Recently, probably in absence of other hot topics, Point Carbon/Reuters dedicated a lot of coverage to China’s still blurry domestic emission reduction ambitions under the 12th 5-year-plan.
The broader context is of course China’s pledge to reduce CO2 emissions per unit of GDP by 40-45% by 2020 compared to 2005 levels. But a similar indicator which essentially measures the same thing is already in place during the current 11th 5-year plan: “GDP energy intensity” (单位GDP能耗). Let’s have a look at where China stands with regards to its own domestic target under the 11th 5-year plan using official government data.
The National Bureau of Statistics has announced earlier this month, that GDP energy intensity rose by 0.09% during the first half of 2010. By now, China has to accelerate its pace to meet its goal of 20% reduction as compared to 2005 by the end of the year. By the end of 2009, the difference to 2005 was estimated at 14.38%, the figure later corrected to 15.6%, that means this year would need to see a reduction of more than 5%, a rate which was never achieved in the past 5 years (highest was 2008 with -4.59%).
http://www.stats.gov.cn/tjgb/qttjgb/qgqttjgb/t20100803_402662765.htm
Here are the 2009 figures broken down by province:
http://www.stats.gov.cn/tjgb/qttjgb/qgqttjgb/t20100715_402657560.htm
Annual reduction in GDP energy intensity (% compared to previous year; source: NDRC)
Still, it is entirely possible and even likely that the target will be met, resorting to drastic measures in certain cases as is already the case now with enforced shut downs of production plants in the South of China. No reliable sources for this, but there are lively discussions on Tianya (e.g.http://www.tianya.cn/publicforum/content/develop/1/470284.shtml). Here’s a highlight:
浙江湖州长兴，由于，没做好有秩序的节能减排以至于没达到上级部门下达的指标，工作组来了，领导慌了，自己的错误让老百姓和企业来埋单，竟然做出连续50天24小时停电限产的决定，现在已经持续了一周了。由于长兴是全国纺织基地，纺织业是当地产业的重点，有几千家纺织工厂。为此，全面停产，造成全国市场的混乱，很多有计划接单的外贸企业，面临无数的官司。如此的损失，谁来承担？假如，一开始有秩序的每个月限产5到10天的安排，也不至于造成如今一刀切带来的后果。再有一周，估计要出大事。
Changxing in Huzhou, Zhejiang province: Because energy saving and emission reduction measures have so far not been systematically implemented, targets set by superior ministries have not been met. Now the workgroup came (for an inspection), the leaders panicked and now the ordinary people and enterprises have to pay the bill. Nobody would have thought that they decided to cut power supply 24h a day for 50 days in a row! This has been enforced now for a week already. Because the textile industry is the most important industry branch in Changxing, there are several thousand factories located here. All these factories facing a full production stop led to chaos in the domestic market and lots of trading companies with pending orders are facing numerous lawsuits. Who will cover such huge losses? If one had from the beginning systematically restricted production for only 5 to 10 days a month, the impact would have been much less severe than such a brusque intervention. If this goes on for another week, something bad is likely to happen.
Other than that, it is always easy to close down already abandoned equipment and claim emission reductions from phasing out backward production capability (淘汰落后产能). This article was published on Xinhuanet.
Here a statement from a steel plant operator:
“我们拆除的210立方米的小高炉其实早就不用了，不符合经济效益呀。以前是停了没拆，现在拆掉了。”河北一家年产量在500万吨的中等规模钢企人士向记者坦言。这拆除的高炉，就出现在了工信部的淘汰名单中。业内人士称，这种实际上在拆除前已废弃的产能，在此次名单中占比不低。
“The small 210m3 blast furnace which we just tore down wasn’t actually used for quite some time now, it was simply not economic anymore. We stopped using it earlier but didn’t tear it down until now.” This statement comes straight from the operator of a medium-sized steel plant with an annual production capacity of 5m tons, located in Hebei province. This exact blast furnace appears on the list of phased out furnaces of the MIIT. According to industry insiders, this kind of already abandoned, but not yet torn down furnaces accounts for a significant part of that list.
It is easy to understand why China cannot accept NAMAs with international monitoring at this point in time. Their top-down measures are not effective enough to achieve their ambitious goals without all kinds of accounting tricks and often set wrong incentives for local government officials and enterprises. What tends to work is the market, apparently, and as market regulation decreases, competition increases and with overcapacity in several key industries, energy efficiency measures will be crucial to the survival of manufacturers in the coming years. The challenge for the Chinese government is how to support these ongoing trends, but also how to measure and communicate them to the Chinese public and the West.