The evolution of low-carbon development strategies in China

Energy 68 (2014) 61e70

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The evolution of low-carbon development strategies in China Nannan Wang a,1, Yen-Chiang Chang b, * a b

School of Management, Shandong University, No. 27 Shan Da Nan Road, 250100, China School of Law, Shandong University, China

a r t i c l e i n f o

a b s t r a c t

Article history: Received 28 March 2013 Received in revised form 15 January 2014 Accepted 18 January 2014 Available online 15 March 2014

This paper reviewed the history of the evolution of low-carbon development strategies and the establishment of low-carbon targets in China, over the past 30 years. The climate policy development in China has been classified into four stages and the key strategies of the Chinese government adopted towards low-carbon development were analysed. The results showed the changing view of the government regarding the climate issue, was the underlying reason for the establishment of low-carbon development targets, whilst a low-carbon economy is now receiving increasing attention in the governance of China. Some recommendations for future improvement were given at the end of the paper. Ó 2014 Published by Elsevier Ltd.

Keywords: Low-carbon development Strategy analysis Energy policy Chinese approach

1. Introduction The climate change issue has attracted attention of both the developed and developing countries, over the last two decades. As many countries set targets to reduce carbon emissions, the Chinese government also established various targets regarding low-carbon development. Although China experienced record levels of rapid economic growth during recent decades, it is still a developing country and faces significant environmental problems. The GDP (Gross Domestic Product) per capita in China is still below the world average. As economic development should drive an improvement in social conditions, this is still the prime goal of the Chinese government. Energy consumption in China has more than quadrupled in the 30 years since economic reform began in 1980, with the total energy consumption in 2010 reaching 3.2 billion tsce (tonnes standard coal equivalent) [1]. The trend and composition of the main energy resources in China in the last 30 years is shown in Fig. 1. Coal has remained the primary energy resource, accounting for a 70%, whilst the contribution of renewable energy has increased from 3.8% to 8.6%. The external dependency on oil rose from 26% in 2000, to 57% in 2010 [2].

* Corresponding author. E-mail addresses: [email protected] (N. Wang), [email protected], [email protected] (Y.-C. Chang). 1 Tel.: þ86 18764178309. 0360-5442/$ e see front matter Ó 2014 Published by Elsevier Ltd. http://dx.doi.org/10.1016/j.energy.2014.01.060

In contrast, the overall energy consumption in some developed countries experienced different patterns during the same period. As examples, the energy consumption trends in the US and the UK are shown in Fig. 2. In the UK, energy consumption in 2012 was only 0.9% more than the 1980 level [3], whereas, US energy consumption grew by 1.7% annually, between 1990 and 2000. Since then, it remained virtually unchanged until 2007, when it started to decline [4]. Although China has become the biggest carbon emitter in the world, its carbon emissions per capita are still below the world average [5]. This trend is likely to continue, as shown in some researchers projections on future carbon emissions in China. Based on the data and energy policies prior to 2005, the carbon emission model of Chen (2005) predicted that the future cost of carbon abatement as potentially being rather high and the room for abatement was somewhat limited [6]. However, there model did not take into consideration the recent low-carbon policies and targets aiming for carbon abatement issue. Similarly, Cai et al. (2008) projected China’s emissions in major sectors will continue increasing [7]. The aforementioned offered suggestions as to emissions reduction, including sector-based mitigation policies, selecting appropriate policy-making perspectives and selecting the most cost-effective mitigation measures. It is unlikely that there will be a downturn in carbon emissions in China in the short-term. Nonetheless Wang and Watson [8] projected the carbon emissions path of China to 2050 and concluded that it would be possible to slow emissions growth and begin to reduce it, from 2020 to 2030. They suggested more action should be taken regarding energy

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low-carbon economy have increasingly interested researchers in recent years. Wang et al. [11] discussed provincial low-carbon policies, by means of two case studies in China. They were of the opinion that the provinces should develop a modern, industrial society, characterised by low-carbon emissions, high energy efficiency and developing carbon-neutral energy at their core. Price et al. (2013) developed an end-use based low-carbon indicator system for provincial and city levels in China [12]. Li (2010) discussed the government’s management innovation towards a low-carbon economy in China, and suggested the government should stimulate innovation in governance philosophy, methods, and organisation [13]. 2.2. Current low-carbon strategies in China Fig. 1. The energy consumption in China (1980e2010) (Data source: National Bureau of Statistics of China, 2012) [1].

efficiency, renewable energy, carbon capture and storage, and transportation. In the last century, it was mostly the developed countries which were required to accept more responsibility for reducing carbon emissions, in order to target climate change issues. In entering the 21st century, developing countries have come under increasing pressure to accept more responsibility for carbon emissions, in the debate on global warming. The result is that the large developing countries, such as China should consider how to transfer their energy-intensive pattern of economic growth, to that of a lowcarbon economy. The critical area requiring significant improvement is, however, the energy efficiency of the key industries, such as manufacturing and construction. How this world’s largest carbon emitter gradually established its low-carbon targets and attempted to balance the economical development and carbon emission control is of vital importance to the world sustainable development. This research intends to review recent development of the national strategies for low-carbon governance in China and investigate how the nation has changed from concentrating purely on economic development, to aiming for low-carbon, economic development. Where appropriate, comparison is made between the practice in China and other countries, in order to establish any problems and make suggestions for good low-carbon governance in China. 2. The studies in low-carbon economy and governance in China

