Ari Huhtala, CDKN’s Director of Policy and Programmes (Climate and Environment), assesses China’s energy outlook at the 3rd Low Carbon Earth Summit in Xi’an

Climate change will have a significant impact on China. Conversely, China’s impact on climate change is considerable. The nation is the world’s second largest economy and the largest carbon emitter. Its energy demand has been growing at breathtaking pace, putting pressure on the security of the country’s electricity supply, 70 per cent of which is based on coal.

China has not remained idle in addressing this challenge. Investments in renewable energy in 2012 reached US$67.7 billion, a 20 per cent increase on 2011. By 2030, renewable energy is expected to contribute to more than half of new generating capacity. The first Chinese domestic carbon-trading scheme has been launched in Shenzen, and others are to follow.

Against this background it is no wonder that China has also launched initiatives to demonstrate international leadership in discussing ways to lower greenhouse gas emissions. An example is the Low Carbon Earth Summit (LCES), first held in 2011. The third LCES took place last week in Xi’an, with the overall objective of ‘breathing new life into green challenges’.

The event took place as part of a larger Euro-Asia Economic Forum for which Xi’an was a most appropriate venue. Not only is the city an increasingly important modern industrial powerbase in the region, but in the past it was China’s ancient gateway to the continental west, the origin of the original Silk Route. Having been larger than Rome 2000 years ago, Xi’an now has a population equal to that of greater London. It is the capital of Shaanxi province, with an annual economic growth rate of over 10 per cent and a corresponding thirst for energy. Not surprisingly, its GHG emissions are increasing.

Although not really a summit, the event attracted hundreds of specialists from over 40 countries and was hosted by an impressive list of organisations including several Chinese ministries, state institutions, banks and academic institutions. The sessions covered a mind-boggling range of topics, spanning low carbon economy, clean development mechanisms, emissions trade-based green economy, clean transport, plus low- carbon industries, cities, architecture and power generation.

Within this context, it was interesting that the keynote plenary on energy preceding the LCES made hardly any references to climate change. Reduced emissions seemed to be an underlying factor, occasionally mentioned but not as the main driver for change. The speeches focused primarily on innovative technologies, the emergence of cities as major instruments of change, and national policies to deliver lower energy consumption and greater resource efficiency. Economic arguments were more explicit than environmental ones, let alone those related directly to climate change.

While Dr. Hans van Guenkel, former Under-Secretary General of the United Nations reminded us wisely that “sustainable development is not a hobby for some, but a necessity for all”, other speakers drew our attention to the “shale gas revolution” which was mentioned more often than “low carbon”. What is the lesson that we should draw from this trend? The emergence of shale gas in the energy mix is likely to complicate the climate change landscape in the years to come.

Xi’an’s historical attractions, such as the famous terracotta warriors and spectacular pagodas, visibly thinned the crowds in the conference rooms, but my initial concern about the relative absence of references to climate change was somewhat dissipated when the 200 registered experts presented their papers in parallel sessions during the following two days. Myriad initiatives to find low-carbon solutions were described and debated, and I was reminded that many wise minds all over the world do have their eyes firmly focused on a less fossil fuel-dependent future. There certainly seemed to be no lack of good examples on innovative solutions ready to be scaled up.

CDKN’s main message to other LCES participants was on the importance of breaking the silos between mitigation and adaptation policies and financing. Ari Huhtala presented the paper Achieving triple-wins in the agricultural sector.

For more on sustainable development in China, see Harnessing market mechanisms to promote sustainable development – Lessons from China and How China built the world’s largest wind market. These examples show that the Chinese government is increasingly looking at renewable energy sources to help provide electricity in an environmentally and socially acceptable way, and at a competitive price. Wind power has been identified as one of the most technologically proven and financially viable technologies, making it today’s market leader.

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