China’s Greenhouse Gas and Energy Proposals for 2016-2020

China’s Greenhouse Gas and Energy Proposals for 2016-2020

March 23, 2016
China’s Greenhouse Gas and Energy Proposals for 2016-2020
On March 16, 2016, China’s National People’s Congress
The Chinese government pledged to participate in a global
adopted a 13th Five-Year Plan (FYP), for 2016-2020, that
effort to address GHG emissions. In the context of the 2015
sets goals of tighter limits on polluting emissions and
Paris Agreement under the United Nations Framework
accelerating a shift away from coal-fired electricity supply
Convention on Climate Change, China pledged to:
toward greater efficiency and non-fossil energy. Questions
remain on specific measures to achieve targets—
 “peak” CO2 emissions around 2030, perhaps earlier;
particularly regarding electric grid interconnection and
 launch in 2017 a national GHG emissions cap-and-trade
other policy reforms, performance data quality, and
system covering electricity and five other industries;
effective enforcement. Despite questions about data quality,
 increase the non-fossil share of China’s energy to
it appears that China met related goals in its 12th FYP.
around 20% by 2030;
Some in the U.S. Congress consider the value of U.S.
greenhouse gas (GHG) reductions to be partly contingent
 lower CO2 emitted per unit of GDP by 60-65%
on China’s emissions performance.
compared with 2005;
 expand forest stock volume by around 4.5 billion cubic
Background
meters; and
The legitimacy of the Communist Party of China depends
 control emissions of hydrofluorocarbons (“HFCs”)—
on continued improvement in the well-being of the people.
another type of potent GHG—by 2020.
For decades, well-being was usually measured primarily by
China’s statement included a host of existing and planned
economic growth, such as increases to Chinese gross
measures to achieve these and additional targets.
domestic product (GDP) per capita. The emphasis on GDP
growth came at the expense of other aspects of well-being,
Emissions and Energy in the 13th FYP
such as healthful air. By the mid-2000s, in the 11th FYP
The 13th FYP ratchets up domestic targets affecting GHG
(2006-2010), central policymakers publicly recognized the
emissions and related energy structures. Lower envisioned
high costs to China’s environmental quality and public
economic growth than in recent years—the “new
health of a growth-at-any-cost focus. Three problems
normal”—will suppress the growth of demand for energy
converged:
and related emissions, as will a promoted shift toward
1. Increasingly severe domestic air, water,
services and higher value-added production.
and soil pollution and regional water
scarcity;
The 13th FYP lists “a better-quality, more efficient,
upgraded economy” as the second among the five major
2. International pressure on China (which
national targets. It aims at GDP growth of 6.5-7.0%
depends heavily on coal) to reduce its
annually in 2016-2020. At the same time, the plan caps
GHG emissions associated with global
primary energy consumption at 5 billion metric tons of coal
climate change; and
equivalent (compared with about 4.3 billion in 2015). The
3. Growing dependence on foreign energy
plan includes targets to:
supply.
 reduce CO
China’s 1
2 emissions per unit of GDP (“CO2 intensity”)
3th FYP continues a shift toward limiting the
by 40-45% by 2020 compared with 2005, cutting CO2
adverse environmental consequences of economic
intensity by18% (-3.9% annually) during 2016-2020;
development. In a recent press conference, Chinese Vice

