Low-carbon economy: developments and prospects

By Liang Meng, Qi Fan
0 CommentsPrint E-mail China Today, September 29, 2010
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In an age increasingly plagued by global warming and dwindling natural resources, the development of a low-carbon economy is a real and pressing challenge for any country. The task of greenhouse gas emission reduction is especially arduous for a big developing country like China. How to lower energy consumption and carbon emissions while still keeping a rapid and healthy economic growth? How to effect the transformation of economic structure toward sustainable social and economic development by promoting low-carbon industries and finance? In recent years the Chinese government has bent on the exploration of a development mode that suits Chinese conditions, and, by utilizing micro policies and market mechanisms, has made a good start on the development of a low-carbon economy.

Government Commitments

The level of governmental commitment to the low-carbon economy determines its level of success. The facts that China is rich in coal but poor in oil and gas and that its energy utilization rate is low are the main causes of its heavy carbon emissions. The Chinese government has long been aware of these problems and has worked hard to reduce energy consumption and develop new energy sources.

In its 10th Five-Year Economic and Social Development Plan (2001-2005), the Chinese government put forward a development strategy that focused on the exploration and conservation of resources - conservation being paramount, the improvement of the resources utilization rate, and the ultimate realization of the sustainable utilization of resources. It called for active development of wind, solar, geo-thermal and other new and renewable energy sources and promotion of energy-saving and comprehensive energy utilization technologies. The 11th Five-Year Plan (2006-2010) elevated the conservation of resources as a basic national policy and specified binding targets for the reduction of energy consumption per unit GDP and the utilization of new energy sources.

In support of the national development strategies, the State Council passed in 2004 the Outline of the Medium and Long-Term Energy Development Plan (draft). The same year the State Development and Reform Commission issued the country's first Special Medium and Long-Term Energy Conservation Plan, and in 2007 published the Medium and Long-Term Renewable Energy Development Plan, setting objectives up to 2020. It also published the National Climate Change Program, which defines comprehensively, systematically and clearly the guidelines, principles, targets and policy measures of China in dealing with climate change. China is the first country in the world to produce such a program.

In legislation, the Standing Committee of the National People's Congress adopted the Renewable Energy Law in 2005 and the revised Energy Conservation Law in 2007, laying the legal basis for energy conservation and the development of new energy sources. Table I shows the effectiveness of China's efforts in reducing per unit GDP energy consumption during the 11th Five-Year Plan period. Chart I shows the growing share of clean energy sources in China's energy consumption structure -- from 5.1 percent in 1990 to 8.9 percent in 2008 - and a gradual decrease of coal's share.

China insists on the "common but differentiated responsibilities" principle and has committed itself to obligations that a developing country should shoulder. It has been active in promoting the institutionalization of clean development and emissions trading mechanisms in China. After committing itself to a 20 percent reduction in per unit GDP energy consumption during the 11th Five-Year Plan period (2006-2010), China further volunteered, at the 2009 Copenhagen Summit, a per unit GDP carbon emissions reduction of 40-45 percent by 2020, showing China's sincerity in meeting its environmental obligations as a trustworthy developing country and the importance it attaches to the issue of climate change and international cooperation in the field.

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