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Monday, August 27, 2012

China Moves Toward Reducing Its Energy Intensity

Summary. China announced it will invest US$372 billion in energy conservation projects by 2015, involving both terminating inefficient power plants and factories, and installing efficient new facilities.  This is part of its program to lower the energy intensity of its economic production, and its carbon intensity as well.  Even so, since China’s overall energy use is still growing rapidly, mostly powered by fossil fuels, its rate of emitting CO2 will continue growing sharply.  The increase in atmospheric CO2 level worsens global warming and the number and severity of extreme weather events.  These cause major damage and suffering to humanity.  All the nations of the world should unite behind the common objective of reducing emissions, as close to zero as possible, as soon as can be agreed to.
 


Introduction. China’s economy has been expanding rapidly in the past several decades.  This growth necessarily is powered by a corresponding increase in its use of energy.  Much of this energy increase has been powered by expansion of fossil fuel-driven electricity generation.  Recently China surpassed the United States as the nation whose rate of emitting greenhouse gases is the highest in the world.

The negotiations leading to the Kyoto Protocol, which is a United Nations-sponsored accord to lower the rate of greenhouse gas emissions, specifically excluded China and other developing countries of the world from its provisions.  It was concluded in 1997, came into force in 2005, and is to expire at the end of 2012. (The U. S. did not ratify the Protocol and is thus not covered by its provisions.)  Over this interval China’s emissions rate has been growing inexorably by large annual percentages, as its economy has expanded.

Background. Annual U. N.-sponsored conferences, for example those recently held in Copenhagen (2009; “From Copenhagen to Cancun – Pursuing a Global Climate Agreement”), Cancun (“The Cancun Conference on Global Warming,Nov.-Dec. 2010), and Durban (“Durban Platform Agreement Concludes 2011 Climate Change Talks”), have sought unsuccessfully to conclude a more comprehensive agreement to supersede the Kyoto Protocol on its expiration.  In these negotiations, China has emphasized promoting goals that reduce its energy intensity, the amount of energy consumed to produce 1 unit of economic activity measured by the gross domestic product, rather than absolute reductions of actual greenhouse gas amounts.

China’s 12th Five Year Plan. China is currently in its 12th Five Year Plan (FYP), covering 2011-2015.  The energy component of the 12th and 13th FYPs ("China’s 12th Five Year Plan: Energy and Greenhouse Gas Emissions”), is summarized in the following table.

KEY ENERGY AND CLIMATE POLICY GOALS AND INDICATORS IN CHINA 2006–2020


 

11th FYP (2006-2010) (TARGET)

11th FYP (ACTUAL)

12th FYP (2011-2015) (TARGET)

13th FYP (2016-2020) (TARGET)

INDICATORS

 

 

 

 

ENERGY INTENSITY REDUCTION IN 5 YRS

20.0%

19.1%

16.0%

NOT SET

CARBON INTENSITY REDUCTION IN 5 YRS

NOT SET

 

17.0%

40-45% vis-à-vis 2005

NON-FOSSIL ENERGY (% OF PRIMARY ENERGY)

10.0%

9.6%

11.4%

15.0%

GROWTH RATES

 

 

 

 

PRIMARY ENERGY CONSUMPTION (ANNUAL GROWTH)

4.0%

6.3%

3.75-5%

-

ELECTRICITY ENERGY CONSUMPTION (ANNUAL GROWTH)

-

11.0%

8.5%

-5.5%

ELECTRICTY GENERATING CAPACITY (ANNUAL GROWTH)

8.4%

13.2%

8.5%

-5.0%

GDP (ANNUAL GROWTH)

7.5%

10.6%

7.0%

-


 
Goals are set in the 12th FYP to reduce both the energy intensity and the carbon intensity, the amount of carbon dioxide (CO2) emitted to produce 1 unit of economic activity, by about one-sixth in five years, and the carbon intensity for the 13th FYP is set to fall to 40-45% below 2005 levels. 

Even so, absolute emissions are expected to continue growing, because the rate of increase in energy use is projected to grow by 8.5% annually (see the table), i.e., by more than the reduction in energy use from efficiency.  This is exemplified in the graphic below from the International Energy Agency (IEA), which shows the projected increase, beyond 2008, for total worldwide primary energy demand; the chestnut band for China alone shows continued, unabated expansion to 2035.
 
