app dload China’s Climate Progress by the Numbers

China’s Climate Progress by the Numbers

This is a piece I wrote with a colleague that was originally published as China Begins Its Transition to a Clean-Energy Economy: China’s Climate Progress by the Numbers” on the Center for American Progress’s website. Itprovides a grand landscape view of China’s clean energy efforts todate, much like this blog’s Green Hops series tries to do.  As we honortoday’s date, I would like to dedicate this piece to the people ofChina.

china energy onpage China’s Climate Progress by the Numbers

By Julian Wong, Andrew Light | June 4, 2009

Also see: Climate Progress in China by Julian Wong and Andrew Light

A common refrain from climate action naysayers is that, “China is building two coal-fired power plants a week!”They insist that the United States should wait until this major emittertakes on binding commitments to climate change mitigation before itdecides to adopt global warming pollution reduction policies in theAmerican Climate and Energy Security Act (H.R. 2454). They further claimthat if such a bill became law, the United States would be transferringits jobs to countries such as China and India that are doing nothing tocurb emissions. But that thinking is exactly wrong.

Critics fairly point to the fact that 80 percent of China’s power is derived from dirty coal, and that China recently surpassed the United States as the word’s largest emitter of carbon dioxide. Yet China’s per capita emissions remain a fifth that of the United States, and its historical cumulative per capita emissions from 1960 to 2005 are less than one-tenth that of the United States.

Still, the Chinese have recognized that it’s climate inaction—notclimate legislation—that will lead to its own economic undoing. As theU.S. Congress debates the merits of enacting renewable electricity andenergy efficiency standards, China has already forged ahead withbuilding its own low-carbon economy, laying the foundation forclean-energy jobs and innovation.

China ranked second in the world in 2007 in terms of the absolute dollar amount invested in renewable energy, according to the Climate Group.It spent $12 billion, which put it just behind Germany’s $14 billion.These investments have placed China among the world leaders in solar,wind, electric vehicle, rail, and grid technologies. And now approximately 9 percent of China’s $586 billion economic stimulus package will go toward sustainable development (excluding rail and grid) projects.

China is expected to unveil in the coming weeks another extensiveand unprecedented stimulus package—reported to be in the range of $440 billion to $660 billion—dedicatedsolely to new energy development over the next decade, includinggenerous investments in wind, solar, and hydropower. If thoseexpectations are fulfilled, China could emerge as the unquestionedglobal leader in clean-energy production, significantly increasing itschances to wean its energy appetite off coal, and at the same timeushering in an era of sustainable economic growth by exporting theseclean-energy technologies to the world.

The bottom line: China is not there yet, but it is beginning totransition to a clean-energy economy through a wide range of actions.The United States should recognize China’s efforts and encourage Chinato expand upon them. We have sketched this claim before, but let’s run though the numbers in more detail.

Energy efficiency

Energy efficiency is China’s primary energy priority. China just last year revised its Energy Conservation Law to declare that it “implements an energy strategy of promoting conservation and development concurrently while giving top priority to conservation” (emphasis added). This emphasis runs through many of China’s policies.

