China, the shepherd in greening the world energy

By Xu Qinhua

There are lots of common challenges to the energy development for the developing economies like China faces with, such as the electricity poverty, unsustainable energy supply, lack of clean energy, great fluctuation in energy price, bottlenecks in production and consumption, technologies compatibility with environment, connectivity and convertibility with other conventional and unconventional security issues and so on.

Being the world’s largest emitter of CO2, China has substantially scaled up its unilateral commitment to emissions reduction: by 2020 carbon intensity will have decreased to 40-45% below 2005 levels. Since this is such an ambitious target, the question from the international climate community is how this target can be achieved, the answer is “Yes”.

Chinese People have been working very hard to combat the challenges. The main endeavor to answer the environment concerns is to optimize its energy mix, which means decreasing as more as possible the carbon-intensive coal and increase the cleaner or renewable energy, for example natural gas, solar, wind and geothermal etc. We call such kind of endeavor to be greening the energy. 

Since the end of 2012, China has become one of the world’s largest energy producer and the largest energy consumer. Chin’s the greening its own energy will undoubtedly green the world energy. China has its own energy culture with distinct characteristics based on its specific cultural viewpoint, its stage of development, political system and institutions of ownership. Thus, Chinese have formed its own practice and become the shepherd of greening energy with the balance of economy development, energy security and environment protection to lots of extent.

The comparative successful practice is composed of two means the “economic” and “administrative”. The core of the socialist market economy is the harmonious combination of the “visible hand” of government with the “invisible hand” of the market. China’s energy policies follow the proportion of the combination of visible hand and invisible hand, changing with the degree of economic development. In the energy sector, it has changed with the development stages of successive Five-Year-Plans.

Traditional Chinese administrative structures are flexible enough to accommodate local contexts, and were constructed to seek compromise between top-down policy approaches, and local, social and business interests. The objectives of Chinese energy efficiency and conservation (EE&C) policy have been transformed, adapting to governing purposes, combining commitments to the general political and social goals with local interests and business incentives.

For example, technical improvements have been proceeding successfully over the past two decades, spread over hundreds of companies in China. The broader use and lower cost of investments in energy efficient developments will be decisive in achieving greater energy efficiency. Two sets of factors — the need to be competitive on a world level and the necessity to comply with the government-set energy intensity standards — are the impetus for Chinese firms to increase efficiency.

The author is a professor with the National Academy of Development and Strategy at Renmin University of China.