A quality change: Low carbon intensity

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By Lin Boqiang (China Daily)
Updated: 2009-11-05 08:40

The commitment, made by President Hu Jintao at the United Nations Climate Change Summit in September 2009, that China will reduce its carbon emission per unit GDP (carbon intensity) by a "notable margin" by 2020 compared with the 2005 levels, signals a qualitative change in China's policy on energy-saving and emission reduction.

China's 11th Five-Year Plan (2006-10) raised the goal of "energy intensity", requiring energy consumption per unit GDP to decline by 20 percent of the 2005 levels in a bid to deal with energy supply constraint and environment deterioration. Energy intensity is a measure of energy consumption efficiency per unit GDP of a country in a certain period. Energy saving, certainly, means emission reduction, which could mitigate the impact of energy consumption on the environment. While this policy mainly aims at maintaining stable and sustained energy supply to economic development, it is basically a problem about the quantity of energy consumption.

Carbon intensity is the ratio of greenhouse gas (GHG) emissions produced to per unit GDP. Although it is also influenced by energy efficiency, carbon intensity is mainly subjected to energy structure, so it is a problem about energy quality (the proportion of clean energy in energy structure).

Carbon intensity is also impacted by macroeconomic factors including economic development stage, industrial structure, technology and energy and environment policies. The change of restricting objective from energy intensity to carbon intensity shows that China's energy policy is experiencing a strategic turnaround, from focusing on improving energy efficiency during the period of the 11th Five Year (2006-10) to highlighting the factor of climate change as binding objectives in the future energy strategic planning.

It has reached consensus worldwide that GHG emissions due to anthropogenic causes are contributing to the ongoing global warming. As the issue of climate change is getting serious, how to realize low-carbon development has become an arduous task confronting each country. China, as a major emitter of carbon dioxide, will face immense pressure from the international community, especially from wealthy countries that are demanding promises of reduction from developing countries, in the coming Copenhagen negotiation.

Cutting per unit GDP carbon intensity could be achieved mainly through increasing clean energy and reducing coal consumption of per unit GDP, which requires China to change its current energy structure with coal as the main part, if clean coal technology cannot be popularized commercially.

Obviously, the goal China set for itself to lower carbon intensity for energy saving and emission reduction has far reaching implications. The goal can only be fulfilled through increasing the proportion of clean energy in the overall energy structure. Conditioned by resources and building period, China's hydropower and nuclear electricity generation could be expected to reach 300 million kilowatt-hours and 80 million kilowatt-hours respectively by 2020. Another two areas with huge potential and bright future for addressing climate change are wind power and solar power generation.

Compared with traditional fossil fuel, the biggest bottleneck of developing clean energy is the higher cost of research, development and utilization. Therefore, the key to lower carbon intensity is to cut the cost of recyclable energy, which China, as a developing country in the process of urbanization and industrialization, needs to cope with.

We are aware that the precondition for China's low-carbon economic development and low carbon intensity is to ensure energy supply for rapid economic growth. The precondition makes it more difficult to control clean energy cost. In contrast, developed countries, with advanced technology and higher will and capacity of people to pay for environment protection, are easy to get support for their clean energy policy. The negative impact of GHGs to global climate change can only be curbed through the joint efforts of all nations under a fair and practical international framework of emission reduction, with more consideration to energy cost in developing countries.

If a country wants to achieve a certain goal of carbon intensity, it can choose the way of improving energy efficiency or try the approach of changing energy structure, such as investing in wind power and solar power. Returns can only be maximized when the marginal gains of improving energy efficiency and investing in clean energy become equal. Thus, the central government could have more alternatives to formulate an effective clean energy strategic planning.

The author is professor at the Center of China Energy Economics Research, Xiamen University, and a member of the Changjiang Scholars Program.

(China Daily 11/05/2009 page8)