Integration of Climate Mitigation into National policies A Framework for Analysis of China’s sustainable development pol

1. Workshop on BASIC Beijing, 18 February 2006 Integration of Climate Mitigation into National policiesA Framework for Analysis of China’s sustainable development policies Xiangyang WU Research Centre for Sustainable Development (RCSD) Chinese Academy of Social Sciences (CASS)

2. Outline • Introduction • The relevance of SD policies to CC mitigation • Understanding the impact: a framework for analysis • SD policies to CC mitigation • Case study: energy saving policies • Conclusions and suggestions

3. Introduction • China has no climate change policies, but has sustainable development policies and measures relevant to CC. • As China’s national strategy, sustainable development has been taken as the primary objective for policy making • China has been contributing to climate mitigation through improving energy efficiency, developing renewable energy, afforestation, family planning, poverty alleviation, etc.

4. SD Policies Non-CC policies Policies Relevant to CC Climate Policies Policy areas: implications for CC mitigation Social policies Economy policies SD Policies Environmental policies

5. The relevance of policies to CC mitigation • Criteria: positive /negative impact on GHG emissions？ • Measurement: cost-effectiveness of reductions and potentials for mitigation • CC mitigation: a co-benefit from SD policies • Inadequate information for measurement

6. Framework of Policy Evaluation • Orientation of SD policies • Its primary objective • Its coverage? national, sectoral, or local? • Its mechanism for implementation: incentive, compulsory, voluntary, guidance? • Implementation: cost and its effect • Implication to GHG emissions, ↑，↓? • Prospects for integration

7. Energy policies Environmental/ecological policies Air pollution control Energy industry institutional reform Forest Optimizing energy structure Social policies Family Planning Energy saving Poverty Alleviation Major SD Policies with direct relevance to CC mitigation Climate Change

8. China’s energy policies (1) • Institutional reform in energy industry: market liberalization ↑ • Price controlled by government  dual price system (government + market)  market price • Examples • Coal sector: 1987, govt price and market price; 2002, market price only. • Power sector: 2002, institutional reform against monopoly, divided into generation enterprises and power grid enterprises. Separated govt. function and enterprises.

9. China’s energy policies (2) • Policies in optimizing energy structure: cleaner ↓ • Renewable energy: (a) plan: the development plan of new and renewable energy(1995), the 10th Five-year plan of … and 2000-2015 plan of … (b) the Renewable Energy Law(2005). • Shut down small thermal power units. Encourage CHP • Use new- and advanced-technology in thermal power plants

10. Renewable achievement • Wind power: • Small hydro: • By 2004，solar PV cell:60MW, solar heater: 65million m2,a share of 40% in the world. • Bio-methane in Rural areas: 11 million digesters, 5.5 billion m3 per year。  • 1994: renewable energy 10.26 Mtce. 2000: 33.57Mtce. Wind power Small hydro

11. Energy saving policies: reduce ↓(case study)

12. Energy policies Air pollution control Energy industry institutional reform Forest Optimizing energy structure Social policies Family Planning Energy saving Poverty Alleviation Major SD Policies with direct relevance to CC mitigation Environmental / Ecological policies Climate Change

13. Environmental / ecological policies (1) • Air pollution control ↓ • Polluter pays: introduced in 1982 • Emission permit system (1994) • Plan of Total Emission Control (1996) • SO2 pollutions control zone & acidity control zone (1998) • Air Pollution Prevent and Control Law (2000): • the pilot program of SO2 Emission Trading (2002) • 10th Five-year Plan: 2005 SO2 emission reduce 20% on 2000. HOWEVER,

14. Total SO2 emission Industry SO2 emission household SO2 emission • Why?

15. Environmental / ecological policies (2) • Forestry ↓ • The Forest Law (1979, revised in 1998) • barren land and mountainous areas: long term lease for private investment allowed • Land use change: sloping farmland to forest (starting from 2000, in 17 provinces) • No disturbance for natural re-generation policy: 30.2 m ha • Tree planting: by 2000，46.67m ha

16. Energy policies Air pollution control Energy industry institutional reform Forest Optimizing energy structure Social policies Family Planning Energy saving Poverty Alleviation Major SD Policies with direct relevance to CC mitigation Environmental / Ecological policies Climate Change

17. Social policies • Poverty alleviation policies：combined with rural energy development and ecological protection ↓ • 1985-2000, 3 rounds of the programs for building rural preliminary electrification counties through small hydro development. • Alleviation poverty through giving science and technology, education to … 2500 million  2.9 million • Family planning policy ↓ • Family planning: 1970s, “late, wide interval, less“，1980s, ”only one ”. • prediction: the peak will be 1.465 billion in 2030, will not exceed 1.5 billion. Avoidance of births: 300 million.

18. Case study: energy saving policies evaluation • primary objective: reduce energy consumption, improve energy efficiency • CC implication: mitigation • Policies introduced: • Energy Saving Law (1997) • management rules for main energy-consume enterprises (1999) • energy saving product certificate

19. Incentives • Grants and subsidies: Direct investment and low interest loans. • key energy saving projects • Energy technologies R&D, demonstration and deployment • Energy related funds: set up by government, local authorities and power companies • State owned investment company: CECIC sep up by government in 1998 • ESCo: since 1997, 60 ESCo has established to implement over 500 projects, invest 1.4 billion and achieve 1.75 Mtce energy saving. • Deposit refund: to encourage deployment of energy saving construction materials • Energy saving products list: encourage its deployment by governmental procurement

20. Ambitious Targets in the 11th Five-year Plan (2006-2010) • National goals: to reduce energy intensity 20%, to control GHGs emissions • “Energy Conservation Plan” : • specific targets: set up for main energy intensive products, energy consuming equipment and energy management • 3 Priority areas : industry, transport, buildings of business and residents • 10 Key energy saving projects • 10 Supportive policies and measures, emphasizing necessity to introduce market-based incentives and new initiatives and enhancing energy management to large energy user

21. Achievement: Energy Intensity decreased Equivalent to 700 Mtce of Energy saving, 1050 MtSO2 and 440 MtC emissions reduction GDP is Calculated with comparable price in 2000;

22. Problems on energy saving policies • Weak implementation: rules were not obeyed strictly. • Insufficient incentives • energy saving policies were not harmonized.

23. Conclusions and suggestions • China’s SD policies (energy, environmental / ecological and social policies) lead to positive contribution to CC mitigation • Policy-coordination is necessary to address CC • Integrating CC into SD framework

24. Next step • Typical cases with cost and benefit analysis on several key policies • Policy making cost, implemental cost, supervising cost, etc. • Benefit: refer mostly to GHG emission, environmental, ecological and social aspects. • Comparative analysis among different policies • How to highlight CC initiatives in SD framework

25. Thank you!