Policy questions to be addressed and structures of IMACLIM-CHINA

Wang YuInstitute of Energy, Environment and Economy

Tsinghua University29 January 2015

• Updated energy and climate polices

• Policies questions to be addressed

• Structure of IMACLIM-CHINA

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An updated energy and climate policies

Updated policies

Energy security

Environment pollution

Climate change

Industrial structure

adjustment

Energy conservation & efficiency

Energy structure

optimizing

Forest carbon sink

increasing

China’s Economic Growth & Energy Consumption

1991~1995 1996~2000 2001~2005 2006~2010 2011~2013

GDP annual growth 11.9% 8.7% 9.9% 11.3% 8.2%

Energy consumption increase 5.9% 2.1% 10.3% 6.6% 4.9%

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Decouple of energy consumption and economic growth

Energy consumption (1990=100)

GDP (1990=100)

Environmental pollution in China

PM2.5 concentration of 28th Nov, 2014

Water resourcesLand resourcesEcological……Air pollution!

Climate change, pressure from international community

• China is the biggest CO2 emitter of the world.• Coal dominated energy system results in higher CO2 emission.

Data source: IEA & China Statistic Yearbook 201419

7119

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CO2 emission in China (million ton)

26.7% of total global CO2 emission

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0%

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Energy structure

An update energy and climate policies

Updated policies

Energy security

Environment pollution

Climate change

Industrial structure

adjustment

Energy conservation & efficiency

Energy structure

optimizing

Forest carbon sink

increasing

Industrial structure adjustment

Closedown

• Small mine• Small coal-fired

power plants• Backward

production capacity (19 sectors, including steel, iron, flat glass, cement, coke…)

New industries

• Low carbon technology innovation• 106 million RMB• 54 pilot projects

• New energy vehicles• New energy

manufacturers• Producer service

industry

The share of industry increase 1% → 600 million ton of additional CO2 emission

The share of service increase 1% → 300 million ton of CO2 mitigation

Energy conservation and efficiency improving

Management & evaluation

Objective responsibility system – provincial governmentsEnergy audit system – new projects in heavy energy consumption, building

Energy conservation projects

energy - saving technical renovation ——2.56 billion RMB in 2013; 5.6 million tce conservationEnergy performance contracting ——280 million RMB; 1.16 million tce

Energy standards

48 energy conservation standards were issued in 2013

Promoting energy-saving technologies and products

State Key Energy-Efficient Technology Promotion CataloguesEnergy saving and low-carbon technologies to promote the achievements list released

Energy intensity decreased by 9% in 2013 compared with 2010

350 million tce coal conservation

840 million ton of CO2 mitigation

Energy conservation and efficiency improving

Intensity target

• The energy intensity of GDP decrease 40~45% in 2020 compared with 2005 level

Absolute target (2020)

• Total primary energy consumption ＜4.8 billion tce

• Total coal consumption ＜4.2 billion ton

• Annual growth rate of energy consumption ＜3.5%

Energy structure optimizing

Coal consumption control

• Scale: 600 or 1000 MW ultra supercritical coal combustion technologies• Efficiency: coal consumption ＜ 300 gce/kWh• Emission: smoke, SO2, NOX emission concentration less than 10, 35, 50

μg/m3 in eastern provinces

New entries

• Closedown backward efficiency turbines ( ＜ 50 MW)• Closedown turbines whose pollutants emission can’t meet environmental

standards• Phase out 100 GW of backward efficient turbines by 2020

Current plants

Targets by 2020: The share of coal in primary energy ＜ 62%More than 60% of coal used for electricity

generation

China-U.S. Joint Announcement on Climate Change

• China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early– The roadmap to achieving the peaking of CO2 emissions?– The CO2 emissions level of peaking?– The effects of transform from BAU to low carbon development

mode?• China intends to increase the share of non-fossil fuels in

primary energy consumption to around 20% by 2030– Renewable energy development potential and cost?– Cost increase/decrease of the whole energy system?– The contribution of non-fossil energy to CO2 mitigation?

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Objectives – Industrial competitiveness

Would the climate policy increase the industrial production cost? Weaken the industrial competitiveness? Domestic context: carbon tax / ETS …… International context: global carbon market

Which industry would suffer the most transition cost? GDP loss? Energy intensive industry? Industrial structure ？

Would that be a chance for China’s low-carbon development? Transition cost? Industrial structure optimization? Import and export trade?

Objectives – Distribution effect & Welfare effect

How the climate policies would affect the residence’s welfare? Carbon tax / ETS …… Domestic context International context

Which group of residence would be most heavily affected? Income levels Income gap Differentiated carbon tax

Would the climate policy optimize energy consumption structure through changing residence life style? Purchase choices Transportation modes

Thanks!