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China is the world’s largest greenhouse gas emitter and accounted for 28% of global emissions in 2013 and also the largest coal producer and consumer in the world. For several years now, China has been conducting a proactive policy to develop clean energies and is seeking to reduce the share of coal in its power generation. The 12th Five-Year Plan (2011-2015) explicitly includes the issue of the fight against climate change and sets out targets in terms of energy and reducing GHG emissions. What assessment can be made of the measures initiated? Is China’s energy transition well underway? These questions were debated at the Agence Française de Développement

Organizers

China currently has a carbon intensive economy. It is the world’s largest greenhouse gas (GHG) emitter and accounted for 28% of global emissions in 2013. Per capita emissions now exceed those of the European Union. China is also the largest coal producer and consumer in the world. Its energy mix is mainly composed of coal.

However, since September 2014, China has also ranked first, ahead of the USA, in the latest edition of the renewable energies barometer “Renewable Energy Country Attractiveness Index » published by the consulting firm Ernst & Young. Indeed, for several years now, China has been conducting a proactive policy to develop clean energies and is seeking to reduce the share of coal in its power generation. For the first time, the 12th Five-Year Plan (2011-2015) explicitly includes the issue of the fight against climate change and sets out targets in terms of energy and reducing GHG emissions. China thus aims to reduce energy consumption per GDP unit by 16% by 2015 compared to 2005 and its CO2 emissions per GDP unit by 17%. At international level, the declared objective is to achieve a share of non-fossil fuels in primary energy consumption of some 15% by 2020.
This new energy policy particularly aims to reduce the country’s dependence on fossil fuels by developing the use of renewable energies, nuclear energy, and by promoting energy efficiency improvement. While Beijing is moving towards a low-carbon energy growth model, with clear objectives set out in the current Five-Year Plan, the implementation of national policies continues to be difficult in the field.

While the 13th Five-Year Plan (2016-2020) is in the process of being prepared, what assessment can be made of the measures initiated? Is China’s energy transition well underway? What challenges do the Chinese authorities need to address? In a year where we are celebrating the 50th anniversary of diplomatic relations between France and China and the 10th anniversary of AFD’s operations in China, what are the strong aspects of cooperation between the two countries in terms of energy innovation?

China: A Low-carbon Energy Transition?

Date

Thursday 13 November 2014

Hour

17:30 - 19:00

Place

Agence Française de Développement
5 rue Roland Barthes
75012 Paris

Conference coordinated by  Anne-Cécile Bras, journalist at RFI.

With:

  • Michel Aglietta, economist, Scientific Adviser at the French Research Center in International Economics (CEPII)
  • Pierre Cannet, Head of the Climate Change, Sustainable Energy and Infrastructure Program, WWF France
  • Christian de Gromard, Energy expert, Agence Française de Développement
  • Misako Takahashi, Head of the Asia, Pacific and Latin America Division, International Energy Agency
  • Yaxiong Zhang, Assistant Director, Department of Economic Forecasting, Information Center of the National Development and Reform Commission (NDRC), China

 

 

The debate was coordinated by Anne-Cécile Bras, journalist at RFI. The speakers were Michel Aglietta, economist, Scientific Adviser at the French Research Center in International Economics; Pierre Cannet, Head of the Climate Change, Sustainable Energy and Infrastructure Program, WWF France; Christian de Gromard, Energy expert, Agence Française de Développement; Misako Takahashi, Head of the Asia, Pacific and Latin America Division, International Energy Agency; Yaxiong Zhang, Assistant Director, Department of Economic Forecasting, Information Center of the National Development and Reform Commission, China.

 

China is the largest greenhouse gas emitter ahead of the USA. However, it has announced that it aims to reach its peak in emissions by 2030. To achieve this, it has launched an energy transition process: the aim is to limit carbon emissions. It is gradually modifying its energy mix using several levers, such as reducing the share of coal in power generation, and developing the gas and renewable energies sectors. The means implemented are part of a comprehensive reform that aims to modify China’s development model.

China’s energy transition: A process with many challenges

The energy transition marks a turning point in China’s history: “It is striking to see the political and social change that took place around 2010” (Christian de Gromard). The process meets a range of major challenges to which the country aims to provide a swift response.