Wang et al. (2011) reviewed low-carbon governance in China and suggested the government should strengthen the operational level towards a low-carbon economy, by such means as law enforcement, industry standards and education [14]. Similarly, Jiang et al. (2010) also indicated that the law, statutes, management institutions and public education, should all be enhanced [15]. They suggested the government should encourage strategies of energy saving and emission reduction as a starting point, promoting low carbon economy. UNDP (2010) recommended that China should invest more in environmental infrastructure, develop and use new energy and improve energy efficiency, in order to build a lowcarbon economy [10]. Liu and Feng (2011) discussed the lowcarbon development choice in China, from considerations as development objectives, development paths, development methods, development emphases, as well as crucial technical and institutional innovation [16]. They suggested that China should scientifically determine its development goals, choose appropriate routes, define development priorities and methods, research and develop key technologies by collective means, and improve the support system provided. Zhang et al. (2011) modelled the relationship between energy consumption and economic development in China and found that the laws, regulations and policies on energy price and use-technology had an important impact on energy consumption [17]. Their advice was to improve the scale of primary and tertiary industries, urbanisation, plus, minimise population growth rate. Yuan et al. (2009) reviewed the energy policies in China between 1982 and 2006, and suggested two methods to evaluate the short and long-term energy savings effects of energy policies respectively, in the Chinese dimension [18].

2.1. Low-carbon economy development 2.3. Suggestions for low-carbon development in China A low-carbon economy is characterised by low energy consumption, low pollution, low emissions and high performance [9], its objective being to advance human and sustainable development [10]. The low-carbon economy concept and the pathway leading to

Some researchers predicted the future energy trend on the basis of the current situation and strategy and indicated that the Chinese government would face more challenges in sustainable economic

Fig. 2. The energy consumption trend in UK and US. (Data source: The UK Department of Energy & Climate Change, 2013; United States Energy efficiency report, (2011)) [3,4].

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development in the future. Kahrl and Roland-Holst (2009) reviewed the economic and energy accounts in China over the last ten years and concluded that incipient structural changes in energy economy and energy demand growth, would cause important and different challenges for decision makers [19]. Many researchers believed China was facing severe energy-related challenges, including conflicts of resource shortage with planned rapid economic growth, energy use with pollution and that of new technology, with dated production patterns [20,21]. The opinions of the researchers towards the energy challenges China is facing are rather similar and pessimistic. In allusion of China’s energy dilemma, a number of researchers have given policy suggestions, for example energy policies, for lowcarbon development. By examining the effectiveness of current policy in China over a longer period, Andrews-Speed (2009) claimed the Chinese government should strive to solve difficult problems regarding such matters as reluctance to use economic and financial instruments, the nature of political decision-making, the dependency of energy policy on industrial and social policies, and skill shortages and social attitudes to energy [22]. Chai and Zhang (2010) suggested it needs to take action in relation to sustainable technology management, economic incentives for sustainable energy technologies and international technology collaboration [21]. Moreover a prioritised strategy with combined policies towards low-carbon development was preferred by some researchers [23e25]. Their proposals were comprising of energy saving, alternative developing energy, energy structure optimisation, promulgation of environmental standards, advancement in environmental technologies, internalisation of environmental costs, establishment of a public benefit fund and adopting a renewable portfolio system. In addition to energy policies, low-carbon governance combining a wider scope of tool in the development of low-carbon economy, including legal, environment, industry structure change, technical, was also proposed in literature. For example, He et al.’s (2010) analyses showed that policies addressing energy efficiency could bring co-benefits for China such as carbon emission reduction and improvement in air quality [26]. They recommended that better industry structure and energy structure, were essential for better air quality. Wang et al. [14] offered a framework for low-carbon governance at multiple levels: strategy, methodology and operation. Good low-carbon governance should combine carbon reduction goals with economic growth, not only by setting appropriate strategies but also by successfully implementing them using various government tools, so as to achieve a successful low-carbon economy. As the largest manufacturer in the world, the biggest challenge to China is how to balance low-carbon development and economic development. Despite all the difficulties, the Chinese government has set low-carbon targets in recent years. China was once a follower in global climate change activities but now has become an important player, with ambitious low-carbon targets being set. As the largest developing country in the world, the experience of China in merging low-carbon operations with economic development could be valuable reference for other developing countries with similar economical structure, which also have to balance energy demand raise and face pressure to reduce carbon emissions. There is, however, a lack of review regarding the history of the establishment of low-carbon development targets set by the Chinese government and the momentum behind such changes. 3. Research methodologies Since the 1950s, the economic development path of China has been guided by sequential national development plans e Five-Year Plan. Government policies are announced in the form of white papers and speeches from central governors, therefore, they

