I. Mitigating Climate Change

Controlling greenhouse gas emissions is not only a key task in China's efforts to address global climate change, but also an essential part of the country's drive to accelerate the shift in its economic development mode and promote industrial transformation and upgrading. In 2011, the Chinese Government issued the Work Plan for Controlling Greenhouse Gas Emissions During the 12th Five-Year Plan Period, which assigns specific carbon intensity reduction targets to all provinces, autonomous regions and municipalities directly under the central government. China has achieved positive results in low-carbon development by optimizing industry and energy structures, vigorously conserving energy and reducing energy consumption, and increasing carbon sinks.

(I) Adjusting Industrial Structure

Transformation and upgrading of traditional industries. The National Development and Reform Commission has released the 2011 edition of the Guideline Catalogue for Industrial Restructuring, further underlining the country's strategic direction towards conserving energy and cutting emissions by optimizing and upgrading its industrial structure. The government has stepped up evaluation and examination of energy conservation, environmental impact assessments, and preliminary examination of land used for construction projects. It has raised the entry threshold for certain industries and strictly limited new projects in industries with high energy consumption, high pollutant emissions or excess capacity. It has also rigorously controlled the export of products with high energy consumption and high pollutant emissions. The State Council has disseminated the Plan for Industrial Transformation and Upgrading (2011-2015) drawn up by the Ministry of Industry and Information Technology to promote green and low-carbon industrial development. The Ministry of Industry and Information Technology has released specific development plans for the 12th Five-Year Plan period to boost industrial transformation and upgrading in a number of key industries, including iron and steel, non-ferrous metals, building materials, petrochemicals and chemicals, energy-saving and new-energy vehicles, industrial energy conservation, bulk solid waste and clean production. Meanwhile, in order to promote technological upgrading, the ministry has improved management mechanisms and increased support with a number of priorities identified. In 2011, the government earmarked 13.5 billion yuan in technological upgrading funds, which in turn generated investments amounting to 279.1 billion yuan. Efforts to stimulate technological upgrading have become more targeted and effective and have yielded very positive results.

Supporting the development of strategic and newly emerging industries. The State Council has issued the Development Plan for National Strategic Emerging Industries During the 12th Five-Year Plan Period. It charts the road map for seven strategic emerging industries - energy conservation and environmental protection, new-generation information technology, biology, high-end equipment manufacturing, new energy, new materials and new-energy vehicles. The National Development and Reform Commission has issued a plan assigning specific tasks to each State Council department, accelerated the development of a statistical system for measuring the performance of strategic emerging industries and carried out trial evaluations, and drafted the Catalogue of Key Products and Services in Strategic Emerging Industries. Meanwhile, it has given greater support to the development of key projects, carrying out a number of major industrial projects and special programs. It has initiated a special fund to boost the development of strategic emerging industries, and expanded its venture capital program for emerging industries. So far 102 venture capital funds have been set up under the program, managing a total of 29 billion yuan. Among these funds, 24, with a total value of 7 billion yuan, are designed to stimulate the development of the energy-saving, environmental protection and new energy sectors.

Vigorously developing the service industry. Apart from continuously implementing the State Council Opinions on Accelerating the Development of the Service Industry, the Opinions of the State Council General Office on Implementing the Policy Measures for Accelerating the Development of the Service Industry and other relevant documents, the government in 2011 published the Guidance of the State Council General Office for Accelerating the Development of Hi-tech Service Industry, in a bid to further improve the environment for the development and upgrading of the service sector. In the Guideline Catalogue for Industrial Restructuring (2011 version), the government redefined service industry sub-sectors and included more sectors under the "Encourage" category. A basic classification system has been drawn up to encourage the development of the service sector. The government has also stepped up and improved its work on market entry, human resources, brand building, standardization, certification and statistics on the service sector. It has carried out nationwide trials of comprehensive reforms in the service sector and set up inter-departmental coordination mechanisms in key areas. Most provinces and cities have released policy documents to encourage the development of the service sector, actively promoted the creation of producer service industry development zones, and accelerated the development of key service sector projects.

