China’s recent statements and
policy initiatives demonstrate
growing concerns about
energy security, pollution and
the ability to sustain long-term
economic strategies for
reducing poverty.
[!]Note:[/!]: this fact sheet is an update of previous posts here and here.
China’s per-capita GDP is less than
one-tenth of U.S. levels, and
about half of its 1.3 billion
people earn less than $2 per
day. Indeed, China confronts
a challenge no other large,
emerging economy has
ever faced: fostering rapid
economic growth while at the
same time limiting harmful
emissions.
Recent Actions By Chinese Officials
- On August 27th, 2009, China’s top legislative
chamber adopted a resolution calling
for active engagement in global climate
negotiations, and new domestic initiatives
to “make carbon reduction a new source of
economic growth.” The Standing Committee
of the 11th National People’s Congress also
endorsed new policies and rules designed
to drive down China’s energy use and emissions.
It also called for improving China’s
capacity to deal with “climate disasters.”
- On June 5th, 2009, China’s highest council
announced that the government would
step up efforts to shut down old, inefficient
power plants and factories, and increase
spending on renewables and efficiency.
Premier Wen Jiabo presided over the State
Council Meeting on Climate Change, Energy
Saving and Emissions Reduction, which also
backed increased incentives for consumers
to buy energy-saving appliances, and new
rules that would drive up costs for “energy
wasting” companies.
China's Evolving Targets
To meet these challenges, China has adopted a
range of new energy policies, rules and targets.
Many of these initiatives are linked to goals
outlined in China’s “National Climate Change
Programme,” approved by the State Council
in June 2007. Indications are that China may
meet or exceed many of its goals, and has even
raised its original targets in some areas. The
government is also currently developing new
energy and climate goals for its 12th Five Year
Plan. The next five year plan, to begin in 2011,
is expected to build on a suite of existing policies,
which include:
Reducing overall national energy intensity by 20% by 2010
Implementing a 2005 policy, China reduced its
energy used per unit of GDP by 1.8% in 2006,
4% in 2007, and 4.6% in 2008. In the first
half of 2009, China reduced energy intensity
by 3.35%; at that pace, China would achieve
the goal set in 2005. Analysts estimate that
reaching the goal will prevent the equivalent
of 1.5 billion tons of carbon dioxide (CO2) from
reaching the atmosphere, compared to “business
as usual.” Initiatives to spur efficiency
have included:
- Making large enterprises more efficient.
The Top 1000 Energy-Consuming Enterprises
Program sets energy-saving targets for
China’s largest industries. The program was
responsible for an impressive two-thirds of
China’s energy efficiency gains in 2006 and
half of the gains in 2007. The program is
on track to reach its goal for 2010.
- Building better coal-fired power
plants. As of 2008, all coal-fired power
plants built in China must use state-of-the-art commercially available technology, or better. As a result, most of the world’s
cleanest and most efficient coal-fired
power plants are now located in China---and the average efficiency of its entire coal-fired power plant fleet is now better
than that of U.S. plants.
- Closing wasteful facilities. China is on
track to close far more inefficient factories,
power plants, and industrial facilities than
originally called for by the 11th Five Year
Plan, adopted in 2006. To date, it has closed
inefficient plants that once produced 60.6
million tons of iron, 43.5 million tons of
steel, 140 million tons of cement, and 64.5
million tons of coke. It has also shuttered
nearly 7,500 small power plants. The policy
of replacing these inefficient power plants
alone could prevent 12.4 billion tons of
CO2 emissions.
- Raising taxes on petroleum. In January
2009, China increased the tax on gasoline
from 11 cents per gallon to 55 cents per
gallon and the tax on diesel rose from 6
cents per gallon to 44 cents per gallon.
- Spurring local government action. Since
April 2008, China has required all local governments
to increase urban energy efficiency
in buildings and public transportation to
meet energy intensity goals. The central government
now audits local government plans,
and the increased local attention has helped
accelerate energy efficiency improvements.
- Helping consumers buy “green” home
appliances. In May 2009, China’s National
Development and Reform Commission and
the Ministry of Finance started the “Conservation
Products Beneficial to Consumers
Project.” It provides consumers with
subsidies that range from $44 to $125 to
buy energy-efficient air-conditioners, refrigerators,
television sets, washing machines
and motors. The subsidies are expected to
generate $60 billion to $75 billion in sales,
and save 75 billion kilowatt hours of power.
