China Rumored to Release Its Carbon Intensity Goal Later This Week

When Chinese President Hu Jintao made the first speech by a Chinese leader to the United Nations General Assembly back in September he signaled that China would be announcing a target to reduce its carbon intensity by a “notable amount” relative to business as usual but did not reveal the actual number. Since then there has been much speculation as to what the “notable amount” that President Hu suggested would be.

This week, the talk has become more specific with reports that China will release its number over Thanksgiving weekend, partly in response to President Obama’s announcement today that the United States will in fact bring a numerical target to Copenhagen. The White House press release stated “the President is prepared to put on the table a U.S. emissions reduction target in the range of 17% below 2005 levels in 2020.”

So what is China likely to put on the table? First of all, it is important to realize that China will be stating a carbon intensity goal – not an absolute reduction target. While all the developed countries are committing to absolute reductions, no one expects developing countries, with their much lower per capita emissions (the average Chinese emits less than ¼ as much as the average American) to be able to reduce in absolute terms in the next decade.

China is going to be coming in with an intensity target, which is a reduction in the amount of carbon emissions per unit GDP. This is a way to show the increasing efficiency of an economy, and a way to have a flexible goal that responds to the much higher volatility of GDP growth in most developing countries.

Secondly, it is worth remembering that China’s commitment under the Bali Action Plan is to take “nationally appropriate mitigation actions” or NAMAs, as they are called. It is these actions that are the key to examining commitments from developing countries, and China already has an array of important actions, including national energy efficiency programs and an unprecedented building program for renewable energy.

The carbon intensity goal itself complements these. The actual number also turns out to be more difficult to calculate than one might think. Because carbon intensity is calculated as emissions per unit GDP, the more your GDP number grows, the better your intensity number looks. Thus, if you are optimistic about China’s growth expectations over the next decade, you might expect a higher carbon intensity improvement. If you are more pessimistic about growth prospects, you are going to predict a lower improvement in intensity, even though if growth were lower, the growth in the actual absolute size of the emissions would actually be lower.

How fast will China grow over the next decade? This is a much-contested question both in China and outside. Some analysts assume continued growth of over 8% a year, and if that is your assumption you get fairly optimistic numbers, such as those the International Energy Agency (IEA) and the US Energy Information Administration (EIA) have released, expecting Chinese carbon intensity to fall by over 40% in the 15 years to 2020. But other analysts are skeptical that China can maintain such a high growth rate as it becomes a middle income developing country. Many countries in this category have seen their growth rates become significantly slower as they need to grapple with structural changes to their economies. Thus, some Chinese analysts are using growth rate projects as low (for China) as 6.5% a year for the next decade. If the growth rate is lower, then you would expect a lower rate of carbon intensity change.

There is also the question of what groups like IEA and EIA are considering “business as usual” for China. They have very optimistic assumptions for energy intensity improvement, much higher than the rates they project for the United States (which are closer to 30%). While I don’t have the details of their assumptions, these BAU projections would take China’s current energy efficiency and renewable policies into account. Since the Chinese already announced these programs, they are business as usual, but they entail a significant and growing commitment. Maintaining progress is not easy, and energy efficiency, in particular, becomes more challenging as you become more efficient. China will need to move from the Top 1000 Enterprises Program to the next 10,000 or so enterprises, in other words from very large companies where you can make large changes at once to much more diverse and smaller companies. They will also need to add in new policies for buildings and for transportation. These are all areas the Chinese have expressed commitments to work in, including in the programs outlined with the United States last week, but it is worth acknowledging that the Chinese are taking on major and important challenges.

Photo by 2 dogs, courtesy of a Attribution-Noncommercial-No Derivative Works Generic License.