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provide the source of data collection in this research. The government documents were collected from the government website and portal website. The keywords used to search for the documents include development plan, energy saving, low-carbon, and energy policy. The strategy development process of the Chinese government was reviewed by using document review, literature review, Internet survey and unstructured interview survey. Unstructured interview surveys with nine senior-level energy experts and practitioners were carried out, for the purpose of understanding the evolutionary process and reasons for the development of the low-carbon development targets. The interviewees came from energy sector (2), government (4), university professor (3), age between 36 and 49. The questions cover the energy situation and low-carbon development history in China. The interviews have been recorded by digital recorder under the permission of the interviewees, and later been interpreted into text. The data was analysed in chronological order, so that the relevant policies could be provide summaries of different development stages. 4. The process of low-carbon development target formation 4.1. Developing economy e (prior to 1992) Given the poor social conditions prior to the 1990s, the central government in China concentrated on economic development. Climate change was treated as a meteorological problem in the 80s, so that few policies were designed to target climate change and to encourage environmental recovery in that period. The Five-Year Plan prior to the 1990s primarily addressed economic development issues. The objectives in China of the first nine, Five-Year Plan until 2000, generally focused on economic development. Environmental protection was first mentioned in the Five-Year Plan of early 1980s, when economic reform started. It was not, however, included among the major goals of the development plans. The government had never linked carbon emission issues to the economic development of the nation, although global warming had received little political attention internationally. Similar to the case in many other developing countries, there were no specific objectives regarding sustainability and carbon emissions in this plan. The economic development of China involved almost zero control on carbon emissions at this stage. 4.2. The sustainable development stage e (1992e2004) Since the 1990s, the global warming issue has attracted the attention of government leaders worldwide. As a member of the United Nations, China was also invited to enter international negotiations on climate change. China was expected to accept some international responsibilities, as the biggest developing country. The government realised that this was a good opportunity for China to re-enter international negotiations and affairs. The government, however, had to respond to the call from the developed world to accept obligations regarding climate change and as a result, the climate change issue was treated as a new, diplomatic issue by the government. As a response to the United Nations Conference on Environment and Development, China issued China’s Agenda 21 e White Paper on China’s Population, Environment and Development in the 21st Century2 (1992) [27]. In this white paper, the government stressed

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http://www.acca21.org.cn/ca21pa.html.

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the necessity to conserve natural resources, even although GDP increment was still defined as the prime goal of the nation. In the 10th Five-Year Plan3 (2001) [28], there was an entire chapter regarding natural resources conservation and sustainability, providing strategies such as resource conservation, reforestation and pollution control. The top energy consuming sectors such as electricity sector, building material industry, pulp and paper become the prime targets. In the meanwhile, the development of auto industry was deemed as an important industrialisation activity due to obvious economic reasons. In the same plan, the government encouraged families to purchase cars. Since then China became the fastest growth private car market in the world. The government failed to realise the potential thread that the transport sector brought to carbon emission control in China. The interviewees also blamed that the car incentive policy starting in 2000 was partially responsible for air pollution and energy shortage. One professor said “the government should have invested more on public transport instead of encouraging families have their own cars.” Some experts living in the major cities complained “the number of private cars is out of control now. Traffic jam and bad air became part of our daily lives.”. It was not until 2004, the government acknowledged the impact of transport sector on carbon emission. Several policies were adopted in 2004 including encouraging the development of diesel cars, setting the up-limits of fuel consumption rate and capping the number of private cars to 2010. The Five-Year Plans of the Chinese government have tended to be only short-term development plans for the economic development of the nation. Having realised that sustainable development required long-term efforts, the government started to formulate medium and long-term development plans. In order to cope with the energy shortage caused by rapid economic growth, the government focused almost all its efforts on energy production. Although low energy efficiency was the main issue in the mainstream industries in China [14,16], the government adopted the development of renewable energy as a national strategy, before any promotion of energy conservation. In 1995, the government announced the 1996e2010 Outline of the Development of New and Renewable Energy4 [29], which clarified that the development of new and renewable energy would be emphasised in the future. The following 2000e2015 Outline of the Development of New and Renewable Energy5 (2000) [30] presented market research on the feasibility, business opportunities, financial benefits, and difficulties relating to the development of new and renewable energy. As a result, the massive energy development, without a balancing focus on energy conservation, led to serious social and environmental problems. For example, a large hydroelectric dam project caused vast number of people to be displaced. Uncontrolled coal mining has caused work-related deaths and serious pollution on land and water. The over-heated solar panel industry faced problems such as surplus production capacity and bad debt. After entry into the World Trade Organisation, China experienced an abrupt upswing in economic development and energy usage. The overall energy consumption of the nation in the subsequent years resulted in the sharpest increase in history, at around a 12% annual growth rate, from 2002 to 2006 [1]. The rapid increase

in energy demand was caused by investment and export driven GDP growth, which was parallelled by mounting energy intensity in China [19]. Zhao et al. (2010) carried out an index decomposition analysis to identify the reason behind the energy intensity increase from 1998 to 2006 [31]. They found the high-energy demand in the industrial sector was mainly attributed to expansion of production scale and a greater industrial structure, while energy saving derived largely from efficiency improvement in energy-intensive industries. It required almost ten years for the government to acknowledge the reality that a low-carbon economy required not only the development of new energy but more importantly, an improvement in energy efficiency. Although most developed countries have defined the energy efficiency issue as a prime target in low-carbon development long before China, strategies and plans for energy conservation began to emerge in China since 2004. The first energy conservation plan e China Medium and Long Term Energy Conservation Plan6 (2004) [32] was issued in November 2004. It set a target of reaching 1.4 billion tonnes of standard coal energy conservation capacity. The long-term development goals could be reflected in the medium- and long-term plans of the government regarding sustainable development. On 24 March 2003, the NDRC (National Development and Reform Commission) launched the Programme of Action for Sustainable Development in China in the Early 21st Century7 (2003) [33]. The two aforementioned documents served as platform documents specifying the principles, objectives, priority areas and safeguard measures for the country’s sustainable development in the early 21st Century. The strategy to develop a sustainable society has begun to appear in key governmental policies. At this stage, the government did not strive to develop renewable energy. There were no specific development goals for wind, biomass or geothermal energy in the 10th Five-Year Plan (2000e 2005) [28]. As a result, the contribution of renewable energy and nuclear power, to total energy consumption in China, rose only slowly, from 6.7% to 7.1% [1]. Among the renewable energy sources, hydroelectric power accounted for 96%, while other renewable energy sources only contribute a very small proportion to the overall energy consumption in China [34].