Speeding up the elimination of backward production capacity. Continuing to implement the Opinions on Curbing Overcapacity and Redundant Construction in Some Industries and Guiding the Sound Development of Industries, as well as the Notice of Further Strengthening Elimination of Obsolete Production Capacity, China has been making efforts to improve the exit mechanism for obsolete production capacity. In 2011, relevant departments, including the Ministry of Industry and Information Technology and the National Development and Reform Commission, jointly issued the Notice of Issuing the Implementation Plan to Assess the Work of Eliminating Obsolete Production Capacity, the Opinions on Resettling Workers Laid off due to Elimination of Obsolete Production Capacity and Corporate Merger and Restructuring, and the Catalogue (2nd Batch) of Obsolete Mechanical and Electrical Equipments (Products) Eliminated due to High Energy Consumption. Following the guidelines set out in these documents, the government has improved its examination and evaluation of efforts to eliminate obsolete production capacity, and issued directions to local governments on the redeployment of displaced employees. In 2011, China shut down small thermal power generating units with a total generating capacity of 8 million kw and eliminated obsolete production capacity in the following industries: iron smelting, 31.92 million tons; steel production, 28.46 million tons; cement (clinker and mill), 155 million tons; coke, 20.06 million tons; plate glass, 30.41 million cases; paper, 8.3 million tons; electrolytic aluminum, 639,000 tons; copper smelting, 425,000 tons; lead smelting, 661,000 tons, and coal production, 48.7 million tons.

(II) Conserving Energy and Improving Energy Efficiency

Enhancing the assessment and management of energy conservation. The State Council has issued the Comprehensive Work Plan on Energy Conservation and Emission Reduction During the 12th Five-Year Plan Period (2011-2015), which includes a breakdown of energy-saving objectives during the period of the plan. Combining assessment of regional targets with evaluation of industry goals, implementation of five-year targets with fulfillment of annual targets, assessment of annual targets with progress tracking, China releases quarterly reports on the completion of energy conservation targets in each region. The Ministry of Industry and Information Technology has released the Blueprint of Conserving Energy in the Industrial Sector During the 12th Five-Year Plan Period; the Ministry of Housing and Urban-Rural Development has released the Implementation Plan for Carrying out the Notice of the State Council to Issue the Comprehensive Work Plan on Energy Conservation and Emission Reduction During the 12th Five-Year Plan Period, the Special Blueprint of Conserving Energy in the Construction Sector During the 12th Five-Year Plan Period, and the Implementation Opinions Concerning Accelerating the Development of China's Green Buildings; the Ministry of Transport has released the Opinions on the Implementation of the State Council's Comprehensive Work Plan on Energy Conservation and Emission Reduction During the 12th Five-Year Plan Period in the Transport Industry Including Highway and Waterway, a plan to distribute tasks among its various departments, and the Work Plan for Controlling Greenhouse Gas Emissions During the 12th Five-Year Plan Period in the Transport Industry; the Government Offices Administration of the State Council has released the Blueprint of Conserving Energy in Public Institutions During the 12th Five-Year Plan Period.

Improving standards of energy efficiency. By the end of 2011, the General Administration of Quality Supervision, Inspection and Quarantine and the National Development and Reform Commission had set a total of 28 mandatory national standards on energy consumption quotas for high-energy-consuming products. Relevant departments, including the Ministry of Industry and Information Technology and the Ministry of Transport, have formulated and revised mandatory standards on energy consumption quotas for key industries and products, as well as the energy efficiency standards for general industrial equipment such as internal combustion engines; they have also initiated 22 projects on industry standards and reviewed 209 energy efficiency standards, carried out spot checks on the implementation of standards on energy consumption per unit product in key industries and the elimination of obsolete mechanical and electrical equipment with high energy consumption, and abolished a list of substandard, high fuel consumption vehicle models that had been permitted to continue operating for a transitional period. By the end of June 2012, 19 batches of vehicle models that meet current standards had been published, covering more than 20,000 models. Newly-purchased operational vehicles have to fully implement the fuel consumption standards. Additionally, five industry standards, including the Energy-Saving Operation Specifications for Driving Vehicles, have been approved and released.

