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Towards a Low Carbon Future: China’s Green Development Policy and Practice. Ye QI Climate and Carbon Policy Institute (CPI) Tsinghua University & China Sustainable Energy Program The Energy Foundation. Presentation Overview. Historical background Recent trends in China
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Towards a Low Carbon Future:China’s Green Development Policy and Practice Ye QI Climate and Carbon Policy Institute (CPI) Tsinghua University & China Sustainable Energy Program The Energy Foundation
Presentation Overview • Historical background • Recent trends in China • China’s policies for low carbon development • Conclusions 2
Economic, Energy, and GHG Emissions Trends China has experienced extraordinary growth of its economy and energy consumption in recent years 3
Economic Development in China GDP growth rate higher than 9% over past 30 years Growth Rate (%) Billion RMB (Constant 2000 RMB) 4 4
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. 5
Economic, Energy, and GHG Emissions Trends China’s economy is heavily dependent on its coal resources 6
Relatively High Share of Coal Use in China Source: BP Statistical Review of World Energy 2008. 8
Coal Dominates China’s Fossil Fuel Reserve Base Source: NBS, 2007. 9 9
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. 10 10
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 11
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. 12
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/climateroadmap/US_China_Roadmap_on_Climate_Change.pdf
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. 14
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. 15
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.
Trend Reversed in 2002 China joined WTO in 2001 and became the world’s 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 17 17 Source: National Bureau of Statistics, China Statistical Abstract, various years.
China’s 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/climateroadmap/US_China_Roadmap_on_Climate_Change.pdf
China’s 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 19
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” • China’s 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) 20
China’s 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. 21 21
Implementation of the government’s 20% energy intensity reduction target } Goal } % Actual 10 Cumulative
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 24
Industry - Top-1000 Industry Program Annual CO2 reductions (million tons)
Renewable Energy • Installed wind capacity doubled in 2008 reaching 12.8 GW and exceeding original targets Installed Wind 32 GW
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 country’s energy efficiency and reducing energy-related GHG emissions.
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 28 Source: National Bureau of Statistics, China Statistical Abstract, various years.
CHINA’S 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 US CHINA 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.
CONCLUSIONS • High carbon intensity; • Leading in rate of decarbonization; • Long way to go towards low carbon economy