Mitigating Climate Change

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Climate change is a common challenge facing human society today. As the largest developing country with a large population, China has complex and diverse terrain conditions, faces unbalanced, uncoordinated and unsustainable problems in the economic development, and is vulnerable to the adverse effects of climate change. An active response to climate change is not only China's responsibility for extensively participating in global governance and building the common destiny of mankind, but also the inherent requirement to achieve sustainable development.

Since 2014, China has actively taken measures in various fields to tackle climate change and achieved remarkable outcomes. China issued the National Climate Change Plan (2014-2020) putting forward China's main objectives and key tasks to address climate change before 2020. China submitted the Intended Nationally Determined Contribution (INDC) to the Secretariat of United Nations Framework Convention on Climate Change (UNFCCC) outlining the objectives including to achieve the peaking of carbon dioxide emissions around 2030 and make best efforts to peak early, and proposing policy measures to ensure their implementation. By adjusting industrial structure, improving energy conservation and energy efficiency, optimizing energy structure, controlling non-energy GHG emissions and increasing forest carbon sinks and taking other efforts to control GHG emissions, China lowered its carbon dioxide emissions per unit of GDP by 6.1% in 2014, with a cumulative decline of 15.8% over 2010, completing 92.3% of its carbon intensity decline target during the 12th Five-Year Plan period. It has reduced the adverse effects of climate change and enhanced the ability to adapt to climate change through positive actions in agriculture, water resources, forestry and ecosystems, coastal areas and relevant waters, human health and other areas. At the same time, China actively promoted international exchanges and cooperation on climate change, issued joint statements on climate change with India, Brazil, UK, EU, US and France and prepared South-South Cooperation Fund for climate change; it actively participated in international negotiations on climate change in a constructive manner for 2015 Paris Agreement and follow-up system construction.

This annual report has been issued to help the comprehensive understanding of China's policies and actions on climate change, and the progress made since 2014.

I. Mitigating Climate Change

Since 2014, the Chinese government has followed the goals and tasks of addressing climate change during the 12th Five-Year Plan, and adopted measures including adjusting industrial structure, saving energy, increasing energy efficiency, optimizing energy structure, controlling GHG emissions from non-energy activities, and increasing carbon sinks. Significant headways have been made in mitigating climate change.

(I) Adjusting Industrial Structure

Promoting the transformation and upgrade of traditional industries. Since 2014, the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT) and other relevant departments issued Implementation Plan for Key Environmental Protection Technologies and Equipments and for Product Industrialization Projects, Notice on Capacity Replacement of Constructing Projects in Some Serious-Overcapacity Industries, and 2014 Special Action Plan on Green Industrial Development, in order to promote the transformation and upgrade of traditional industries. In May 2015, the State Council issued "Made in China 2025" and put forward to build China into a world leading manufacturing power. It proposed 9 key tasks, 10 priority areas and 5 key projects. In 2014, China eliminated 4.86 GW of backward thermal power generation capacity, 31.1 Mtons(million tons)of backward steel production capacity, 87 Mtons of cement (clinker and grinding capacity) and 37.6 million weight boxes of flat glass, successfully completing the target set by the government working report. From 2011 to 2014, the cumulative elimination of backward steel production capacity totaled 77 Mtons, cement (clinker and grinding capacity) 600 Mtons, flat glass 150 million cases, achieving the target of backward production capacity elimination for the 12th Five-Year period one year ahead.

Accelerating the development of strategic emerging industries. In April 2015, NDRC issued Guidelines for Issuing Special Bonds in Strategic Emerging Industries to increase the support of corporate bonds in nurturing and developing strategic emerging industries. In August 2015, the State Council approved the establishment of national venture capital funds for emerging industries with a total size of 40 billion Yuan, focusing on early-stage innovative enterprises. MIIT issued Opinions on Further Optimizing the Market Environment for Solar PV Corporate Mergers and Acquisitions as well as Key Outlines of Transformation and Development of Raw Material Industries in 2015, and launched and implemented the special action of intelligent manufacturing pilots and demonstrations.