Promoting energy conservative technologies and products. China has actively promoted the adoption of energy-saving technologies. The National Development and Reform Commission oversaw the publication of the fourth edition of State Key Energy-Efficient Technology Promotion Catalogues, covering 22 energy-efficient technologies in 13 industries including coal, electric power, and iron and steel. The Ministry of Industry and Information Technology has published the Notice of Carrying out Energy Efficiency Benchmarking and Target-Hitting Activities in Key Industries, directing all local governments to press ahead with these activities, implement energy-saving technologies in key enterprises, and actively promote advanced energy-saving production processes. Catalogues, applications and technical guidelines for advanced energy conservation and emissions reduction technologies have been compiled for 11 key industries including iron and steel, petrochemicals, nonferrous metals and building materials, covering more than 600 energy-saving technologies; the ministry has continued to promote the creation of energy management centers in industrial enterprises, and launched pilot programs for the online monitoring of industrial energy consumption. It also formulated plans to improve energy efficiency in industry and the efficiency of electrical equipment, including roadmaps for the improvement of energy efficiency in industry and the elimination of energy-inefficient equipment, and in 2011 distributed energy-efficient equipment with a total generating capacity of more than 2 million kw. The government continues to promote energy-saving products under a project to subsidize the use of these products. In 2011, the country distributed more than 18.26 million high-efficiency air conditioners, 150 million energy-saving lamps and more than 4 million energy-efficient motor vehicles.

Carrying out key energy-saving projects. The National Development and Reform Commission continues to undertake key energy-saving projects, including improving the efficiency of boilers, furnaces and electrical equipment, economizing on the use of oil and using oil substitutes, energy system optimization, re-use of surplus heat and pressure, construction of energy-saving buildings, and a green lighting project. It has published the Roadmap for IL (Incandescent Lamps) Phase-out, and banned the import or sale of 100-watt-or-greater incandescent bulbs from October 1, 2012. In 2011, the country constructed 1.39 billion square meters of energy-efficient floor space and completed heat metering and energy efficiency renovations on 140 million square meters of existing residential buildings in 15 provinces, autonomous regions and cities in northern China. Following on from a pilot program to construct low-carbon transport systems in ten cities including Tianjin, a second program has been launched in 16 cities, including Beijing. These key projects and others saved energy equivalent to more than 17 million tons of standard coal in 2011.

Developing a circular economy. The National Development and Reform Commission has formulated the Development Plan for a Circular Economy During the 12th Five-Year Plan Period; issued and implemented the Methods for Management of Recycling of Waste Electrical and Electronic Products; catalogued 60 model circular economy projects across the country; carried out pilot recycling projects in 22 industrial parks; oversaw the implementation of the third group of national demonstration bases for recovering mineral resources from city waste in seven industrial parks; carried out a second phase of pilot programs for the treatment and re-use of kitchen waste in 16 cities; begun the construction of bases for comprehensive re-use of industrial solid waste in 12 regions; stepped up efforts to promote key generic circular economy technologies, and identified 18 national education demonstration bases for developing a circular economy.

Promoting of energy performance contracting. The National Development and Reform Commission has published the second and third batches of 1,273 registered energy service companies. Specific policies to support energy performance contracting have been enacted in provinces, autonomous regions and cities across the country. Initially focused on industry, energy performance contracting has been extended to other fields including construction, transport and public institutions. In 2011, the output value of the energy conservation service industry amounted to 125 billion yuan, an increase of 49.5 percent year on year. Energy service companies carried out more than 4,000 energy performance contracting projects with a total investment of 41.2 billion yuan, up 43.5 percent year-on-year, saving energy equivalent to more than 16 million tons of standard coal.

Implementing fisical and tax incentives. The Ministry of Industry and Information Technology, together with other relevant departments, have issued two editions of the Catalogue of Energy-saving and New-energy Vehicle Models Eligible for Vehicle and Vessel Tax Reduction or Exemption. Users of eligible cars and vessels will enjoy a tax reduction or exemption according to the new policy. The Ministry of Finance and the Ministry of Transport have earmarked special funds for energy conservation and emission reduction to subsidize 402 projects in 2011 and 2012 that achieved a reduction of 1.837 million tons of CO2 emissions. The State Oceanic Administration has earmarked special funds for island protection, allocating about 200 million yuan to 15 local protection projects. The Ministry of Agriculture has invested 4.3 billion yuan, directing local governments to increase subsidies to encourage the use of methane gas. In 2011, a total of 41 million households were using methane, cutting CO2 emissions by 60 million tons. The ministry also allocated 13.6 billion yuan to launch a subsidy and bonus mechanism for grassland ecological protection in nine provinces and autonomous regions including Inner Mongolia, Tibet, Xinjiang and Gansu. The State Forestry Administration has increased subsidies for afforestation and forest management and invested more than five billion yuan in pilot projects to subsidize forest management.

