China

Pursuing low-carbon growth policy at unprecedented scale

China has pursued aggressive climate and energy policies with particular focus on energy efficiency and renewable energy. Still, between 2000 and 2010, China represented 68% of the increase in global energy-related CO₂ emissions.

sectorIndustry

These graphs show the changes in emissions, emissions drivers, and policy in the Industry sector in China

 
 
 

Emissions Energy consumption by industry


China did not report greenhouse gas emissions from industry, but they were very closely related to energy consumption, which more than doubled since 2002.

     
     
     
     

    Emissions Drivers Sector energy intensity


    Industrial emissions intensity improved dramatically across all sectors, although from a generally high starting point.

       
       
       
       

      Policy Phase out targets


      The government set specific targets for many large industries regarding how much capacity was to be phased out or retired.

         
        • Starting from a very high energy intensity level, China initiated two decades of energy efficiency investment and improvement. GDP grew faster than energy demand. China also began some market reforms and took first steps towards building an initial institutional framework for environmental protection.

          • Policy Barriers

            • Energy Efficiency Target:
              Quadruple GDP and only double energy consumption 1980-2000 (Levin 2009)
              Energy effciency investment 12% of total energy investment in first years
              Energy effciency improvement via low-hanging fruit fixes and practices
            • Established new institutions:
              China Energy Conservation Investment Corporation, 1988
              Bureau of Energy-Saving and Comprehensive Energy Utilization under State Planning Commission Market price reform, 1988
              Dual pricing system (state-owned enterprises permitted to sell commodities at market prices outside planned quota)
            • Institutional structure for environmental protection grew (Qui 2009)
              Environmental Protection Commission established under State Council, 1984
              National Environmental Protection Agency established, 1984
          • Underlying changes

            • Reform and Opening Up Policy of 1978 introduced economic incentives and some competition
            • Domestic market began to open to global competition and imported technologies (Rosen 2007)
        • GDP continued to rise faster than energy demand with energy efficiency still improving at a notable pace. Institutional infrastructure and funding for energy conservation was weakening by the end of the decade.

          • Policy Barriers

            • Energy efficiency action continued over the decade; however, funding and institutional infrastructure weakened by end of the 1990s (Levine 2009, Price 2001)
              Ministry of Energy created in 1988 but abolished in 1993
              Industrial ministries demoted to bureaus in 1998 resulting in weakened state control over enterprises (Price 2001)
            • State Council stipulated closures of small facilities in 15 high polluting industries, (e.g. small coal mines, paper), 1996
            • Energy Conservation Law, 1997
            • In early 1990s, adoption of UN Agenda 21 led to incorporation of sustainable development as national strategy in China Agenda 21
            • National Environmental Protection Agency upgraded to State Environmental Protection Administration (SEPA), 1998
          • Underlying changes

            • Became net importer of oil, 1993
            • Asian financial crisis, 1997
        • China saw a sudden decline in the emphasis on energy conservation from 2002-2005, accompanied by a stronger focus on capital-intensive economic growth. Energy demand grew dramatically. China returned to a strong focus on energy intensity reduction in the second half of the decade.

          • Policy Barriers

            • Developed the West Policy of 2000, including investment in infrastructure
            • Return to energy conservation, 2005
              2005 target to reduce energy intensity by 20% by 2010 (Zhou 2010)
              NDRC focus on effciency revived (Zhou 2010)
              11th FYP EE Programs targeted major efficiency opportunities
              Top 1,000 Industrial Enterprises energy saving targets
              Phasing-Out of Outdated Capacity Project
              Ten Key Energy-Saving Technology Improvement Projects Energy Conservation Law amended 2007
              Mainstreamed Energy Conservation as a fundamental national strategy
              Announced Target Responsibility System and evaluation measures
            • Differential electricity pricing, late 2000s
            • NDRC set energy policy and prices, but energy management still spread across agencies
            • Rhetoric changed:
              Chinese Communist Party 17th Congress raised “ecological civilization” for first time
            • 11th FYP set first air quality targets
            • SEPA elevated to Ministry of Environmental Protection, 2008
          • Underlying changes

            • Rising labor costs and commodity prices
            • Dramatic build-out of infrastructure and generation capacity
            • Energy use per GDP unit increased by 3.8% annually from 2002-2005 and then began to decrease in 2006 (Zhou 2010)
            • China demand driving global prices
            • Industrial production moved up value chain
            • Accelerated export and increasing industry energy intensity
            • Chinese economic growth contributed to global commodity shortage in mid-2000s
            • Became net importer of coal