Minister of Environmental Protection Wu Xiaoqing stated
reduce energy consumption per unit of GDP by 15%
that China “shall not trade environment for GDP growth in
(-3.4% annually) in 2016-2020; and
the short term, which is not sustainable”
 increase the share of non-fossil fuels in the primary
(http://news.xinhuanet.com/english/2016-03/07/
energy supply to 15% by 2020, compared with 12% in
c_135164022.htm).
2015.
The plan also proposes a ban on commercial logging in
China surpassed the United States to become the largest
“natural forests.” Overall, the 13th FYP would shift from
emitter of GHG globally around 2006. It releases more than
boosting energy supply to achieving “the real low-carbon
one-quarter of all fossil-fuel-related carbon dioxide (CO2)
economy” by providing incentives aimed at enterprises,
emissions. Halting the increase of atmospheric
consumers, investors, and investments to promote
concentrations of CO2 would be extremely difficult without
technology advances. Identification of concrete measures
China reducing its net emissions to near zero along with
are expected in a promised strategy to 2030 “for
other major emitters. Other nations also require China’s
revolutionizing energy generation and consumption, push
participation in GHG reductions to avoid adverse effects on
forward the transformation and development of the energy
trade competitiveness and “leakage” of emissions—that is,
sector, and exercise control over both the total amount and
activities shifting to locations without comparable controls.
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China’s Greenhouse Gas and Energy Proposals for 2016-2020
intensity of energy consumption.” Enhancements of a
Binding targets include tasks assigned to various
“smart” electric grid allow greater utilization of existing
administrations overseeing government-run industries and
renewable energy capacity and allow further development
to regional governments. The major environmental targets
of distributed energy. Planned reforms would “apply an
within the plan, such as energy intensity of GDP and CO2
energy-saving low carbon approach to management of
intensity, will be binding for all industry administrations
power distribution.” At the same time, the plan announces
and local governments.
an intention to “strictly control expansion of coal
production capacity and of coal-fired power plants, ensure
Concerns About Data and Compliance
cleaner use of coal in non-industrial sectors, and substitute
Questions remain about how China may achieve its targets,
electricity for more polluting forms of energy, and promote
the quality of China’s data, and its enforcement of targets
renewable energy-generated electricity, and more quickly
and standards. In February 2016, China’s chief climate
upgrade coal-fired electric capacity and fuel quality.”
change negotiator acknowledged flaws in the nation’s GHG
emissions statistics as well as the official intention to
The 13th FYP states that new incentives would lift price
correct them: “It is a question of ability.... At every level of
controls in the power, petroleum, natural gas, and
statistics there are exaggerations added to the data.
transportation sectors—including an expansion of “trial
Everyone knows that, and everyone is anxious [to fix it].
price reform” for electricity—and “policy for adjusting
We have set up a system to calculate and monitor energy
prices for electricity generated by environmentally friendly
saving and emission reduction, and are gradually improving
facilities.” The 13th FYP also promises structural reforms
it” (http://en.ccchina.gov.cn/Detail.aspx?newsId=59081&
for state-owned enterprises, reforms on taxes on resource-
TId=96%22%20title=
based products, and an environmental protection tax.
%22China%27s%20climate%20envoy%20bullish%20on%
Further plans include:
20hitting%20reduction%20goal%20for%202020). Even so,

China’s pledges and 13th FYP have not been supported, yet,
increasing high-speed railways in service by 50%, to
by official quantitative projections of how policies would
30,000 kilometers, linking 80% of big cities;
achieve the targets.
 accelerating competitiveness of manufacturing “new
energy” (i.e., electric) vehicles;
In recent years, the Chinese government has strengthened
 promoting Green Cities as a component of continuing,
policies to enforce its environmental laws and set rules with
massive urbanization; and
harsher penalties for violations. For example, reforms
 increasing installed capacity of nuclear power to 58
included incorporation of environmental targets in
million kilowatts and plants under construction to 30
promotion standards for government officials. Many
million kilowatts by 2020 (http://english.gov.cn/news/
observers follow how well the new rules will be
video/2015/12/01/content_281475245821937.htm).
implemented by local authorities and whether penalties will
be upheld by China’s courts.
Measures would curtail the growth of coal use and force
increases in coal use efficiency. The National Energy
Preparing for a National Carbon Cap-and-Trade
Administration aims to close more than 1,000 coal mines in
Program
2016, having production capacity of 60 million metric tons,
The 13th FYP mandates that China will need to improve the
according to Reuters reports. Over two to three years, as
institutional infrastructure necessary to make effective its
many as 6 million jobs could be affected in the coal
announced national CO2 emissions cap-and-trading system
industry and energy-intensive sectors that currently have
in 2017. The system will need a trustworthy national
excess capacity (e.g., steel). The 13th FYP promises
registry to track emissions and emission reductions and a
“rewards and subsidies” as part of “proper arrangements” to
firm legal underpinning to reduce risks to market
address displaced workers to ensure that they are “resettled
participants regarding rules, rights, and reliability. Clarity
and provided with employment.” Reuters reported that
on allocation of permits and effective monitoring and
China’s leadership intends to spend 150 billion renminbi
compliance assurance structures would also need to be in
($23 billion) for worker resettlement
place.
(http://www.reuters.com/article/us-china-economy-layoffs-
exclusive-idUSKCN0W33DS).
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According to a central government website
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(http://english.gov.cn/news/top_news/2016/03/07/
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content_281475302915204.htm), Xu Shaoshi, minister of
IF10379
the National Development and Reform Commission, said
the plan includes “guiding targets” and “binding targets.”

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China’s Greenhouse Gas and Energy Proposals for 2016-2020

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