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China’s Policies on Climate Change: a Perspective of Development
Ji ZOURenmin University of China
The Harvard Alumni Association and the Harvard Clubs of AsiaGlobal Series: China / Asia, Harvard and the WorldPudong Shangri-La, Shanghai, March 28~30, 2008
Outline
• Development strategies: goals, path, and constraints
• Demand: investment, consumption, and net export
• Energy use and GHG emissions
• Response measures
• Obstacles and challenges
• Conclusion
Development Strategy: Goals 1• GDP: Re-doubling the amount of GDP per capita
in 2000 by 2020 (with 7.2% annual growth rate in average)
• Industrialization: lowering share of agriculture, raising share of manufacture and service with higher technological competitiveness and value-added
• Urbanization: higher share of urban population (from 45% in 2005 to 60% in 2020 and 75% in 2050) to and adequate urban infrastructure (tap water, sanitary system, energy, transport, housing, other public facilities, etc)
Development Strategy: Goals 2
• Full employment – a socioeconomic matter: surplus labor forces, weak social security system, and increasing income gap
• Economic stabilization: inflation, increasing cost of labor, energy and environment
• Trade – export or domestic market-oriented? Environmental and energy conditions of accessing to market; flows-in/out of goods, resources, capitals, and technologies for whom?
Development strategy: path
• Contribution of factor input growth and efficiency improvement to the gross-growth rate
• Kaya Equation:
PopPop
GDP
GDP
energy
energy
emissionEmission ***=
efficiencyfinputf GGG −− +=
6
It’s a matter of development paths: Conventional v.s. Innovative (SD)
GDP per capita
GH
G
Em
ission
1. Install low carbon technologies
2. Human resources
3. Policies and measures
Conventional path
Innovative SD path
Limits of GHGs emission
4. Financial resources
0
How to make this shift?
Inputs:
Development Strategy: Constraints• Accumulative capital in early stage of
development: from farmers/agriculture and the environment/natural resources via low price of labors and primary products
• Huge amount of surplus labors (~130 million) and lack of qualified human resources
• Growth pattern: the growth relies on high rate of investment (up to ~40%) and low efficiency of factor input
efficiencyfinputf GGG −− +=
Energy Use and GHG Emission in China
China’s Energy Use （ Mtoe ）
2000 2001 2002 2003 2004 2005 2006
Total energy
consumption
966.7 1000.0 1057.8 1228.7 1423.5 1566.7 1697.8
Coal 656.7 697.6 733.6 871.9 1012.1 1119.8 1212.3
Oil 223.6 227.9 247.4 271.7 318.9 327.8 349.8
Natural gas 21.5 24.1 25.7 29.9 35.0 41.2 50.0
Hydroelectricity+Nuclear 54.12 66.74 70.86 74.01 91.43 101.86 106.59
Source ： BP Statistical Review of World Energy June 2007
Alternative Projections of China’s Primary
Energy Demand in Future
6028 Mtce
3974 Mtce
3280 Mtce
3857 Mtce
3000 Mtce
5456 Mtce
4073 Mtce
2030
2020Wang, 2007
2020DRC, 2004
2030
2020ERI, 2007
2030
2015IEA, 2007
Energy intensive Demand: Investment, consumption, and net
export
• Industry used about 71% of the total energy in 2005 and 2006;
• Such six sectors as (1) ferrous and (2) nonferrous metal, (3) raw chemical materials and chemical products, (4) non-metallic and (5) metallic mineral products, and (6) petroleum refining, coking, and nuclear fuel, account for 72% of the industrial energy use, more than 50% of the total.
• A large gap exists in energy efficiency in these sectors between China and international standard.
