1. Policy questions to be addressed and structures of IMACLIM-CHINA Wang Yu Institute of Energy, Environment and Economy Tsinghua University 29 January 2015

2. Updated energy and climate polices Policies questions to be addressed Structure of IMACLIM-CHINA 2

3. An updated energy and climate policies Updated policies Energy security Environment pollution Climate change Industrial structure adjustment Energy conservation & efficiency Energy structure optimizing Forest carbon sink increasing

4. China’s Economic Growth & Energy Consumption 1991~19951996~20002001~20052006~20102011~2013 GDP annual growth11.9%8.7%9.9%11.3%8.2% Energy consumption increase5.9%2.1%10.3%6.6%4.9%

5. Environmental pollution in China PM2.5 concentration of 28 th Nov, 2014 Water resources Land resources Ecological …… Air pollution!

6. Climate change, pressure from international community China is the biggest CO2 emitter of the world. Coal dominated energy system results in higher CO2 emission. Data source: IEA & China Statistic Yearbook 2014 26.7% of total global CO2 emission

7. An update energy and climate policies Updated policies Energy security Environment pollution Climate change Industrial structure adjustment Energy conservation & efficiency Energy structure optimizing Forest carbon sink increasing

8. Industrial structure adjustment Closedown Small mine Small coal-fired power plants Backward production capacity (19 sectors, including steel, iron, flat glass, cement, coke…) New industries Low carbon technology innovation 106 million RMB 54 pilot projects New energy vehicles New energy manufacturers Producer service industry  The share of industry increase 1% → 600 million ton of additional CO 2 emission  The share of service increase 1% → 300 million ton of CO 2 mitigation

9. Energy conservation and efficiency improving Management & evaluation Objective responsibility system – provincial governments Energy audit system – new projects in heavy energy consumption, building Energy conservation projects energy - saving technical renovation ——2.56 billion RMB in 2013; 5.6 million tce conservation Energy performance contracting ——280 million RMB; 1.16 million tce Energy standards 48 energy conservation standards were issued in 2013 Promoting energy-saving technologies and products State Key Energy-Efficient Technology Promotion Catalogues Energy saving and low-carbon technologies to promote the achievements list released  Energy intensity decreased by 9% in 2013 compared with 2010  350 million tce coal conservation  840 million ton of CO2 mitigation

10. Energy conservation and efficiency improving Intensity target The energy intensity of GDP decrease 40~45% in 2020 compared with 2005 level Absolute target (2020) Total primary energy consumption ＜ 4.8 billion tce Total coal consumption ＜ 4.2 billion ton Annual growth rate of energy consumption ＜ 3.5%

11. Energy structure optimizing

12. Coal consumption control Scale: 600 or 1000 MW ultra supercritical coal combustion technologies Efficiency: coal consumption ＜ 300 gce/kWh Emission: smoke, SO 2, NO X emission concentration less than 10, 35, 50 μg/m3 in eastern provinces New entries Closedown backward efficiency turbines ( ＜ 50 MW) Closedown turbines whose pollutants emission can’t meet environmental standards Phase out 100 GW of backward efficient turbines by 2020 Current plants Targets by 2020:  The share of coal in primary energy ＜ 62%  More than 60% of coal used for electricity generation

13. China-U.S. Joint Announcement on Climate Change China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early –The roadmap to achieving the peaking of CO2 emissions? –The CO2 emissions level of peaking? –The effects of transform from BAU to low carbon development mode? China intends to increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030 –Renewable energy development potential and cost? –Cost increase/decrease of the whole energy system? –The contribution of non-fossil energy to CO2 mitigation?

14. Comparisons of Central Government Targets and the Actual Capacity Growth of RE

15. Objectives – Industrial competitiveness  Would the climate policy increase the industrial production cost? Weaken the industrial competitiveness?  Domestic context: carbon tax / ETS ……  International context: global carbon market  Which industry would suffer the most transition cost?  GDP loss?  Energy intensive industry?  Industrial structure ？  Would that be a chance for China’s low-carbon development?  Transition cost?  Industrial structure optimization?  Import and export trade?

16. Objectives – Distribution effect & Welfare effect  How the climate policies would affect the residence’s welfare?  Carbon tax / ETS ……  Domestic context  International context  Which group of residence would be most heavily affected?  Income levels  Income gap  Differentiated carbon tax  Would the climate policy optimize energy consumption structure through changing residence life style?  Purchase choices  Transportation modes

17. Thanks!