Behind China’s green goals

China has unveiled its energy and emissions-saving targets for the next five years – but how were they chosen? Feng Jie and Yuan Duanduan explain the process.

Earlier this month, after a year of debate, China finally unveiled its green goals for the next five years. On March 5, premier Wen Jiabao presented his “government work report” during China’s annual parliamentary session in Beijing, revealing the key goals of the country’s 12th Five-Year Plan (FYP). These include targets to cut energy intensity by 16% and carbon intensity by 17% by the end of 2015. China also aims to boost the proportion of non-fossil fuels in primary energy consumption to 11.4%.

The figures may appear dull, but they will direct China’s energy-saving and emission-reduction efforts over the next five years, and have a huge impact on the country’s economic growth and output. But how were they determined?

In the build up to the 2011 “Two Sessions” (the simultaneous meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference held in Beijing once a year) the heads of two key economic planning bodies in each of China’s 31 provinces – the Development and Reform Commission and Economic and Information Commission – received their specific “tasks” for the 12th FYP period from Beijing.

While an overall goal to cut energy-intensity (energy consumed per unit of GDP) by 16% was set for the nation, at a provincial level this figure was adjusted up or down to suit local conditions – namely, each region’s level of development. The provinces were classified into four rough groups: coastal developed, developed, central or western.

In the far west, Qinghai, Xinjiang and Tibet, which have large ethnic minority populations, were treated as special cases and given energy-intensity targets of 10%. Ningxia and Gansu, also in the west, got 15%. Eastern or central provinces were allocated targets of 16%, or one to two percentage points higher.

This approach contrasts with the 11th FYP, under which the majority of provinces were set a 20% target. In the second half of 2010, many local governments, under huge pressure to hit these goals, resorted to power cuts – triggering widespread complaints about the application of blanket, arbitrary targets.

According to reports submitted by each province to this year’s parliamentary sessions in Beijing, only Xinjiang admitted it had failed to hit its 11th FYP target – achieving a 10.2% cut against a target of 20%. Of the 30 other provinces, eight said they had either hit their targets earlier than required or exceeded them, while four – Anhui, Fujian, Jiangxi and Qinghai – gave ambiguous responses. Anhui, for example, said it “expected to be able to hit” its target, while Fujian said it “will hit” its target. The remainder all said they had fully met their emissions-reduction obligations.

For local officials, there is a direct link between achieving these targets – even by the skin of their teeth – and keeping their jobs. This led to the absurd situation last year where local officials chose to cut off power to businesses, even hospitals, in order to meet their energy-saving goals. Responding to public anger over the measures, Zhang Ping, the chair of the National Development and Reform Commission (NDRC) – China’s top economic planning body – made a public apology on March 6, admitting that the institution had made errors due to a lack of experience.

In addition to energy-saving targets, goals for cutting carbon-intensity (carbon dioxide emitted per unit of GDP) were also allocated. An authoritative source explained that the use of dual targets is only transitional – it is very likely that, after the 13th FYP, carbon-intensity targets will replace energy-intensity targets altogether, as they are “more comprehensive and more easily comparable internationally”.

Why 16%?

Why did the government go for a 16% energy-saving target, rather than 18% or 20%? Different academic camps have been debating the appropriate level continuously since late last year. He Jiankun, director of Tsinghua University’s Laboratory of Low Carbon Energy, has done some calculations and believes the new target, though on paper lower than that of the previous five years, is still ambitious: “A 16% drop in energy intensity in the 12th FYP will require more energy to be saved than during the 11th FYP, as total GDP will be larger during the 12th FYP period,” he said.

The challenge is compounded by the fact most cheap and quick energy-saving measures have been exhausted over the last five years, and there is now less potential for shutting down out-dated facilities. During the 11th FYP period, 72 gigawatts of small thermal-power plants were closed – only half as much capacity remains to be closed down during the 12th FYP.

