China’s Clean Intentions

China Has Clean Intentions

Clean energy in China is a rapidly growing industry. China’s 12th five year plan contains China’s most ambitious energy-saving, water-conserving, and emissions-reducing targets to date. This fascinating article describes how China is investing heavily in clean energy technology and how it is heading towards being the clean and green leader of the world

It appears that China has recognized the unsustainable nature of its development model to date and is taking measures to address this. The rise of China significantly increased the rate of global resource depletion and pollution production. China is the world’s largest consumer of coal (burning more than United States, India and Russia combined), steel, meat and grain and the second largest consumer of oil. China’s Vice Minister for Environmental Protection, Mr Zhang Lijun admitted in public in March 2011 that China was still producing more “traditional pollutants” than it could bear.

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The United Nations’ Carbon Dioxide Information Analysis Centre ranks China first as the world’s largest CO2 producing nation. If China’s current energy mix remains unchanged, its greenhouse gas emissions will reach 17 billion tons/year by 2050 or 60% of global emissions, three times China’s current emissions. This would be catastrophic for the global environment.

China Clean Energy Efforts

In its latest Five-Year-Plan (FYP), China committed to its most ambitious measures to date to improve environmental performance. These sit alongside China’s pledges made at the Copenhagen Climate Change Summit (CCCS).

China’s 12th FYP & CCCS commitments

China’s 12th FYP contains China’s most ambitious energy-saving, water-conserving, and emissions-reducing targets to date. It is also the first FYP to mention climate change. Targets set under the 12th FYP are critical steps toward implementing China’s 40% to 45% carbon intensity reduction target announced at CCCS.

12th FYP Environmental Commitments

Category Target (based on 2010 levels)
Reduced energy use per unit of GDP 16%
Reduced water use per unit of value-added industrial output

30%

Reduced chemical oxygen demand 8% - 10%
Reduced sulphur dioxide 8% - 10%
Reduced carbon emission per unit of GDP

17%

Percentage of primary energy consumption from non-fossil fuels 11.4%
Reduced nitrogen from ammonia 10%
Reduced nitrogen oxides 10%
GDP from strategic emerging industries (see description below) 8% (not mandatory)
Annual energy consumption 4 billion TCE (not mandatory

Note: The above are primarily mitigation targets. The 12th FYP essentially does not address climate adaptation.

CCCS Commitments

  • Reduce carbon dioxide emissions per unit of GDP by 40% to 45% from 2005 levels;
  • Source 15% of its energy from non-fossil fuels;
  • Increase forest cover by 40 million hectares and forest stock volume by 1.3 billion cubic meters from 2005 levels.

Major factors driving the China Clean Energy shift towards growing the economy with the environment in mind are:

  • Resource security: Much of China’s development to date has been driven by antiquated, highly inefficient industrial methods. China hopes to more efficiently use resource inputs (including oil, coal, water and land) to reduce the rate of domestic resources depletion and its reliance on imported resources. If China does not significantly increase its efficiency in resource use, its development will be hindered by a lack of affordable resources, which exactly the reason why China is turning to Clean Energy
  • Environmental sustainability: Until the 11th FYP (which commenced in 2006), China paid little attention to environmental protection. Pollution generated by industry and wide-spread environmentally damaging practices have, over the past 30 years, led to the rapid depletion of arable land, useable water and bio-diversity. Unnatural illnesses are on the rise within China. China wishes to reverse some of these trends so that its natural habitat could better support the country’s population and economic activities;
  • Industrial upgrade and innovation: China wishes to resolve its energy security and environmental sustainability problems through indigenous innovation. The process of innovation (e.g. in clean technologies), China hopes, will upgrade China’s economy, at least along the more developed east coast, from a low-end, low-skilled, export-oriented manufacturing economy to a domestic-innovation led economy for China coupled with a healthy services / consumer sector. (Indigenous innovation as opposed to imported innovation is a key focus not only because of its potential to generate high value export revenue but also because China’s expanding consumer market is demanding tailored solutions. That is, China is moving from ‘made in China’ to ‘created in China’ and ‘created for China’);
  • Affordability: Throughout its 30 years of development, China accumulated significant export revenue, which it is now using to invest in infrastructure and research and development. Unlike the EU and the US, China is not short on funds to invest in the clean sector.
  • China Is Investing Heavily in Clean Energy

    To realize its 12th FYP and CCCS environmental commitments, China is investing heavily in its clean technology sector. In 2010, China became the world’s largest investor in clean technology by a long shot, winning it title as the best country for clean technology investment by Ernst & Young. Mr Shi Dinguan, senior adviser with China’s State Council, publicly announced that by 2020, the Chinese government will have invested RMB300 trillion (approximately US$45 trillion) in clean technology.

    Working with the World on China Clean Energy Projects

    In addition to investing in clean technology, China also wishes to work closely with the international community on technology transfer. In Premier Wen Jiabao’s March 2011 Work Report, the Premier expressed the need for Chinese companies to intensify overseas mergers and acquisitions to acquire technology. Technology transfer is essential for China to meet its 12th FYP targets. China lacks 43 or 70% of the 62 core technologies a United Nations Development Program study demonstrated are needed to achieve a low carbon future.

    During the 11th FYP period, China demonstrated the determination and ability to introduce large-scale, sector wide changes to ensure that the 11th FYP targets were achieved. From 2006 to 2010, China reorganized its energy industry by closing down 70GW of inefficient power plants (equivalent to closing all power plants in UK). China also linked local government promotions, salaries and the award of honorary titles to local government’s ability to achieve the energy intensity targets allotted to their respective regions. In many cases, local governments resorted to the disruptive method of randomly closing highly polluting, unsafe or energy inefficient power plants that supplied electricity to households, businesses and hospitals to achieve their targets. The Central Government publicly criticized these extreme measures and urged local governments to not repeat them. During the 12th FYP period, the same determination to achieve the 12th FYP goals without such extreme measures could be expected.

    China Clean Energy transformation is the driving force behind China’s strong desire to become the world’s clean and green leader; A situation that could generate environmental benefits for us all. Achieving this goal is contingent on many factors – ensuring local governments implement suitable projects in the right way, establishing robust monitoring, reporting and enforcement mechanisms (China’s current environmental measurement and verification methods are mostly unavailable for public scrutiny), carrying out appropriate community engagement and education programs, fostering domestic innovation (will China’s top-down directed approach to innovation work? Innovation comes from the bottom up in most other regions around the world), acquiring sufficient foreign technologies (why would foreign organizations transfer their technologies to a country with loose IPR protection?), etc. These make predicting the extent to which China will achieve its goal difficult. However, achieving solid outcomes could gain China the kudos it seeks to legitimize its position as the second (of at least one of the) most powerful nation(s) on the world stage.

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    About the Author

    Sjuen Yin is a lawyer, a policy analyst, events management specialist and a China consultant. She grew up in Australia and arrived in China three and a half years ago to rediscover her roots and to explore the implications of China's transition. She resides in Shanghai and is launching into China's entrepreneurial scene