4.3. The establishment of goals e (2005e2008) The more recent plans, such as the 11th Five-Year Plan8 (2006e 2010) [35], issued in 2006, addressed the energy efficiency issue and encouraged the development of renewable energy sources. In this development plan, the development of a circular economy was first included in the main content. In 2005, the government issued the Notification on the Immediate Priorities for Building a conservation-oriented Society and Several Opinions on Accelerating the Development of Circular Economy,9 which gave the definition of circular economy as: to maximise economic output and minimise waste by reducing resource waste and environmental impact on the basis of ‘reduce, recycle and reuse’ [36]. This notification set several measures for the 11th Five-Year period (2006e 2010) including: 1) the output from unit energy and mineral resources to increase by 25%, 2) energy consumption per unit GDP to reduce by 18%, 3) the efficiency rate of agricultural irrigation water to improve to 0.5, 4) utilisation rate of industrial solid waste to

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http://www.people.com.cn/GB/shizheng/16/20010318/419582.html. http://law.solidwaste.com.cn/view/id_697. 5 http://www.xjwind.com/download/%B7%C7%BC%BC%CA%F5%C2%DB%CE%C4/ 2000%A3%AD2015%C4%EA%D0%C2%C4%DC%D4%B4%BA%CD%BF%C9%D4%D9%C9%FA %C4%DC%D4%B4%B2%FA%D2%B5%B7%A2%D5%B9%B9%E6%BB%AE%D2%AA%B5%E3. pdf. 4

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http://www.china.com.cn/chinese/PI-c/713341.htm. http://www.gov.cn/gongbao/content/2003/content_62606.htm. http://www.gov.cn/ztzl/2006-03/16/content_228841.htm. http://www.gov.cn/zwgk/2005-09/08/content_30305.htm.

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increase to 60%, 5) the increase in the rate of domestic waste to be less than 5%. In accordance with the national 11th Five-Year Plan, the government issued the 11th Five-Year Plan for Renewable Energy Development10 (NDRC, 2008) [34], acting as guidance for the implementation of renewable energy sources and the development of a renewable industry. The development goal for renewable energy was aimed to reach 300 million tsce, accounting for 10% of overall energy consumption. For the long-term development path, the Chinese government issued the Medium and Long Term Development for Renewable Energy11 (2007) [37], which extended the original 5-year programme in the 11th Five-Year Plan, to 15 years. More specifically, it proposed the construction of 40GWe of nuclear capacity by 2020. The energy experts in the interview survey recommended that “the Chinese government be primarily influenced by the US’ progress on the development of nuclear power”. The focus of the national development plans changed from short-term economic targets to long-term environmental goals, which shows the determination of the central government to create a sustainable development path for the nation. There was rapid development in China in the renewable energy industries, such as solar panel, wind power and bio-mass. The implementation of renewable energies was, however, greatly constrained by inaccessibility to the national grid. Renewable energy still played a very small part in the energy consumption in China, as was the case in 2008. The central government published several white papers, such as China’s Policy on Mineral Resources12 (2003) [38], China’s Energy Conditions and Policies13 (2007) [39] and China’s Policies and Actions on Climate Change14 (2008) [40]. In these white papers, the government encouraged diversified development in the energy sector. The government continued to update the white papers in the following year, with the development of renewable energy being listed as an important part of national energy strategy. In 2008, the General Office of the State Council issued the Opinion on Accelerating the Promotion of the Integral Utilisation of Crop Straws15 [41]. Supported by the government policies, the renewable energy sector in China has grown rapidly. Prior to the 11th Five-Year Plan, the energy efficiency issue received scant attention in economic development plans. For the first time, in 2005, the government set an energy intensity reduction target, to reduce energy consumption per unit GDP by 20%, by 2010 [35]. In reality the energy consumption per unit GDP decreased by 19.1% between 2005 and 2010 [42]. The government also set a target for primary energy consumption during the 11th Five-Year Plan period, which was to control the amount at a 4% annual increase rate. This target was questionable, as the energy consumption in China during the previous 10th Five-Year Plan had increased at around 10% annually. The statistical data also proved this target was too ambitious to be achieved at that time. Between 2005 and 2010 the average annual increase rate of primary energy consumption in China was over 7%. Although this was lower than during the previous period, it greatly exceeded the planned target

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http://www.sdpc.gov.cn/zcfb/zcfbtz/2008tongzhi/t20080318_198262.htm. http://www.gov.cn/zwgk/2007-09/05/content_738243.htm. 12 http://www.gov.cn/zwgk/2005-05/27/content_1475.htm. 13 http://www.sdpc.gov.cn/zcfb/zcfbtz/2007tongzhi/t20071226_181363.htm. 14 http://www.qibebt.cas.cn/kxcb/kpwz/nyzcgh/200906/ P020090630582872257263.pdf. 15 http://www.baidu.com/link? url¼77tphhbuBt6LaJeeSuInlI8vevIowA56CGYDfR2_RGXO0tJKPsr_ lsh3SkZpvCfxhGdfz3TjOb6cPljMCH-B6_oKCwTX5WAlyiPeG8oQaa2tmM_uLT-Fev2oMSjx9De. 11

