By Haibing Ma

Guangdong is releasing a series of policies to ensure a green future. ©nfdaily.cn

According to media reports, Guangdong province has taken the lead in becoming the pioneer of low-carbon practices in China. Guangdong is one of 13 pilot regions—including five provinces and eight municipalities—that the Chinese government has selected to explore low-carbon development. So far, it is the only pilot region that has issued a comprehensive plan for this development and had it approved by the central government.

In January 2012, the National Development and Reform Commission (NDRC) reviewed and then “approved with positive comments” Guandong’s “Implementation Plan for Low-Carbon Pilot Programs.” Although this plan has not been made public, it reportedly lays out eight “key actions”:

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12th Five-Year Plan, cap and trade, carbon emission, carbon intensity, China, emission trading, energy intensity, green development, Guangdong province, low-carbon, MRV, NDRC, pilot program, statistics

By Haibing Ma

Provinces and municipalities had been competing to establish emissions trading systems (Source: nddaily).

In an article co-authored with my colleague Alexander Ochs in September 2010, we discussed China’s interest in setting up a scheme for carbon-emissions trading in the next five years. Now, the deal is set: The National Development and Reform Commission (NDRC) recently issued an official notice to initiate pilot carbon-trading programs in seven regions. By embracing market-based approaches to mitigating climate change, China is seeking to facilitate a smooth and efficient transition to sustainable development.

The seven pilot regions are the cities of Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen, as well as Guangdong and Hubei provinces. It’s no surprise that some of these regions overlap with China’s “Five Provinces, Eight Cities” pilot program on low-carbon development, initiated in 2010. Although details of the emissions trading programs have not been elaborated, designation of the pilot regions indicates that the central government has finally made up its mind to issue clearer guidance on exploring carbon markets, in order to better coordinate existing municipal and provincial interest in emissions trading.

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12th Five-Year Plan, absolute cap, carbon emission, carbon intensity, carbon tax, China, emission trading, energy intensity, environmental equities, Grand Western Development Program, NDRC, pilot, preferential policies, Special Economic Zone, voluntary

At the opening ceremony of the 5th World Future Energy Summit, held in Abu Dhabi on January 16, 2012, Chinese Premier Wen Jiabao assured the world that China will stick to a green and sustainable development path. As the highest-ranking Chinese official ever to present at the summit, Wen’s speech delivered a clear message to the world about what China plans to do to secure its future development.

Premier Wen Jiabao gives his speech in Abu Dhabi.

But sustainable actions already being pursued in China provide an even more convincing picture than the premier’s words. In its 12th Five-Year Plan—an overarching guidance framework used in Chinese policymaking—China includes a fairly comprehensive collection of sustainable development goals, among them energy intensity and carbon-emission intensity targets. Because the Five-Year Plan lays out only very general goals and measures, it is up to individual ministries or the State Council, China’s cabinet to sketch out and pursue implementation.

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12th Five-Year Plan, carbon intensity, carbon market, China, clean industry, emerging strategic sectors, emission trading, energy conservation, energy intensity, NDRC, renewable energy, sectoral structure, sustainable development, sustainable transition

Solar Panels installed on the roof of the 2010 World Expo Theme Pavilion in Shanghai

By Qiong Xie

China’s energy regulator, the National Development and Reform Commission (NDRC), announced its first nationwide feed-in-tariff (FiT) for solar photovoltaic (PV) installation projects on July 24th, 2011, in an effort that it would boost its domestic solar industry and increase the share of solar power in China’s energy portfolio. The unveiling of the feed-in-tariff policy has shed light on China’s goal to achieve 50 gigawatt (GW) of solar installation by 2020.

Before the first nationwide FiT for solar PV projects was announced this past July, the Chinese government had sponsored two rounds of public tender since 2009. The first public tender in 2009 ended with a single solar project: a 10 megawatt (MW) installed capacity solar power plant in Dun Huang, Gansu province. The Dun Huang tender provides the solar developers with a payment of RMB1.09 (RMB is the abbreviation of Chinese currency, RMB1.09 is equal to approximately US $0.170, including tax) per kilowatt-hour (kWh) for their solar power feed into the grid. Besides, China initiated its second round of public tender for concession solar power projects in 2010. At the end of this tender, 13 projects were announced with a total installed solar power capacity of 280 MW. To be more specific, it is reported that the winning bids ranged from RMB 0.728 per kWh (approximately $ 0.114, including tax) to RMB 0.991 (approximately $0.155, including tax). But the bid price was much lower than some of the solar industry participants expected as RMB 1.1 (approximately $ 0.172, including tax) thus it discouraged energy power companies and private solar equipment suppliers’ investment enthusiasm.

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12th Five-Year Plan, China, feed-in tariff, grid-access, NDRC, solar power, solar radiation, Township Electrification Program, wind energy

By Haibing Ma and Alexander Ochs

Recently, a China Daily news report caught Uncle Sam’s attention, presumably at an inconvenient time: just when the U.S. Senate finally admitted to abandoning its plan of issuing a federal climate bill by the end of this year, top Chinese officials were discussing how to launch carbon trading programs under their country’s next Five-Year Plan (2011–15). Serving as China’s overarching social and economic guidance, Five-Year Plans consistently lay out the most crucial development strategies for this giant emerging economy. Once included in the plan, carbon trading will be viewed as part of China’s national goals and will be domestically binding. This occurred most recently with the country’s 2010 energy intensity target, which called for a 20 percent reduction from 2005 levels and was disaggregated into provincial and local targets, with local officials held accountable for achieving them. In short, China seems to be accelerating full-throttle toward a low-carbon economy.

Chinese policymakers have been eyeing a domestic emission-trading scheme for a while. Last August, Xie Zhenhua, Deputy Director of the National Development and Reform Commission (NDRC), announced that China will launch a pilot carbon trading program in selected regions and/or sectors—basically the same message conveyed in the recent China Daily story. On one hand, this reiteration demonstrates that the Chinese government is seriously considering such a market-based mitigation mechanism; on the other hand, the fact that the program’s status is still in discussion a year later shows that putting cap-and-trade into action might be not be that easy in China either.

Here are some of the problems: A non-voluntary emission-trading system cannot work without a mandatory cap on emissions, either for the economy as a whole or for individual sectors. However, China is currently unlikely to set an absolute emission target because this would contradict its long-standing position at international climate negotiations that industrialized countries have a historic responsibility to take the lead in this area. Most Chinese climate officials and experts agree that China could probably peak its emissions between 2030 and 2035, but huge uncertainties remain.

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cap and trade, carbon trading, China, Climate Change, emissions reductions, energy intensity, MRV, NDRC, Tianjin Climate Exchange, U.S., UNFCCC