”.
Pacific countries are at the forefront of growing global momentum towards a just transition away from fossil fuels, and it is way past time for Australia to get with the program. It is no longer a question of whether fossil fuel extraction will end, but whether that end will be appropriately managed and see communities supported through the transition, or whether it will be chaotic and disruptive.
So will this budget support the transition away from fossil fuels, or will it continue to prop up coal and gas?
When it comes to sensible moves the government can make right now, one stands out as a genuine low hanging fruit. Mining companies get a full rebate of the excise (or tax) that the rest of us pay on diesel fuel. This lowers their operating costs and acts as a large, ongoing subsidy on fossil fuel production — to the tune of $11 billion a year!
Greenpeace has long called for coal and gas companies to be removed from this outdated scheme, and for the billions in savings to be used to support the clean energy transition and to assist communities with adapting to the impacts of climate change. Will we see the government finally make this long overdue change, or will it once again cave to the fossil fuel lobby?
2. Make big polluters pay
While our communities continue to suffer the escalating costs of climate-fuelled disasters, our Government continues to support a massive expansion of Australia’s export gas industry. Gas is a dangerous fossil fuel, with every tonne of Australian gas adding to the global heating that endangers us all.
Moreover, companies like Santos and Woodside pay very little tax for the privilege of digging up and selling Australians’ natural endowment of fossil gas. Remarkably, the Government currently raises more tax from beer than from the Petroleum Resource Rent Tax (PRRT) — the main tax on gas profits.
Momentum has been building to replace or supplement the PRRT with a 25% tax on gas exports. This could raise up to $17 billion a year — funds that, like savings from removing the diesel tax rebate for coal and gas companies, could be spent on supporting the clean energy transition and assisting communities with adapting to worsening fires, floods, heatwaves and other impacts of climate change.
As politicians arrive in Canberra for budget week, they will be confronted by billboards calling for a fair tax on gas exports. The push now has the support of dozens of organisations and a growing number of politicians. Let’s hope the Treasurer seizes this rare window for reform.
3. Support everyone to be part of the solution
As the price of petrol and diesel rises, electric vehicles (EVs) are helping people cut fuel use and save money. However, while EV sales have jumped since the invasion of Iran sent fuel prices rising, they still only make up a fraction of total new car sales. This budget should help more Australians switch to electric vehicles and, even more importantly, enable more Australians to get around by bike, on foot, and on public transport. This means maintaining the EV discount, investing in public and active transport, and removing tax breaks for fuel-hungry utes and vans.
Millions of Australians already enjoy the cost-saving benefits of rooftop solar, batteries, and getting off gas. This budget should enable more households, and in particular those on lower incomes, to access these benefits. This means maintaining the Cheaper Home Batteries Program, and building on the Household Energy Upgrades Fund.
4. Build the industries of the future
If we’re to transition away from fossil fuels, we need to be building the clean industries of the future.
No state is more pivotal to Australia’s energy and industrial transformation than Western Australia. The state has unrivaled potential for renewable energy development and for replacing fossil fuel exports with clean exports like green iron. Such industries offer Western Australia the promise of a vibrant economic future, and for Australia to play an outsized positive role in the world’s efforts to reduce emissions.
However, realising this potential will require focussed support from the Federal Government. Among other measures, Greenpeace has recommended establishing the Australasian Green Iron Corporation as a joint venture between the Australian and Western Australian governments, a key trading partner, a major iron ore miner and steel makers. This would unite these central players around the complex task of building a large-scale green iron industry, and unleash Western Australia’s potential as a green industrial powerhouse.
5. Build community resilience
Believe it or not, our Government continues to spend far more on subsidising fossil fuel production — and on clearing up after climate-fuelled disasters — than it does on helping communities and industries reduce disaster costs through practical, proven methods for building their resilience.
Last year, the Government estimated that the cost of recovery from disasters like the devastating 2022 east coast floods on 2019-20 fires will rise to $13.5 billion. For contrast, the Government’s Disaster Ready Fund – the main national source of funding for disaster resilience – invests just $200 million a year in grants to support disaster preparedness and resilience building. This is despite the Government’s own National Emergency Management Agency (NEMA) estimating that for every dollar spent on disaster risk reduction, there is a $9.60 return on investment.