Expanding the use of renewable energy
By 2020, China has committed to using energy
technologies that don’t burn fossil fuels –
including hydro, wind, solar and biomass and
nuclear – to generate at least 15% of its total
energy. In particular, China aims to promote
renewable energy by:
- Rapidly expanding windpower. China is
now the world’s fastest-growing installer of
wind turbines, and in 2008 it set a goal of
increasing wind power generation capacity
to 100 GW by 2020. In 2008, China installed
6.3 GW of new wind power, with total
installed capacity reaching 12.2 GW. To provide
an incentive for wind power operators,
some utilities pay fixed rates for new power---called “feed-in tariffs”---that are higher than those paid for electricity from coal.x
- Growing its solar industry. Although most
of the photovoltaic (PV) panels produced in
China to date have been exported---China
is the world’s largest PV producer---the
government has announced increased
spending on R&D and subsidies for installing
PV systems in order to foster a domestic
market for making solar electricity.xiv Under
the “Golden Sun” program announced in
July 2009, for instance, the government will
provide up to 70% of the cost of installing
PV generation and transmission systems
for projects selected by provincial governments.
By 2020, some analysts estimate
that China’s installed solar capacity could
range from 1.8GW to 10GW, depending on
policy decisions, although some believe
20GW is feasible.
- Diversifying domestic energy sources. The
public and private sectors are increasingly
using waste gases captured from facilities
such as dumps, manure pits and coal mines
to make heat and electricity for household
use. More than 50 cities, for instance, run
waste-to-energy or district heating plants.
By 2030, China’s aims to convert 30% of its
total municipal waste into energy.
- Expanding capacity for biomass. By 2010,
China wants biomass – from crop plants
to wood chips – to provide about 1% of its
total energy. Biomass can be burned directly
for heat, converted to a gas (“biogas”), or
converted to liquid fuels (such as ethanol).
The government is promoting biomass with
direct subsidies, and also provides financial
incentives for generating electricity from
biomass by paying generous fixed fees for
biomass power.xviii By 2010, China plans to
use biomass to produce 5.5 million kilowatt
hours of electricity; 2 million tons of liquid
fuels; 19 billion cubic meters of biogas, and
1 million tons of fuel pellets.
Conclusion: China's Development Challenge
Although China is now the world’s largest
annual emitter of greenhouse gases, China’s
per capita emissions are just one-fifth of those
of the United States (see chart). So, as
China pursues economic development levels on
par with the United States, it will be critical to
de-link its economic growth from greenhouse
gas emissions. This “decarbonization” of
China’s economy is beginning with the policy
steps it is taking today. To stabilize global
greenhouse levels, however, the United States
and China must together move beyond their
reliance on fossil fuels, to cleaner and more
secure sources of energy.
[img_assist|nid=11342|title=Per Capita CO2 Emissions For Select Major Emitters, 2007 and 2030 (Projected)|link=node|align=none|width=480|height=203]
In a recent series of high-profile statements,
China’s leaders have indicated that confronting
climate change and improving energy efficiency
are becoming central goals of China’s domestic
and foreign policies:
After a cabinet meeting on August 12th, 2009,
Premier Wen Jiabao warned that global warming
threatened China’s environmental and economic
health. He said, “Controlling greenhouse gas
emissions and adapting to climate change,”
would become “an important basis for setting
the medium and long-term development strategies
and plans of government at every level.”
The stated intention to continue policies that
foster the “decarbonization” of China’s economy
received a spotlight in the first-ever speech
by a Chinese president to the United Nations
General Assembly on September 23rd, 2009.
President Hu Jintao said China will reduce its
carbon intensity by “a notable margin” by 2020
and confirmed that China will ratchet up national
targets for producing renewable energy.
President Hu’s speech included a commitment
to take “determined and practical steps” and
“forceful measures” to integrate climate goals
into China’s economic development policies, a
strong indication that national-level attention
and action will be sustained.
WRI & Climate Policy in China
The World Resources Institute (WRI) is drawing
upon the Institute’s technical expertise,
research and analytical tools, and history
of effective private sector collaboration to
support Chinese policy-makers, businesses,
and researchers in reaching their climate and
energy goals.
Relevant WRI programs and projects include:
- A joint research program in Beijing with
the Tsinghua University Low Carbon Energy
Laboratory with major projects focused on
carbon capture and storage, and elements
of a potential international agreement,
including both measuring and reporting
issues and technology.
- In June 2009, WRI established ChinaFAQs,
the Network for Climate and Energy, to develop better information tools for policymakers
in the United States to understand
China’s climate and energy policies and
data.
- The GHG Protocol Initiative is a partnership
of businesses, NGOs, governments and
academics convened by WRI and WBCSD.
The GHG Protocol Corporate Accounting
and Reporting Standard has emerged as
the pre-eminent international standard for
preparing a corporate-wide GHG emissions
inventory. Last year the protocol team
began developing GHG standards and programs
in China focused on the country’s
most energy intensive sectors--power,
cement, steel and petroleum.
- The Green Power Market Development
Group is working with Jiangsu Province to
promote the domestic renewable market
and led off with a program on promoting
solar power in Nanjing in April 2009.
- WRI’s New Ventures China project promotes
sustainable growth by accelerating
the transfer of capital to small and medium
enterprises (SMEs) that deliver social
and environmental benefits. Since 2004,
NV China has mentored 40 companies that
have since received a combined total of
$70 million in equity and debt financing.
