2007 Massey Energy Postgraduate Conference

Patrick Schroeder Victoria University of Wellington 2007 Massey University 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




Why China?

Leapfrogging – useful theories

Existing clean energy Partnerships & relevance for New Zealand


Why China?China and Climate Change

Coal accounts for about 65% of China’s energy

consumption, with demand exceeding 2 billion tons per

year.

China has surpassed the United States as

largest emitter of CO2.

China accounts for 28% of the world’s coal

consumption

In 2006 newly added energy capacity of 105

GW (90 GW through coal)


Why China?Embodied Emissions – China’s production, our consumption

(Bin & Harriss, 2005)

About 7 -14% of China's current CO2 emissions are the result of producing exports for US consumers

US–China trade has increased global CO2 emissions by an estimated720 million metric tonnes

According to World Bank

estimates up to 40% of China’s emissions are the result of

export manufacturing.


Why China?New Consumers enter the stage…Global Consumer Class (GCC)

Golden Resources Shopping Mall, China

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.

Where is the GCC?

Consumption patterns similar to those in developed countries (>7000 USD BIP)

What is the GCC?

(Bentley 2003: Leading consumer classes in countries, 2002)

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.


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


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


Development of primary energy consumption under the IEA reference scenario

Development of primary energy consumption under the alternative ‘leapfrog’ [R]evolution scenario

Why China?Strategic Leapfrogging Energy Scenarios – Greenpeace/EREC [R]evolution


Why China?WBCSD Pathways 2050




Why China?




Hu

ma

n D

eve

lop

me

nt In

de

x

Ecological Footprint per person

High demand on biosphere per person

High demand on biosphere per person

Low human developmentWithin carrying

capacity

Low human development

Minimum acceptable level of Human Development

‚Developing Countries‘

Why leapfrogging?Leapfrogging into sustainable development

‚Developed Countries‘

Wo

rld a

vera

ge

bio

cap

aci

ty

ava

ilab

le p

er

pe

rso

n

leap

frogging‚business as ususal‘

(UNEP/CSCP 2007)

Sustainable Development


What is leapfrogging?System Innovation

5 10 20

factor 10 or more

factor 5

factor 2

systemoptimization

systemredesign

systeminnovation

Time horizon ( Years)

Imp

rove

me

nt o

f en

viro

nm

enta

l eff

icie

ncy

(Tukker, 2005)

‘Radical innovations’ instead of ‘system compliant solutions’

Impact = Population x Affluence per capita x Technical efficiency or production/consumption


What is leapfrogging?Adaptive niche market management

Dynamic multi-level perspective of technology diffusion process

(Geels, 2002)


• 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

• ???

What is leapfrogging?Barriers to environmental technology transfer…. … and solutions

• 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

• ???




Why China?




China’s Renewable EnergyCurrent 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


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


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 CleanDevelopment and Climate (APP)

• Australia-China Bilateral Cooperation on Climate Change

• Kyoto protocol - CDM

Existing PartnershipsRoaring 40s – China Activity

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 ofwind energy assets in China by 2011/12


Relevance for New ZealandOpportunities for Government, 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:

New Zealand Businesses:

New Zealand Civil Society:

New Zealand Academia:

• 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

• 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



Thank you 谢谢您的注意

Documents

2007 Massey Energy Postgraduate Conference