China’s INDC Sebastian Wienges, Climate Policy Team April 18, 2016
China’s Role in the international INDC Process • Strong supporter of international process: “To act on climate change (…) is not only driven by China’s domestic needs for sustainable development (…) but also driven by its sense of responsibility to fully engage in global governance (…).” • China announced (in 2014) to submit their INDC early, aimed for agreed deadline (March 31, 2015) Title of Presentation 2
China’s Role in the international INDC Process • Understands INDC as commitment, not only contribution, and supports ambitious commitments: “China will take on international commitments that match its national circumstances, current development stage and actual capabilities by enhancing mitigation and adaptation actions and further strengthening south-south cooperation on climate change.” Title of Presentation 3
China’s Preparation of their INDC • Aiming for an ambitious target: absolute target • Struggled with forecasting rapid urbanization and industrialization interest in exchange with developed countries how to account for development when committing to targets • Partnership for Market Readiness supported economic modelling Title of Presentation 4
China’s INDC • Submitted on June 30, 2015 15 th country which submitted • 5 th developing/emerging country which • submitted • Intensity target: -60% up to -65% CO2 Emissions intensity per GDP by 2030 • Additional target: Emission Peak around 2030 Title of Presentation 5
China’s INDC • Includes plans in all GHG emitting sectors: Energy, Transport, Buildings, Industries, Waste, Agriculture, Forestry • Includes quantified sectoral targets for: Energy (renewable energy, methane), Transport (public transport), Buildings, Industries (HCFCs), Forestry, Agriculture (fertilizers) • Includes market-based policies (ETS, green procurement, green credit mechanism, preferential taxation and pricing for RE) Title of Presentation 6
Carbon Markets in China’s INDC Implementation • "To build on carbon emission trading pilots, steadily implementing a nationwide carbon emission trading system and gradually establishing the carbon emission trading mechanism so as to make the market play the decisive role in resource allocation" • Committed to promote carbon markets internationally Title of Presentation 7
Thank you for your time and attention Sebastian Wienges swienges@worldbank.org Ana Bucher abucher@worldbank.org
Reviewing China’s climate targets under the 13 th Five Year Plan April 2016
Agenda Introduction Overview of key domestic and international climate targets Key differences between the 13 th FYP and the Paris Agreement Overall coherence of China’s climate targets and strategies Key trends of China’s climate action Key challenges ahead 10
Introduction • In March 2016, China’s National People’s Congress passed the 13 th Five Year Plan (FYP) The 13 th FYP can be considered as the country’s • overarching plan for 2016-2020, with a set of binding targets and guidelines for a range of social, economic and environmental issues 11
Overview of key climate targets as set out in China’s 13 th FYP and (I)NDCs Type FYP (2016-2020) (I)NDCs (2020 and 2030 targets) • By 2020, reduce its carbon intensity per unit of GDP by • By 2030, achieve the peaking of carbon Emission reduction 18% and energy intensity per unit of GDP by 15% from dioxide emissions and lower carbon 2015 levels intensity per unit of GDP by 60% to 65% from the 2005 level • Invest a total of RMB 2.3 trillion in clean energy • By 2030, increase the share of non-fossil Energy • In the next five years, China plans to more than double fuels in primary energy consumption to its wind energy capacity, nearly treble its solar capacity around 20%. • Over the next three years, China plans to cut down 20% • Control total coal consumption; enhance of its coal production the use of clean coal • By 2020, China aims to increase cumulative production • Control emissions from buildings and Clean transport and sales of clean energy vehicles by tenfold, to 5 million transport each • 800 billion RMB to rail projects investment to enhance • To promote the share of public transport in Infrastructure energy efficiency of intercity travel motorized travel in big-and- medium-sized • China will also continue large-scale investment in low cities reaching 30% by 2020 • To carbon infrastructure – RMB 3.8 trillion on rail and RMB scale up distributed energy and 2.4 trillion on grid (including an estimated investment of strengthen the construction of smart grid RMB 175 billion on smart grid) during the 13th FYP • By 2020, reach 23.04 % forest coverage. • By 2030, increase the forest stock volume Forest by around 4.5 billion cubic meters on the 2005 level • Government is required to develop the rules and • Scale up cross-cutting policies like Cross-cutting regulations to manage the program oversight of the emissions trading and improve emissions- national emission trading scheme, which it plans to accounting systems launch in 2017 12
Key differences between the 13 th FYP and the Paris Agreement • Level of detail and clarity • The FYP provides more measurable targets and lays out specific tools and foundations (However, follow-up plans are expected to provide more detailed targets for specific provinces and sectors) • NDCs are limited in measurable targets and lack clarity in certain aspects • Level of bindingness • FYPs are introduced via a top-down approach • The FYP sets binding targets on energy intensity and carbon intensity • China has a laudable record in meeting or exceeding many of its targets in previous FYPs • NDCs under Paris Agreement are not legally binding and will rely on the UNFCCC transparency framework • Nevertheless, many believe that China will overachieve its international carbon intensity targets for 2020 and 2030 13
Overall coherence of China’s climate targets and strategies • In terms of coherence of overall targets, strategies and focus policy areas, China’s climate legislation is relatively well developed • Both international and domestic targets indicate that China is serious about the transition to a low carbon economy • There is also evidence that targets trickle down to the policy level (e.g. emission trading scheme and the TOP-1000 program) 14
Key trends of China’s climate ambition • Reduce coal • Over the next three years, cut down 20% of its coal production • Promote low carbon energy • 15% of primary energy from non-fossil fuel sources by 2020 • Promote “innovation”, “openness”, “coordination”, and a “green” and “inclusive” growth 15
Potential challenges ahead • Social challenges associated to shutting down coalmines and coal power plants in China • Curtailment of wind as a result of overcapacity • Structural issues with measuring, reporting and verification (MRV) standards • Lack of transparency regarding the origin of data and methodologies for emission scenarios • Mismatch between national and provincial data 16
Summary • “Sustainable development” is a key development strategy • A comprehensive set of climate actions across key sectors will be used to achieve emission reduction targets • Challenges should be addressed to ensure a successful implementation of climate targets 17
Annex: Overview of China’s institutional setup for addressing climate change Level Institutions Descriptions National People’s Congress Legislation Exercises legislative power of the state; approves FYP as well as other laws and targets State Council Highest executive and administrative body; introduces mandates and targets Program National Leading Group on The highest administrative body overseeing mitigation Climate Change policies and actions National Development and Lead ministry on coordinating climate and energy Reform Commission strategy and actions Provincial Local Development and Leading group on climate change; overseeing and Reform Commission coordinating provincial mitigation policies and actions. All provinces have established their own leading groups to address climate change with the provincial governors chairing them. Provide direct support to China’s climate policy External e.g. Energy Research Institute, Tsinghua University, development through research Chinese Academia of Social Science 18
Thank you for your time and attention Rachel Chi Kiu Mok rmok@worldbank.org
Potential Applications for the Networked Carbon Market (NCM) Initiative in China Dr Xi LIANG CFA 18/Apr/2016 Presentation at the World Bank
Content Overview of China’s Carbon Markets Apply NCM Framework for Domestic Linkage Apply NCM Framework to Improve Linkage Compatibility Introduction to the NCM Scoping Project 29-Apr-16 21
• Timeline of ETS developing in China Pilot ETS in 7 regions National ETS Link with other ETS Post-2020 2011 2016 - 2017 22
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