The first challenge relates to an energy issue. China has realized that it is overly dependent on coal: “Over 65% of its electricity production is generated by this fuel” (Misako Takahashi). Nationwide, it “generates considerable air pollution” (Misako Takahashi) from which the inhabitants are the first to suffer the consequences. The rebalancing of the energy mix also corresponds to a demand from the population, which is “willing to support political efforts to reduce greenhouse gas emissions” (Yaxiong Zhang).

The energy transition is consequently part of a broader economic and social challenge: “In order to understand China’s energy revolution[…] it is first and foremost necessary to understand China’s economic and social development pattern” (Yaxiong Zhang). The 12th Five-Year Plan (2011-2015) and the one which will follow aim to implement qualitative growth. They must enable China to enter into an “ecological civilization” (Pierre Cannet).

Finally, the overarching challenge is that of a global leadership in climate issues. By aggregating the energy demand of 34 developed countries, the OECD observes that “China accounts for over 50% of overall demand” (Misako Takahashi). It is a major actor in international relations and “aims to extend its diplomacy and position itself as a leader on these issues of sustainable development” (Pierre Cannet). It is for this reason that the modalities of the energy transition are of particular interest for France: “Climate and biodiversity are two main areas that drive cooperation between France and China” (Christian de Gromard).

 

Multi-lever strategy to modify the energy mix

It is necessary to activate several levers in order to reduce carbon emissions.

The Government first of all wishes to promote “the replacement of coal by gas”: China has one of the world’s richest gas reserves and is very eager to develop this sector” (Misako Takahashi). This is the aim of the projects implemented in partnership with AFD in Sichuan Province: following the earthquake, the institution “financed 100,000 domestic biogas units[…], facilities which avoid the use of wood or coal” (Christian de Gromard).

Various alternative means are also being implemented, in Heilongjiang Province, biomass cogeneration units replace coal-fired boilers. All renewable energies should be developed in China: “Our aim is for renewable energies to account for 15% of our consumption by 2020” (Yaxiong Zhang). But while the country “is already a leader in this field”, it aims to continue the process “to develop nuclear energy” (Misako Takahashi).

The other possible avenues to reduce CO2 emissions involve qualitative and quantitative factors: “Above and beyond the energy mix, the quality of growth raises the issue of energy efficiency” (Michel Aglietta). It is a question of a cleaner consumption of resources, for example “through the action plan launched in September to improve coal-fired power plants” (Misako Takahashi), or of consuming less: “Energy-saving measures have also been introduced” (Misako Takahashi).

 

Ambitious objectives

China’s post-2020 target “is to achieve a peak of CO2 emissions by 2030 […] renewable energies will then account for 20% of primary energy consumption” (Yaxiong Zhang). Is this target realistic? “Generally speaking, when China makes announcements they are respected” (Christian de Gromard). WWF has observed that there is a really proactive approach to the implementation of policies at all levels: “Things are starting to change in the provinces. This is also the case in cities” (Pierre Cannet).

It is because the ongoing “energy revolution” (Pierre Cannet) is driven by long-term dynamics. Upstream, the increase in salaries has had a direct impact on the ecological issue: it implies higher productivity and leads to the development of more effective, and therefore more energy-efficient, technologies. It modifies the structure of the consumption of production: with the growth of the middle class, “service industries are developing and play a major role” (Michel Aglietta). The importance of energy-guzzling heavy industry is declining.

Downstream, the energy transition is part of an ambitious project: the 13th Five-Year Plan emphasizes “a development model based on innovation” (Yaxiong Zhang). Local governments are fully aware of the strong economic potential of, for example, renewable energies. They integrate ecological themes into their development plans. “A connection is established between national orientations and implementation at local level” (Pierre Cannet).

The consideration of these issues will be one of the major issues for the challenge that China still faces: by 2030, 300 million people will migrate from rural areas to cities. “The key issue of the new urbanization is the need for smart cities” (Michel Aglietta). To give this urbanization an ecological character it is necessary, for example, to refurbish buildings or develop public transport. The process must not take place to the detriment of rural dwellers: growth with quality calls for “integrated rural-urban development” (Michel Aglietta).

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