Einzeltitel
Global Challenges
Climate change is an urgent and huge challenge for the 21st century. To reduce the external effects of human-induced climate change on socio-economic sectors, human health and ecological systems, a significant reduction in greenhouse gases emissions is required globally. The World Bank estimates in a recently published report, “Clean Energy and Development: Towards an Investment Framework”, that emissions will be 1.6 to 3.5 times higher than present levels by 2050. The incremental costs of mitigating greenhouse gas emissions are estimated to range from less than $10 billion per year to about $200 billion per year, depending on the stabilization target, the pathway to stabilization and the underlying development pathways of developing countries.
As climate change is a global issue and industrialized countries are responsible for most of the greenhouse gases currently in the atmosphere, developing countries like China are not expected to bear the additional costs of a low-carbon economy.
As a developing nation, China is not so far bound by the carbon dioxide emission reduction targets laid out in the Kyoto agreement. There is no real incentive in the Kyoto agreement for the Chinese government to invest in environmental friendly policies. Nevertheless, increasing environmental degradation in China is contributing to global warming and is considerably affecting economic and social development within China. Therefore the international community together with China must find additional creative common financial solutions to address this problem.
Costs of China’s Economic Development
Rapid industrialization and social change have raised the standard of living for millions of China's people, mainly in the East and Southeastern coastal provinces, who can now afford washing machines, televisions, and, increasingly, cars. Car sales during the first five month of 2002, for example, were up nearly 40 percent compared to 2001. The process of industrialization is often linked to deteriorating environmental quality and is rarely turned around until a country has increased its standard of living. It will be decisive whether trade liberalization in transition countries like China or India can be rapidly integrated into comprehensive, implementation-oriented national and international environmental regulation policy frameworks.
It will also be crucial in this respect to find sustainable energy efficiency solutions for the fast rising middle income class, who are adopting western patterns of consumption.
The social and economic costs of environmental pollution in China are considerable. The World Bank estimates that air and water pollution costs China US$54 billion per year, or about eight percent of GDP. The World Bank further estimates that, every year, air pollution exceeding China's own air quality standards leads to 6.8 million emergency room visits, 346,000 hospital admissions, and 178,000 premature deaths. In addition, air pollution causes some 7.4 million work-years to be lost annually.
As coal use is still frequent, the associated adverse health, social and ecological impacts will continue to be considerable unless special measures are taken to mitigate them. Air pollution is especially severe in many cities in China. In Beijing, the health effects and social costs of air pollution caused by the burning of coal are estimated to be approximately equal to the cost of the coal itself. In addition, at the local level, there are concerns about the potentially heavy social costs associated with coal mining.
Of international concern is China’s contribution to global warming. At current rates of increase, global atmospheric concentrations of carbon dioxide could double by 2050. China's rising greenhouse gas emissions are a major contributor to this global growth rate.
China is the second-largest source of carbon dioxide emissions behind the United States. It will take first place after 2025. China produces 36 percent of the world’s coal and is dependent on coal for 69 percent of its primary energy demand.
To reduce the internal and external environmental costs caused by rapid economic development in China, national and international efforts to achieve substantial improvements have to be well-targeted and better-coordinated.
National efforts since the 1980s.
Governmental programmes and strategies
The Chinese government has displayed a high level of awareness of the social and economic costs of pollution. It has made a number of major policy announcements concerning environmental issues since the beginning of the reform era in 1978. In 1983 the government declared environmental protection a basic national policy.
In 1990 the government established the inter-ministerial National Climate Change Coordinating Committee, making it responsible for policies and measures to address climate change activities.
In 1994, with Chapter 18 of China’s Agenda 21, China set out a broad plan to achieve sustainable development which was viewed in Agenda 21 as a “limitation to the scale and pace of China’s economic development”.
In March 1999, Xie Zhenhua, director of the State Environmental Protection Agency, made the (perhaps too) bold prediction that "China plans to stop environmental degradation by 2010." This, and the government's other numerous policy pronouncements on the environment, however, have been more than just lip service. For example, in 1998 China's National Environmental Protection Agency (NEPA) was elevated to ministry status. In 1998, China devoted a greater percentage of GDP (nearly 1 percent) to the environment than it had ever before, and more, according to the head of SEPA, than any other developing country in the world.
Only recently in 2006 three major government plans and documents related to energy security and climate change has been published.
In January the Chinese Government launched the new Law on Renewable Energy, which took effect on January 1, 2006. The new law seeks to promote cleaner energy technologies with a stated goal of increasing the use of renewable energy to ten percent of the country’s electricity consumption by 2010. By 2050, the renewable energy proportion should rise to 21.6 percent. Coal consumption in primary energy structures will decrease to 53.7 percent in 2020 and to below 40 percent in 2050. The primary energy structures mainly depending on coal will be radically changed.