By redirecting funds currently spent on subsidising fossil fuel production, the Government can both stop incentivising climate destruction in the first place, and ensure that Australian communities and industries are better protected from worsening climate extremes.
No communities have more to lose from climate damage, or carry more knowledge of practical solutions, than Aboriginal and Torres Strait Islander peoples. The budget should include a dedicated First Nations climate adaptation fund, ensuring First Nations communities can develop solutions on their own terms, and access the support they need with adapting to extreme heat, coastal erosion and other escalating challenges.
6. Be a better neighbour
The global response to climate change depends on the adequate flow of support from developed economies like Australia to lower income nations with shifting to clean energy, adapting to the impacts of climate change, and addressing loss and damage.
Such support is vital to building trust and cooperation, reducing global emissions, and supporting regional and global security by enabling countries to transition away from fossil fuels and build greater resilience.
Despite its central leadership role in this year’s global climate negotiations, our Government is yet to announce its contribution to international climate finance for 2025-2030. Greenpeace recommends a commitment of $11 billion for this five year period, which is aligned with the global goal under the Paris Agreement to triple international climate finance from current levels.
This new commitment should include additional funding to address loss and damage from climate change and a substantial contribution to the Pacific Resilience Facility, ensuring support is accessible to countries and communities that need it most. It should also see Australia get firmly behind the vision of a Fossil Fuel Free Pacific.
7. Protect nature
There is no safe planet without protection of the ecosystems and biodiversity that sustain us and regulate our climate.
Last year the Parliament passed important and long overdue reforms to our national environment laws to ensure better protection for our forests and other critical ecosystems. However, the Government will need to provide sufficient funding to ensure the effective implementation of these reforms.
Greenpeace has recommended $500 million over four years to establish the National Environment Agency — the body responsible for enforcing and monitoring the new laws — and a further $50 million to Environment Information Australia for providing critical information and tools.
Further resourcing will also be required to fulfil the crucial goal of fully protecting 30% of Australian land and seas by 2030. This should include $1 billion towards ending deforestation by enabling farmers and loggers to retool away from destructive practices, $2 billion a year for restoring degraded lands, $5 billion for purchasing and creating new protected areas, and $200 million for expanding domestic and international marine protected areas.
Conclusion
This is not the first time that conflict overseas has triggered an energy crisis, or that a budget has been preceded by a summer of extreme weather disasters, highlighting the urgent need to phase out fossil fuels. What’s different in 2026 is the availability of solutions. Renewable energy is now cheaper and more accessible than ever before. Global momentum is firmly behind the transition away from fossil fuels. The Albanese Government, with its overwhelming majority, has the chance to set our nation up for the future, or keep us stranded in the past. Let’s hope it makes some smart choices.
The 2026 budget test: Will Australia break free from fossil fuels?
Anne Jellema is Executive Director of 350.org.
The war on Iran and Lebanon is a deeply unjust and devastating conflict, killing civilians at home, destroying lives, and at the same time sending shockwaves through the global economy. We, at 350.org, have calculated, drawing on price forecasts from the International Monetary Fund (IMF) and Goldman Sachs, just how much that volatility is costing us.
Even under the IMF’s baseline scenario – a de facto “best case” scenario with a near-term end to the war and related supply chain disruptions – oil and gas price spikes are projected to cost households and businesses globally more than $600 billion by the end of the year. Under the IMF’s “adverse scenario”, with prolonged conflict and sustained price pressures, we estimate those additional costs could exceed $1 trillion, even after accounting for reduced demand.
Which is why we urgently need a power shift. Governments are under growing pressure to respond to rising fuel and food costs and deepening energy poverty. And it’s becoming clearer to both voters and elected officials that fossil dependence is not only expensive and risky, but unnecessary.
People who can are voting with their wallets: sales of solar panels and electric vehicles are increasing sharply in many countries. But the working people who have nothing to spare, ironically, are the ones stuck with using oil and gas that is either exorbitantly expensive or simply impossible to get.
