China: Towards Low Carbon Green Development

Qi Ye

Climate Policy Initiative (CPI)

Tsinghua University

Beijing, China

qi@tsinghua.edu.cn

Sciences Po and IDDRI, Paris, 4 May 2011

OUTLINE

Carbon Emission from China and the Carbon Intensity of the Chinese Economy

Efforts to Reduce Carbon Intensity

Towards a Low-Carbon, Green Economy

International Cooperation

Carbon Emission of from China

The largest carbon emitter in the worldThe largest energy consumer in the

world In 2010: 3.2 5billion tce of energy consumption 7 billion tCO2 emission from fossil fuel

combustion

An energy and carbon intensive economy

Energy intensity

5X Japan 3X US

Is China’s economy inefficient?

Benchmarking: Power generation

1985 1990 1995 2000 2005 2010250

270

290

310

330

350

370

390

410

317 315303 301299300

292

392

379

363

343342332

322

China

Source:

Building Energy & CO2 Intensity

87 77 64 69

28

0

20

40

60

80

100

US Canada Japan Korea ChinaCO

2in

tens

ity (k

gCO

2/(m

2.a)

)

International comparison on CO2 emission, per unit area CO2

7521 6589

5454

3394 3271 2940 2019

297 245 177 849

0

3000

6000

9000

US Australia Canada Russia Japan Korea OECDEurope

Africa India Brazil China

CO

2in

ten

sity

(kgC

O 2/(c

a. a))

World avr 1326

International comparison on CO2 emission, per capita CO2

Fuel Economy Standards

7

88

A Coal-based Energy System

0

500

1,000

1,500

2,000

2,500

3,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Mtc

e

China's Primary Energy Consumption1980-2006

Hydro & Nuclear

Natural Gas

Petroleum

Coal

99

Resource endowment

Coal238 billion tons coal equivalent

97% total fossil fuel reserve base

Oil Natural Gas

Source: NBS, 2007.

10

中美碳排放比较

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

1111

Per capita CO2 Emission

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.

-

5

10

15

20

25

1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006

Tonn

es o

f CO

2/Pe

rson

Per Capita Energy Related CO2 Emissions1950-2007

China

US

Global Average

Middle-income country emission

Efforts to Reduce Energy Intensity

The largest carbon emitter in the worldThe largest energy consumer in the

world In 2010: 3.2 5billion tce of energy consumption 7 billion tCO2 emission from fossil fuel

combustion

1414 Source: National Bureau of Statistics, China Statistical Abstract, various years.

Effort to Reduce Energy Intensity

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1980 1985 1990 1995 2000 2005

kg c

oal e

quiv

alen

t/10

,000

(200

0) R

MB

Average Annual Decline of5% per year

Average Annual Increase of2% per year

On track to goalDuring the 11th FYP, China was on track to meet energy intensity target, reversed an upward trend of energy intensity between 2002 and 2005.

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20080.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1.20

1.16

1.22 1.29

1.28

1.24 1.18

1.12 1.08

En

erg

y In

ten

sit

y (

tce

/10

4 R

MB

)

10 th FYP 11 th FYP

1616

Reversal of the trend

Note: energy intensity values are calculated using deflated year 2000 GDP values; expressed in kilograms coal equivalent primary energy consumption per reminbi GDP.

2000 2001 2002 2003 2004 2005 2006 2007 2008 20091.00

1.05

1.10

1.15

1.20

1.25

1.19

1.14

1.11

1.16

1.22 1.23

1.20

1.16

1.10

1.08

The Power Sector

Decarbonization of power industry: 2005 - 2008

2005 2006 2007 2008

Power industry total capacity (GW) 517 621 713 791

Thermal power capacity (GW) 391 484 554 601

Hydro power capacity (GW) 117 129 145 172

Wind power capacity (GW) 1.1 1.9 4.0 8.9

Nuclear power capacity (GW) 6.9 6.9 8.9 9.1

Power industry total generation (TWh) 2500 2866 3282 3467

Thermal power generation (TWh) 2047 2370 2723 2790

Hydro power generation (TWh) 397 436 485 585

Wind power generation (TWh) 1 3 6 13

Nuclear power generation (TWh) 53 55 62 68

Power industry CO2 emission intensity (gCO2/kWh) 766.8 772.4 760.3 716.6

Thermal power industry carbon emission intensity (gCO2/kWh) 935.8 933.2 914.7 887.8