Vigorously developing the service industry. In August 2014, the State Council issued Guiding Opinions on Accelerating the Development of Productive Service Industries to Promote the Industrial Restructuring and Upgrading, which makes a comprehensive planning for the development of productive service industries for the first time and proposes to accelerate the development of manufacturing service industries such as software and information technology services, industrial design and modern logistics. The Government Working Report in 2015 put forward the "Internet+" action plan for the first time and promoted an in-depth integration of information technology with industrialization. By the end of 2014, the economic scale of national information consumption reached 2.8 trillion Yuan with an annual increase rate of 18%; the economic value of electronic commerce transaction amounted to 12 trillion Yuan with an annual increase rate of 20%; the revenue of telecommunications, software and information technology service, and the internet industries saw a annual growth of 4%, 20% and 50% respectively. Service trade developed rapidly, and the total service (excluding government service) imports and exports reached 432.75 billion US dollars in the first 8 months of 2015,increasing by 15.2% over levels of a year ago.

Thanks to the work of all sides, China's industrial structure keeps optimizing. By the end of 2014, the share of three industries of China was optimized to 9.2%: 42.6%: 48.2% respectively, showing a significant improvement compared with 10%: 43.9%: 46.1% in 2013. The adjustment of industrial structure has played a growing role in achieving the carbon intensity reduction target.

(II) Energy Conservation and Improving Energy Efficiency

Strengthening the management and appraisal of energy conservation. In May 2014, the State Council issued 2014-2015 Action Plan on Energy Conservation, Emission Reduction and Low-Carbon Development, which makes a comprehensive arrangement for the work on energy conservation, emission reduction and carbon mitigation in 2014 and 2015. NDRC issued Notice on Further Increasing Energy Conservation Efforts to Ensure the Completion of Energy-Saving Targets of the 12th Five-Year Plan Period, and carried out in conjunction with other relevant departments' on-site assessments of the completion of energy conservation and total energy consumption targets in 31 provinces (autonomous regions and municipalities) in 2013. The energy conservation on project level was also assessed and reviewed. In 2014, totally 320 projects were assessed and reviewed and the energy consumption of them amounted to 290 million ton coal equivalent (Mtce), saving energy consumption by 1.5 Mtce.

Accelerating the implementation of key energy-saving projects. The central government budget continued to be arranged to support energy-saving projects. A total of 1.3 billion Yuan of budget was appropriated in 2014 to support 617 energy-saving technology transformation and industrialization projects and capacity-building projects for energy monitoring institutions, equivalent to an energy saving potential of 2.68 Mtce annually.

Further improving energy efficiency standard and labeling scheme. The "One Hundred Energy Efficiency Standard Promotion Program" is carried out and streamlined by NDRC, Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and the Standardization Administration. As of September 2015, a total of 105 compulsory energy consumption standards and 70 mandatory energy efficiency standards have been published. AQSIQ organized special actions of law enforcement inspections on energy-efficiency labeling of products in the project of delivering the benefit of energy-saving products to Chinese citizens.

Promoting energy-saving technologies and products. In 2014, NDRC released Interim Measures for the Promotion and Management of Energy-Saving, Low-Carbon Technologies and Catalogue of National Key Low-Carbon Energy Technologies for Promotion (2014), in order to promote the progress and popularization of energy-saving, low-carbon technologies. The project of delivering the benefit of energy-saving products to Chinese citizens are continued to be implemented. The first and second batch of energy-saving vehicle catalogues and the sixth batch of energy-efficient motor catalogue are released, and 100 million energy-saving bulbs are promoted via financial subsidies. In addition, the Implementation Plan for Energy Efficiency Leader Systems, Catalogue of Energy Efficiency Star Product and Catalogues of Recommended Energy-Saving Electromechanical Equipment (Products) are released.

