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Valerie Karplus | ChinaFAQs

Based on recent economic developments and the newly-released Thirteenth Five-Year Plan, China is well on its way to reaching its climate goal of peak CO₂ emissions by 2030.

The Plan charts the overarching course of China’s economic and social development through 2020, and will be translated into plans for provinces and specific sectors like energy in the coming months and years. The national plan, by reflecting the government’s high-level priorities, provides important momentum toward meeting China’s climate change commitments.

In many respects, the Plan hews closely to the goals set out in the country’s previous long-term energy plans and its climate policy commitments for the Paris Agreement. China’s pledge included targets to reach peak CO₂ emissions around 2030 (with the intention to peak earlier), by reducing the CO₂ intensity of economic activity by 60-65% by 2030 relative to 2005, and raising the share of non-fossil energy in the country’s energy mix to around 20% by 2030.

In crafting the Plan, China’s policymakers have emphasized the role of both the expansion of low-carbon energy and continued improvements in energy efficiency. It suggests that even in the face of slower growth, top policymakers recognize that both strategies are consistent with the country’s latest growth targets.

Moving forward on climate and energy

Generally speaking, the Plan is in step with the country’s National Energy Development Plan, released in 2014, which calls for substantial increases in clean and renewable energy deployment through 2020. While the new Five-Year Plan does not mention targets for installed electricity generation capacity, it reaffirms the country’s existing target to raise the non-fossil share of energy use to 15% by 2020. To achieve this goal, China’s National Energy Administration has stated that China will need a total of 250 gigawatts (GW) of wind power capacity, and 150 GW of solar, which would exceed the targets set in 2014 by 50 gigawatts each. (China is also aiming for 350 GW of hydropower capacity by 2020.) Realizing the full generation potential of wind and solar capacity—and its contribution to the country’s non-fossil target—will require reforms that introduce greater flexibility in dispatch and allow balancing across larger grid areas.

Nuclear and biomass are also slated to expand substantially, by 38-49 GW and 30 GW, respectively (Bloomberg New Energy Finance). Expansion of the country’s natural gas infrastructure is also likely to facilitate increased use, which has not occurred as fast as anticipated through 2015.

Energy efficiency will also be critical, especially realizing efficiencies in the parts of the economy that policy doesn’t easily reach. Indeed, many of the large energy users and emitters have cleaned up substantially in recent years in response to energy efficiency directives and technology upgrades. While there may be little low hanging fruit left in some segments of the economy, finding, reaping, and quantifying the remaining opportunities for energy efficiency improvement will be an important task in the Thirteenth FYP.

The creation of a national carbon trading market—focused on large enterprises in high-emitting sectors—will help to support this transition. Set to launch in 2017, the system will price in a portion of the damages of fossil energy use, encouraging clean energy substitution and innovation over the longer term. Finding ways to expand the coverage of the carbon price to smaller and more distributed emitters offers a promising way to expand cost-effective reductions, while preventing “leakage” of emitting activities from covered to un-covered sectors.

As in past Plans, the Thirteenth FYP lays out energy and CO₂ intensity reduction targets. The plan targets an energy intensity reduction of 15% (the Twelfth FYP targeted 16%, while the Eleventh FYP targeted 20%). The targeted CO₂ intensity reductions of 18%, compared to 17% for the Twelfth Five-Year Plan, will boost the contribution of low-carbon sources in the energy mix and support further decoupling of China’s economic growth from its reliance on fossil energy. This shift is already well underway—China’s share of coal in primary energy has dropped from over 72% in 2007 to 64% in 2016. The CO₂ market will be designed to contribute substantially to sustaining reductions in CO₂ intensity, in line with the 18% goal.

A shift toward consumption and services

A shift away from investment and exports toward consumption and services as key economic growth drivers in the coming years now seems to be underway in earnest, and will further contribute to reductions in emissions, relative to a no-shift scenario. In this regard, the government’s objectives are aligned with domestic environmental goals. China’s progress provides lessons for emerging economies generally to help in avoiding an emissions-intensive development path.

All of these developments, while not surprising, are reassuring. Combined with the 6.5%/year average annual growth the Plan targets, the latest energy and CO₂ intensity goals could translate into a CO₂ emissions peak well before 2030, in keeping with China’s pledge to make best efforts to peak early.

Author Information: Dr. Valerie J. Karplus, a ChinaFAQs expert, is an Assistant Professor in the Global Economics and Management Group at the MIT Sloan School of Management, and is the Faculty Lead of the China Energy and Climate Project in the MIT Joint Program on the Science and Policy of Global Change.

ChinaFAQs is a project facilitated by the World Resources Institute that provides insight into critical questions about Chinese policy and action on energy and climate change. The ChinaFAQs network is comprised of U.S.-based experts, including researchers at U.S. universities and government laboratories, independent scholars, and other professionals. 

