Chinas INDC Sebastian Wienges, Climate Policy Team April 18, 2016 - - PowerPoint PPT Presentation

China’s INDC

Sebastian Wienges, Climate Policy Team April 18, 2016

China’s Role in the international INDC Process

Title of Presentation 2

• 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 3

• 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.”

China’s Role in the international INDC Process

China’s Preparation of their INDC

Title of Presentation 4

• 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

China’s INDC

Title of Presentation 5

• Submitted on June 30, 2015
• 15th country which submitted
• 5th developing/emerging country which

submitted

• Intensity target: -60% up to -65% CO2

Emissions intensity per GDP by 2030

• Additional target: Emission Peak around 2030

China’s INDC

Title of Presentation 6

• 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)

Carbon Markets in China’s INDC Implementation

Title of Presentation 7

• "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

Thank you for your time and attention

Sebastian Wienges swienges@worldbank.org Ana Bucher abucher@worldbank.org

Reviewing China’s climate targets under the 13th Five Year Plan

April 2016

Agenda

10

Overview of key domestic and international climate targets Key trends of China’s climate action Key differences between the 13th FYP and the Paris Agreement Introduction Key challenges ahead Overall coherence of China’s climate targets and strategies

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• In March 2016, China’s National People’s Congress

passed the 13th Five Year Plan (FYP)

• The 13th FYP can be considered as the country’s
• verarching plan for 2016-2020, with a set of binding

targets and guidelines for a range of social, economic and environmental issues

Introduction

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Overview of key climate targets as set out in China’s 13th FYP and (I)NDCs

Type FYP (2016-2020) (I)NDCs (2020 and 2030 targets) Emission reduction

• By 2020, reduce its carbon intensity per unit of GDP by

18% and energy intensity per unit of GDP by 15% from 2015 levels

• By 2030, achieve the peaking of carbon

dioxide emissions and lower carbon intensity per unit of GDP by 60% to 65% from the 2005 level Energy

• Invest a total of RMB 2.3 trillion in clean energy
• In the next five years, China plans to more than double

its wind energy capacity, nearly treble its solar capacity

• Over the next three years, China plans to cut down 20%
• f its coal production
• By 2030, increase the share of non-fossil

fuels in primary energy consumption to around 20%.

• Control total coal consumption; enhance

the use of clean coal Clean transport

• By 2020, China aims to increase cumulative production

and sales of clean energy vehicles by tenfold, to 5 million each

• Control emissions from buildings and

transport Infrastructure

• 800 billion RMB to rail projects investment to enhance

energy efficiency of intercity travel

• China will also continue large-scale investment in low

carbon infrastructure – RMB 3.8 trillion on rail and RMB 2.4 trillion on grid (including an estimated investment of RMB 175 billion on smart grid) during the 13th FYP

• To promote the share of public transport in

motorized travel in big-and- medium-sized cities reaching 30% by 2020

• To

scale up distributed energy and strengthen the construction of smart grid Forest

• By 2020, reach 23.04 % forest coverage.
• By 2030, increase the forest stock volume

by around 4.5 billion cubic meters on the 2005 level Cross-cutting

• Government is required to develop the rules and

regulations to manage the program oversight of the national emission trading scheme, which it plans to launch in 2017

• Scale up cross-cutting policies like

emissions trading and improve emissions- accounting systems

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• 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

Key differences between the 13th FYP and the Paris Agreement

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• 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)

Overall coherence of China’s climate targets and strategies

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• 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

Key trends of China’s climate ambition

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• 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

Potential challenges ahead

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• “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

Summary

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Annex: Overview of China’s institutional setup for addressing climate change

Level Institutions Descriptions Legislation National People’s Congress 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 Climate Change The highest administrative body overseeing mitigation policies and actions National Development and Reform Commission Lead ministry on coordinating climate and energy strategy and actions Provincial Local Development and Reform Commission Leading group on climate change; overseeing and coordinating provincial mitigation policies and actions. All provinces have established their own leading groups to address climate change with the provincial governors chairing them. External e.g. Energy Research Institute, Tsinghua University, Chinese Academia of Social Science Provide direct support to China’s climate policy development through research

