2007 Massey Energy Postgraduate Conference

1. 2007 Massey Energy Postgraduate Conference What are the opportunities to assist China in leapfrogging through clean energy cooperation? Patrick Schroeder, Victoria University of Wellington

2. 2007 Massey Energy Postgraduate Conference What are the opportunities to assist China in leapfrogging through clean energy cooperation? Why China? Leapfrogging – useful theories Existing clean energy Partnerships & relevance for New Zealand

3. Why China? China and Climate Change China has surpassed the United States as largest emitter of CO2. In 2006 newly added energy capacity of 105 GW (90 GW through coal) China accounts for 28% of the world’s coal consumption Coal accounts for about 65% of China’s energy consumption, with demand exceeding 2 billion tons per year.

4. Why China? Embodied Emissions – China’s production, our consumption About 7 -14% of China's current CO2 emissions are the result of producing exports for US consumers According to World Bank estimates up to 40% of China’s emissions are the result of export manufacturing. US–China trade has increased global CO2 emissions by an estimated 720 million metric tonnes (Bin & Harriss, 2005)

5. Why China? New Consumers enter the stage…Global Consumer Class (GCC) What is the GCC? Consumption patterns similar to those in developed countries (>7000 USD BIP) Where is the GCC? • 1.7 billion members, of these • 50% in developing countries • 362 million in China and India, more than in Europe • In the next years, the GCC will grow most strongly in developing countries. China is the fastest growing car market in the world with a predicted vehicle fleet of more than 350 million by 2030. Alone in Beijing 1000 new passenger cars hit the roads daily, adding to a total of 2.6 million in 2005. Golden Resources Shopping Mall, China (Bentley 2003: Leading consumer classes in countries, 2002)

6. Why China? China’s Energy Supply – ‘business as usual’

7. Why China? China’s CO2 emissions – ‘business as usual’

8. Why China? Strategic Leapfrogging Energy Scenarios – Greenpeace/EREC [R]evolution Development of primary energy consumption under the IEA reference scenario Development of primary energy consumption under the alternative ‘leapfrog’ [R]evolution scenario

9. Why China? WBCSD Pathways 2050

10. 2007 Massey Energy Postgraduate Conference What are the opportunities to assist China in leapfrogging through clean energy cooperation? Why China? Leapfrogging – useful theories Existing clean energy Partnerships & relevance for New Zealand

11. Why leapfrogging? Leapfrogging into sustainable development leap frogging High demand on biosphere per person Sustainable Development ‚Developed Countries‘ Minimum acceptable level of HumanDevelopment ‚business as ususal‘ ‚Developing Countries‘ Human Development Index High demand on biosphere per person Low human development World average biocapacity available per person Within carrying capacity Low human development Ecological Footprint per person (UNEP/CSCP 2007)

12. What is leapfrogging? System Innovation efficiency system innovation system redesign factor 10 environmental or more system optimization of factor 5 factor 2 Improvement 5 10 20 Time horizon ( Years) (Tukker, 2005) ‘Radical innovations’ instead of ‘system compliant solutions’ Impact = Population x Affluence per capita x Technical efficiency or production/consumption

13. What is leapfrogging? Adaptive niche market management Dynamic multi-level perspective of technology diffusion process (Geels, 2002)

14. What is leapfrogging? Barriers to environmental technology transfer…. … and solutions • Un-strategic policies in recipient countries • Intellectual property rights • Lack of information and communication • Tariff barriers for renewable energy equipment • Lack of economic incentives for investors • Institutional & administrative difficulties • Limited access to capital and finance • Different technology needs of recipient countries • Weak NSI and ‘absorptive capacity’ • Unwillingness of TNCs to transfer clean technologies • Interest group lobbying (e.g. extraction industries) • Cultural and language barriers • ??? • Strengthen environmental policies, introduce carbon taxes • Strengthen IPR legislation and enforcement • Improve communication networks & ICT infrastructure • Special provisions under trade agreements • Market reforms, tax breaks, feed-in-laws, removal of subsidies • Institutional capacity building, set up intermediaries (MFO) • Innovative finance mechanisms, ODA, multilateral funds • Involve local businesses & NGOs, re-design products • Lower level of integration, procurement through local suppliers • Promote Corporate Social Responsibility (CSR) • Educate the public and policy makers • Overcome Eurocentric worldviews • ???

