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Energy Efficiency and Sustainable Development in China. Professor Shujie Yao and Dr Dan Luo School of Contemporary Chinese studies University of Nottingham. Outline. Can China sustain its fast growth? What is the implication on environment? Energy consumption & growth

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Energy Efficiency and Sustainable Development in China

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Energy Efficiency and Sustainable Development in China

Professor Shujie Yao and Dr Dan Luo

School of Contemporary Chinese studies

University of Nottingham


Outline

  • Can China sustain its fast growth?

  • What is the implication on environment?

  • Energy consumption & growth

  • Structural changes

  • Factors for high energy demand and low energy efficiency

  • Conclusions and policies


Background

  • Sustainable development

    ----“development that meets the needs of the present generation without compromising the ability of future generation to meet their own needs”.

  • Economic growth and environment

    -- Past: Western Industrial Revolution: fossil fuels  pollution  global warming, ocean acidification, loss of tropical forests and water supply shortage

    -- Present: Emerging economies: emissions from BRICs


Current situation in China

  • Pressure: reducing CO2/GDP by 40-45%, 2005-20

  • Internal challenges

    Highly energy-intensive growth path

    Massive consumption: 3.2 bil.TCEin 2010, 20% of world total, >US, largest energy consumer

    Massive imports: oil (2010) 239 mil tons, 53% of total demand. By 2030, import dependency, 80% of oil, 10-20% of coal  energy security problems

    Severe environmental pollution.


Chinese government policy

  • 11thFYP (2006-10): efficiency 20%, or 3.7%/year

  • 12thFYP (2011-15): efficiency by another 16-17%

    However, current trend not promising due to

    Poor industrial structure and lack of innovation


Growth and Energy: Challenge I

  • Limited domestic reserves and low per capita supply

    -- Energy reserves << demand, esp. oil  energy security;

    -- Per capita consumption low but aggregate demand massive

    a) Rapid urbanization and industrialization

    b) Changing consumption of people due to rising income


Energy consumption, China & US, 1971-2010


Energy consumption (TOE/head)


China’s oil consumption & imports 1980-09


  • Growth and Energy: Challenge II

  • Over-dependency on coal GHG emission

    Composition of China’s energy consumption, 1978-2009


Electricity output, 2008 (bilkwh)


  • Growth and Energy: Challenge III

  • Fast growth of energy demand and efficiency

    -- Fast economic growth with fast energy growth

    -- Low efficiency in China: 4.5 times energy and 3.8 times electricity for same amount of GDP compared to OECD

    -- Energy efficiency of China significantly lower than India and Brazil.


GDP, energy/electricity growth in China


China’s GDP growth/energy consumption


Energy & electricity per unit of GDP by country


High demand/low efficiency

of energy in China: Factor I

Economic and industrial structure: GDP dominated by industry


High demand/low efficiency of energy in ChinaFactor II: industry dominated by heavy industry


Energy/consumption by industry in China, 1995-09


Fast expansion of 8 energy intensive sub-industries

  • Industrial production and energy consumption of eight key industries to total


Energy consumption per unit output by 8 industries, 1995-09


Output of energy intensive products, 1978-09


Exports of energy intensive products, (billion US $)


High demand/low efficiency of energy in ChinaFactor III: Industry relocation coastalto inlandEnergy production/consumption by region, 1990-09


GDP, energy consumption &output of 8 industries by region, 1990-09


Conclusion & policy implications

Factors for China’s rising energy consumption


Policy recommendations

  • Structure transformation, reducing reliance on heavy industry and polluting industries

  • Reducing dependency on exports of polluting goods

  • Price reforms

  • Alternative energy

  • Technology and innovation

  • Creating a self-enforcing endogenous growth model


Thanks for listening!


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