New report: China charts ‘clean industrial revolution’ to power its new economy

4 March 2011

China ‘pulling its weight’ on low carbon energy targets though challenges remain

BEIJING, 7 March 2011: A new report by The Climate Group commissioned by the HSBC Climate Change Centre of Excellence, says the Chinese government’s decision to put a ‘clean industrial revolution’ at the heart of the nation’s 12th Five Year Plan will deliver real carbon savings that could begin to curb national emissions, unlock new investment opportunities and ensure China is seen to be “pulling its weight” on international climate targets.

The report – Delivering Low Carbon Growth – A Guide to the 12th Five Year Plan – is published as China’s National People’s Congress (NPC) meets this week to finalize agreement on the government’s economic roadmap to 2016.

China is now the world’s second biggest economy and biggest greenhouse gas emitter, and the report findings show how the country’s new national development strategy will combine ambitious growth targets – including a seven per cent GDP annual growth goal – with a need to rapidly de-carbonize its coal-based economy.

For the first time in a Five Year Plan (FYP), China has set a national carbon intensity reduction target of 17 per cent and intends to cut energy intensity by 16 per cent by 2015. The FYP will also boost investment for seven strategic new industry sectors vital to national competitiveness and sustainability paving the way for a more efficient economy and creating higher value industries in alternative energy, low carbon transport and energy efficient products.

Critically, the report concludes that, although real challenges remain, the pace of deployment of low carbon energy compares favourably with International Energy Agency’s World Energy Outlook 2010 scenario for stabilizing atmospheric concentrations of CO2 at 450ppm by 2100, suggesting that China is ‘pulling its weight’ relative to international expectations in this regard.

Changhua Wu, Greater China Director, The Climate Group says: “China has learned valuable low carbon lessons over the last five years which have given the government confidence to deepen its commitment to a clean industrial revolution. Green growth is now at the very heart of China’s national development strategy. These ambitious new policies will create the necessary certainty for the business community to ride a new wave of green investment.”

Nick Robins, Head, HSBC Climate Change Centre of Excellence says: "What is striking about China's plans for low carbon growth is how they underpin the next phase of the country's economic development. Cutting carbon intensity is not just an environmental objective, but a way of driving up the competitiveness of core industrial sectors. Its seven emerging strategic industries have been chosen to give China an increasing technological edge as well as enable it to take a larger share of the global climate economy."

Mark Kenber, CEO, The Climate Group said: “It is hugely symbolic that China is putting green growth at the core of its national development plan and should be a wake-up call to Europe and North America policy-makers that a clean tech race is well under way. This bold policy plan unequivocally aims to set China on a clear low carbon trajectory and will ensure the country remains a major global hub for clean energy technologies for years to come. However, unabated coal consumption remains a significant reality check on China’s low carbon vision and, as with other countries, a comprehensive long-term approach backed by tough action on the ground will be needed to ensure that China’s green growth strategy delivers on its undoubted promise.”

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