15. 2007 Massey Energy Postgraduate Conference What are the opportunities to assist China in leapfrogging through clean energy cooperation? Why China? Leapfrogging – useful theories Existing clean energy Partnerships & relevance for New Zealand

16. China’s Renewable Energy Current Status and Market Potential China accounted for 9% of $70 billion of global investment in renewables in 2006. China produced 370 MW solar cells in 2006 and is now third largest producer after Germany and Japan. China will have 5 GW wind power capacity installed by the end of 2007. The Chinese city Rizhao wins 2007 World Clean Energy Award

17. Existing PartnershipsOverview • Multilateral grant/loan Partnerships • China World Bank/GEF Renewable Energy Development Project (REDP) • China World Bank/GEF Renewable Energy Scale-Up Project (CRESP) • China UNDP/GEF Renewable Energy Commercialization Project • Bilateral (ODA) Partnerships • EU-China Energy and Environment Program • GTZ Renewable Energy Projects in China • Australia-China Bilateral Cooperation on Climate Change • Sino-Italian Cooperation Programme for Environmental Protection • R&D Partnerships • China Huaneng Group/FutureGen - Clean Coal and CCS • US DoE/China - Cooperation on the Beijing 2008 Green Olympics • China Academy of Science/Energy Research Centre of the Netherlands - wind power research centre • Business Partnerships (joint ventures) • SolarWorld AG – SunTech Power Holdings • Xantrex - Shanghai Electric • Roaring 40s - China Datang Jilin Corporation

18. Existing PartnershipsRoaring 40s – China Activity • Shuangliao Windfarm Project • 49 megawatt wind farm • CDM project between UK and Chinawith CERs of 103585 • Capital expenditure: A$79 million • Turbine capacity: 850 kilowatts • Datang Jilin Power Generation Co Ltd • Gamesa Corporacion Tecnologica SA (turbine supplier) • Enabling partnerships • Asia Pacific Partnership on Clean • Development and Climate (APP) • Australia-China Bilateral Cooperation on Climate Change • Kyoto protocol - CDM • Roaring 40s Renewable Energy Pty Ltd. (50:50 joint venture between Hydro Tasmania and CLP Asia Ltd) • Currently the leading foreign renewable • energy investor in mainland China • • Six 50 MW wind farms commissioned or under construction • • Planned portfolio of 1000 equity MW of • wind energy assets in China by 2011/12

19. Relevance for New ZealandOpportunitiesforGovernment, Business, Civil Society, Academia,… • Establish a NZ-China climate change or renewable energy partnership • Make special provisions for renewable energy technology in the NZ-China FTA • Make renewable energy a ‘priority sector’ for NZTE engagement in China • Consider a CDM project involving NZ renewable energy companies and technology New Zealand Government: • Renewable energy businesses to explore opportunities in China (Windflow) • NZ businesses already involved in China (e.g. Fonterra) to make their businesses sustainable and transfer clean technologies (including technical knowledge) • NZ financial institutions financing renewable energy projects New Zealand Businesses: New Zealand Civil Society: • Asia-NZ Foundation to include climate change dialogues and exchanges into their activities • Education activities aiming at businesses and the public about Asia’s environmental issues • Establish joint R&D programmes with Chinese universities and research institutes • Establish academic networks through Chinese students in New Zealand • Open exchange of research results New Zealand Academia:

20. 2007 Massey Energy Postgraduate Conference Thank you 谢谢您的注意