Cutting carbon

Ye Ruqiu describes China’s remarkable achievement in cutting energy use and carbon dioxide emissions while both its economy and its population grew.

Energy is important for developing national economies. Traditionally, as this development takes place, the demand for energy increases. But exploiting and using energy resources intensively can damage the environment.

Since 1978 – when the policy of opening up and economic reform was first implemented – China has experienced rapid economic growth: its GDP has grown at an average rate of about 10 per cent a year. For most of this time, energy production and consumption kept growing too; consumption rose from 571.4 million tonnes of coal equivalent (tce) in 1978 to 1,389.48 million tce in 1996. But they then started to decrease slowly in 1997 and 1998.

China is rich in energy resources, with reserves amounting to 4.5 trillion tonnes of coal, 94 billion tonnes of oil and 38 trillion cubic metres of natural gas – and hydropower resources of 676.8 million kilowatts. China is the world’s greatest producer and consumer of coal. In 1949 it accounted for 96.3 per cent of energy production, and 95.1 per cent of consumption. By the 1990s these proportions had been reduced, but still remained above 70 per cent.

Several problems affect energy use. First, despite the large reserves, the size of China’s population means that its energy resources per capita are lower than the world average. Proven reserves of coal and hydropower, for example, account for 11.0 and 13.2 per cent of the Earth’s total – but on a per capita basis they are only 45.5 and 55.1 per cent of the world average. Per capita proven reserves of oil and natural gas are even lower, amounting to only 10.7 and 5.0 per cent of the world average.

Second, per capita energy consumption is similarly low – at only about half the world average – despite the large total amount of energy production and consumption in China. Per capita consumption of coal is higher than the world average – since it is so much the country’s major energy source – but the figure for oil, natural gas, and electricity is far below it.

Third, energy resources are distributed very unevenly in China. The west of the country has 82 per cent of its hydropower resources; the north has 84.2 per cent of its coal and 76.7 per cent of its oil and natural gas resources. On the other hand, the east and central-south parts of China – which produce 57 per cent of the country’s GDP, and account for 43.4 per cent of its total energy consumption (including 44.7 per cent of coal consumption and 50.6 per cent of electricity consumption) – have only 11.6 per cent of its energy resources. This imbalance requires coal to be transported from the north to the south, and electricity to be transmitted from the west to the east. The lack of capacity to transport coal is a serious constraint on economic development.

Fourth, the efficiency of energy use is low. The energy intensity of China’s economy has decreased significantly, but it is still several times higher than in industrialized countries, with a high level of energy consumption for each unit of industrial output. The efficiency of energy technologies falls far below the levels in industrialized countries, especially in industries that consume a lot of energy and have a high energy intensity. Many of China’s industrial sectors are still dominated by small-scale and inefficient modes of production.

Fifth, the carbon intensity of primary energy sources is higher in China than in other countries, because of the importance of coal. In 1990, China’s carbon dioxide (CO2) emissions amounted to 2.384 billion tonnes, one tenth of the world total – though per capita emissions were only half the world average. Coal burning is also the main cause of air pollution in China. In all, approximately 75 per cent of the country’s air pollutants come from the burning of fossil fuels.

The Chinese Government has, for many years, been adopting a series of administrative, economic and technical measures to raise energy efficiency and reduce energy consumption, while promoting economic development. In 1980, it defined the general principle for energy as ‘putting emphasis on both energy exploration and saving, with energy saving as the first priority’. Since the 1980s, it has formulated and implemented approximately 30 laws and regulations concerning energy conservation.

In the early 1990s the Outlines of Technical Policy of Energy Saving were formulated to guide the development and application of energy-saving technologies, while the Energy Conservation Law came into force on 1 January 1998. In March 1993, the State Council approved China’s Agenda 21 – White Paper on China’s Population, Environment, and Development in the 21st Century – one of the world’s first national Agenda 21s. The concept of sustainable development penetrates through the Agenda’s action plans, including those for energy and the environment.

The Government has significantly reduced subsidies for energy consumption in order to raise the efficiency of energy use. Coal subsidy rates fell from 61 per cent in 1984 to 11 per cent in 1995: petroleum subsidy rates dropped from 55 per cent in 1990 to 2 per cent in 1995. Interest rates on capital loans provided by the state for constructing energy efficiency projects are 30 per cent lower than those on commercial loans, while half the interest on state loans for efficiency technological renovation projects is subsidized.

Implementing these policies has achieved significant progress in improving the energy structure and reducing energy use and CO2 emissions. In 1980 China’s energy consumption was 13.34 tce per 10,000 yuan RMB. This was reduced to 10.2, 6.78, 5.88 and 4.89 tce in 1985, 1995 1998, and 1999 respectively. The energy intensity of GDP was thus 33.5 per cent lower in 1995 than in 1985: as a result about 660 million tce of energy was saved that year. Between 1995 and 1999, furthermore, energy intensity was reduced by another 32.45 per cent. In all, energy consumption per 10,000 yuan RMB decreased by 64.7 per cent between 1980 and 1999, saving 2.3 billion tce. It is estimated – using the average emission factor for fuel in China of 2.374 tonnes of CO2 for each tce – that CO2 emissions in 1995 were 1.57 billion tonnes less than they would have been had the energy intensity remained at its 1985 level. The equivalent reduction in 1999 compared to the energy intensity of 1980 is 5.4 billion tonnes.