Renewable Energy and Nuclear Power

Installation: Renewable energy: 226GW in 2009;

Hydro: 200GW in 2010 (20GW added each year);

Wind power was 25.8GW in 2009 (annual growth of 130% from 2006 to 2009)

Generation: Renewables and nuclear power: 18.5% of national total in 2009. The electricity generated by hydro, wind and nuclear power increased from 2005’s 451.4TWh to 2009’s 666.7TWh, 47.7% higher than 2005 level, and the growth rate surpassed that of thermal power (36.3%).

Thermal Power: Structure and Efficiency

Closure of small and inefficient power plants: 72 GW, 20% more than total capacity of UK. 26.17GW closed in 2009 alone.

Structural change: 34% of units larger than 600MW in 2009 as compared to 13% in 2005; and proportion of units smaller than 300MW decreased from 53% to 31%, respectively.

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

5000

10000

15000

20000

25000

30000

新增装机 (MW) 累计装机 (MW)

Wind Power Installation

Source:

Policies for decarbonization of the power industry

The Manufacturing Industry Sector

Energy and Carbon Intensity

2005~2008, energy intensity decreased 13.3%, an 4.6% average annual reduction.

2005~2008, carbon intensity decreased 14.8%, a 5.4% average annual reduction.

2.10 2.05 1.93

1.82

0

0.5

1

1.5

2

2.5

2005 2006 2007 2008

单位

工业

增加

值能

耗（

tce/

万元

）

(年)

(a)

5.08 4.96 4.58

4.30

0

1

2

3

4

5

6

2005 2006 2007 2008单位

工业

增加

值C

O2排

放（

t-C

O2/万

元）

(年)

(b)

Ene

rgy

inte

nsity

(tc

e/10

4R

MB

)

CO

2 em

issi

ons

inte

nsity

(tc

e/10

4R

MB

)

Energy Savings in Manufacturing Sector

2006~2008, the industrial sector achieved cumulative energy savings of 421Mtce (frozen 2005 energy intensity baseline).

2006~2008, the industrial sector achieved aggregate CO2 emission reduction of 1170MtCO2.

2006 2007 2008

1618

1417

1546

1866

1451

1686

248

34

140

Unit: Mtce

Baseline

Energy savings

Actual energy consumption

2006 2007 2008

3814

3425

3674

4509

3505

4073

695

80

398

Unit：MtCO2

Baseline

CO2 emissions Reduction

Actual CO2 emissions

Goal: Reduce energy intensity from 2005-2010 by 20%

Manufacturing Sector Policy and Energy Saved

Policy Energy savings, 2006-2009

Contribution to 20% EI reduction

Top 1000 Energy Consuming Enterprises

132Mtce (exceeds target)

27%

Ten Key Energy Conservation Projects

140 Mtce (2006-2008) 29%

Small Plant Closures 110 Mtce 22%

EE gains in Power and Mfg

Energy consumption and CO2 emission increased rapidly, but energy efficiency and carbon productivity also improved.

Key policies:–Renewable Energy Law–Energy Conservation Law–10 Key Energy Conservation Projects–Top 1000 Energy-Consuming Enterprises Program–Plant Closure Program

The Building Sector

Bldg more challenging

Energy consumption and CO2 emissions up rapidly; but efficiency modest.

Key policies: –District heating–Building codes–Fuel economy standards–Public transportation prioritization

2005 2006 2007 20080

10

20

30

40

5048.2 47.3 46.5 45.7

24.1 25.6 27.4

25.7

10.4 11.0 11.7 11.6

45.5 47.1 47.2

44.6

不同建筑类型的单位建筑碳排放

北方城镇集中采暖 城镇住宅除集中采暖外农村住宅 公共建筑除集中采暖外

单位：千克标煤

/平米

The growth of CO2 emission in the building sector is slowing down

In 2008, China’s building sector• Energy consumption: 540 Mtce, 18.4% of China’s total

• CO2 emission 1260 MtCO2, 19.8% of China’s total

2006~2008 Growth rate• Energy: 8.6%

• CO2: 7.8%

220 225 234 237 247 273

295 336

381 422

468 519

540

0

100

200

300

400

500

600

1996 1998 2000 2002 2004 2006 2008

Ene

rgy

(Mtc

e)