Drain on households and economies
In India, street food vendors can’t get cooking gas and in the Philippines, fishermen can’t afford to take their boats to sea. A quarter of British people say that rising energy tariffs will leave them completely unable to pay their bills. This is the moment for a global push to bring abundant and affordable clean energy to all.
In April, we released Out of Pocket, our new research report on how fossil fuels are draining households and economies. We were surprised by the scale of what we found. For decades, governments have reassured people that energy price spikes are unfortunate but unavoidable – the result of distant conflicts, market forces or geopolitical shocks beyond anyone’s control. But the numbers tell a different story.
-
Santa Marta: Ministers grapple with practicalities of fossil fuel phase-out
Around 60 governments that want to make progress on transitioning away from coal, oil and gas are meeting in Colombia to work out how they can do it an equitable way -
Why the transition beyond fossil fuels depends on cities and collective action
Cities will help identify concrete pathways for an equitable shift to clean energy at the Santa Marta conference, with C40 members aiming to halve their fossil fuel use by 2030
What we are living through today is not an energy crisis. It is a fossil fuel crisis. In just the first 50 days of the Middle East conflict, soaring oil and gas prices have siphoned an estimated $158 billion–$166 billion from households and businesses worldwide. That is money extracted directly from people’s pockets and transferred, almost instantly, into fossil fuel company balance sheets. And this figure only captures the immediate impact of price spikes, not the permanent economic drain of fossil dependence. Fossil fuels don’t just cost us once, they cost us over and over again.
First, through our bills. Every time there is a war, an embargo or a supply disruption, fossil fuel prices surge. For ordinary people, this means higher costs for energy, transport and food. Many Global South countries have little or no fiscal space to buffer the shock; instead, workers and families pay the price.
Second, through our taxes. Governments around the world continue to pour vast sums of public money into fossil fuel subsidies. These are often justified as a way to protect the most vulnerable at the petrol pump or in their homes. But in reality, the benefits are overwhelmingly captured by wealthier households and corporations. The poorest 20% receive just a fraction of this support, while public finances are drained.
Third, through climate impacts. New research across more than 24,000 global locations gives a granular account of the true costs of extreme heat, sea level rise and falling agricultural yields. Using this data to update IMF modelling of the social cost of carbon, we found that fossil fuel impacts on health and livelihoods amount to over $9 trillion a year. This is the biggest subsidy of all, because these massive and mounting costs are not charged to Big Oil – they are paid for by governments and households, with the poorest shouldering the lion’s share.
Massive transfer of wealth to fossil fuel industry
Adding up direct subsidies, tax breaks and the unpaid bill for climate damages, the total transfer of wealth from the public to the fossil fuel industry amounts to $12 trillion even in a “normal” year without a global oil shock. That’s more than 50% higher than the IMF has previously estimated, and equivalent to a staggering $23 million a minute.
The fossil fuel industry has become extraordinarily adept at profiting from instability. When conflict drives up prices, companies do not lose, they gain. In the current crisis, oil producers and commodity traders are on track to secure tens of billions of dollars in additional windfall profits, even as households face rising bills and governments struggle to manage the fallout.
Fossil fuel crisis offers chance to speed up energy transition, ministers say
This growing disconnect is impossible to ignore. Investors are advised to buy into fossil fuel firms precisely because of their ability to generate profits in times of crisis. Meanwhile, ordinary people are told to tighten their belts.
In 2026, unlike during the oil shocks of the 1970s, clean energy is no longer a distant alternative. Now, even more than when gas prices spiked due to Russia’s invasion of Ukraine in 2022, renewables are often the cheapest option available. Solar and wind can be deployed quickly, at scale, and without the volatility that defines fossil fuel markets.
How to transition from dirty to clean energy
The solutions are clear. Governments must implement permanent windfall taxes on fossil fuel companies to ensure that extraordinary profits generated during crises are redirected to support households. These revenues can be used to reduce energy bills, invest in public services, and accelerate the rollout of clean energy.
Second, we must shift subsidies away from fossil fuels and towards renewable solutions, particularly those that can be deployed quickly and equitably, such as rooftop and community solar. This is not just about cutting emissions. It is about building a more stable, fair and resilient energy system.