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[1]. There was a specific column in the 11th Five-Year Plan regarding key energy saving programmes, which included areas such as; construction, coal boilers, renewables, government organisation and energy monitoring. The Chinese government recognised that low-carbon development was a long-term task, so that pilot programmes were needed to demonstrate the benefits of new technologies to the key industries. In addition, the government planned to control the primary energy consumption below to 2.7 billion tsce by 2010, with an annual increase of around 4% [37]. The National Medium- and Long-Term Plan for the Development of Science and Technology16 [43] was established in 2006, following the Renewable Energy Law. The plan included the development of energy saving and clean energy technologies, as one of the eight development objectives of future science and technology development. Since 2006, the government has introduced a number of initiatives to restructure key industries and sectors [10], such as the Enforcement Regulations of the Ten Major Energy Savings Projects17 [44]. Another policy in the area of reforestation is the development of the concept of the energy forest. The State Forestry Administration drafted the National Energy Forest Construction Plan18 in 2006 [45] and the Construction Plan for Forestry Biodiesel Resource19 during the 11th Five-Year Plan period [46] in 2007, in order to support the development of the concept of the energy forest. The government understood the benefits of forest development, as regards reducing the carbon emissions, thus, decided to adopt forest protection and development policies in the 11th and 12th Five-Year Plan20 [47]. In response to the UNFCCC (United Nations Framework Convention on Climate Change), the Chinese government formulated China’s National Climate Change Programme21 (2007) [48], setting an overall target of a 20% reduction in energy consumption per unit of GDP, where the principles and key actions were also suggested, as well as policies and measures to address climate change for the period until 2010. The guidance for subsequent action was then indicated in China’s Scientific and Technological Actions against Climate Change22 (2007) [49]. The other policy at this stage regarding structural adjustment of economic development was the promoting of the development of the third industry and reducing the dependence of the economy on manufacturing. This policy was adopted in the 11th and 12th FiveYear Plan. In 2008, the government issued the Opinion on the Implementation of a Number of Policy Measures to Accelerate the Development of the Service Sector23 [50] and the Guidelines for Accelerating the Development of High-tech Service Industry24 [51]. New adjustment plans were adopted, in order to set higher standards for those high energy-consuming manufacturing companies in the car, steel and petrochemical industries. In China’s Policies and Actions on Climate Change (2008) [40] the government established financial subsidies to enhance energy-saving products. The later published white paper e China’s Policies and Actions for Addressing Climate Change25 (2008) [52], summarised the achievements in mitigating climate change at this stage.

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http://www.gov.cn/jrzg/2006-02/09/content_183787.htm. http://www.sdpc.gov.cn/zcfb/zcfbtz/tz2006/t20060802_78934.htm. http://www.forestry.gov.cn/portal/swzny/s/751/content-102899.html. http://www.gov.cn/ztzl/2007-01/11/content_493780.htm. http://www.gov.cn/2011lh/content_1825838.htm. http://www.fmprc.gov.cn/ce/ceun/eng/smhwj/2007/t326971.htm. http://www.most.gov.cn/eng/pressroom/200706/t20070615_50483.htm. http://www.molss.gov.cn/gb/zxwj/2007-03/28/content_171130.htm. http://www.gov.cn/zwgk/2011-12/16/content_2021875.htm. http://www.ccchina.gov.cn/WebSite/CCChina/UpFile/File419.pdf.

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However, some interviewees had doubts on the prioritisation of low-carbon policies. One claimed that “the government focused too much on the development of renewable energy sector and heavy industries. The energy conservation of other sectors, such as construction industry and service sector, were overlooked.” 4.4. Low-carbon development e (2009 e to date) Many countries set targets to reduce carbon emissions, giving China, thus, adding more pressure to low-carbon development. The US targeted 17% green house gas emissions below the 2005 level by 2020 [53]. The UK aimed to reduce carbon dioxide emission by 60% by 2050 from current level, aiming to develop a low-carbon economy [9]. At the 2009 Copenhagen Climate Change Conference, China announced an even more ambitious target of cutting CO2 emissions per unit GDP by 40e45%, in comparison to the 2005 level. Although many countries targeted overall carbon emissions in the future, the Chinese government established their carbon emission target using its own definition. It focused on the reduction of carbon intensity, rather than on overall carbon emissions. As suggested by Chang and Wang (2010) the green house gas emission of developing countries such as China had unique patterns and problems, therefore, it should not follow the same emission targets and low-carbon development paths as those other, developed countries [54]. The development of a low-carbon economy in China should be based on its practice and own characteristics. Given the fact that the upward emission trend in China could not be reversed in the short term [6e8], the government made an informed decision not to set up overall reduction target for carbon emissions, in the manner adopted in other, developed countries. In China, for the first time, the government set up targets for energy saving during the 12th Five-Year Plan. The energy consumption by sector in China has a very different pattern from that in developed countries. As the largest energy consumer, the industrial sector was set a target of reducing energy consumption by 21%, from its 2010 level, by 2015. Considering that the industrial sector is the prime driver of the Chinese economy and that economic development still plays an important role in China’s development plans, it will take strenuous efforts by industry and the governors, to achieve this goal. Instead of giving an overall emission target in the 11th Five-Year Plan, in 2012, the government issued the Energy Conservation and Carbon Emission Reduction 12th Five-Year Plan,26 which defined detailed energy conservation goals for each sector [47]. It defined 47 GHG emission reduction indicators for the main energy consumers such as industry, construction, transportation, agriculture and the public sector. Among the sectors, the industry was allocated most of the emission targets (77%) to be achieved by 2015. Industrial structural optimisation was prioritised over all other missions, particularly targeting the top energy-intensive industrial sectors. There were 21 goals in the plan, aimed at closing down outdated production facilities, such as the power sector, metal smelting, coke coal, papermaking, chemical fibre production and filament lamp products. Furthermore, the Ministry of Industry and Information, Ministry of Housing and UrbaneRural Construction and the Ministry of Transport also established development plans, such as the Industry Energy Conservation 12th Five-Year Plan27 [55], the Building Energy Conservation Twelfth Five-Year Plan Subject Plan28 [56] and the Road and Waterway Transportation Energy Conservation Twelfth Five-Year Plan29 [57], as guidance to

