Climate Policy Initiative Finds China Made Significant Investments in Low-Carbon Development During the 11th Five-Year Plan but Challenges Remain

    Rapid industrialization and urbanization pose challenges for the 12th
    Five-Year Plan


BEIJING, Nov. 9, 2011 /CNW/ -- Climate Policy Initiative has published its second "Annual Review of Low-Carbon Development in China," which tracks China's performance and strategies to transition to a low-carbon economy. Under the 11th Five-Year Plan (2006-2010), China achieved a 19.1 percent reduction in the energy intensity of its economy relative to 2005 levels, although overall emissions grew by 33.6 percent.

Technology upgrades delivered two-thirds of the total energy intensity improvement; economic restructuring accounted for around one-quarter:

    --  Energy efficiency improvements in power plants, industries, and
        buildings reduced China's energy intensity, while renewable energy
        reduced carbon intensity. Continued penetration of these technologies
        provides an additional opportunity for the future.
    --  While the industrial sector expanded as a share of the economy,
        to the mix of industries and a shift to higher value-added products
        delivered a net reduction in energy use of 143 Mtce relative to the
        2005 baseline.


Rapid industrial growth in middle, western, and northeastern China drove up national energy consumption and carbon emissions despite an overall decrease in energy and carbon intensity in these regions.

To facilitate low-carbon growth, China employed a diverse set of policies, new implementation mechanisms, and significant financial support:

    --  Public funding and incentive instruments (e.g. rewards) had the
        greatest impact, reducing emissions by 777 MtCO2 relative to the
        baseline; administrative instruments (e.g. industry targets, building
        codes, and vehicle efficiency standards) reduced emissions by 473 Mt,
        and market instruments (e.g. energy performance contracting) by 15 Mt.
    --  New implementation mechanisms include an accountability system for
        energy efficiency targets and market instruments such as energy
        performance contracting.
    --  China's cumulative investment in clean energy and energy efficiency
        2.59 trillion yuan (USD 399 billion).


Local governments, large enterprises, and consumers played important roles in China's performance:

    --  Local governments explored low-carbon development strategies under the
        11th FYP, but struggled to reconcile these strategies with their
        economic growth priorities.
    --  Government policies focused on large, energy-intensive enterprises
        during the 11th FYP and supported the achievement of the Top 1000
        Enterprises energy efficiency target a year ahead of schedule; some of
        these policies have now been expanded to cover smaller enterprises.
    --  Carbon emission from building operation and transport grew faster than
        total emissions (41% compared with 34%); these trends are likely to
        continue as incomes grow.


"Understanding how China reduced its energy intensity during the 11th Five-Year Plan will help policymakers achieve further reductions under the 12th Five-Year Plan," said Qi Ye, director of CPI Beijing. "Our review indicates that China should encourage further technology penetration, explore additional market-based policy instruments, and extend support to small and medium-sized enterprises. Key challenges include containing the growth of energy-intensive industries, particularly in the West and Northeast, accelerating growth through low-carbon development, and redirecting increasingly energy-intensive consumer behavior."

Climate Policy Initiative (CPI) is an analysis and advisory organization focused on policy effectiveness. Its mission is to assess, diagnose, and support nations' efforts to achieve low-carbon growth.



SOURCE Climate Policy Initiative

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