Photo: Kaj17 via Flickr  Creative Commons License   

MIT Energy Initiative report provides recommendations for reductions in light-duty vehicle energy use and greenhouse gas emissions

Study led by Joint Program Research Affiliate Hanquin Tian; coauthors include JP Co-Director Ronald Prinn and Research Affiliates Jerry Melillo and Eri Saikawa

The following article appeared in CLP New Horizons, a compendium of news and perspectives on how to move the Asia-Pacific region toward a more sustainable energy future:

John Reilly | MIT Joint Program on the Science and Policy of Global Change

We live in a world where water, energy, land and the environment are inextricably linked. For example, water is used to produce electricity from hydropower as well as for thermal cooling. Water withdrawals for agriculture—the world’s largest consumer of water—deplete rivers and streams, thereby impacting freshwater ecosystems. Such ecosystems are also threatened by the discharge of water from power stations, which increases water temperature, and by the collection of water in large dams.  

Dams not only produce hydropower but also store water from spring snowmelt or rainy seasons for use in irrigation during dry spells, and provide recreational opportunities as well. Use of water for hydropower, irrigation and recreation requires a careful balance. The availability of water for irrigation will partly determine land use, and how land is managed can affect runoff and sedimentation in reservoirs and other bodies of water, potentially degrading water quality and ecosystems.

Other energy, industry and domestic uses of water can be substantial in areas where water resources are limited. For example, there’s concern that development of China’s shale gas resources, located in dryer western regions of China, could be constrained by water availability.
 

Global changes

In Asia, population growth and economic development are increasing demand for water, food and energy, exacerbating conflicts among land, water and energy needs. In addition, climate change is expected to significantly affect agricultural productivity worldwide and alter the supply of water. While global warming will, in general, speed the hydrological cycle and lead to more precipitation, rainfall will be unevenly spread across the globe, and many currently water-stressed areas will become more stressed.

Efforts to reduce greenhouse gas emissions will change the energy mix, and if renewable sources like wind and solar become more widely used, smaller water withdrawals will be needed for thermal cooling. On the other hand, if biomass energy is part of the mitigation solution, that could increase pressure on land and indirectly on water in order to increase food crop yields.

Rising concerns for fresh water ecosystems may lead to restrictions on the amount of water withdrawn from rivers and lakes. Many areas are already considered overused. In addition, areas relying on groundwater resources may become unsustainable. 

Building a more sustainable future

Businesses can take a number of steps to build a more sustainable future. First, by reducing greenhouse gas (GHG) emissions—ideally supported by government incentives—they can limit the amount of climate change in the coming decades. Second, they can adopt practices that improve water use efficiency and maintain water quality. Third, they can take climate change into consideration when planning the location of new facilities, while noting the uncertainties in climate models.

Our recent research indicates that water stress will increase in China and India. In China, climate change and growth are expected to exacerbate water stress; in India, climate change is projected to have a neutral effect on water supplies, although growth will likely increase water stress. In mainland Southeast Asia, climate change is expected to increase water supplies, partly offsetting the impact of growth.

In all regions, the range of possibilities are far wider than the historical variability in water resources. This highlights the difficulty involved in facilities planning.

References

Modeling U.S. water resources under climate change  Blanc, É., K. Strzepek, A. Schlosser, H. Jacoby, A. Gueneau, C. Fant, S. Rausch and J. Reilly, Earth's Future, 2(4): 197–224 (doi:10.1002/2013EF000214), 2014

Climate change impacts and greenhouse gas mitigation effects on U.S. water quality  Boehlert, B., K.M. Strzepek, S.C. Chapra, C. Fant, Y. Gebretsadik, M. Lickley, R. Swanson, A. McCluskey, J.E. Neumann and J. Martinich, Journal of Advances in Modeling Earth Systems, 7(3): 1326–1338, 2015

Impacts on Resources and Climate of Projected Economic and Population Growth Patterns  Reilly, J. , The Bridge (National Academy of Engineering), 45(2): 6–15, 2015

The future of global water stress: An integrated assessment  Schlosser, C.A., K. Strzepek, X. Gao, C. Fant, É. Blanc, S. Paltsev, H. Jacoby, J. Reilly and A. Gueneau, Earth's Future, 2(8): 341-361 (doi:10.1002/2014EF000238), 2014

A Framework for Analysis of the Uncertainty of Socioeconomic Growth and Climate Change on the Risk of Water Stress: a Case Study in Asia  Fant, C., C.A. Schlosser, X. Gao, K. Strzepek and J. Reilly, Joint Program Report Series, 48 p., 2014