But Jiang Kejun, a researcher with the NDRC’s Energy Research Institute, is still convinced that a 20% drop in energy intensity would be possible over the next five years, with appropriate policy, rational economic development and stronger adjustments to economic structure. In early February, he and several colleagues put forward this suggestion in the hope of influencing the government’s decision. But in February, the disappointing realisation dawned on him that the 16% target was already a done deal

Despite a six-month debate, the different sides failed to persuade each other. They do, however, agree on where the 16% figure has come from: China’s 2020 targets.

In the lead up to the global climate-change talks in Copenhagen in 2009, the Chinese government committed to cutting carbon intensity by 40% to 45% on 2005 levels by 2020, and to including binding targets to achieve this in its five-year plans.

He Jiankun has worked it out: carbon intensity during the 11th FYP period dropped by around 20%; with a fall of 17% to 18% over the next five years, and then a further 16% to 17% drop under the 13th FYP, the 45% reduction by 2020 will be achieved.

“The current 16% energy-intensity target has been set by working backwards from the 40% carbon-intensity target for 2020,” agrees Yang Fuqiang, WWF’s director of global climate solutions. “But it is inadequate just to consider climate change – energy-saving is an important weapon for meeting a number of different challenges.”

Yang added that the decision to set the 12th FYP target at a comparatively low level may have been connected to the fact that the claimed achievement under the 11th FYP – a 19.1% reduction in energy intensity – was actually an exaggeration. Southern Weekend learned that the 16% target was chosen after progress under previous plans had been assessed, as well as future energy-saving potential, but that the Copenhagen commitment was also a factor.

Tug of war

As far back as December, researchers pressing for higher targets realised that, while the overall energy-intensity target had not formally been finalised, provincial governments had already been informed of national energy-intensity goals.

Towards the end of last year, Wang Yongyao, head of Ningxia’s Economic and Information Commission, was nervously waiting for targets from central government so that he could set production levels for energy-intensive products such as calcium carbide and ferroalloys. Ningxia had earlier shut down crucial but energy-hungry industries for three months in order to meet energy-saving and emissions-reduction targets. 

Ningxia had calculated that an appropriate energy-intensity reduction target for the province would be 2.1%, Wang explained. If the state were to set a 16% target, there would be a huge gap.

As with the 11th FYP, the 12th FYP set an overall target for the country and then allocated provincial targets accordingly. However, this time around, both central and provincial governments were much more cautious.

At the start of the 11th FYP, the NDRC told provinces to send in their proposed energy-saving targets. Not realising the potential impact of these targets, the provinces were extremely ambitious. Jilin, for example, set itself a goal of a 30% reduction in energy intensity, to which the NDRC did not object. When mid-period evaluations were carried out in 2008, it was found there was no hope of this target being met, and it was eventually adjusted to 22%.

An authoritative source revealed that a three-stage process was used to allocate provincial-level targets. First, provincial governments submitted their proposed target to central government and the NDRC responded with an adjusted target. This was then repeated. Finally, the provinces submitted a third figure, which was examined and approved by the National People’s Congress before being announced as part of official provincial tasks.

One source familiar with the process described it as a “tug-of-war” between central and provincial government. The provincial governments make sure to keep their first proposal low, while central government, aware that its response will again be undercut, keeps something in reserve.

While setting these targets is a top-down process, warnings about the challenges of implementation from the provinces were taken into account. This did not mean they secured the low targets they wanted, however. In the end, Ningxia – far from getting its desired 2.1% target – was told to achieve a 15% reduction, only one percentage point lower than the national target.

Pan Jiahua, member of China’s National Climate Change Expert Committee and director of the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences (CASS) sums up the process: “The [energy-intensity target in the]11th Five-Year Plan was a political decision, and so is that in the 12th Five-Year Plan. Discussion is one thing; policy is another.”


This article was first published in Southern Weekend. It is used here with permission.

Feng Jie is a reporter at Southern Weekend and Yuan Duanduan an intern.

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