In 2011, the energy consumed for every 10,000 yuan of GDP (at 2010 prices) was equivalent to 0.793 tons of standard coal, 2.1 percent lower than in 2010. Overall energy consumption for major industrial products is decreasing, albeit at different rates. Energy consumption per ton of steel produced in large and medium enterprises was 0.8 percent lower in 2011 compared to 2010. For aluminum oxide, energy consumption fell by 3.3 percent over the same period, and for lead smelting by 4 percent. In 2011, the implementation rate of mandatory energy efficiency standards for new urban buildings, which require a 50-percent energy-saving, reached almost 100 percent in the design stage and 95.5 percent in the construction stage. A total of 1.39 billion sq m of energy-efficient floor space was constructed. In 2011 energy consumption in public institutions fell 2.93 percent year on year per person, and 2.24 percent per unit of construction area.

(III) Optimizing Energy Structure

Accelerating the development of non-fossil fuel. The National Energy Administration has drawn up the Development Plan for Renewable Energy During the 12th Five-Year Plan Period as well as four specific plans for hydropower, wind power, solar power and biomass energy, which together map out the overall goals and policies for China's renewable energy development to 2015. It has also launched the green energy demonstration projects in 108 counties and the pilot projects of a large-scale utility of renewable energy in buildings in 35 cities and 97 counties. It has formulated plans for wind power, solar power, biomass energy, shale gas, and the development of recharging stations for electric vehicles in five cities, including Shanghai. In 2011, it published 372 industrial standards covering the energy industry, announced plans to issue 633 other formulations and amendments covering major energy fields including nuclear power, new energy and renewable energy. It also plans to establish a standardized management system for the bio-fuel industry and accelerate the construction of bio-fuel production capacity. In 2011, consumption of non-fossil fuel energy reached 283 million tons, accounting for 8.1 percent of total energy consumption. Taking installed power generating capacity, as a whole, 27.7 percent uses non-fossil energy resources, up 3.4 percentage points from 2005. In 2011, installed hydropower capacity reached 230 million kw, up 14 million kw. Including 12.6 million kw of new construction, a total of 55 million kw was under construction in 2011. Hydropower stations generated 662.6 billion kw/h of electricity. Installed nuclear power capacity increased by 1.73 million kw, generating 86.9 billion kw/h. China led the world in constructing on-grid wind power capacity with an increase of 16 million kw, generating 80 billion kw/h. Installed photovoltaic power capacity reached 3 million kw, an increase of 2.1 million kw. Installed biomass power capacity reached 6 million kw, generating 30 billion kw/h of electricity. Installed geothermal capacity reached 24,200 kw and ocean energy 6,000 kw, generating a combined total of 146 million kw/h of electricity. Solar powered heating covered an area of 2.15 billion sq m in urban buildings, and shallow geothermal energy 240 million sq m. The installed photovoltaic power capacity used in urban buildings reached 1.27 million kw, including projects under construction.

Promoting the clean utilization of fossil fuel. The government continues to promote the clean and efficient development of conventional fossil energy production and utilization. The Natural Gas Development Plan During the 12th Five-Year Plan Period, and the Guidelines for Developing Distributed Energy Systems (DES) for Natural Gas set out key development objectives and tasks. The Development Plan for Coal Industry During the 12th Five-Year Plan Period, which has been issued and implemented, calls for the vigorous development of clean coal technology and the efficient and clean utilization of coal. The government is accelerating the construction of highly efficient large scale coal-fired power generators and power plants. China leads the world with 40 one-million-kw ultra-supercritical power generating units in operation. Thermal power units with a capacity of 300,000 kw and above account for 74.4 percent of total thermal generating capacity. The government has promoted the exploration of unconventional energy sources and formulated the Development Plan for Shale Gas (2011-2015), which defines the goal of completing a survey and evaluation of national shale gas resources by 2015 and sets a production target of 6.5 billion cu m. of shale gas. The Plan for Coal-bed Gas Exploration and Utilization During the 12th Five-Year Period sets a target for coal-bed gas production to reach 30 billion cu m. by 2015; other projected development targets are that installed coal bed methane (CBM) power capacity will reach 2.85 million kw, 3.2 million households will be using CBM, and proven reserves of CBM will increase by one trillion cu m.