In March 2006 the 11th Five Year Plan mentioned for the first time that economic growth during the 10th Five Year Plan period was achieved at the expense of resources and the environment. The plan underlined the importance of making timely changes to this growth mode because sustainable development could hardly be achieved by heavily relying on resource consumption. This clear criticism of unsustainable economic activity within the government is new and might be a sign of real change.
In the plan China has clearly set out its main goals for environmental protection for the next five years: By 2010, until when the national economy will maintain relatively stable and fast growth, the environmental quality of key regions and cities shall be improved, and the trend toward ecological deterioration shall be brought under control. Energy consumption per unit of GDP shall decline by 20 percent compared with the end of the 10th Five Year Plan period. The total amount of major pollutants discharged shall be reduced by ten percent, and forest coverage shall be increased from 18.2 percent to 20 percent.
In June 2006 the Chinese government published a report with the title “Environmental Protection in China” ( 1995-2005).
(http://www.china.org.cn/english/2006/Jun/170355.htm).
This report systematically introduces the unremitting efforts made by China in environmental protection over the past ten years in the fields of Environmental Protection Legislation and System, Prevention and Control of Industrial Pollution, Pollution Control in Key Regions, Protection of the Urban and rural Environment, Ecological Protection and Construction, Economic Policy and Investment Concerning the Environment, Environmental Impact Assessment, Environmental Science and Technology, Industry and Public Participation, and International Cooperation in Environmental Protection.
When reading and citing these policy documents one could get the impression that China is making significant progress in tackling environmental degradation in an efficient manner, and it should not be denied that some concrete results have been achieved.
Concrete results
China’s energy intensity- the amount of energy needed to fuel economic growth-declined by approximately 60 percent between 1977 and 1997.
One major consequence of China’s energy and economic reforms has been a sharp reduction in the share of coal in total Chinese primary energy consumption. A significant factor was the shutting down by the government of some 47,000 mines. Fuel switching and improved coal quality also contributed to the steep decline in coal consumption. However, there has been considerable debate over the precise reduction in coal consumption, the degree to which it can be sustained, and its impact on carbon emissions. Reduced consumption does not translate directly to reduced carbon emissions. Improved coal quality means less ash is burned, so less coal by weight is consumed, but net emissions may be unchanged.
Renewable energy accounted for less than ten percent of China’s primary energy consumption in 2002. With respect to renewable sources of electricity, China is one of the most well-endowed countries in the world. Its resources are estimated to include160GW of wind power, over 75GW of commercially exploitable small hydropower, about 125 GW of biomass energy, and 6.7GW of known geothermal energy. Analyses indicate that the greatest potential for displacing coal by renewable energy is in the power sector. Even so renewable sources accounted for only 7.8 percent of primary energy in 2002, with large hydropower plants the dominant source.
As renewable energy in China is mainly produced through large hydropower plants, the proportion of renewables in the overall energy mix is still small. One major obstacle to a sustainable environmental policy in China is the Institutional weakness to implement environmental policy on regional and local levels.
Weak Law Implementation Capacity
China has not had a tradition of using so-called "positive" law to address societal problems. The primary purpose of legal reform was to support China's radical economic reform and expansion. The Chinese government was well aware that it would not be able to attract foreign investment or develop a market economy without a more stable, transparent legal infrastructure. Legal reform has included the creation of a large body of environmental law. This legal regime includes at least six laws addressing pollution prevention and nine laws concerning natural resources protection, 29 sets of environmental protection regulations, more than 70 statutes, and over 900 local regulations.
While the volume of environmental legislative activity may seem impressive, it says nothing of the efficacy of these laws in protecting the environment. To date, China's environmental law regime has suffered from the same weaknesses as Chinese laws in general: vague statutory language, weak institutions and infrastructure, and poor enforcement. The weakness of environmental law, in particular, is not surprising considering the dampening effect environmental protection often has on economic development. Moreover, the fact that environmental benefits often only manifest themselves in the long-term reduces the political imperative to address environmental problems today.
Many provisions of important Chinese environmental laws are more policy pronouncements than law. This vagueness suggests that government still perceives the law as primarily a means of disseminating policy. However, even for such a broader policy function, the imprecise nature of many of the laws creates obvious problems in determining what behaviors are required or prohibited, and which entities have duties to follow or enforce the law.
The efficacy of environmental law is further hampered by systemic weaknesses in the Chinese legal system. These include the absence of a strong, independent judiciary, and poor enforcement of laws and judgments.
A Weak Judiciary
Though the Chinese Constitution calls for an independent judiciary, in reality, Chinese courts are affected by a variety of outside influences, including the legislative and executive departments, the Communist Party, and commercial interests. Local government officials can also exercise significant control over the judiciary because judicial salaries, resources, and funding are provided by the local government. Chinese judges have traditionally lacked adequate legal education and are held in low societal regard. Chinese judges also lack the inherent power to make law or interpret the law. The power to interpret the law is generally delegated by the National Congress to the executive bodies responsible for enforcement. The courts will generally not overturn agency interpretation of laws.