  • China aims to reduce energy intensity—theamount of energy consumed per unit of gross domestic product—by 20percent of 2005 levels by 2020. Each province and provincial-level cityhas been assigned an energy intensity reduction target ranging between12 percent and 30 percent, and the respective governors or mayors areheld accountable to such targets. Their success is part of the basisfor their evaluation for promotion. China has made steady progresstoward reaching this goal, achieving a 10-percent reduction of energyintensity by the end of 2008. If the goal is fully realized, it willtranslate to an annual reduction from a business-as-usual scenario ofover 1 billion tons of carbon dioxide per year starting in 2010. By comparison,the European Union’s targets under the Kyoto Protocol translate to anannual absolute reduction of 300 million tons of carbon dioxide by theend of its compliance period in 2012.
  • The Top 1,000 Energy-Consuming Enterprises program,which China started in 2006, sets energy efficiency benchmarks for thetop 1,000 energy-consuming enterprises across nine sectors of heavyindustry. These 1,000 industries alone constituted 33 percent ofChina’s overall energy consumption and 47 percent of industrial energyconsumption in 2004, and 43 percent of China’s carbon dioxide emissionsin 2006. Data suggests that the program is on target to achieve itsgoal of saving 100 million tons of coal equivalent, which translates toreducing carbon dioxide emissions by between 300 million and 450million tons. This is also the equivalent of removing 68 million to 100million cars from the road.
  • China launched a rebate program in April 2008 to subsidize the purchase of energy efficient light bulbsby 30 percent on wholesale purchases and 50 percent on retail sales.Some local governments provide an additional subsidy of up to 40percent. China subsidized 62 million bulbs by the end of January 2009,which can help save 3.2 billion kilowatt hours of electricity annuallyand reduce carbon dioxide discharges by 3.2 million tons. Chinaannounced plans earlier this year to double the size of the program tosubsidize 100 million bulbs in 2009.
  • Smaller and less efficient power plants in China are closing down as larger, more efficient power plants are built. China shut down 34 gigawatts worth of small, inefficient plantsbetween 2006 and 2008, and plans to close another 31 GW over the nextthree years. This active policy of“opening-the-large-and-closing-the-small” increased averageefficiencies from 370 grams of coal per kilowatt hour of electricitygenerated in 2005 to 349 grams in 2008. And new plants such as the 1 GWultrasupercritical coal plant in Yuhuan can generate a kilowatt hour ofelectricity with just 283 grams of coal.
  • China enacted a new building code in 2006 that requires new buildings to halve their energy consumption levelscompared to the current average. Enforcement remains a difficultchallenge, and the code does not address the vast stock of existingstructures, only 4 percent of which meets the new standards. A moresuccessful program has been the requirement that government offices setthermostats at no lower than 26 degrees Celsius in the summer and nohigher than 20 degrees Celsius in the winter, while encouraging thegeneral public to do the same. And China has recently launched the Three Star green building evaluation standard,a voluntary set of standards aimed at encouraging green buildingdevelopment with performance standards above and beyond what thebuilding code requires.
  • China is the world’s largest producer of electronic and homeappliances, and it developed mandatory energy efficiency standards andlabels for a range of such products in 2005. These standards arecoupled with the adoption of green procurement polices for governmentoffices and state-owned enterprises and will enable China to avoid 100 million tons of carbon dioxide emissions per year.
  • A pilot energy demand-side program—whereby the quantity and patternof consumption are smartly managed to match supply constraints—inJiangsu province has eliminated the need to build 300 megawatts of electricity capacity in the area, thus eliminating 1.84 million tons of carbon dioxide equivalent. A World Bank studyconcludes that if properly scaled, demand-side management can eliminatethe need to build more than 100 GW of electricity capacity in China by2020.

Renewable energy

China is keenly aware of the threats that climate change poses andthe need to diversify its energy base away from coal and oil. The Renewable Energy Law of 2006 and subsequent Medium and Long-Term Renewable Energy Plan set a framework for ambitious targets to develop renewable energy sources in China.

