A new approach at Copenhagen (2)

China must achieve and improve on its energy-saving targets in order to realise low-carbon development, writes Hu Angang in the second section of a three-part essay.

[Produced in association with Rutgers Climate and Social Policy Initiative]

China has set very challenging targets on reducing energy use and emissions. The eleventh Five-Year Plan, which runs from 2006 to 2010, aims to reduce energy intensity (energy consumption per unit of GDP) by 20%, the equivalent of reducing energy consumption from 1.22 tonnes to 0.97 tonnes of coal per 10,000 yuan of GDP. Even if China were to continue its 10% annual GDP growth, seen during the tenth Five Year Plan, energy consumption can only grow by 5.2% a year. However, the figures for 2006 and 2007 show this will be no easy task. The European Union gave itself a similar target, but has until 2020 to achieve it.

However, there are signs of change as energy consumption and release of major pollutants in China start to drop, laying a foundation for a new phase. In 2006 and 2007, energy intensity dropped by 1.23% and 3.2% respectively, the first drop for years. In 2007, SO2 emissions and Chemical Oxygen Demand (COD) dropped by 4.66% and 3.14% respectively.

Generally speaking, there is a delay from the adoption of a policy to seeing its effects. The locked-in effects of existing infrastructure mean this is especially true in this area of policy. It is no surprise that the targets have been missed these past two years.

There is a historical precedent for a large drop in China’s energy consumption. During the sixth Five-Year Plan, energy intensity dropped by 5.2% per year on average; by 5.7% during the eighth Five-Year Plan; and by 8% during the ninth. Therefore, an average annual drop of 5.4% between 2008 and 2010 is possible. Although the task is hard because of the level of economic development, industrial structure, urbanisation and trade patterns, the unprecedented international environment, political will and economic investment makes it possible. China is capable of achieving its energy saving targets in the eleventh Five-Year Plan and beyond.

The target is not simply economic; it is a political commitment by the government to its citizens – and to the world. It indicates China’s political will and its commitment to reducing emissions, meeting the challenges of climate change and developing a low-carbon economy. This target is the first step on the road to a low-carbon economy, and it is of greater political than economic significance.

However, China’s international emissions reduction policy is not in step with the world. China is still considered a developing country, with no emissions reduction responsibilities, commitments or contributions toward meeting an international consensus.

A public commitment to reduce emissions, backed by central government targets, would be a massive spur to domestic emissions cuts. Participation in international climate-change negotiations and adopting climate-change regulations can provide the opportunity to implement of a beneficial energy and climate policy. More importantly, worsening climate change will increase the pressure to cut emissions. Failure to change energy and climate policy will mean choosing to fight over resources.

In the long term, a commitment to reduce emissions is in accord with the Chinese government’s ideas of scientific development and ecological civilisation. Its implications, targets and processes are exactly those needed to ensure national energy security, address climate change and establish a resource-saving and environmentally-friendly society.

Currently the road map for global emissions reductions is clear:
•By 2020 carbon dioxide emissions should have peaked;
•By 2030 there should be annual emissions of less than 35 billion tonnes;
•By 2050 there should be annual emissions of less than 20 billion tonnes.

A Chinese road map should mirror this three-step process:
•By 2020 carbon dioxide emissions should have peaked;
•By 2030 there should be annual emissions of less than 2.2 billion tonnes (a reduction to 1990 levels).
•By 2050 there should be annual emissions of less than 1.1 billion tonnes (half of 1990 levels).

Undertaking these commitments is a major strategic decision that will impact on China’s long-term development. It is a question of whether China’s national interests are the same as those of human development.

An undertaking to reduce emissions raises two questions: what to commit to; and how to achieve it. The decisions made by Chinese politicians today will set the direction for development in the future.

In 1987 a similar plan was proposed by Deng Xiaoping: first, tto double the 1980 gross national product (GNP) and ensure adequate food and clothing for people, a goal that has already been achieved; second, to double 1980 GNP by the end of the century, and achieve a “relatively good” standard of living; third, by the middle of the twenty-first century to have per-capita GNP at that of “intermediate-level” developed countries, to be modernised and for people to be “relatively well-off”. In response to doubts, Deng said it may be necessary to rely on the greater intelligence of future generations. It now appears that all of these goals were realistic.

China’s current leaders should take a leaf out of Deng’s book: identify the strategic direction and trust that future generations will be wiser. The  leaders themselves will only be in power for a decade at most; it is neither feasible nor necessary for them to reach the goals they set. Completion will take several generations. All that is needed now is the commitment.

Since 1750, the world has seen four industrial revolutions. First, the Industrial Revolution in Britain, in which China played no part. Then the industrialisation of the United States in the mid-nineteenth century, in which China also missed out. In the late twentieth century, information technology changed the world, and this time China seized its opportunity.

With the advent of the new century a change has arrived in the form of the green industrial revolution. China missed out on the first two revolutions and was only a follower in the third, but it can be the leader, innovator and driver of the fourth, alongside the United States, Japan and the EU.

We can expect climate change to form the domestic and international backdrop for China’s future development. Against this backdrop, the Chinese leadership faces two pressing questions: how to transform China’s economy into a low-carbon economy; and how to participate in global governance, moving from national to regional and worldwide governance.

There is no doubt about the direction the tide is flowing. We can ride the wave and prosper, or fight the flow and be pulled under. China’s leaders must realise this and fall in line with global proposals.

NEXT: China’s contribution to the world

Hu Angang is one of China’s best-known economists. He is professor at the Chinese Academy of Sciences and Tsinghua University and the director of the Centre for China Study, a leading policy think-tank. Hu has worked as the chief editor for China Studies Report, a circulated reference for senior officials.

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