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US-China Strategic and Economic Dialogue: Pledges of Greater Energy Market Transparency and Energy Supply DiversificationPosted by Deborah Seligsohn on May 26, 2010
Climate change was not the big news it was a year ago at the US-China Strategic and Economic Dialogue (S&ED). This is not surprising given that China made its major commitment on emissions reductions – its 40-45% carbon intensity target by 2020 – last year and US climate legislation is pending in the Senate. But many of the key players on climate change, including Secretary of State Clinton, her Climate Negotiator Todd Stern, and Department of Energy Assistant Secretary David Sandalow, were at the meeting. Energy Secretary Steven Chu stayed in the US to address the Gulf of Mexico oil spill, but his Department co-hosted three major bilateral seminars on energy efficiency, renewable energy and biofuels after the S&ED.
- China has substantially stepped up its enforcement of energy-saving building codes since 2007.
- Current energy codes call for improving the efficiency of new structures by 50% over pre-code buildings.
- Although rigorous, multi-step evaluations are ensuring high compliance with energy codes in major urban areas, buildings in rural areas often fail to meet the standards.
- More stringent standards and continued enforcement of energy efficiency codes can help China curb future energy demand in residential and commercial buildings.
- Historically, China’s leaders have responded to the rising demand for energy with efforts to increase supply.
- In recent years, however, these leaders have recognized that China cannot just grow its supply of energy, but must also find ways to curb demand.
- While China is taking significant steps to curb demand, the nations’ leadership remains wary of embracing policies to reduce demand that could be politically unpopular and slow economic growth. As a result, China faces longer-term risks of energy shortages and economic and environmental problems.
The concept of a carbon tax is receiving more and more attention in China, and there are even some formal proposals floating around the government. It was discussed by Jiang Kejun of China’s Energy Research Institute at the recent China Green Enterprise Forum and our network expert Bo Shen of the Lawrence Berkeley National Labs alerted us that both the Chinese and English versions of a newspaper article on the subject have now appeared on the National Development and Reform Commission’s (NDRC) climate change website. The Chinese article gives more detail than the English article and quotes unnamed officials from the Ministry of Finance (MOF) and the State Tax Bureau as well.
Indian Environment Minister Jairam Ramesh described the “Copenhagen Spirit” as substantially improving ties between China and India and leading to improved cooperation in related environmental areas, including hydrographic data, glaciological research and forestry. He expressed hope that an MOU signed last fall on energy technologies would yield some concrete projects, but admitted those opportunities had yet to be explored.
This week China held its second high-level discussion in two weeks on implementing its energy intensity target at the same time as disappointing first quarter numbers appeared showing that energy intensity has risen by 3.2% in the first quarter of 2010. Premier Wen Jiabao told provincial officials to use “an iron hand” in implementing energy intensity targets. This comes in the wake of last weeks’ announcement of eight new policies to enhance implementation of the 20% energy intensity target.
- China has become one of the world’s largest and fastest-growing markets for household appliances, such as televisions, clothes washers and refrigerators.
- To improve the energy efficiency of these products, China has developed an array of mandatory and voluntary standards and labeling programs.
- These programs promise to significantly reduce energy use and greenhouse gas emissions, but stepped up compliance testing and enforcement could enable China to reap even bigger gains.
- International collaboration – including with experts from the United States – has played an important part in China’s appliance efficiency efforts.