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

22 Presentation Overview Historical background Recent trends in China China’s policies for low carbon development Conclusions

33 Economic, Energy, and GHG Emissions Trends China has experienced extraordinary growth of its economy and energy consumption in recent years

44 Economic Development in China GDP growth rate higher than 9% over past 30 years Billion RMB (Constant 2000 RMB) Growth Rate (%)

55 Energy Use in China and the U.S. Source: National Bureau of Statistics, various years, China Statistical Abstract. National Bureau of Statistics, 2007, China Energy Statistical Yearbook. China Source: U.S. Energy Information Administration, Annual Energy Outlook. US 2006 Industry dominates energy use in China

66 China’s economy is heavily dependent on its coal resources Economic, Energy, and GHG Emissions Trends

77 China’s Commercial Energy is Heavily Coal-Based

88 Relatively High Share of Coal Use in China Source: BP Statistical Review of World Energy 2008.

99 Coal Dominates China’s Fossil Fuel Reserve Base Source: NBS, 2007.

10 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.

11 China now emits more energy-related carbon dioxide (CO 2 ) than the U.S. in absolute terms, but not if measured on a per capita or cumulative basis Economic, Energy, and GHG Emissions Trends

12 Energy-Related Carbon Dioxide Emissions Source: Historical US, China and global emissions data from Oak Ridge National Laboratory, Carbon Dioxide Information Analysis Center; US, China and global emissions data are preliminary estimates from Carbon Dioxide Information Analysis Center. Heavy reliance on coal in China leads to CO 2 emission levels similar to the U.S.

13 Comparison of U.S. and China Energy- Related Emissions – Three Perspectives Source: Asia Society, Common Challenge, Collaborative Response: A Roadmap for U.S.-China Cooperation on Energy and Climate Change.

14 Per Capita Energy-Related Carbon Dioxide Emissions Source: Historical US, China and global emissions data from Oak Ridge National Laboratory, Carbon Dioxide Information Analysis Center; US, China and global emissions data are preliminary estimates from Carbon Dioxide Information Analysis Center; population data of China from China Statistical Bureau; US and global population data from US Census. Chinese emissions are far lower than the U.S. on a per capita basis

15 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 Recent Trends in China

16 Source: National Bureau of Statistics, China Statistical Abstract, various years. Average Annual Decline of 5% per year Energy Intensity (E/GDP) Declined Steadily From 1980 to 2002 Remarkably, China reduced energy use per unit of GDP while industrializing

17 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

18 China’s Energy Intensity Compared to the U.S. Source: Asia Society, Common Challenge, Collaborative Response: A Roadmap for U.S.-China Cooperation on Energy and Climate Change. Comparison is based on current exchange rates and thus not reflective of physical energy intensities

19 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

20 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 ( ): outlined goal of reducing energy consumption per unit of GDP by 20% between 2006 and 2010 Depending upon the GDP growth rate energy − 5-year savings of about 700 Mtce (19.5 Quads)

21 China’s 5- Year Energy Intensity Reduction Target Note: energy intensity values are calculated using deflated year 2000 GDP values; expressed in kilograms coal equivalent primary energy consumption per reminbi GDP. 20% energy intensity of GDP reduction by 2010

% } } Actual Goal Cumulative Implementation of the government’s 20% energy intensity reduction target 10

23 Key Energy-Efficiency Policies and Programs

24 Initial Results of Top-1000 Program Top-1000 Enterprises Energy Use Report – –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 MtCO 2 –Current Trends 175 Mtce (4.9 Quads) = ~ 420 MtCO 2 Top-1000 Program on track to deliver ~ 20% of the energy savings needed to meet the % E/GDP goal

Industry - Top-1000 Industry Program Annual CO 2 reductions (million tons)

Renewable Energy Installed wind capacity doubled in 2008 reaching 12.8 GW and exceeding original targets Installed wind capacity doubled in 2008 reaching 12.8 GW and exceeding original targets 32 GW Installed Wind

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.

28 Source: National Bureau of Statistics, China Statistical Abstract, various years : Average Annual Decline of 5% per year Energy Use in China: Recent Trends : Average Annual Increase of 2% per year : 1.7% decrease : 3.66% decrease : 4.59% decrease

CHINA’S GREEN STIMULUS Economic Stimulus Dollars Devoted to Green Projects (Billion USD) Green Stimulus Dollars as a ratio of 2008 GDP 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 US CHINA $94 $201 CHINAUS 0.7% 4.6%

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