Vigorously developing the circular economy. In order to strengthen the macro guidance, NDRC developed and issued 2015 Circular Economy Promotion Plan and completed the review and acceptance of two batches of national circular-economy pilots. As to continue promoting circular-economy pilots, NDRC organized and carried out the review for industrial park circular transformation demonstration pilots, national "urban minerals" demonstration bases as well as meal and kitchen waste recycling and safe disposal pilot cities in 2015, and identified 25 industrial park circular transformation demonstration pilots, 4 "urban minerals" demonstration bases and 17 meal and kitchen waste recycling and safe disposal pilot cities. NDRC launched "Old for Recycled and Remanufactured Products" pilot, identified 10 pilots for promotion, and offered subsidies to the consumers returning remanufacturing old pieces and purchasing recycled and remanufactured products listed in the announcement. NRDC certified the remanufactured products and released 4 batches of Catalogue of Remanufactured Products, covering 95 remanufactured products from 27 companies, which further guided the consumption of remanufactured products. In 2014, China recycled a total of 245 Mtons of renewable resources, equivalent to saving 200 Mtons of coal consumption. In order to improve supporting policies and systems, NDRC and other departments issued Opinions on Promoting the Use of Recycled Urban and Industrial Waste in Production, and Scheme for Implementing Key Resource Recycling and Utilizing Projects (Technology Promotion and Equipment Industrialization), so as to promote the safe disposal and utilization of urban and industrial waste and improve China's technical equipment level in related fields. At present, China is working on drafting Policies on Electric Vehicle Battery Recycling and Utilization Technologies.

Promoting energy conservation in building area. China amended its Public Building Energy Efficiency Design Standards, and all the newly-built urban buildings began to adopt the mandatory energy efficiency standards. In 2014, energy-saving building area increased by 1.66 billion square meters, equivalent to an energy-saving capacity of 15 Mtce; the completed energy-saving building area in China totaled 10.5 billion square meters, accounting for 38% of urban area for civil use and equivalent to an energy-saving capacity of 100 Mtce. China actively developed green buildings, revised Green Building Evaluation Standards, formulated and promulgated Green Store Building Evaluation Standards. Beijing, Chongqing, Jiangsu, Zhejiang and Shenzhen began to enforce new green building standards in urban civil buildings, totaling nearly 400 million square meters accumulatively; by the end of June 2015, a total of 3,241 green projects obtained green building rating labels, with a total construction area of more than 370 million square meters. China further promoted the heating metering and energy conservation renovation of existing residential buildings in northern heating areas, and completed the renovation area of 210 million square meters in 2014 and 830 million square meters during the first four years of the 12th Five-Year Plan Period, exceeding the target of 700 million square meters set for the 12th Five-Year Plan Period by the State Council. The application of renewable energy buildings was also actively promoted. Along with the construction of renewable energy demonstration counties, the total area of solar thermal application in urban regions of China reached 2.7 billion square meters, the area of shallow geothermal energy application reached 460 million square meters, and the installed capacity of solar PV buildings reached 2,500 MW as of the end of 2014. To promote the industrialization of construction industry, the Ministry of Housing and Rural-Urban Development (MHRUD) issued Opinions on Promoting the Development and Reform of the Building Industry.

Driving energy conservation in transportation sector. In 2014, the Ministry of Transport (MOT) released 2014 Key Outlines of Energy Conservation and Emission Reduction of Transport and issued Accounting Rules for Transportation Energy-Saving and Emission Reductions and Energy Conservation Investment (2014). It designed green, circular, low-carbon transport system frame, released the evaluation index system for green traffic provinces, cities, roads and ports, promoted energy monitoring pilots, carried out transport energy consumption monitoring pilots in Beijing, Handan, JiYuan, Changzhou, Nantong and Huaian, and organized energy consumption statistics and monitoring pilot for highway and waterway transport enterprises, covering a total of 125 highway and waterway companies throughout the whole year. The Ministry adhered strictly to the implementation of fuel consumption standard for road-transport vehicles and released over 30,000 standard-reaching models in 31 batches. It also issued Fuel Consumption Limits for Passenger Vehicles, Fuel Consumption Limits for Heavy Commercial Vehicles, and Opinions on Speeding up the Promotion and Application of New Energy Vehicles in

Transportation Industry and other documents. 83,900 new energy vehicles were manufactured in 2014, a year-on-year increase of nearly 4 times, and 156,200 new energy vehicles were manufactured in the first 9 months of 2015, a year-on-year increase of nearly 3 times. Compared with 2013, the energy consumption per unit transport volume of commercial vehicles decreased by 2.4% in 2014, while that of ships by 2.3% and the port saw a fall of 2.5% in comprehensive unit consumption. In 2014, the Civil Aviation Administration issued Guide for Civil Aviation Energy Conservation Special Fund Project (2013-2014) and appropriated 528 million Yuan to support the implementation of 238 energy-conservation and emission-reduction projects. In 2014, the energy consumption per passenger of airport fell by 8.6% over the same period last year.