Finally, we need binding plans to phase out fossil fuels altogether, replacing them with homegrown renewable energy that can shield economies from future shocks. Because what the current crisis has made clear is this: as long as we remain dependent on fossil fuels, we remain vulnerable – to conflict, to price volatility and to the escalating impacts of climate change.
The true price of fossil fuels is no longer hidden. It is visible in rising bills, strained public finances and communities pushed to the brink. And it is being paid, every day, by ordinary people around the world.
It’s time for the great power shift.
Full details on the methodology used for this report are available here.
The Great Power Shift is a new campaign by 350.org global campaign to pressure governments to bring down energy bills for good by ending fossil fuel dependence and investing in clean, affordable energy for all
The post What fossil fuels really cost us in a world at war appeared first on Climate Home News.
Computer models that use artificial intelligence (AI) cannot forecast record-breaking weather as well as traditional climate models, according to a new study.
It is well established that AI climate models have surpassed traditional, physics-based climate models for some aspects of weather forecasting.
However, new research published in Science Advances finds that AI models still “underperform” in forecasting record-breaking extreme weather events.
The authors tested how well both AI and traditional weather models could simulate thousands of record-breaking hot, cold and windy events that were recorded in 2018 and 2020.
They find that AI models underestimate both the frequency and intensity of record-breaking events.
A study author tells Carbon Brief that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI weather forecasts
Extreme weather events, such as floods, heatwaves and storms, drive hundreds of billions of dollars in damages every year through the destruction of cropland, impacts on infrastructure and the loss of human life.
Many governments have developed early warning systems to prepare the general public and mobilise disaster response teams for imminent extreme weather events. These systems have been shown to minimise damages and save lives.
For decades, scientists have used numerical weather prediction models to simulate the weather days, or weeks, in advance.
These models rely on a series of complex equations that reproduce processes in the atmosphere and ocean. The equations are rooted in fundamental laws of physics, based on decades of research by climate scientists. As a result, these models are referred to as “physics-based” models.
However, AI-based climate models are gaining popularity as an alternative for weather forecasting.
Instead of using physics, these models use a statistical approach. Scientists present AI models with a large batch of historical weather data, known as training data, which teaches the model to recognise patterns and make predictions.
To produce a new forecast, the AI model draws on this bank of knowledge and follows the patterns that it knows.
There are many advantages to AI weather forecasts. For example, they use less computing power than physics-based models, because they do not have to run thousands of mathematical equations.
Furthermore, many AI models have been found to perform better than traditional physics-based models at weather forecasts.
However, these models also have drawbacks.
Study author Prof Sebastian Engelke, a professor at the research institute for statistics and information science at the University of Geneva, tells Carbon Brief that AI models “depend strongly on the training data” and are “relatively constrained to the range of this dataset”.
In other words, AI models struggle to simulate brand new weather patterns, instead tending forecast events of a similar strength to those seen before. As a result, it is unclear whether AI models can simulate unprecedented, record-breaking extreme events that, by definition, have never been seen before.
Record-breaking extremes
Extreme weather events are becoming more intense and frequent as the climate warms. Record-shattering extremes – those that break existing records by large margins – are also becoming more regular.
For example, during a 2021 heatwave in north-western US and Canada, local temperature records were broken by up to 5C. According to one study, the heatwave would have been “impossible” without human-caused climate change.
The new study explores how accurately AI and physics-based models can forecast such record-breaking extremes.
First, the authors identified every heat, cold and wind event in 2018 and 2020 that broke a record previously set between 1979 and 2017. (They chose these years due to data availability.) The authors use ERA5 reanalysis data to identify these records.
This produced a large sample size of record-breaking events. For the year 2020, the authors identified around 160,000 heat, 33,000 cold and 53,000 wind records, spread across different seasons and world regions.
For their traditional, physics-based model, the authors selected the High RESolution forecast model from the Integrated Forecasting System of the European Centre for Medium-Range Weather Forecasts. This is “widely considered as the leading physics-based numerical weather prediction model”, according to the paper.
They also selected three “leading” AI weather models – the GraphCast model from Google Deepmind, Pangu-Weather developed by Huawei Cloud and the Fuxi model, developed by a team from Shanghai.
The authors then assessed how accurately each model could forecast the extremes observed in the year 2020.
