In May China revealed it was struggling to meet its energy intensity targets of reducing energy per unit of GDP by 20 per cent between 2005 and 2010; something the country’s leaders seemed rather embarassed about, particularly given that new carbon intensity commitments are a key part of their climate negotiating strategy.
At the time, we wondered what sort of measures that would translate into, to curb an actual increase in intensity in recent months. Well this week China’s central bank announced what looks to be a serious measure, declaring restrictions on loans to energy-intensive sectors.
But how ambitious really is this energy-intensive goal, and the more important commitment to reduce carbon intensity?
The main question on the targets, particularly on carbon intensity is: how much do they deviate from the likely ‘business as usual’ trajectory? The country expects to transition to a less capital-intensive, more knowledge-based economy anyway, and it’s already relatively energy-intensive.
Marc Horovitz and François Lévêque of Mines ParisTech describe some of the doubts that such a reduction would really be very different from business-as-usual:
According to the British laboratory E3G, the current emissions, instead of doubling in the business-as-usual scenario, will increase by around 50%. Others, like Frank Jotzo of the Climate Change Institute at the Australian National University are less optimistic. According to him, if we take into account China’s annual growth over the last few years (from 8% to 12%), the emissions will double.
However the Global Energy Policy Center has come up with an even more sceptical view of China’s carbon intensity targets (not energy intensity) — its Copenhagen commitment to reduce its carbon intensity by 45 per cent by 2020, from 2005 levels.
They argue that US Department of Energy data shows that China’s carbon intensity fell by more than 44 per cent in the preceding 15 years (1990 – 2005) without even trying. India’s commitment, they believe, is even worse.
The academics at GEPC have made a spreadsheet available to show their workings, but here is a snapshot of the numbers:
A couple of points, however, in China’s (and India’s) defence.
Firstly, as the GEPC authors point out, this ‘trick’ was learned from US:
Of course this intensity game is nothing new. Then President Bush used it on Valentines day 2001, when he promised to cut U.S. emissions intensity between 2000 and 2010 by 18 percent. That was two percent more than what we did in the previous 10 years without trying.
Secondly, Horovitz and François Lévêque quote Fatih Birol, the IEA’s chief economist, as saying that China’s carbon intensity commitments mean it would take on more than a quarter of the CO2 emissions cuts needed to stay within the 2°C safety limit recommended by scientists. They explain:
The world thus needs to decrease the emissions by 3.8 gigatons, and China would cut by around one gigaton (China would be responsible for more than 25% of the necessary reductions). Thus, with a 10% annual increase in GDP, a 45% cut in carbon intensity would multiply China’s emissions by a factor of 1.6, which corresponds to E3G’s evaluations.
Will China’s environment problems affect its growth? FT Energy Source
Is China making empty threats on energy targets? FT Energy Source