Promoting energy conservation in public institutions. In 2014, National Government Offices Administration and AQSIQ issued Notice on Strengthening Energy Resources Measurement Work in Public Institutions, revised Regulations on Energy Resources Consumption Statistics System for Public Institutions, promulgated Reference Catalogue of Energy-Saving and Water-Saving Technologies and Products for Public Institutions (2015), and released Notice on Energy Resources Conservation Arrangements for Public Institutions in 2015. These two bodies organized and carried out the establishment and acceptance inspection of the 2nd batch of energy-saving public institutions and energy resources conservation assessment of central state organs, strengthened the reporting of energy conservation information in public sectors, and promoted the project "R&D and Demonstration of Key Energy Efficiency Technologies in Public Institutions" and "R&D and Demonstration of Green Energy Efficiency Technologies in Public Institutions".

With concerted efforts, China's energy consumption per unit of GDP fell by 4.8% in 2014, 1.1% higher than that in 2013 and the highest since the 12th Five-Year Plan Period. The energy consumption per unit of GDP dropped by 13.4% accumulatively in the first 4 years of the 12th Five-Year Plan Period, saving energy consumption by 600 Mtce, equivalent to a reduction of 1.4 billion tons of carbon dioxide emissions.

(III) Optimizing Energy Structure

Imposing strict control over total energy consumption. The State Council issued Energy Development Strategy Action Plan (2014- 2020) in November 2014, which clearly put forward China's energy development targets in 2020, adopting coal consumption reduction replacement, reducing the proportion of coal consumption, and cutting total regional coal consumption in Beijing-Tianjin-Hebei-Shandong, the Yangtze River Delta and Pearl River Delta regions. To put into practice Air Pollution Prevention Action Plan, NDRC and relevant departments issued Interim Measures for Coal Consumption Reduction Replacement Management in Key Areas in December 2014, which proposed coal consumption reduction replacement targets and programs for Beijing, Tianjin, Hebei, Shandong, Shanghai, Jiangsu, Zhejiang and the Pearl River Delta region. In May 2015, NDRC, the Ministry of Environmental Protection (MEP) and National Energy Administration (NEA) issued the Program to Strengthen Total Coal Consumption Control in Key Air Pollution Control Cities, which proposed that the top 10 cities of poor air quality should achieve a negative growth in total coal consumption compared with the previous year.

Strengthening the clean use of fossil fuels. To promote the clean and efficient use of coal, NDRC and other five departments jointly issued Interim Measures for Commercial Coal Quality Management in September 2014 to improve coal quality and consumption efficiency. In October 2014, NDRC, AQSIQ and MEP issued the Implementation Plan for Coal-Fired Boiler Comprehensive Energy Conservation and Upgrading Project, so as to ensure the safe and economic operation of coal-fired boilers, improve energy efficiency and reduce pollutant emissions. To promote the use of natural gas, NEA issued Program for Energy Industries to Strengthen Air Pollution Control in March 2014, which proposed specific objectives and tasks to increase natural gas supply. In April 2014, NDRC issued Several Opinions on Establishing Long-Term Mechanisms to Guarantee Stable Natural Gas Supplies, proposing tasks and measures to safeguard long-term stable supply of natural gas. In July 2014, NEA issued the Notice on Regulating the Scientific and Orderly Development of Coal Oil and Synthetic Natural Gas Industries to regulate coal liquefaction and synthetic natural gas projects and proposed evaluation criteria such as energy conversion efficiency, energy consumption and carbon dioxide emissions. In November 2014, NDRC and other relevant departments jointly issued Regulations for Natural Gas Distributed Energy Demonstration Projects to further promote the development of natural gas distributed energy resources. In 2014, the apparent consumption of natural gas reached 184.5 billion cubic meters, accounting for close to 6% of primary energy consumption. In April 2015, NEA issued Action Plan for Clean and Efficient Use of Coal (2015-2020), which clarified the target and task of laying scientific regulation on coal production volume and layout and speeding up the clean and efficient use of coal.