Statistical data for recent years show that energy consumption has grown more slowly than the economy: between 1990 and 1996, the elasticity ratio of energy consumption ranged from 0.36 to 0.66. In 1997 and 1998, moreover, energy consumption actually decreased, producing a negative elasticity ratio.

Between 1985 and 1995 the proportion of coal in primary energy consumption decreased by 1.2 percentage points: this slight change cut CO2 emissions by 36.2 million tonnes. Between 1996 and 1999 total energy consumption decreased by 7 per cent: coal burning fell by 14.7 per cent (corresponding to 214 million tonnes), while the consumption of oil, natural gas and hydroelectricity increased by 20.75, 14.47, and 8.3 per cent respectively. This led to a reduction of 8.8 per cent in CO2 emissions between 1996 and 1999. Within this, the improvement of the energy structure led to a cut of 47.66 million tonnes. Turning coal into other kinds of energy sources like electricity, heat, gas and coke helps to raise the efficiency of energy use, to reduce CO2 emissions and to alleviate environmental pollution. The amount of coal processed and transformed increased from 31.12 per cent in 1985 to 50.4 and 56.49 per cent in 1995 and 1998 respectively. The proportion used for electricity generation increased from 20.15 per cent in 1985 to 32.28 per cent in 1995 and 38.22 per cent in 1998.

Increasing the proportion of liquefied petroleum gas, natural gas, coal gas and electricity in residential energy use is an important measure for alleviating urban air pollution and reducing CO2 emissions. As the population increased, residential energy rose by 24.27 million tce between 1985 and 1995. Between 1995 and 1998, the population of China grew by another 3 per cent. However, the improvement of the structure of energy consumption cut the proportion of residential coal burning from 61.4 per cent in 1995 to 44.1 per cent in 1998, reducing the amount of coal burned by about 47 million tonnes. As a result, despite continued population and economic growth, residential energy consumption decreased by 11.4 per cent and emissions of CO2 by 13.6 per cent between 1995 and 1998. Energy consumption by industry accounted for 66.65, 73.33 and 71.41 per cent of the country’s total in 1985, 1995 and 1998 respectively. Industrial sectors are therefore the major consumers of energy and biggest emitters of CO2 in China. The Chinese Government always gives priority to energy saving in industry and has taken a series of economic, technical and administrative measures to promote it. Energy consumption per 10,000 yuan RMB of industrial GDP has been decreasing continuously as a result. It fell from 36.97 tce in 1985 to 19.85 tce in 1995 – falling by an average 6.4 per cent a year. Between 1995 and 1998, the rate of decrease accelerated to 11.6 per cent annually.

There are still problems of relative energy shortage in many rural areas. About 60 per cent of rural households still rely on firewood, straw and stems for energy. The Government has worked hard to popularize firewood-saving stoves and coal briquettes and to develop small-scale hydroelectricity and other types of renewable energy. As a result, 24.76 million tce were saved in rural areas between 1985 and 1995, while 1.09 million tce of renewable energy were developed. This reduced CO2 emissions by 59 million tonnes. In 1998, the exploitation of renewable energy amounted to 29.14 million tce, corresponding to a 68.8 million tonne reduction in CO2 emissions.

In conclusion, implementing energy-related policies during the 1985-1995 period reduced the annual rate of increase of CO2 emissions by 4.82 percentage points. The decrease of energy intensity over that decade cut emissions by 1.57 billion tonnes. The even greater decrease over the 1980s and 1990s as a whole cut them by 5.4 billion tonnes. This shows the great effort the Chinese Government has made to reduce CO2 emissions so as to mitigate the impact of climate change.

Acknowledgement: thanks to Professor Liu Xueyi of the Energy Institute of the State Development and Planning Committee for kindly providing energy conservation and related data

Ye Ruqiu is Senior Adviser to the China State Environmental Protection Administration.

PHOTOGRAPH: Wa Shuangyan/UNEP/Topham

This issue:
Contents | Editorial K. Toepfer | Secure and sustainable | Fuelling multilateralism | Meeting growing needs | Make way for the zero-litre car | Power sharing | Oil and rising water | Energetic challenges | At a glance: Energy | Competition | Power to the people | Cutting carbon | Winds of change | Power and choice | Rising sun | Give us a wave! | Less energy, more wealth

Complementary articles in other issues:
Issue on Climate and Action December 1998
Issue on Climate change December 1997
Xie Zhenhua: Being in earnest (Hazardous wastes) 1999
Lui Yi: Taking firm steps (Ozone) October 1997

AAAS Atlas of Population and Environment:
Climate change
Air pollution