An energy intensity (energy use per unit of GDP) target is a key aspect of China’s current five-year plan, running from 2006-2010, which has a target to reduce energy intensity by 20 per cent over this five-year period. Despite significant efforts being made to increase energy efficiency, reduce pollution and promote the widespread use of renewable energy, China has had limited success to date in achieving this energy intensity goal.
For China to achieve its energy intensity and carbon intensity targets, key policy reforms need to take place in how energy is utilised and created.
The major consumer of energy in China is industry, which accounts for about 70 per cent of the country’s total energy consumption. Therefore, this sector is crucial for China to meet its targets. A number of polices have been implemented to counter the current energy-inefficient and environmentally degradative pattern of industrial growth—such as having top 1000 enterprises to hold accountable for their energy saving and pollution cutting, and the elimination of export tax rebates, which will help to enhance energy efficiency. Other polices implemented include accelerating the closure of thousands of small, inefficient coal- and oil-fired power plants and concurrently encouraging the construction of larger, more efficient, and cleaner units, the improvement of energy efficiency in residential buildings and an increase in both the fuel economy standards and the stringency of emissions standards for vehicles.
Increasing the use of renewable energy is another set of polices and measures being implemented by the central government. China has targeted alternative energy sources to meet up to 15 per cent of the nation’s energy requirements by 2020— up from 8.9 per cent in 2008.
But China is not only setting extremely ambitious renewable energy goals – it is making large efforts to meet these goals. China invested US$34.6 billion in renewable energy in 2009, causing the United States to lose the top spot in absolute levels of investment for the first time in five years.
Despite these efforts, China’s proposed carbon intensity target needs not only to be seen as ambitious, but as credible. Is China’s proposed carbon intensity target credible?
Answering this question necessitates consideration of three issues.
First, is China’s 2020 target simply business as usual?
It has been argued that the 2020 carbon intensity target just represents business as usual. This is disingenuous as even the lower end of that target represents a deviation of 4.8 per cent below the World Energy Outlook 2009 baseline levels, not to mention a deviation of 12.7 per cent below the World Energy Outlook 2009 baseline levels at the higher end.
Second, as China’s pledges are in the form of carbon intensity, the reliability of emissions and GDP data matters. Are these statistics accurate?
China’s figures on energy and GDP are dubious, given that China is not generally known for the reliability of its statistics. China’s compromise at Copenhagen to agree to open its emissions data to international consultation and analysis is a start, and the government is making continuing efforts to improve the accuracy and reliability of China’s statistics on economic activity and energy use.
Third, is China really able to achieve its target, given that China has faced and continues to face great difficulty meeting its own 20 per cent energy intensity target in 2010?
Given that China has shifted control over resources and decision making to local governments during the past three decades, this depends on, among other factors, whether local governments act in accordance with centrally directed policies and have adequate funding to achieve their own policy goals.
There is no doubt that achieving these targets pose a significant challenge for China. The whole world is waiting to see whether China can turn this challenge into a win-win outcome for China and for global climate change.
ZhongXiang Zhang is a senior fellow at the East-West Centre, Honolulu. The above piece is a summary of an article published in Ross Garnaut, Jane Golley and Ligang Song (eds): ‘China, The Next 20 Years of Reform and Development.’
There are a number of interesting points here.
Firstly, just like the use of carbon pollution by the Rudd government, this article uses dirty coal. One is not sure when clean coal technologies are used, whether coal will still remain dirty or not.
Second, many people say China’s statistics are problematic. The question in terms of carbon intensity should perhaps not really be about that problem, but about the consistency of China’s statistics. If the statistics are largely consistent over time, then it will not be a serious problem.
Thirdly, assuming the measure of intensity is consistent over time, then a question on whether China’s target is ambitious or not, or credible or not, also involves whether the World Energy Outlook 2009 baseline levels (its business as usual levels) are correct or not, if they are to be used as a guide for evaluating China’s target.
Fourthly, while it may be interesting to know that “the whole world is waiting to see whether China can turn this challenge into a win-win outcome for China and for global climate change”, it is also important for the rest of the world to take serious actions as opposed to “waiting to see”.
Lastly, while it is convenient to talk about China being the world’s largest aggregate emitter of carbon dioxide, one should not ignore the fact on per capita basis China’s emissions are only a fraction of those in most industrialised countries. After all, it is the per capita level of emissions that is the key issue, given the huge variations in the size of countries across the world.