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http://www.gov.cn/zwgk/2012-08/21/content_2207867.htm. http://www.gov.cn/gzdt/2012-02/27/content_2077536.htm. http://www.gov.cn/zwgk/2012-05/31/content_2149889.htm. http://www.gov.cn/zwgk/2011-07/08/content_1902139.htm.

their sectors in terms of energy saving and carbon emission reduction. In the mean time, the government also proposed another target to increase the proportion of ‘non-fossil energy’ in the total energy consumption to 15% in 2020, this being included in the white paper e China’s Energy Policy30 (2012) [58]. The change in terminology was not coincidental but deliberate. As stated above, the government set a goal in 2007,31 to increase the contribution of renewable energy, nonetheless it changed to non-fossil energy in 2009. Consequently, the development of nuclear energy was included in the national development plan. As a result, renewable energy was no longer deemed the only source of alternative energy. According to the interview results, one reason for this change was due to difficulties such as “cost and on-grid problems, in the implementation of renewable energy”. The performance of new technologies such as solar, wind and biomass was less satisfactory than that of hydroelectric generation and nuclear energy. Soon after the announcement of the 2009 carbon emission target, the promotion of nuclear and the hydroelectric power industries was prioritised over wind, solar and biomass energy, in the 12th Five-Year Plan. The attitude of the government towards wind, solar and biomass energy became more conservative, for example the primary objective for them was to actively resolve the effective conversion problem in an orderly manner. In 2013, the Forestry Bureau issued the National Forest Biomass Energy Development Plan,32 aiming to plant 1.7 million hectares of energy forest and to form 20 billion tsce of biomass energy by 2020 [59]. Consequently, more purpose-built policies regarding lowcarbon development in China have been launched and at a much faster speed, since 2009. Despite the fact that the five-year development plan mainly addressed the economic development of the nation, in the 12th Five-Year Plan announced in 2010, environmental development was placed in the first chapter, replacing economic development, as opposed to what had appeared in all previous plans. This set the objective of a 17% carbon emission reduction per GDP, from 2011 to 2015. This was the first time in any Five-Year Plan that a carbon emission reduction target was included, in addition to an economic growth target. Given the experience of China’s fulfilling its energy intensity target in the 11th Five-Year Plan period and the unsatisfactory performance in 2011, it is reasonable to believe that China will be facing even greater difficulties in meeting its carbon intensity target. The central government has emphasised low-carbon development as one of the main criteria for the economic development of China over the next five years. The target for the primary energy consumption by 2015 was some 40 billion tsce [2], thus allowing 46% greater consumption than provided for in the 11th Five-Year Plan. The increased target for primary energy consumption was more realistic than that in the 11th Five-Year Plan, with a predicted annual increase rate of around 4.3%. The energy structure in China is currently unbalanced, as the industrial sector consumes 73% of the energy produced. For example the industrial sector consumes the majority of the coal produced in China and the coal input to the industrial sector increased from 77% in 1990, to 95% in 2010 [1]. The eagerness for energy from the industrial sector in recent years together with low energy efficiency stimulated energy-related imports, such as coal and oil. The GDP of the industrial sector shows almost the same trend as that shown by the oil and coal imports during the last 20 years as shown in Fig. 3. Coal imports increased after 2005 at an

30

http://www.china.org.cn/government/whitepaper/node_7170375.htm. In the Medium and Long Term Development for Renewable Energy (2007), The National Development and Reform Commission, China. 32 www.sdly.gov.cn/resource. 31

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Fig. 3. The industry GDP in comparison of energy import in China. (Data source: National Bureau of Statistics of China, 2012) [1].

average rate of 100% expansion each year. China has become the largest coal importer in the world. In the interview survey, experts suggested the reason for this was mainly “due to the increased coal price in the domestic market in China, forcing the closure of a large number of small inefficient coal mines by the government, plus and the heavy tax and fees levied on the coal sector”. Nevertheless, the poor quality of some imported coal brought more problems such as additional SO2 emissions and dust pollution [60]. The government not only defined an overall energy efficient target but also set up a target for energy structural adjustment. The NDRC proposed a goal for energy structure optimisation, which involved raising the proportion of gas related to primary energy consumption to 7.5%, and reducing coal to 65% [2]. Furthermore, the target to control the external dependency of oil was to fall below 61%. Although the demand from the industrial sector for oil was maintained at around a 4% annual increase on average, the proportion to the overall oil consumption decreased each year, from 64% in 1990, to 40% in 2010. On the other hand, the share of construction and transportation sectors increased rapidly. For example, the oil input to the transportation sector in 2010 was over 8 times that of the 1990 level. It had a share of 34% of oil consumption in 2010, thus becoming the second largest oil consumer after the industrial sector [1]. The main reason of the mounting energy demand in this sector is due to the rapid increase in the ownership of private cars. An expert from NDRC stated that “the air pollution and carbon emission from transport is worrying. Although several large cities have adopted policies to control the increase speed of private cars, most of medium and new cities do not have any control over car licensing.” With the improvement of social status, private car became more affordable than ever for the citizens in China. Another expert said “the average car ownership per capita in China is much lower than the world average. we can expect the private car market will keep booming in the medium term.” The 12th Five-Year plan also stated that the government would vigorously develop emerging industries, such as those involved in energy saving, resource recycling, environmental protection, biotech advances, new energy sources, new materials and new energy car industries. The government issued the 12th Five-Year National Strategic Development Plan for Emerging Industry33 [61]. One of the objectives of the plan was to raise the proportion of emerging industries in terms of GDP, to 15%. In the recent 2012 white paper, China’s Energy Policy, energy saving was prioritised as the primary energy policy, above all other policies, such as energy security, new energy, technology innovation, wider reform, international collaboration, and improving people’s livelihood [58]. In

