China Records Its Climate Actions By Copenhagen Accord Deadline

China’s Commitment

China has submitted its proposed climate mitigation actions to the UNFCCC in a letter dated January 28, ahead of the January 31, 2010 deadline in the Copenhagen Accord. Given Premier Wen Jiabao’s hands-on role, along with President Obama and the leaders of India, Brazil and South Africa, in creating the Accord last month, it is encouraging to see China demonstrate its commitment to moving global climate negotiations forward.

In its letter, China reaffirmed its earlier announcement of policies to: (1) reduce its carbon intensity by 40-45% by 2020 from 2005 levels, (2) increase the share of non-fossil energy in its primary energy consumption to around 15% by 2020, and (3) increase forest coverage by 40 million hectares and forest stock volume by 1.3 billion cubic meters by 2020 from 2005 levels. China noted that these actions will be implemented in accordance with the principles and provisions of the UNFCCC.

Although China did not explicitly state its association with the Copenhagen Accord, it had previously joined the other BASIC* countries in expressing its support for the Accord and underlining its importance as representing a high-level political understanding among the participants on some of the most contentious issues of the climate change negotiations. The U.S., Japan, E.U. and Australia have all formally associated with the Accord and submited their commitments. India has officially submitted their mitigation action, while Brazil and South Africa have confirmed that they will submit their mitigation actions by the deadline as well. Together, these countries represent over 65 percent of global emissions and include all of the major emitters.

Let’s be clear: the aggregate reduction in carbon from these pledges is not enough to keep atmospheric carbon dioxide (CO2) concentrations below the 450 parts per million level that science tells us is necessary to have a 50 percent chance of keeping global warming to within 2 degrees Celsius and avoiding the worst impacts of climate change. Nevertheless, this is a critical start that would have been unimaginable just a few years ago.

China’s Carbon Intensity Target

The centerpiece of China’s submission is its commitment to decrease its carbon intensity – the amount of carbon dioxide it emits for every unit of GDP – by 40 to 45 percent by 2020 compared to a 2005 baseline (as I’ve blogged about here). China’s leaders have made it clear that this target will be binding on a domestic level, and that China will strive to achieve this goal regardless of other countries’ emissions reductions and irrespective of external financing.

Our own analysis has shown that China’s carbon intensity target is a solid commitment, a conclusion also held by the International Energy Agency (IEA). In its most recent World Energy Outlook, IEA calculated the efforts that each country would need to make to keep atmospheric CO2 concentrations below 450 ppm and global warming to no more than two degrees Celsius. The upper range of China’s 40-45% carbon intensity reduction target is close to the 47% carbon intensity reduction target for China estimated under IEA’s 450 ppm scenario, under which China’s actions would help to avoid almost 1 billion tons of CO2 emissions by 2020, more than any other country.

Meeting Targets

To meet its target, China cannot just do business as usual. It will need to build upon the existing, aggressive efforts it undertook in the last four years to reduce its energy intensity by 20 percent from 2005 to 2010, including:

• Continuing a program aimed at reducing the energy consumption of its top 1,000 energy-consuming enterprises (the “Top 1000 Enterprises Program”), which were responsible for a third of total energy consumption in 2004.
• Replacing even more small inefficient power plants and outdated iron, steel and cement capacity.
• Developing more aggressive energy standards for industry, buildings, vehicles and appliances and improving their implementation.
• Continuing to evaluate government officials on their performance meeting energy and environmental targets (as my colleague, Alex Wang, has blogged about here).

China will also have to sustain its rapid deployment of clean energy to meet the goal of having around 15% of the nation’s primary energy consumption come from non-fossil sources by 2020. This will require a massive amount of investment. In 2008, China invested a total of $15.6 billion in sustainable energy investment (see here). China is reportedly planning to invest between $440 billion and $660 billion in the next 10 years on alternative energy development, including nuclear, in what could be the largest such program in the world.

China will also have to build upon its aggressive reforestation efforts. At present, China’s man-made forest coverage is 54 million hectares, after a prior drive to increase forest coverage by 20.5 million hectares from 2003-08. China’s forestry efforts, which are in addition to its carbon intensity reduction efforts, could remove over 2 billion tons of CO2 by 2020.

Chinese leaders are keenly aware of the economic and environmental damage that climate change can cause, and they also understand the benefits that becoming a world leader in renewable energy and clean technology will provide in terms of jobs and energy security. This is apparent in the manner in which China is already moving forward with its plans to reduce the growth of its emissions.

Results Under the 11th Five Year Plan

Looking at the serious ways that China has pursued its current Five-Year Plan goals, I am optimistic that China can live up to its pledges under the Copenhagen Accord. While many challenges remain, China has already achieved considerable progress in a number of its emission reduction efforts to date:

• The Top 1000 Program: Under the Top 1000 Enterprises program, the Chinese government negotiated energy savings targets with the top 1,000 energy-consuming enterprises and required the enterprises to conduct energy audits and establish energy savings plans to reach their targets. An evaluation of the top 1,000 enterprises’ performance last November (Chinese only) has noted that the enterprises as a whole have invested 90 billion RMB ($13.2 billion) in improving their efficiency and have already met their collective target under the 11th Five Year Plan of reducing energy consumption by 100 million tons of coal equivalent. Scientists from Lawrence Berkeley National Laboratory have estimated that the program will avoid about 450 million tons of CO2 emissions through 2010.
• Closing Inefficient, Outdated Power Plants and Factories: By replacing outdated, inefficient power plants and industrial capacity, China is improving the efficiency of its electricity production and industry. According to the latest reports, China has phased out 55.5 gigawatts of old thermal power plants from 2006-09, as well as 61 million tons of outdated iron-making capacity and similarly large quantities for steel and cement (see here). Of course, this does not mean that total emissions from Chinese power plants or industry are decreasing - in fact, China’s net thermal power capacity actually increased by 49 gigawatts in 2009. But because new plants and factories benefit from more efficient technology and processing methods, these efforts to shut down inefficient, outdated production capacity are critical for reducing the growth of China’s carbon emissions.
• Job Performance Rating System: The government also established in 2007 an evaluation system to monitor progress in meeting energy savings targets, under which provincial officials and enterprise leaders who did not meet their targets wouldn’t receive promotions or annual awards. The central government has already seen promising results for motivating provincial and local officials to meet their targets. While environmental enforcement remains a serious problem in China, this bureaucratic job evaluation system is a very powerful tool in China to ensure that targets are achieved. We can expect in the next Five-Year Plan, to be released later this year, that officials will now also be evaluated based on their performance in meeting their carbon intensity targets.
• Renewable Energy Development: China’s ambitious plans to develop its renewable energy resources are also integral to reaching its carbon intensity target. In 2008, China’s renewable energy use was equivalent to 250 million tons of standard coal, avoiding 600 million tons of CO2, roughly equal to the entire annual emissions of Canada. China’s installed wind capacity has grown exponentially in recent years, and at the end of 2009 China passed Spain to rank third in the world in installed wind capacity, behind the United States and Germany.
• Meanwhile, China’s solar industry has also taken off. China created two solar subsidy programs in 2009 (the Golden Roof and Golden Sun programs) to boost domestic solar installation, and has become the world leader in manufacturing solar PV panels in just a few years. China also announced several utility-scale renewable energy projects last year, including the world’s largest wind farm, a 10 GW “Three Gorges of Wind Power” project in Gansu Province, and a 2 GW solar power plant in Northern China using Arizona-based First Solar’s thin-film solar PV panels. While there continue to be challenges connecting renewable projects to the grid, the government is taking steps to address these issues by investing in smart grid technology and amending the Renewable Energy Law to strengthen grid connection rules.
• China plans to invest $7.3 billion in its smart grid in 2010, just slightly more than the United States. China’s 2009 green investment plan also included $1.5 billion in subsidies over the next three years to develop alternative-energy vehicles. China is investing $9 billion a month on clean energy, and investment in clean energy R&D under its 863 Program is soaring at over 20 percent per year. Renewable energy jobs in China reached 1.12 million in 2008 and are climbing by 100,000 a year.

Ramping Up Since Copenhagen

As President Obama noted in his State of the Union address last week, countries like China “aren’t standing still.” China has indeed taken several other noteworthy steps in the weeks following the Copenhagen meeting.

Last week, China’s Ministry of Environmental Protection issued an official document encouraging monitoring of source-level greenhouse gas (GHG) emissions in localities “where conditions permit” and setting forth plans to carry out a pilot project to monitor carbon dioxide, methane and N20 at a number of sites. This is another step towards building the capacity to monitor GHGs in China, and comes soon after the agreement on cooperation signed between the US EPA and China’s NDRC in November of last year to collaborate on the development of a GHG inventory for China.

In addition, just one week after Copenhagen ended, China’s legislature passed amendments to its Renewable Energy Law, which was originally enacted in 2006. Although we need to wait for implementing regulations to flesh out much of the detail, the amendments illustrate China’s continued commitment to expanding its renewable energy supply and overcoming some of the barriers that have stood in the way of achieving this goal. The amendments contain several notable changes, including: (1) creating stronger incentives for grid companies to connect and purchase renewable power through mandatory renewable power targets, (2) encouraging grid companies to invest in smart grid technology, (3) streamlining the government fund that finances renewable energy R&D and deployment and (4) strengthening central government oversight of renewable energy planning and development at the provincial level. The passage of these amendments at such a critical time illustrates that China is pushing ahead with its vows to clean up its energy supply and is able to respond quickly to new challenges as they arise.

Finally, last week, the Chinese government formally established a National Energy Commission, at the highest level possible, headed by Premier Wen Jiabao. The creation of the NEC is a positive development because it will allow for better coordination of energy policy, including raising energy efficiency, curbing emissions, and strengthening China’s energy security. When China releases its 12th Five Year Plan for 2011-15 later this year, it will set forth in greater detail the steps it will take to meet the climate commitments it has set out for itself. Both the creation of the National Energy Commission and the drafting of the 12th Five Year Plan are crucial steps that lay the groundwork for China to meet its targets.

President Obama also noted in his speech last week that “the nation that leads the clean energy economy will be the nation that leads the global economy,” and countries like China are “making serious investments in clean energy because they want those jobs.” (The media has taken note of China’s efforts too, as seen in this recent New York Times article proclaiming “China Leading Global Race to Make Clean Energy.”) Taking action on climate change is an opportunity for both the U.S. and China to develop the clean energy technologies and industries of the future that will create hundreds of thousands of clean energy jobs, strengthen their economies and increase energy security.

Although there is still much to be done to prepare for the next U.N. climate conference in November, China, the U.S., and many other countries have shown through their support of the Copenhagen Accord and the submission of their pledges that they are ready and willing to come together to take the next steps needed to reach a global agreement on climate change and transition to a clean energy future.

*The BASIC countries are Brazil, South Africa, India, and China.

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