More Energy Conservation Stimulus Needed in China

Originally published on WWF.

Beijing – Economic development plans in China need to further promote a low carbon economy, says a new WWF report assessing the climate and energy impacts of China’s stimulus package.

In November 2008, the State Council (China’s highest decision-making body) decided to invest four trillion RMB – approximately 586 billion US dollars – to bolster the country’s economy from the global financial crisis. As in March China’s National Congress will adopt the 12th Five-Year Plan, the main policy tool driving economic and social development in China, this study offers an important reference on how to direct future investments.

The study found that China’s stimulus package has been successful in boosting economic growth mainly through investments in infrastructures. This has increased demand for energy-intensive industries and pushed up China’s energy consumption in the short-term (2009-2010). It is estimated, however, that the stimulus will have long terms benefits for energy conservation and that its net effects on carbon emissions will be positive from 2014 onwards.

“There are signals that macroeconomic planning is starting to take carbon emissions seriously into account. We will need more of this in the future. All investment policies will have to factor in energy and resource conservation, as well as climate change,” said Dr. Li Lin, Leader of WWF’s China for a Global Shift Initiative.

The main benefits in the long term will be driven by investment in the railway and urban transport systems, contributing to reduce energy consumption in the transport sector by 20% by 2020. Overall, it is anticipated that the originally forecast 9.63 billion tons of CO2 emissions by 2020 will decline to 9.36 billion tons. However, more efforts are needed to reach the goal that China pledged at the Copenhagen Climate Conference in December 2009 (reducing emissions per unit of GDP by 40-45% by 2020 compared to 2005).

The report recommends that China increase investments in energy conservation, including stricter approval standards for energy-intensive projects and disincentives for those using inefficient technologies. China also needs to take full advantage of the country’s renewable energy potential and upgrade the energy grids.

Carbon footprint accounts for 54% of China’s total ecological footprint, according to a WWF report published in November 2010, so promoting a low-carbon economy will be crucial for China’s environmental sustainability.

“If properly directed, economic interventions can support the transition to low carbon development. The next Five-Year Plan offers an enormous opportunity to set China firmly on track towards the achievement of a low carbon economy,” added Dr. Li.

Related Story: A New Vision for the Future

Photo Credit: Sprengben [why not get a friend]

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top