Dr Zhongwei Zhang is the lead author on the study and a researcher at Karlsruhe Institute of Technology. He tells Carbon Brief that many AI weather forecast models were built for “general weather conditions”, as they use all historical weather data to train the models. Meanwhile, forecasting extremes is considered a “secondary task” by the models.
The authors explored a range of different “lead times” – in other words, how far into the future the model is forecasting. For example, a lead time of two days could mean the model uses the weather conditions at midnight on 1 January to simulate weather conditions at midnight on 3 January.
The plot below shows how accurately the models forecasted all extreme events (left) and heat extremes (right) under different lead times. This is measured using “root mean square error” – a metric of how accurate a model is, where a lower value indicates lower error and higher accuracy.
The chart on the left shows how two of the AI models (blue and green) performed better than the physics-based model (black) when forecasting all weather across the year 2020.
However, the chart on the right illustrates how the physics-based model (black) performed better than all three AI models (blue, red and green) when it came to forecasting heat extremes.
The authors note that the performance gap between AI and physics-based models is widest for lower lead times, indicating that AI models have greater difficulty making predictions in the near future.
They find similar results for cold and wind records.
In addition, the authors find that AI models generally “underpredict” temperature during heat records and “overpredict” during cold records.
The study finds that the larger the margin that the record is broken by, the less well the AI model predicts the intensity of the event.
‘Warning shot’
Study author Prof Erich Fischer is a climate scientist at ETH Zurich and a Carbon Brief contributing editor. He tells Carbon Brief that the result is “not unexpected”.
He adds that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
The analysis, he continues, is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI models are likely to continue to improve, but scientists should “not yet” fully replace traditional forecasting models with AI ones, according to Fischer.
He explains that accurate forecasts are “most needed” in the runup to potential record-breaking extremes, because they are the trigger for early warning systems that help minimise damages caused by extreme weather.
Leonardo Olivetti is a PhD student at Uppsala University, who has published work on AI weather forecasting and was not involved in the study.
He tells Carbon Brief that “many other studies” have identified issues with using AI models for “extremes”, but this paper is novel for its specific focus on extremes.
Olivetti notes that AI models are already used alongside physics-based models at “some of the major weather forecasting centres around the world”. However, the study results suggest “caution against relying too heavily on these [AI] models”, he says.
Prof Martin Schultz, a professor in computational earth system science at the University of Cologne who was not involved in the study, tells Carbon Brief that the results of the analysis are “very interesting, but not too surprising”.
He adds that the study “justifies the continued use of classical numerical weather models in operational forecasts, in spite of their tremendous computational costs”.
Advances in forecasting
The field of AI weather forecasting is evolving rapidly.
Olivetti notes that the three AI models tested in the study are an “older generation” of AI models. In the last two years, newer “probabilistic” forecast models have emerged that “claim to better capture extremes”, he explains.
The three AI models used in the analysis are “deterministic”, meaning that they only simulate one possible future outcome.
In contrast, study author Engelke tells Carbon Brief that probabilistic models “create several possible future states of the weather” and are therefore more likely to capture record-breaking extremes.
Engelke says it is “important” to evaluate the newer generation of models for their ability to forecast weather extremes.
He adds that this paper has set out a “protocol” for testing the ability of AI models to predict unprecedented extreme events, which he hopes other researchers will go on to use.
The study says that another “promising direction” for future research is to develop models that combine aspects of traditional, physics-based weather forecasts with AI models.
Engelke says this approach would be “best of both worlds”, as it would combine the ability of physics-based models to simulate record-breaking weather with the computational efficiency of AI models.
Dr Kyle Hilburn, a research scientist at Colorado State University, notes that the study does not address extreme rainfall, which he says “presents challenges for both modelling and observing”. This, he says, is an “important” area for future research.
The post Traditional models still ‘outperform AI’ for extreme weather forecasts appeared first on Carbon Brief.
Traditional models still ‘outperform AI’ for extreme weather forecasts
-
Climate Change9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy6 months agoSending Progressive Philanthropist George Soros to Prison?
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits
-
Greenhouse Gases10 months ago
嘉宾来稿：探究火山喷发如何影响气候预测