2010, China hosted a UN climate change meeting in Tianjin, prior to the Cancun Conference. The increasingly proactive participation in international negotiations demonstrated that China would take an important role in fighting climate change issues, rather than simply being a follower in such important affairs. In the speech of President Hu Jintao, at the Copenhagen Climate Change Conference in 2009, a target of reforestation was set: an increase of 40 million hectares of forested area in 2020 and 1.3 billion m3 more forest stock volume, in comparison to the 2005 level. The National People’s Congress Resolution on Climate Change34 (2009) [62] stressed the importance of the development of forestry resources in fighting climate change. The result was that the State Forestry Administration issued the Action Plan of the Forestry Sector in Fighting Climate Change35 in 2009 [63], in order to promote reforestation and related ecological projects. In the same year, the A Guide on Sustainable Overseas Forests Management and Utilization by Chinese Enterprises36 was published, in order to regulate forestry industry activity [64]. As China has entered international negotiations on climate change, new concepts and mechanisms have gradually been introduced in China, such as an emission inventory, SDM, Carbon MRV and Carbon Trading. It seems likely that more such mechanisms will be introduced to China and these are likely to influence the architecture of low-carbon governance. An interviewee from the public sector suggested that “China was now treating lowcarbon development as internal requirements rather than a respond to external pressures”. The 18th Communist Party of China National Congress was held in November 2012, where new leaders were elected for China. The low-carbon development issue was included in the government report to the congress, which is confirmation that the new government will place low-carbon development on their agenda. 5. Discussion The strategies regarding low-carbon development have undergone substantial change, which could be viewed in terms of four stages. Under the current post-2012 international climate change policy regime, the Chinese government received increasing pressure for mitigating carbon emissions [65], regardless the fact it is still a developing country. The central government has shown a strong and internal willingness to support low-carbon development. The mind-switch of the government causes immense changes in development strategies and energy policies towards low-carbon development. This positive switch has also been observed by some other researchers [14e16,18,25,66]. The experience in China has revealed that a developing country can balance economic and low-carbon development in strategic planning, although the first priority of developing countries is still economic development. China was once a follower in fighting climate change but then decides to take positive actions, including setting targets, detecting problems, as well as setting more practical and specific targets. In the recent 12th-year development plan period towards year 2015, the government makes another wave on low-carbon development by issuing sectoral low-carbon development plans including construction, transportation, manufacture industry, energy, recycling, solar industry, power grid, clean coal, urban lighting, biomass

34 35 33

http://www.gov.cn/zwgk/2012-07/20/content_2187770.htm.

67

36

http://www.loc.gov/lawweb/servlet/lloc_news?disp3_l205401694_text. http://www.gov.cn/gzdt/2009-11/09/content_1459811.htm. http://www.forestry.gov.cn/portal/main/s/224/content-401396.html.

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sectors.37 It can be expected that China will play an important role in the global campaign for constructive responses to climate change. Most importantly the success of China can be a good example for the developing countries [66]. For example the cost of carbon emission reduction is lower in comparison to developed countries [16]. However, the review of the evolution history of low-carbon targets revealed that there are still rooms for improvement in China’s low-carbon governance. As a result, the low energy efficiency in industries such as construction and transport lead to burden of energy imports [15]. Cai et al.’s forecast also proves that a huge potential exists in reducing carbon emission in those sectors [7]. The government has made tremendous efforts in developing renewable energy sector and energy saving in heavy industry, however some other energy intensive industries have not been paid enough attention. For example, the energy efficiency in construction industry, transport and service sectors in China needs significant improvement in order to ease energy shortage and keep sustainable development. This finding is in line with some other literature. For example, Jiang and Tovey (2010) discover the Chinese government overlooked the opportunity to use clean development mechanism to reduce carbon emission for buildings [65]. Liu and Feng believe that China bears high cost and risks due to dependence on energy import, which affected China’s stability and industrial competitiveness [16]. The strengthening of industrial regulation and standards is considered the more effective way to energy saving [23,67]. Another sector that was neglected at the early stage is the transport sector. When developed countries encourage people to give up private cars and utilise those more energy efficient public transports, China advocates private car purchase. It becomes the most controversial policy at the beginning of the 21st century, which leads to unintended consequences. The number of cars per capita in China is still currently much lower than in developed countries. With the improvement in living conditions and social status, private cars became more affordable to ordinary citizens in China. In addition, the urbanisation process is unstoppable, at least in the short term. There was research suggesting urbanisation should be considered beneficial to energy reduction and human society at local regional and global scale [17]. Although the benefits of urbanisation process remain to be seen, it can be expected that the number of private cars will continue to increase in China. Should the government not issue a strict control target on the number of private cars, the transportation sector would exceed the industrial sector and in time, become the largest consumer of oil resource. Similarly, the booming of the housing market was also stimulated by the rapid urbanisation process, while few of them were considered as green building [67]. Currently the domestic energy consumption accounts for 11% of the total energy consumption. Nevertheless, the domestic energy consumption would potentially become a larger carbon emitter in China if the government failed to adopt effective instruments to control the energy efficiency for housing products in short term. The shortage of robust low-carbon measures for each sector is another issued in China’s low-carbon development. The interview survey suggests more practical measures should be implemented in for example building industry, transport, and service industry. In