Estimation of China’s Recent GHG Emission (Mt-CO2)
• IEA ： 5101 in 2005
• WRI ： 5204.8 in 2004
• CDIAC ： 5010 in 2004
• China ： 5600 in 2004
Alternative Projections of China’s GHG
Emissions in Future
10,630 Mt-CO2
8,177 Mt-CO2
7,231 Mt-CO2
8,617 Mt-CO2
6,563 Mt-CO2
11,447 Mt-CO2
8,631 Mt-CO2
2,899 Mt-c 2030
2,230 Mt-c2020Wang, 2007
1,972 Mt-c2020DRC 2004
2,350 Mt-c 2030
1,790 Mt-c2020ERI 2007
3,122 Mt-c2030
2,354 Mt-c 2015IEA 2007
Scenarios of Primary Energy Demand in China (BAU) -RUC
0
100000
200000
300000
400000
500000
600000
700000
2005 2020 2030 2050
年 份
万吨
标准煤
煤炭 石油 天然气 水电
核电 生物质能 风能 太阳能
Scenarios of Primary Energy Demand in China (with policies) - RUC
0
100000
200000
300000
400000
500000
600000
2005 2020 2030 2050
年 份
万吨标
准煤
煤炭 石油 天然气 水电
核电 生物质能 风能 太阳能
Scenarios of CO2 Emission from Fossil Fuel (BAU) - RUC
1000
1500
2000
2500
3000
3500
4000
2005 2020 2030 2050
年 份
百万
吨碳
基准情景 政策情景
Coefficients for both BAU and Policy Scenarios - RUC
2020: 26.8
2050: 28.6
2020 ： 32.7
2050: 36
CO2 emission (t-C)
2005-20 ： 0.54
2020-50 ： 0.20
2005-20 ： 0.65
2020-50 ： 0.22
Elasticity of Energy Use
2005-20 ： 4.2
2020-50 ： 0.8
2005-20 ： 5.1
2020-50 ： 0.9
Growth Rate of Energy Use %
2020 ： 39
2030 ： 45
2050 ： 50
2020 ： 44
2030 ： 51
2050 ： 58
Energy Use （ 100 Mtce ）
With PoliciesBAUIndicators
Response Measures
Near-term (5~10 years)• Public awareness improvement: low carbon
economy, new lifestyle• Development of policy implementation system• Infrastructure investment with high-efficient
technologies (power, transportation, and buildings) to prevent from Lock-in Effects
• Efficiency improvement in high-energy-intensive sectors
• LUUCF for keeping and increasing carbon sink• Capacity building for R&D of low-carbon
technologies and policy enforcement, and development of human resources
Long-term (20~30 years)
• Mature policy and institutional system (standards/norms, Cap-and-Trade, and environmental taxation; monitoring and verifiability, etc)
• Much higher R&D investment and companies become a major driven force
• Mature financial mechanism linking capital markets: Public-Private-Partnership
• Commercialized ESTs in major sectors at international level
Technology change will be a key
• What’s technology? (a system)• What’s transfer of technology? (in place and
effective)• What’s development of technology?• What’s diffusion and deployment of technology?• What conditions and infrastructure are needed?• What awareness we need to develop to address
the contradiction between the protection of climate change as global public goods and IPR as private goods? How can we coordinate this?
Preliminary identification of barriers of technology transfer
• barriers from provider side– Political will and politician and entrepreneur’s
awareness on global public goods– Technology export ban– Market forces: e.g. monopoly tendency by
technology owners– Very high expectation for revenue– Inadequacy of economic incentives from
public policies
Preliminary identification of barriers of technology transfer
• Barriers from receiver side– Awareness– Knowledge and information– human resources– Financial resources– Lack of monitoring and enforcement of technological
norms and regulations– Lack of economic incentives: taxation, clarification of
PR, including IPR– Divided institutional arrangement
• Infrastructure Barriers– Transportation and telecommunication– Enabling legal basis and policies
Risks and Challenges• Awareness and lifestyle• High pressure of population and employment
call for high growth rate and lead to massive inputs of resources
• Rural population and infrastructure: incremental energy use
• Lock-in by low efficient technologies in infrastructure (transport, power, and buildings)
• Human resources for next several decades• Managing increasing financial resources
Conclusion• China’s energy use and GHG emission will
continue to increase, but may be in a more sustainable manner
• Awareness and policy infrastructure should go in advance of the implementation of policy instruments as a learning process
• Recent focuses should be on specific sectors and technologies
• International cooperation is needed, incl. an innovative, PPP-based financial mechanism to support R&D, transfer, and deployment of CSTs
