China has set conservative targets for reducing energy use and cutting carbon emissions in its 12th five-year plan – and will reveal the policies to achieve them next week.
Chinese Premier Wen Jiabao submitted the Communist Party’s master economic plan for 2011-2015, the draft 12th five-year plan (FYP), to the annual meeting of the National People’s Congress (NPC) on 5 March.
The plan continues the theme of sustainable and “scientific” development set out in the 11th FYP, adding policies to restructure the economy and setting new targets meant to reduce China’s reliance on energy imports, improve energy efficiency and slow the pace of environmental degradation.
During the previous five-year period (2006-10) China set an energy intensity target of 20% below 2005 levels and nearly achieved it – recording 19.1% for 2010 – despite record energy consumption and emissions over the past two years of stimulus spending.
The 12th FYP sets an further energy intensity improvement target (the amount of energy consumed per unit of GDP) of 16%, and a corresponding 17% mark for carbon intensity. Observers note that the targets are conservative, and near the bottom range of figures considered by the government, but that they fall on the trajectory of the 40-45% carbon intensity reduction below 2005 by 2020 that China pledged under the Copenhagen Accord.
The FYP projects 7% annual GDP growth for the next five years. Observers wonder if Beijing can succeed in slowing down the economy (the previous plan aimed for 7.5%, while in reality the economy grew by more than 11% per year on average), but Changhua Wu, head of greater China at NGO The Climate Group, says the official figure should help achieve the energy and carbon efficiency goals.
Up until now, high GDP growth has ensured political advancement for officials, often at the expense of compliance and enforcement of efficiency measures, but Wu says she expects this to change: “At the national level, the aim is 7%, so [officials] are not going to be held accountable for high GDP growth. It’s now about how to hold back, to control yourself.”
Last Friday, the official Chinese press reported the country would restrain itself by capping “total energy consumption at 4 billion tonnes of coal equivalent by 2015.” But experts note that this figure is not an official target of the FYP and may be only an informal, aspirational figure.
However, China does intend to reduce coal consumption, even as the country is projected to increase coal-fired power capacity by 260GW in the next five years, according to a Climate Group report. Under the FYP, natural gas will replace coal to the largest extent – increasing from 4 to 8% of the energy mix.
The plan also targets 11.4% of total primary energy consumption to come from “non-fossil fuel” sources by 2015,
up from 9.6% at the end of 2010 and on the way to the 2020 mark of 15% set in 2005. Although various figures for nuclear, hydro, wind and solar power expansion have been mentioned in the press, the finalised targets will be published in the “New Energy Industry Development Plan” expected in coming months.
Details about the specific policies to achieve these targets, including environmental taxes and market mechanisms, are expected when the NPC approves the FYP on or around 14 March.
By. Joshua Speckman
Source: Environmental Finance