Promoting the development of non-fossil energy. Since 2014, NDRC and NEA have issued a series of policy documents to support the development of renewable energies, including Notice on Improving Price Formation Mechanisms for Pumped Storage Power Stations, Notice on Further Implementing Distributed PV Power Generation Policies, Notice on Arrangements for Wind Power Grid Connection and Consumption in 2015, and Interim Measures on Management of Special Funds for Renewable Energy Development, etc. By the end of 2014, China's non-fossil fuels accounted for 11.2% of primary energy consumption, with an annual increase of 1.4%. Non-fossil fuels accounted for 32.6% of total installed capacity of power generation, with an increase of 1.7% over the year before, of which the installed capacity of hydropower, wind power, grid solar power and nuclear power increased by 7.9%, 25.9%, 60.7% and 37.0% respectively. Non-fossil fuels accounted for 24.6% of China's total power generation, with an annual increase of 2.3%, of which, the power generation of hydropower, wind power, solar power and nuclear grew by 15.7%, 10.1%, 194.1% and 19.5% respectively.

Strengthening the transformation and upgrading of thermal power units. In September 2014, NDRC, MEP and NEA jointly issued Action Plan for Coal Power Energy-Saving Upgrading and Transformation (2014-2020), which proposed to raise the proportion of coal for power generation to over 60% of coal consumption in 2020 and made clear requirements on the coal consumption per unit of power generation. In 2014, the clean generation of thermal power units was further enhanced. Almost all the new coal power units, except cogeneration ones, are ultra-supercritical units with the capacity equal or above 600 MW, and the proportion of thermal power units with the capacity equal or over 300 MW raised to 75.1%. The average unit energy consumption of thermal power units equal or over 6 MW was 319 gce/kWh, falling by 2 gce/kWh on year-on-year basis and maintaining the world's advanced level.

(IV) Controlling GHG Emissions from Non-energy Activities

NDRC, together with the Ministry of Foreign Affairs (MOFA), the Ministry of Finance (MOF), MEP and other relevant departments, carried out HFCs control actions, issued Notice on Carrying out Hydro Fluorocarbons Disposal and Related Work, and issued two batches of central budget investment plans for key demonstration projects of hydro fluorocarbons reduction in 2014 to support the enterprise's HFC-23 incinerator installation. MEP developed the management plan under the "Montreal Protocol" to accelerate HCFC phase-out, and actively participated in developing rules and provided the assistance for check of HFC-23 destruction, with a purpose to promote the co-benefits of addressing climate change and protecting ozone layer. It also actively conducted studies on non-carbon-dioxide GHGs and use the platform of China Council for International Cooperation on Environment and Development to carry out the project "Research on Collaborative Policies for Addressing Climate Change and Controlling Air Pollution".

(V) Increasing Forest Carbon Sinks

Since 2014, the State Forestry Administration organized the drafting of Working Focuses of the Forestry to Address Climate Change during the 13th Five-Year Plan Period, developed and issued the working arrangements and division for the forestry to address climate change in 2014 and 2015. It strengthened ecological forestry construction and arid region afforestation in Beijing-Tianjin-Hebei-Inner Mongolia Region; continued to promote the shelterbelt system construction in the Three-North region and the Yangtze River Basin, issued the guidance on the renovation of degraded shelterbelts, and started degradation shelterbelt renovation pilot; comprehensively strengthened forest management, amended and promulgated forest tending regulations and requirements, inspection and acceptance rules, pushed steadily forward the construction of national forest management model base, and launched a new round of forest sustainable management pilots; officially launched a new round of Reforestation Project to return 1,500 mu of farmland to forests and grassland and afforest 100 mu of barren hills and wasteland during 2014-2015; actively promoted national forest reserve and delimited 1,500 mu of forest as national reserve in 2014. In 2014 alone, China afforested 8,324 mu of land and tended 135 million mu of forest. And in the first half year of 2015, it completed 5,437 mu of afforestation, accounting for 57% of the annual target, and completed 63 million mu of forest tending, accounting for 60% of the annual target.

With the joint efforts, the carbon dioxide emission per unit of GDP fell by 6.1% in 2014 on a year-on-year basis, with a cumulative decline of 15.8% over 2010. It is expected to achieve the carbon intensity reduction target of 17% for the 12th Five-Year Plan period ahead of schedule, thus making concrete contributions to addressing global climate change.

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