Poor Law enforcement
The lack of enforcement of Chinese environmental laws can be attributed to a number of factors. Enforcement of environmental laws is largely in the hands of local officials, who are often poorly trained, ill-equipped, or unmotivated to enforce environmental regulations.
Chinese environmental laws view citizen participation mainly as the right to report infractions to authorities.
Even with its many weaknesses, Chinese environmental law does further environmental protection along a number of limited avenues. First, it sends a message to lower level administrations and the Chinese citizenry that the environment is a government priority; this is a view of law as a political resolution of sorts. Second, environmental legislation shifts bureaucratic power to environmental government entities that have traditionally been weaker than industry- and economy-related government bodies.
International Cooperation – Role of the EU
The volume effects of rising global consumption lead to demand growing faster than eco-efficiency gains. International cooperation with China to support eco-efficiency and technology transfer will be decisive in the next few years. Financing provided by international financial institutions coupled with carbon finance can create the right positive incentives for investors and companies in both developing and developed countries to meet increasing energy needs in a climate-friendly manner. A long-term energy and carbon agreement could generate up to $100 billion in investment and would leverage a much larger overall investment in clean energy. The following conditions are key in order to facilitate this investment: 1) a long-term energy and climate policy perspective, 2) good energy governance, 3) a good return on investment and 4) sufficient market size.
If China wants to comply with the extremely ambitious targets of the 11th Five Year Plan of a 20 percent improvement in energy efficiency/conservation, it will have to attract major international investment. The first steps in this direction have already been taken. With extensive World Bank and GEF support in the development of a renewable energy strategy, the government has decided to adopt a policy aimed at building demand by mandating electricity suppliers to meet some of their needs from renewable resources, known as a mandated market policy. Four pilot provinces have agreed to adopt the law and to take the actions necessary to comply with it over the next four years. Other international and bilateral programmes have similar objectives.
Further energy intensity reduction will be heavily influenced by the speed at which China’s major energy consuming industries move closer to international standards.
If China maximises use of sustainable renewable energy like solar power, wind, biofuel, and biogas, as the 11th Five Year Plan proposes, it can drive the price, and the cost of producing solar, wind and other renewable energy could diminish considerably.
During the eighth China-EU Summit in Beijing on 5 September 2005, a joint declaration on Climate Change was issued, which confirmed the establishment of an EU-China partnership on climate change. Six key areas for technical co-operation were identified:
-energy efficiency, energy conservation, and new renewable energy;
-clean coal
-methane recovery and use
-carbon capture and storage
-Hydrogen and fuel cells
-Power generation and transmission
This agreed Partnership on Climate Change includes two major cooperation goals to be achieved by 2020. The first is to develop and demonstrate, in China and the EU, advanced zero-emission coal technology. The second cooperation goal is to significantly reduce the cost of key energy technologies and to promote their deployment and dissemination.
More than a year after the Partnership Agreement, the European Commission proposed in a Communication (06.10.2006) a 100 million euro risk capital fund for developing countries to boost energy efficiency and renewables. The Global Energy Efficiency and Renewable Energy Fund (GEREF) has been designed to accelerate the transfer, development and deployment of environmentally sound technologies. These projects will also combat climate change and pollution. As energy efficiency and renewable energy projects face significant difficulties in raising commercial funding, GEREF aims to help overcome these barriers by providing new risk-sharing and co-financing options to mobilize international and domestic commercial investments. The Council and the European Parliament still have to comment on the GEREF initiative and to endorse the Commission’s aim of reaching the initial funding target by mid-2007.
Conclusion
The latest Chinese and international initiatives show an important trend towards an increasing willingness and awareness of Chinese and international policy decision-makers to tackle environmental problems in a proactive manner.
If the Chinese government takes the right decisions with strong financial support from the international community, it can be regarded as part of the solution to climate change. But there is still a long way to go.
Partnerships to pursue this global energy agenda are decisive. There is an enormous opportunity through learning curves to bring down costs for all kinds of new energy sources. China provides an enormous opportunity for this. With regard to the latest policy statements from China and Europe, one can be rather optimistic. But Europeans and industrialised countries in general have to keep in mind that they were able to modernize their economies by benefiting from very cheap oil for decades and did not have to think about CO2 emissions. Market pull approaches for companies (like the EU's Emission Trading Scheme) must be sustained through external technology pull approaches to mobilise public finance towards global access to climate-friendly, affordable and secure energy services. The European Union and other donors with a long history as CO2 emitters have to financially assist currently developing countries to take on the additional costs of adapting themselves to climate friendly technologies.
Denis Schrey
Research Associate
Konrad-Adenauer-Stiftung
European Office Brussels