  • China has set a goal of generating 10 percent of its electricity from renewable energy sources by 2010, and 15 percent by 2020.
  • China just tripled is 2020 target for installed wind capacity from 20 GW to 100 GW and has recently surpassed India as the fourth-largest installer of wind power.
  • China’s 2020 target of building 1.8 GW of installed solar power capacity is expected to be increased at least fivefold to 10 GW. China was the world’s largest manufacturer of solar photovoltaic panels until recently, providing roughly 40 percent of the global market sharein 2008. An overwhelming majority of those solar panels have beenexported, but China’s domestic solar market is on the cusp ofexperiencing a boom thanks to new solar incentives announced this year that cut the cost of purchase and installation by as much as half.
  • One in 10 Chinese households use solar thermal water heaters.China had deployed 40 million solar water heaters in 2007—two-thirds ofthe global market share. The country plans for 30 percent of itshouseholds to have installed solar water heaters by 2020.
  • China has a target for 300 GW of installed hydropower by 2020, which is twice what it has now.
  • China implemented a feed-in tariff for biomass power generation atthe rate of 3.2 cents per kwh. This means that China essentiallyprovides a preferential electricity tariff to biomass power producersof 3.2 cents per kwh over the tariff for conventional fossil fuels. Itplans to install 30 GW of biomass power capacity by 2020.
  • China aims to use 10 million tons of bioethanol and 2 million tonsof biodiesel by 2020, replacing 10 million tons of petroleum-based fuelannually.
  • The national renewable energy targets do not include nuclearenergy. China currently has just over 9 GW of installed nuclear power,but is poised to ramp that up to account for 5 percent of electricity production by 2020, translating to an installed capacity of 60 to 75 GW.
  • All electricity end-users (other than the agriculture sector andresidents of Tibet) have had to pay a renewable energy surcharge of0.001 yuan per kwh since 2006. This surcharge doubled to 0.002 yuan perkwh for commercial and industrial users in August 2008. Proceeds fromthe surcharge have been distributed in three batches to renewableenergy projects (mostly wind and biomass)—$34.6 million in 2006, $106million in the first through third quarter of 2007, and $295.2 million in the fourth quarter of 2007 through the second quarter of 2008.

Energy grid

China, like the United States, must modernize its national gridinfrastructure in order to accelerate its uptake of renewable energy.This discussion is actively in the works now.

Auto industry

In contrast to the decline of the United State’s automotiveindustry, China is creating a strong and robust automotivemanufacturing capacity, especially with respect to highly efficientcars, hybrid-electric vehicles, and pure-electric vehicles.

  • China has fuel economy standards that translate to 36.7 miles per gallon and is said to be considering a proposal to raise that to 42.2 mpg by 2015.The U.S. standard was only 27.5 MPG for 20 years, although PresidentBarack Obama announced a new standard in May of 35.5 mpg by 2016.
  • China last September doubled taxes on carswith engines above four liters from 20 percent to 40 percent, andincreased them from 15 percent to 20 percent for those with enginesbetween three and four liters. At the same time, China reduced taxesfor cars with engines under one liter from 3 percent to 1 percent.
  • China has been criticized until recently for fixing energy pricesat artificially low rates. China is now embarking on progressive energyprice reform to indirectly link transportation fuel prices to global crude prices.It raised gasoline and diesel prices once in 2007 and once in 2008. Yetit has increased prices twice in the first five months of this yearalone.
  • China wants to raise its annual production capacity of hybrid, all-electric cars and buses to 500,000 by the end of 2011. This would account for only 5 percent of total car sales, but is up from 2,100 in 2008. Thirteen cities will roll out pilot subsidy schemes for “new energy vehicles,”ranging from $7,350 for small hybrid passenger cars to $87,700 forlarge, fuel-cell-powered commercial buses. The subsidies will targetpublic-sector purchases such as public transportation, sanitation, andpostal services. The State Grid plans to deploy pilot networks of charging stations in Beijing, Tianjin, and Shanghai, while Nissan-Renault plans to help establish a pilot charging infrastructure network in Wuhan.
  • China’s emerging leadership in electric vehicles is based on itsinnovation in energy storage technology. The world’s firstmass-produced, plug-in hybrid is the F3DM, launched by China’s BYD Auto last December.Just six years ago this company was only in the business of makingbatteries for mobile phones. The F3DM sells in China for approximately$22,000.
  • China has also become the world’s leader in electric bicycles,which are fitted with a small 250-watt motor and rechargeablenickel-cadmium battery. They have a range of 60 kilometers betweencharges and can reach speeds of 30 kilometers/hour, which make themideal for intracity mobility, providing a zero-emission (duringoperation) alternative to a car or motorcycle. China accounts for 80percent of global electric bicycles sales.

Public transportation

Cars will probably remain outside of economic reach for Chinesehouseholds, despite the growing automotive market. Masstransit—particularly intracity subways and long-distance high speedrail—will remain the mobility solutions of choice.