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

29-Apr-16 21

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

Content

22 National ETS Link with other ETS Pilot ETS in 7 regions 2011 2016 - 2017 Post-2020

• Timeline of ETS developing in China

29-Apr-16 23

• Provincial DRC are required to submit the list of

companies involved in the national ETS (the threshold is 10,000 tonne metric coal energy consumption or equivalent per year);

• Conduct corporate audit, third party verification, and

prepare government reports for the NDRC (year 2013, 2014, 2015 data);

• Train and select third party verification institutes and

staff; and

• Strengthen capacity building

2016 Work Plan for National ETS Development Released by NDRC in Jan 2016

The study’s current linkage readiness index between the EU ETS and the GD ETS scored 6.3 out of 10

Findings from an early study from EU-Guangdong ETS Linkage Research Project

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BACKGROUND OF CARBON MARKETS IN CHINA

• A scoping study in China will be led by Tsinghua

University, University of Edinburgh, and the China Beijing Environment Exchange (CBEEX) to explore

• pportunities for the NCM Initiative to support

China’s international linkage efforts

• The study will conduct stakeholder outreach to

explore opportunities for the NCM Initiative to support China’s international linking efforts and identify potential for conducting regional pilots

NCM ACTIVITIES

Planned Scoping Study on ‘Networking’ in China

7 Pilot ETSs (2013-2015/6) Varying levels of economic development in participating regions Local governments given significant flexibility in designing pilot ETSs Resulted in ETSs with fairly heterogeneous structures National ETS Phase 2 (post- 2020) The second phase would start to explore pilot regional or sectoral international linkage and implement concepts networked carbon market

• pportunities

National ETS Phase 1 (2017- 2020) The first phase will focus on refining the national carbon market framework and convince Chinese stakeholders consider apply NCM framework for ETS linking in the national ETS design.

Image source: SEI (2012)

29-Apr-16 26

• Stakeholder Consultation
• Research Paper

Section 1: Conceptual review - risks and opportunities of ETS linkages in China and options for applying the NCM initiative to support linking efforts Section 2: Recommendations for developing international linkage opportunities in China

• Apply NCM Framework to Improve Linkage Compatibility
• The 2nd China’s market international linkage workshop

Work Plan for the Scoping Study on ‘Networking’ in China (to be completed by 30 Sep 2016)

29-Apr-16 27 The 1st China’s Carbon Market International Linkage Workshop held in Beijing on 8/Jul/2015 (Right)

Plan to host the 2nd China’s Carbon Market International Linkage Workshop in Beijing in Summer 2016

29-Apr-16 28

Let’s hope to apply NCM in the Chinese context. From CCS Readiness to ETS Linkage Readiness

Guangdong Government and China Resources Power Jointly Launched 1st CCS Readiness Power Plant Design in China in Mar 2015 (Right)

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Acknowledgements 感谢支持

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University of Edinburgh Centre for Business and Climate Change 爱丁堡大学气候变化与商业中心教职人员

Xi Liang Centre Director & Senior Lecturer in Energy Finance Gbenga Ibikunle MSc Carbon Finance Programme Director, Lecturer in Carbon Finance Francisco Ascui Senior Lecturer in Business and Climate Change Craig Mackenzie Senior Lecturer in Corporate Social Responsibility, Senior Strategic Analysts in Aberdeen Asset Management Matthew Brander Senior Fellow in Business and Climate Change Sarah Ivory Early Career Fellow in Climate Change and Business Strategy Kathi Kaesehage Early Career Fellow (ECF) at the University of Edinburgh Business School

• CBCC established in 2008, started the first MSc in Carbon Finance in the world in 2010
• 7 Faculty working on low-carbon and energy finance and business
• Research interests of Centre Members：Low-carbon policy, carbon market linkage, carbon market

microstructure, low-carbon investment and financial innovation, carbon capture utilization and storage, energy system modelling for low-carbon building

• In China, formal collaboration with Tsinghua 3E, PKU Guanghua, China Carbon Exchange (Guangzhou), and co-

established the UK-China (Guangdong) CCUS Centre

• Opening MSc in Energy Finance and Market in 2016/17