China's requirement for green development is obvious and to achieve that goal is difficult. China has a great population with a low per capita energy consumption. It is currently in a development stage that requires large amount of energy to support growth, and has a coal-dominated energy structure that is difficult to change for a period of time.

The industrialization and urbanization are key development stages in China's transition to a middle-income country. There are two basic characteristics of China's energy demand during urbanization and industrialization: high energy demand growth rate and the coal-dominated energy structure.

China's urbanization rate was 46.6 percent in 2009, and will increase to about 62 percent by 2020, implying a net incremental of 300 million urban population (the equivalent of US population). It is estimated that energy consumption of China's urban residents is about 3.5 to 4 times that of rural residents. Urbanization requires large quantity of cement and steel. Further, labor-intensive (also energy intensive) industries can provide sufficient jobs to support urbanization.

The rapid economic growth of China is accompanied by low energy efficiency, high energy consumption, and high emission. And the high economic growth in China will continue, likely until 2020. It is ideal for China to have rapid growth with high energy efficiency. But it is by no means easy to achieve.

Both the central and local governments have made great efforts in working out plans on adjusting energy consumption toward lower energy intensity, still greater efforts are needed to translate planning into realities.

From an energy perspective, China's current development constraints mainly include energy scarcity, environmental pollution and climate change, energy security, and energy cost.

China's energy problem is related to its large population and therefore large demand. Energy scarcity will be a major constraint of future economic growth, and should be a fundamental driving force for energy conservation.

China is facing challenges of environmental pollution and climate change. Utilization of large amount of energy directly affects the environment and is a main source of pollution in China. So far, government efforts fail to fundamentally reverse the trend of deteriorating ecosystem and pollution, largely due to rapid economic growth. More importantly, China will face pressure from climate change due to its large incremental CO2 emissions.

Chinese energy security primarily refers to oil security. China's oil consumption increased about 7 percent annually in the past 10 years. China's oil production peak is expected between 180 million to 200 million tons. Even with more oil reserve discovery, oil output cannot be over 200 million tons, as China needs to keep certain production capacity for a long period. If nothing done, China's oil dependence could possibly reach 70 percent by 2015, more than that of the United States.

Energy cost is a real issue in all developing countries. The rapid economic growth requires sufficient and cheap energy. Large energy demand incremental makes emission reduction more difficult and more costly.

Therefore, China's current strategy of transiting to low carbon should be achieved by energy conservation, clean energy development subsidiary, and clean energy diversification to substitute oil consumption. The reason this strategy is proposed is that China's large space for energy conservation.

What should China do? Clean development is inevitable, but adds to production costs. The government's financial support is needed in the short run, but longer-term development will require reforms in energy pricing.

If government continues to control energy prices, a better design of subsidies is required. However, the government's effort to maintain low energy cost, which was demonstrated in difficulties in increasing electricity tariffs, reduces potential for energy conservation and clean development.

China is also calling for controlling energy demand, which requires changes in production structure. If China could not slow down urbanization process, changing production structure seems to be difficult. However, China can take urbanization as an opportunity for energy conservation. Further, China can use urbanization process as an opportunity for guiding people in choosing a life style that is more suitable for China's energy and environmental condition.

What should developed countries do? They should have a better understanding of difficulties in clean development in developing countries, hopefully leading to more financial and technical support. Being in different development stage, priorities of developing countries are different from those of developed countries. Governments in developing countries are under far larger stress for GDP growth and social stability, which require cheaper energy. From an individual perspective, willingness and affordability to pay for clean development are important foundation for clean development. Environmental valuation is highly correlated to per capita income and affordability is also related to income. Developed countries clearly have advantages in both. Comparisons of factors affecting clean development between developing and developed countries require a better understanding.

Similar to China, India potentially will have large CO2 emissions for many reasons. India's per capita energy consumption is very low. Population was about 1.2 billion in 2010 and is growing. India will likely to maintain a coal-dominated energy structure. Therefore, if we could help China find a low carbon growth solution, it might be applicable to India and could prepare us for the upcoming clean development problems of India.

The author is the director of China Center for Energy Economics Research at Xiamen University.