37 According to a series sectoral 12th-year development plans issued by State Council, Development and Reform Commission, Ministry of Technology, Ministry of Industry and Information, Ministry of Environmental Protection, Ministry of Housing a Rural Cosntruction, Ministry of Transportation, Bureau of Energy between year 2010 and 2012.

this case, Price et al. propose an energy end-use indicator for China’s low-carbon measurement [12]. Wang et al. suggest lowcarbon measures should be set and they should gain legal support [14]. China gradually realises that the high-consumption industrial development pattern is not sustainable, therefore industry restructuring become the priority of economic development. The high carbon emission industry has lead to severe environmental pollution and social problems in China [16]. Some researchers believed that industrial restructuring could reduce energy consumption in China [10,17,19]. The keys to improve energy efficiency of industry sectors are through technology innovation, cross-sector cooperation and education [11,14,16]. 6. Conclusions and recommendations The development of low-carbon strategies in China was discussed in this paper. It was found that the government has increasingly realised the close relationship between carbon reduction and economic development and has recognised that the two are not necessarily mutually antagonistic. Under various external pressures and internal needs, the attitude of the Chinese government in global affairs towards climate change has transferred from passive to proactive. The policy changes of the Chinese government on low-carbon development have evolved in four stages. Prior to 1992, the government focused mostly on pure economic development, to raise the living standards and social conditions in China. From1992 to 2005, the government issued several white papers and other measures, to encourage the development of new and renewable energy. This stage was the initiation stage of low-carbon governance in China. The policies at that time, as represented by the development of renewable energy, initiated the reform of energy policy towards low-carbon development. It was a fact, however, that the lack of specific targets was a weakness in the strategy. The government priorities for the development of new energy and energy conservation were inappropriate, leading to a negative impact on society and the environment. The third stage was from 2005 to 2008, with further targets being set by the Chinese government, in order to improve energy efficiency and reduce carbon emissions. The policies toward lowcarbon development increasingly covered more areas, such as scientific development, regulating the market, adapting to climate change, optimising industry structure, establishing topedown energy management organisation, resource saving, forestry, stimulating and monitoring local government. The government monitored and reviewed the results of each development plan and policy, in order to try to detect problems as early as possible. In the fourth stage, from 2009 to the present day, the government’s policies were set to address problems emerging during lowcarbon development, such as renewable energy on-grid issues. The emission reduction targets were more specific and customised in this period. Based on the fact that China faced different energy problems in comparison with developed countries, they have set such measures as reduction in carbon intensity rather than overall emissions. Recent government policies have focused more on problem solving, in response to the problems experienced in developing a low-carbon economy. As one of the larger developing countries, China attaches more and more importance to the lowcarbon concept and has been active in carbon reduction, in the context of proactively participating in multilateral climate negotiations. During the four aforementioned stages, the government adopted main strategies to build a low-carbon economy for the future, these being summarised below:

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C C C C C C

Developing new energy sources Energy conservation Targeting carbon emission Reafforestation Developing a circular economy Industry restructuring

The viewpoint of the government on the low-carbon issue underwent several changes over the years. Previously passive action became more proactive and as a result, low-carbon development targets were gradually established. The changing attitude of the government towards environmental issues was the overriding initiative for the establishment of low-carbon development targets. The evolution of low-carbon targets in China has provided valuable experience for other developing countries, in terms of: 1) low-carbon development requires a combination of linked government strategies; 2) energy conservation in both existing and emerging sectors should be the first targeted area for a nation, in developing a low-carbon economy; 3) the development of renewable energy must be in line with market demand. Developing countries can balance economic development and low carbon emissions, if an appropriate development path were to be tailored to the individual nation. Although the government has set various targets for low-carbon development, there are still rooms for improvement. As the largest energy consumer in China, the industrial sector consumes over 70% energy but contribute only 40% of GDP. The government should focus on improvements in energy efficiency in the industrial sector, especially those relating to the energy-intensive industries. The government should put greater effort into developing highly efficient and new energy-powered vehicles and introduce new policies to control the quantity of private cars in circulation, whilst improving the public transportation system. A review on the effectiveness of the low-carbon development targets in China was excluded from this research. It is recommended, however, that researchers should investigate the likely consequences of China’s low-carbon governance.

Acknowledgement The authors would like to express their gratitude to experts at NDRC for their collaboration during interview survey. This research is sponsored by: Natural Science Foundation of Shandong (Grant No.ZR2013GQ014), the “ Independent Innovation Foundation of Shandong University” (Grant No. IFW12108; IFW12065); Blue and Yellow Economic District Research Fund of Shandong Development and Reform Commission (No. 2012-H-002).

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