Towards a Low Carbon Future: China

1
Towards a Low Carbon Future Chinas Green
Development Policy and Practice

• Ye QI
• Climate and Carbon Policy Institute (CPI)
• Tsinghua University
• China Sustainable Energy Program
• The Energy Foundation

2
Presentation Overview

• Historical background
• Recent trends in China
• Chinas policies for low carbon development
• Conclusions

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Economic, Energy, and GHG Emissions Trends

• China has experienced extraordinary growth of
  its economy and energy consumption in recent
  years

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Economic Development in China
GDP growth rate higher than 9 over past 30 years
Billion RMB (Constant 2000 RMB)
Growth Rate ()
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Energy Use in China and the U.S.
US 2006
Industry dominates energy use in China
China 1980-2006
Source U.S. Energy Information Administration,
2008. Annual Energy Outlook.
Source National Bureau of Statistics, various
years, China Statistical Abstract. National
Bureau of Statistics, 2007, China Energy
Statistical Yearbook.
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Economic, Energy, and GHG Emissions Trends

• Chinas economy is heavily dependent on its coal
  resources

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Chinas Commercial Energy is Heavily Coal-Based
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Relatively High Share of Coal Use in China
Source BP Statistical Review of World Energy
2008.
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9
Coal Dominates Chinas Fossil Fuel Reserve Base
Source NBS, 2007.
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Per Capita Proven Coal Reserves
China has limited domestic coal resources
Source BP Statistical Review of World Energy
2008 World Bank, World Development Indicators
database 2008.
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Economic, Energy, and GHG Emissions Trends

• China now emits more energy-related carbon
  dioxide (CO2) than the U.S. in absolute terms,
  but not if measured on a per capita or cumulative
  basis

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Energy-Related Carbon Dioxide Emissions
Heavy reliance on coal in China leads to CO2
emission levels similar to the U.S.
Source Historical 1950-2005 US, China and global
emissions data from Oak Ridge National
Laboratory, Carbon Dioxide Information Analysis
Center 2006-2007 US, China and global emissions
data are preliminary estimates from Carbon
Dioxide Information Analysis Center.
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Comparison of U.S. and China Energy-Related
Emissions Three Perspectives
Source Asia Society, 2008. Common Challenge,
Collaborative Response A Roadmap for U.S.-China
Cooperation on Energy and Climate Change.
http//www.asiasociety.org/taskforces/climateroadm
ap/US_China_Roadmap_on_Climate_Change.pdf
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Per Capita Energy-Related Carbon Dioxide
Emissions
Chinese emissions are far lower than the U.S. on
a per capita basis
Source Historical 1950-2005 US, China and global
emissions data from Oak Ridge National
Laboratory, Carbon Dioxide Information Analysis
Center 2006-2007 US, China and global emissions
data are preliminary estimates from Carbon
Dioxide Information Analysis Center 2006-2007
population data of China from China Statistical
Bureau 2006-2007 US and global population data
from US Census.
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Recent Trends in China

• From 1980 to 2002, energy intensity in China
  decreased significantly.
• This was followed by a very large and unexpected
  increase in energy intensity from 2002 to 2005.

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Energy Intensity (E/GDP) Declined Steadily From
1980 to 2002
Remarkably, China reduced energy use per unit of
GDP while industrializing
Average Annual Decline of 5 per year
16
Source National Bureau of Statistics, China
Statistical Abstract, various years.
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Trend Reversed in 2002
China joined WTO in 2001 and became the worlds
factory one of several factors that caused the
large increase in energy intensity
Average Annual Decline of 5 per year
Average Annual Increase of 2 per year
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Source National Bureau of Statistics, China
Statistical Abstract, various years.
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Chinas Energy Intensity Compared to the U.S.
Comparison is based on current exchange rates and
thus not reflective of physical energy
intensities
Source Asia Society, 2008. Common Challenge,
Collaborative Response A Roadmap for U.S.-China
Cooperation on Energy and Climate Change.
http//www.asiasociety.org/taskforces/climateroadm
ap/US_China_Roadmap_on_Climate_Change.pdf
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Chinas Policies to Reduce Energy Use and
Greenhouse Gas Emissions

• Major policy initiatives were introduced in 2005
  to reverse the trends in energy demand growth
  experienced from 2002 to 2005

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In 2005, China Adopted an Energy Intensity
Reduction Target

• November 2005 Premier Wen Jiabao at the Plenary
  of the Communist Party Energy use per unit of
  GDP must be reduced by 20 from 2006 to 2010
• Chinas 11th Five Year Plan (2006-2010) outlined
  goal of reducing energy consumption per unit of
  GDP by 20 between 2006 and 2010
• Depending upon the GDP growth rate - 2010 energy
• - 5-year savings of about 700 Mtce (19.5 Quads)

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Chinas 5- Year Energy Intensity Reduction Target
20 energy intensity of GDP reduction by 2010
Note energy intensity values are calculated
using deflated year 2000 GDP values expressed in
kilograms coal equivalent primary energy
consumption per reminbi GDP.
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Implementation of the governments 20 energy
intensity reduction target

Goal


Actual
10
Cumulative
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Key Energy-Efficiency Policies and Programs
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Initial Results of Top-1000 Program

• Top-1000 Enterprises Energy Use Report - 2007
• 954 enterprises submitted statistics
• 942 enterprises submitted energy audit reports
• Top-1000 Enterprises saved 20 Mtce (0.6 EJ, 0.56
  Quads) in 2006
• Recently reported 2007 annual savings 38 Mtce
  (1 Quad)

• Two scenarios
• 2010 Target Achieved
• 100 Mtce (2.8 Quads) 240 MtCO2
• Current Trends
• 175 Mtce (4.9 Quads) 420 MtCO2

• Top-1000 Program on track to deliver 20 of the
  energy savings needed to meet the 2010 20 E/GDP
  goal

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Industry - Top-1000 Industry Program
Annual CO2 reductions (million tons)
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Renewable Energy

• Installed wind capacity doubled in 2008 reaching
  12.8 GW and exceeding original targets

Installed Wind
32
GW
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Recent Achievements in China

• With these strong policies and programs, China
  has been able to reverse the increase of energy
  use per unit of GDP and has made remarkable
  progress in improving the countrys energy
  efficiency and reducing energy-related GHG
  emissions.

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Energy Use in China Recent Trends
1980-2002 Average Annual Decline of 5 per year
2005-2006 1.7 decrease
2006-2007 3.66 decrease
2007-2008 4.59 decrease
2002-2005 Average Annual Increase of 2 per year
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Source National Bureau of Statistics, China
Statistical Abstract, various years.
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CHINAS GREEN STIMULUS

• Economic Stimulus Dollars Devoted to Green
  Projects (Billion USD)

• Green Stimulus Dollars as a ratio of 2008 GDP

4.6
201
94
0.7
US
CHINA
US
CHINA
Stimulus data from HSBC Global Research March 31,
2009 updates to the report A Climate for
Recovery The Color of Stimulus Goes Green. GDP
data from IMF world economic outlook data,
retrieved April 2009.
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CONCLUSIONS

• High carbon intensity
• Leading in rate of decarbonization
• Long way to go towards low carbon economy