China’s Energy and Climate Initiatives: Successes, Challenges, and Implications for U.S. Policies

On March 14, China’s National People’s Congress adopted its 12th Five Year Plan for economic development, which includes new goals for carbon intensity, renewable energy deployment, and energy efficiency. In 2010, China made international headlines for its use of measures such as partial shutdowns of manufacturing plants to meet its energy efficiency goals of the 11th Five Year Plan. While there were many challenges associated with its approach, there were also many positive developments, such as a 19 percent reduction in energy intensity.

On April 5, 2011, the Environmental and Energy Study Institute (EESI) and the ChinaFAQs project of the World Resources Institute (WRI) held a briefing on China’s increasing role in advancing renewable energy, energy efficiency, and climate policies. China is a leader in the deployment of clean energy technologies, and the world’s largest manufacturer of wind turbines and solar panels. The United States and China cooperate on a number of clean energy initiatives, producing benefits for both countries. However, China has emerged as a major competitor with the United States and other countries in clean energy technology on a global scale. Moreover, some commentators in each country see the other country as a roadblock to an international climate agreement, and China and the United States emit the most greenhouse gases in the world. Speakers highlighted key aspects of China’s approach to clean energy and climate policy, how it fits into the global landscape, and the challenges and opportunities for U.S. efforts to develop clean energy and tackle climate change.

• China is now the global manufacturing leader of most renewable energy technologies, and the largest user of clean energy. In 2010 alone, clean energy investment in China topped $154 billion, while approximately 77 gigawatts of old fossil fuel power was shut down.
• These achievements were accomplished by a variety of targets and priorities such as the “Top 1000 Enterprises Program”, which focused on reducing energy consumption in the largest enterprises in the country, the “10 Key Projects” program, a financial incentive program, and redefining strategic industries, focusing more on new energy, energy saving and high-end and next generation information technology, to name a few.
• While enormous progress had been made from 1980 to 2002 to decouple China’s economic growth from its energy demand, there was an increase in energy intensity from 2002 to 2005. However, the downward trend of China’s energy intensity has continued again since 2006.
• Deborah Seligsohn of the World Resources Institute (WRI) remarked that China is taking action on clean energy and environmental policy out of its own self interest. The transformation occurring in the energy industry is also a driver for their economic policy. In the past, much more focus was placed on securing imported energy and maintaining supply.
• China has recognized the damage that climate change and environmental problems are causing the country and the need to economically restructure in order to address these issues.
• Dr. Seligsohn pointed out that the key difference between U.S. and Chinese energy policy: in China, energy policy supports its economic vision, whereas the United States still struggles over the question of whether to view clean energy development as a cost or an opportunity.
• Many studies from highly-respected institutions predict that China’s emissions will continue to rise through 2030. However, they do not project further into the future, where Dr. Mark Levine estimated, China’s total energy use will plateau by 2050.
• This conclusion was based on the assumptions that end uses for energy, like appliances, will saturate the market while commercial and residential floor space will plateau—not following the U.S. trajectory because of China’s urban density. Furthermore, demand for steel and cement will wane as China finishes its highway and rail system infrastructure in the next decade and a half.
• Steel and cement production were key reasons why, during the 2002-2005 timeframe, China’s energy intensity rose significantly. One of the other major reasons was its entry into the World Trade Organization and subsequent spike in its export economy.
• Sun Guoshun, First Secretary at the Chinese Embassy, reiterated China’s commitment to clean energy development and tackling climate change. Mr. Sun asked Congressional staffers in attendance to convey the message to Members of Congress that China will cooperate with the United States to address climate change and energy security.
• China’s largest policy driver for solar is the feed-in tariff, and there are reports that China will set a goal of 10-15 gigawatts of solar power by 2015, making it the world leader in installed solar power.

Background

On March 14, China’s National People’s Congress adopted its 12th Five Year Plan for economic development, which includes new goals for carbon intensity, renewable energy deployment, and energy efficiency. In 2010, China made international headlines for its use of measures such as partial shutdowns of manufacturing plants to meet its energy efficiency goals of the 11th Five Year Plan. While there were many challenges associated with its approach, there were also many positive developments, such as a 19 percent reduction in energy intensity.