Reproduced from World Energy Outlook (WEO) 2010 © OECD/IEA.  The OECD has essentially similar membership as the IEA, plus 5 additional nations.   Data to the left of the solid vertical line at the year 2008 are actual.   Energy demand beyond 2008, to the right of the vertical line, is a projection based on the New Policies Scenario.  The dashed line indicates predictions based on the Current Policies Scenario (Reference Scenario).  Mtoe, energy demand (consumption) expressed as equivalents of millions of tons of oil.
Source: WEO 2010 Presentation to the Press, Nov. 9, 2010,     http://www.worldenergyoutlook.org/docs/weo2010/weo2010_london_nov9.pdf
 
In addition, the IEA projects that China’s use of all fossil fuels, especially coal, will grow considerably from 2008 to 2035, and that it will also expand its energy production from non-carbon sources, nuclear, hydro and other renewables. 
 
China’s Current Energy Investments. Reuters Point Carbon reported on August 22, 2012 that China will undertake US$372 billion worth of energy conservation projects by 2015, i.e., by the end of the current FYP.  The country projected that the various projects and investments would contribute to achieving about half of the goal stated in the FYP of reducing energy intensity by 16% below the 2010 level (see the table above).  The projects entail both increases in efficiency and reduction of greenhouse gas emissions, according to Reuters.
 
US$155 billion will be dedicated to increasing efficiency of energy use, especially in industry; the Ministry of Industry and Information Technology has set a goal of reducing industrial energy intensity by 21% by 2015.  Over the past few years China has decommissioned thousands of older, less efficient fossil fuel-based generation plants and factories.  It is expanding its renewable energy portfolio (see the table), and is currently the world’s largest producer of renewable energy.  In China, this includes perhaps larger proportions of nuclear and hydro power than some other countries.
 
The report notes that China’s rapidly expanding economy has led it to import growing amounts of fossil fuels, at high prevailing market prices, leading to unforeseen losses at state-owned power plants.  This factor contributes to its policy of lowering the growth of greenhouse gas emissions.  Nevertheless, China’s annual rate of CO2 emissions continues to grow, reaching 9.7 billion tonnes in 2011, 29% of the world’s total.  According to the report, China expects that its annual rate of emissions will reach a peak around 2030.
 
Analysis
 
Five Year Plans. China’s Five Year Plans are generated within the Communist Party-led government of the People’s Republic, and the measures taken for their implementation generally emanate from it as well.  Its 12th FYP covering 2011-2015, made public in March 2011, expressed the country’s goal of reducing its energy intensity by 16% during the five years in question, and its carbon intensity by 17%.  The Aug. 22 report shows that China is following up on these goals, making actual investments and expenditures in accordance with the FYP.
 
Improved Energy Intensity. The table above shows that improvements in energy intensity in China average to just over 3% per year; this is an index of improved efficiencies in power generation and in energy utilization throughout China’s economy.  Nevertheless, the table also shows that the annual rate of growth of primary energy consumption was foreseen to be between 3.75 and 5%, electricity generating capacity was projected to increase by 8.5% per year, and the annual growth rate of China’s gross domestic product (GDP) was projected to be 7%.  Since these latter numbers, which reflect the national demand and use of energy, are higher than the rate of reduction in the energy intensity, it is evident that the absolute amount of energy used by China during this FYP is expected to continue increasing, just as it has in earlier years. 
 
The graphics above for primary energy demand and the cumulative emission of CO2 are examples of this increase.  (Although the annual percent of energy provided by non-fossil energy will increase by about 2.2%, its absolute level is still too low to offset the increase in use of fossil fuels.) 
 
Emissions Continue to Increase. We conclude from these numbers that during this FYP and beyond, China’s annual rate of emission of CO2 will continue to increase, solidifying its position as the nation with the highest emission rate in the world.  This conforms with the cumulative total amount of CO2 projected to be released between 2010 and 2035, shown in the graphic above. 
This result is further confirmed by reference to the graphic below, which shows the projected increases in primary energy demand by China (orange segments of the bars) between 2008 and 2035, for the fossil fuels coal, oil and gas (upper three bars).
 