(yr)

534 541 559 566 592 653 707

808 902

1007 1116

1228 1260

0

250

500

750

1000

1250

1500

1996 1998 2000 2002 2004 2006 2008

CO

2em

issi

on (

MtC

O 2)

(yr)

Energy consumption CO2 emission

75% of the energy saving targets by 11th FYP has been fulfilled during 2006~2008

2006 2007 2008

540

468

519

581

480

544

40.1

11.7

25.3

Unit: Mtce

Baseline

Energy savings

Actual energy consumption

Energy saving by policy clusters

Building codes40%

Heat reform30%

Renewable energy20%

EMC8%

Appliances2% The implementation of

building codes Heat reform in north urban

China Renewable energy

application Energy management contract More efficient appliance

The Transportation Sector

2005 2006 2007 20080

200

400

600

800

1000

509557

604631

交通部门的二氧化碳排放量

二氧化碳排放量

MtCO2

Transportation

3. More Energy-intensive TransportationP

asse

nger

Tra

nspo

rt

Fre

igh

t T

ran

spor

t

(a) Passenger mode share change, passenger-kilometers travelled(b) Freight mode share change, ton-kilometers travelled

(Sources: China Transportation Yearbook)

The Agriculture and Forestry Sector

GHG Emissions/Absorptions of the Agriculture and Forestry Sector

Direct CO2 Emissions Other Greenhouse Gas Emissions

CO2 Absorptions Indirect Embedded CO2 Emissions

Other Greenhouse Gas (GHG) EmissionsDirect CO2 Emissions

Fertilizers production

Pesticides production

Agricultural machinery depreciation

Agricultural film production

Rice cultivationFertilizers application

Livestock enteric fermentation

Livestock manure management

ForestryAgricultural

soil

CO2 CH4 N2O

Fossil energy consumption

122131 164158 66.1 110

420 50.7 272 13.6 6.37 24.4

CO2 Absorptions Indirect CO2 Emissions (Embedded Carbon)

Performance Evaluation of GHG Emissions Reduction

1. Reduction of energy consumption and direct energy related CO2 emissions, obviously reduction of energy intensity per

unit of agricultural added value .

2. CH4 and N2O total emissions kept stable.

3. Indirect embedded CO2 emissions of agricultural means of

production continued to increase.

4. Fertilizers related GHG emissions became the leading

source, but the corresponding intensity per fertilizers

application rate was reduced.

5. Fast growth in forest carbon sink, effectively increase in

agricultural soil.

Finding 7: Good news in ag and forestry

Agriculture: direct energy emissions declined, non-CO2 emissions stable.

Afforestation added 420MtCO2 per year to carbon sinks.

Key policies:•Logging ban•Afforestation

0

5

10

15

20

25

第一次 第二次 第三次 第四次 第五次 第六次 第七次

赵敏，周广胜 (2004)

李克让等 (2009)

Fang et al.( 2001)

王效科等 (2001)

Carbon storage in forestry

GtC

O2

Energy efficiency reduces carbon emission China’s carbon emissions intensity fell

largely as a result of energy intensity decrease, effect of energy mix was insignificant.

Policies that target emissions (not just energy) would accelerate reduction of carbon intensity.

Effective but not efficient policies

The most effective policies were top-down administrative measures such as the target responsibility system (TRS).

More cost-effective policies are needed to achieve future targets.

Much of the low-hanging fruit for reducing energy intensity has been picked (e.g., small plant closures). Economic structure has improved. Further reductions in energy intensity during the 12th FYP period will be more challenging.

Low-hanging fruit picked

Source: Xu Huaqing, 2007; State electricity regulatory commission, 2010

12th FYP: Towards A Low Carbon Green Economy

• A national consensus• Restructuring of economy• Emission reduction, not just energy efficiency• Consumption side management

• Market-based instruments: • ETS pilot• Energy Performance Contracting• Carbon tax

• Coal (energy) consumption cap and trade

International Cooperation

• The need for cooperation• Break the Prisoner’s dilemma• Build a shared vision of a green economy• Take small but concrete steps

Thank you very much for your attention !