  • China is embarking on the largest railway expansion in historyand plans to spend more than $1 trillion expanding its railway networkfrom 78,000 km today to 120,000 km in 2020. Of this, 13,000 km will becomprised of high-speed rail. The 1,300 kilometer Beijing-Shanghai lineis under construction and it will reduce travel time between thosedestinations from 14 hours to 5 hours when it opens in 2013. This willattract an estimated 220,000 daily passengers and should dramaticallyreduce air travel between the metropolises.
  • China reportedly has 26,000 km of electrified railways,making it second in the world in this arena. Encouragingly, this figureaccounts for 32 percent of China’s total railways, but is responsiblefor 50 percent of overall passenger and cargo volume.
  • China is poised to have the world’s largest network for intracity urban rail transit.About 2,100 km of railway lines will be laid and operational by 2015 in19 cities. Ten cities currently have 29 urban rail routes, totaling 778km, and 14 cities are building 46 urban rail lines, which total 1,212km.

Other initiatives

  • An unprecedented wave of rural-to-urban migration is creatingopportunities to experiment with new development patterns. There areover 40 different eco-city projects currently proposed or under development throughout China.
  • Low-carbon manufacturing zones, such as those in Baoding, Tianjin,and Jiangsu, are emerging as engines of growth for clean energy.
  • China has a target to increase forest area coverage to 20 percent by 2010 and has committed $9 billion annually toward this effort.
  • A total of 1,200 counties across the country are utilizing fertilizers according to the results of local soil tests to reduce emissions of nitrogen oxide—a less common but more potent global warming pollutant.

Conclusion

It’s true that China’s absolute emissions are rising as its economycontinues to expand by 6 percent to 8 percent annually even amidst aglobal recession, and that compliance with government mandates aredifficult to assess given the lack of transparency in reporting or toenforce due to limited institutional capacity. But it would clearly beincorrect to accuse China of doing nothing on climate change.

When the framework for assessing a country’s climate changemitigation efforts is narrowly confined to carbon emission caps, itglosses over a multitude of complementary actions that providemeaningful emissions reductions compared to a business-as-usualscenario. This is why we at the Center for American Progress haveproposed “carbon cap equivalents” as a better model for assessing a country’s carbon profile rather than only looking at stipulated caps.

The carbon cap equivalents strategy calls for us to rigorously modelwhat China’s carbon dioxide emissions reductions will add up to througha future date—such as the 2020 benchmark midterm year used in the U.N.climate change negotiations process—relative to a base line year, suchas 1990. Looking at the full range of China’s measures in this wayshows that these iterated measures will amount to significantreductions relative to a business-as-usual scenario had China continuedits emissions growth unabated. Together they will amount to a level ofemissions reductions equivalent to if China had adopted an explicittargeted emissions cap.

We must also use the same technique to reveal the actual carbonemissions reductions achievable in the midterm by the American CleanEnergy and Security Act currently making its way through Congress. Afull analysis of the carbon cap equivalent of ACES compared to a modelof the full range of measures being undertaken by China will likelyshow that the two countries are not as far apart in terms of theiraspirations for carbon reductions as is commonly thought.

What makes the above list of actions by China all the moreimpressive is that the country’s leaders decided to act unilaterallyeven though its per capita GDP and per capita emissions, bothhistorical and present, remain a fraction of the United States’. Chinahasn’t done so out of charity, but out of recognition that doing so isboth critical to its national security and a huge opportunity forfuture economic prosperity.

Sure, China can do more. But we can create a much more constructiveplatform for forging a consensus in Copenhagen or forming the basis fora bilateral agreement with China on climate change by acknowledging andunderstanding the effects of the full range of China’s climate actionsoutside of its lack of hard caps on carbon emissions. A more extensiveanalysis should quiet the naysayers on Capitol Hill that use the falseexcuse of Chinese inaction to block the passage of the historic climateand energy bill in the U.S. Congress.

Download this memo (pdf)

Julian Wong is a Senior Policy Analyst and Andrew Light is a Senior Fellow at the Center for American Progress.

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