Reproduced from World Energy Outlook 2010 © OECD/IEA. 
The color scheme is the same as in the first graphic, above.  The bars for coal and oil to the left of the “0” line represent decreases in usage for these fuels over the period 2008-2035 in the OECD countries.  Single-handedly China accounts for profound increases in demand for fossil fuels over this period, as well as for renewable sources of energy.  Mtoe, energy demand (consumption) expressed as equivalents of millions of tons of oil. Source: WEO 2010 Presentation to the Press, Nov. 9, 2010, http://www.worldenergyoutlook.org/media/weowebsite/2010/weo2010_london_nov9.pdf
 
The continued growth in demand for energy by developing countries, fueled primarily by burning fossil fuels, is reflected in the world’s cumulative emissions of CO2, as projected by the IEA in its World Energy Outlook 2011, shown in the graphic below.
 
Actual 1900-2009 (purple) and projected 2010-2035 (lavender) CO2 emissions from regions with significant emissions.
Source: World Energy Outlook, International Energy Agency; Presentation to the press, Nov. 9, 2011;
 
Of the regions shown, the U. S., the European Union and Japan are members of the Organization of Economic Cooperation and Development (OECD; i.e. developed, or industrialized, countries), and China and India are non-OECD (developing) countries.  The developed countries all have total cumulative CO2 emissions covering the 109 years from 1900-2009 (purple) that are much greater than the projected future emissions in the 25 years 2011-2035 (lavender).  In contrast, China and India cumulatively emitted relatively little CO2 between 1900-2009, but are projected to emit cumulatively at least double the baseline amount, very large increases, between 2011 and 2035.
 
China’s Status as a Developing Country.  As an indication of the rate of expansion of China’s economy over the years, in 1997 (the year the Kyoto Protocol was signed) the per capita gross national product was US$886, whereas by 2011 this number was US$4,930 (World Bank ). This corresponds to a compound rate of growth of 13%.  Such an intense rate of expansion of the economy required a corresponding expansion in its use of energy, most of which was provided by fossil fuels, causing a corresponding expansion of its rate of emitting CO2.
 
China and other developing countries of the world were excused from the Kyoto Protocol in recognition of their desire to grow rapidly in order to attain the economic status of the developed countries.  China’s approach to global climate regulation largely continues to reflect this point of view.  As recently as the 2010 Cancun conference of the United Nations Framework Convention on Climate Change, the Chinese representative summarized China’s position that the industrialized nations have already attained high levels of economic prosperity, whereas China is still a developing country with a high level of poverty and urbanization still proceeding (“The Cancun Conference on Global Warming, Nov.-Dec. 2010). 
 
China is now the world’s leader in the annual rate of emitting CO2, having recently surpassed the emissions rate of the U. S.  China’s emissions rate is still growing rapidly, whereas that of the U. S. is flat or beginning to decrease.  Every newly-installed power plant based on fossil fuels will remain in service for 30-40 years, emitting more CO2 into the atmosphere each year during its lifetime.  Most of the newly-emitted CO2 remains in the atmosphere for 100 years or more, contributing to an increase in the accumulated level of atmospheric CO2, which worsens long-term global warming.  Global warming is now directly linked to extreme weather events and the damages they cause to humanity (“Extreme Weather Events and Global Warming).
 
Perhaps in recognition of these facts, China appears to have adopted a longer-term objective of reducing its annual rate of emissions, starting in its next FYP (see the table above).  The table suggests that China unilaterally intends sharply to lower its carbon intensity, and to reduce its annual rates of generation and consumption of electricity.
 
Striving to Reduce Emission Rates. Since CO2, once emitted, accumulates in the atmosphere for long times, it is necessary to begin now to lower the annual rate of emissions in order to slow the accumulation of CO2 in the atmosphere.  Its higher level contributes to a worsening of extreme weather and climate events that adversely impact all peoples of the world.  Ideally, in order to stabilize the accumulated CO2 level at some future, higher, value, without having further increases, the nations of the world would need to strive toward attaining a zero net annual rate of emission.  A worldwide agreement working toward such a goal is needed as soon as possible.

© 2012 Henry Auer

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