By Haibing Ma
China recently announced that it achieved its national goal for energy savings as outlined in the 11th Five-Year Plan of 2006–2010. But the real test of this success is just beginning. The country is about to release its next five-year plan for economic development and will need to delegate responsibility for achieving the next set of nationwide energy and emissions targets at the provincial and local levels.
On January 6, Zhang Ping, Director-General of the National Development and Reform Commission (NDRC), China’s macroeconomic planning body, announced that the country “basically” met its goal of reducing energy consumption per unit of GDP (i.e., energy intensity) by 20 percent by the end of 2010. This is the first time that a top Chinese official has claimed such success, although the exact level of energy savings has yet to be disclosed.
But what about targets for the period past 2010? Zhang made his announcement during the first day of a two-day National Energy Administration meeting to outline key energy-related tasks for 2011. Yet the meeting didn’t reveal any detailed targets for China’s 12th Five-Year Plan (2011–15), instead providing basic guiding principles such as promoting clean and efficient use of fossil fuels, expediting the development of new and renewable energy sources, and optimizing regional energy projects.
The new goals won’t be a secret for much longer. In early March, the annual assembly of the National People’s Congress will be held in Beijing. This yearly meeting of China’s highest organ of state power is the birthplace of the nation’s all-important policies. It is bound to attract significant worldwide attention this year because representatives from all around China will be gathering to review and then release the country’s next five-year plan for economic and social development.
Of the numerous grand goals to be set in the 12th Five-Year Plan, the two figures that concern the international climate community the most are a new energy-intensity target and a first-time-ever target for reducing China’s carbon dioxide emissions per unit of GDP (i.e., carbon intensity). Although previous reports indicated that the nation’s new energy-intensity reduction target might be 17.3 percent, recent media coverage of the draft 12th Five-Year Plan hints at a 16-percent reduction (from the 2010 baseline) for both energy and carbon intensity. But these figures are still subject to change between now and March.
The potential lowering of the energy-intensity target may reflect the challenges that China faced in achieving this goal in the recent 11th Five-Year Plan period. So far, Chinese media sources have reported on energy-savings successes in only some provinces or municipalities, such as Beijing and Tianjin, but little is known about potential struggles in reaching the target elsewhere. “Official” statistics on nationwide energy savings for the 2006–10 period won’t be available until mid-2011, although preliminary figures may be available from the National Bureau of Statistics.
The wrap-up of the 11th Five-Year Plan has been a tense time for provincial and local officials, especially those who have seen slow progress in energy savings within their jurisdictions. In December, officials from Guangdong provincial government publicly indicated the difficulty in meeting the province’s energy-intensity target and asked for an “appropriately lowered target” for the next five-year period.
It’s not that Guangdong has been lagging in energy-saving efforts. On the contrary, in the first four years of the 11th Five-Year Plan (2006 to 2009), the province achieved a 13.9 percent reduction in energy intensity, achieving 86 percent of the 2010 target. However, progress in energy saving slowed significantly in 2010, when most of China’s economic stimulus plans took effect. Some counties in the region, such as Zhaoqing and Heyuan, have even showed a trend of increasing energy intensity.
The Guangdong government argues that it started from an already-low level of energy consumption in 2005, making it more difficult, and more costly, to achieve further savings over the planning period. Indeed, according to the National Bureau of Statistics, Guangdong reported an energy intensity of as low as 0.79 tons of coal equivalent (tce) per 10,000 Yuan in 2005, the lowest of all Chinese provinces, whereas most other provinces are well above 1 tce/10,000 Yuan. For this reason, the energy-saving target assigned to Guangdong for 11th Five-Year plan was 16 percent instead of the nationwide average of 20 percent.
Guangdong’s difficulty in meeting its 2010 target may reflect wider problems within China’s economic structure. Three decades have passed since the large-scale reforms of the late 1970s, and the Chinese economy is still highly energy intensive—a characteristic that won’t change overnight. Moreover, at a time when the national economy has been affected by worldwide recession, China’s most convenient strategy for boosting growth has been anything but “green.” The bulk of the government’s 4 trillion Yuan (US$586 billion) economic stimulus funding has been invested in public infrastructure development, boosting energy- and emissions-intensive sectors such as iron and steel, cement, and electricity.
In Guangdong’s case, the region is being assigned more energy-intensive industrial development over the next 10 years, according to the central government’s macroeconomic plan. Thus, the province’s appeal for an “appropriately lowered target” for energy efficiency in the 12th Five-Year Plan may be “reasonable,” as long as the central government can persuade other regions to assume higher energy-saving targets to make up for it. The national target is usually non-negotiable; if the burden is lifted from one region, then it must be compensated for in other regions.
The problem is that “other regions” may have their own excuses for petitioning for lower energy-saving targets. Local governments in China’s central and western provinces have argued that the relatively lower energy-intensity in the country’s southern and eastern coastal regions, where Guangdong is located, was made possible only because western provinces provided these areas with low-cost energy sources and a cheap labor force.
Western China feels that it is now time for its eastern counterparts to return the favor and to allow more “development space” for western regions. Sound familiar? Yes. Government officials from western China are actually citing the controversial concept known as “common but differentiated responsibility”—a principle that is used in international climate negotiations to distribute mitigation responsibilities between developed and developing countries.
Western China is burdened with an economic structure that is driven by energy- and emissions-intensive sectors such as coal, aluminum, chemicals, and cement, so its struggle to free itself from this current path is bound to be challenging. Although China’s renewable energy sector has been growing at an astonishing pace, as described in a recent Worldwatch Institute report, its current small share of the national energy mix makes it unlikely to dramatically change the nation’s energy-consumption picture in the short term. China’s rapidly expanding economy still has to rely mostly on “dirty” fossil fuels, especially coal, for the foreseeable future. This means that provinces such as Shanxi and Inner Mongolia, where China’s fossil fuels are concentrated, will continue to struggle to reduce their energy intensity.
If the Chinese government responds positively to all of the provinces that wish, like Guandong, to reduce their energy-intensity targets, then the next national energy-savings target will be missed. Petitions from provincial and local governments eventually need to be balanced out. Without a doubt, there will be compromises and further complaints. And in the short run, specific energy-savings targets for regions might be reached through informal lobbying of the central government, with those localities that have greater political resources and influence likely achieving greater success.
In the long run, however, China needs to establish a science-based standard for target-setting in order to balance provincial interests. This standard would ideally take into account the differences in resources, economic structure, development level, and R&D capacity across the nation. The standard itself as well as the relevant measurement, reporting, and verification (MRV) system will need to be logical and transparent.
In a previous blog, I suggested that the Chinese government’s recent commitment to allow its national emissions-reduction target be internationally binding, announced at the Cancún climate conference in December 2010, is a good opportunity for the country to consolidate and systemize its energy conservation and emission reduction efforts. But the central government’s governance capacity will be put to the test when the time comes to actually distribute among provinces whatever national targets are set in the upcoming 12th Five-Year Plan.
At a press conference last September, NDRC Deputy Director-General Xie Zhenhua admitted that the individual targets assigned to provincial governments in the 11th Five-Year Plan may not have weighted relevant local conditions adequately. Let’s hope that such target-setting can be done in a more efficient and transparent manner this next time around.
Haibing Ma is China Program Manager at the Worldwatch Institute.