Rarely is there any “good news” regarding progress to zero or low carbon economies. In fact the gloomiest outlook is often focused upon the projected GHG burden of China and India. That may still turn out to be true, but there are some indications that China is in fact doing something different — by implementing policies and incentives that would be totally impossible in the developed democracies. China “fell off the wagon” in 2004-2005 and may well do so again as the Chinese provinces are fighting the central government policies. And the data we gave on energy intensity is dependent on Chinese government statistics.
For reference I will excerpt my 29 September comments on China’s on-again, off-again energy intensity policies – from Dispelling China’s Environmental Myths:
There is some unreported good news regarding China’s energy policy. First, the jump in energy intensity in 2002-2004 was related to the abandonment by Bejing of their intensity improvement goals, including a dismantling of the bureaucracy that had been available to advise industry on technology to improve intensity. That policy was reversed in 2005, and now China seems to be back on track to improve intensity while growing rapidly at the same time. That is atypical of developing economies.
For an informed discussion, I highly recommend the Stanford Center for Social Innovation podcast interview with Mark Levine: “Dispelling China’s Environmental Myths“. Dr. Levine is group leader of the China Energy Group at Lawrence Berkeley National Laboratory (LBNL)
Two days ago William Chandler published Memo to Copenhagen: Commentary is Misinformed—China’s Commitment is Significant. Dr. Chandler goes into more detail on the results achieved by Chinese central government policy. I think this confirms Mark Levine’s main conclusions. Here’s an excerpt on the policy switches and the resulting energy intensity changes:
China once before did achieve a high rate of energy (and carbon) intensity reduction over a long period of time. In the 1980s and 1990s, post-Mao China was exceptionally wasteful in energy use, as were all centrally planned economies. Reform, restructuring, energy shortages, and exceptionally strong regulation enabled China to make rapid reductions in energy and, therefore, carbon intensity.
But China’s economy has not performed well over the last decade in reducing energy and carbon intensity. Intensity turned sharply upward in 2001 and got worse each year through 2006.2 Energy and emissions increased much faster than the economy between the years 2000 – 2005. Technically speaking, the energy and carbon GDP elasticity was well above unity.
Only a draconian effort to reduce energy intensity by 20 percent by 2010 reversed that trend. The Chinese central government imposed a five-year policy to reduce year 2010 energy intensity by 20 percent relative to 2005. The policy is decided by the central government, but is implemented by provincial and city governments, who see it as a drag on GDP growth and a weight around the neck of local development plans. That policy is set to expire next year.
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Moreover, many of the provinces are unlikely to meet their current targets, and can be expected to oppose their continuation and strengthening (see Figure 3). The current energy intensity policy (which the author of this paper has supported) can legitimately be described as severe, even draconian. The policy imposes hundreds of detailed industrial efficiency standards to a degree unparalleled in any other country in the world. The policy has forced closure of tens of thousands of factories, power plants, and production lines that failed to meet the standards. It is unimaginable that such a policy could ever be enacted in the United States, much less be continued for another decade. It’s a non-trivial error to call it a “reference case,†as the IEA has done.
William Chandler is a fellow at the Carnegie Endowment for International Peace.