(IV) Increasing Carbon Sinks

Enhancing forest carbon sinks. The State Forestry Administration has formulated the Action Points for China's Forestry Departments in Response to Climate Change During the12th Five Year Plan (2011-2015) Period, initiating five actions to mitigate climate change, namely accelerating afforestation, improving forest management, strengthening forest resources administration, enhancing forest disaster prevention and control, and fostering emerging forestry industries. It has published the Outline of the National Afforestation Plan (2011-2020) and Forestry Development Plan During the 12th Five-Year Plan Period, clarifying the goals of ecological forest development. The government continues to carry out its program of returning farmland to forest and the key shelterbelt construction projects in northwest, northeast and northern China and along the Yangtze River. It continues to promote the program to control sandstorms in the Beijing and Tianjin area and the comprehensive management of stony desertification. It has launched shelterbelt construction along the Pearl River and Taihang Mountain and afforestation in plains regions, as well as the second stage of the natural forests protection program. The government has increased subsidies for forest management and implemented pilot and demonstration forest management projects. It has issued relevant technical plans including the Regulations on Forest Management Work and Design, Supervision Measures on Policy of Central Financial Subsidies for Forest Management, and the Code of Formulating and Implementing Forest Management Schemes. In 2011, China completed afforestation of 5.9966 million hectares and management of young forests of 7.3345 million hectares, and upgraded 0.7888 million hectares of forests with low yield capacity and low protection efficiency. A total of 2.514 billion trees were planted in volunteer tree-planting drives. Urban green areas reached 2.2429 million hectares. The urban per-capita green park space reached 11.80 sq m, with the green area rate and green coverage rate of built-up areas reaching 35.27 percent and 39.22 percent respectively.

Enhancing grassland carbon sinks. In 2011, the State Council disbursed 13.6 billion yuan to develop a subsidy and award mechanism for grassland conservation in nine provinces and autonomous regions, including Inner Mongolia, Tibet, Xinjiang and Gansu. A total of 10.567 million farmers and herdsmen households benefited from the subsidy and award policy. In 2012, the policy was extended to cover all herding and semi-herding areas in five more provinces, including Hebei and Shanxi. In 2011, the total area of grassland fenced off for conservation reached 4.504 million hectares, while 1.459 million hectares suffering from severe degradation were re-sowed. In addition, a total of 47,000 hectares of man-made forage meadows were constructed, and 91,000 hectares of pasture were treated to help control the sources of sandstorms that affect the Beijing and Tianjin area. In 2012 so far, as part of the project of returning grazing land to grassland in nine provincial-level regions, including Inner Mongolia, Tibet, Sichuan and Gansu, a total of 4.404 million hectares of grassland have been fenced off for conservation and 1.401 million hectares suffering from severe degradation have been re-sowed. In addition, a total of 55,000 hectares of man-made forage meadows have been constructed and 34,000 hectares of pasture treated to control sources of sandstorms that affect Beijing and Tianjin.

Enhancing carbon sinks in other fields. To strengthen agricultural carbon sinks, the central government has assigned 30 million yuan in special funds to promote conservation farming technology, and invested a total of 300 million yuan in conservation farming projects. In 2011, the area cultivated using conservation farming techniques increased by more than 19 million mu, bringing the national total to 85 million mu. Conservation farming helps improve carbon storage. The carbon storage capacity of farmland soil can be increased by 20 percent by the application of conservation farming technology, helping cut farmland emissions of CO2 and other greenhouse gases by 0.61-1.27 tons per hectare annually, which, applied nationally, amounts to an annual reduction of more than 3 million tons of CO2. Regarding wetland carbon sinks, China brought 330,000 hectares of new wetland under protection and restored a total of 23,000 hectares of wetland during 2011, substantially increasing the carbon storage capacity of the country's wetlands.

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