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Energy efficiency and urban infrastructure as Chinese and Global challenges Jun Li Engaging China on Climate Change: Crossroads.

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Presentation on theme: "Energy efficiency and urban infrastructure as Chinese and Global challenges Jun Li Engaging China on Climate Change: Crossroads."— Presentation transcript:

1 Energy efficiency and urban infrastructure as Chinese and Global challenges Jun Li Engaging China on Climate Change: Crossroads of 21st-century Foreign Policy Brussels, 2 February 2011

2 2 Overview Ambitious target for energy efficiency improvement in Chinas 11th 5-year plan:20% reduction in GDPs EI (over 150 bn US$ invested) November 2009: 40-45% carbon/GDP intensity reduction in 2020 relative to 2005 Low-carbon economy has been adopted as a national strategy in the 12 th five-year plan(2011-2015) During the 12 th FYP, Chinese government is likely to impose binding targets on regions to achieve the 40- 45 objective

3 China 2050 LCE scenario Energy efficiency will be the largest contributor to carbon emissions reduction in China Source: CCICED 2009 3

4 4 Challenges in DCs: urban infrastructure Infrastructure development (buildings; transport; energy; water supply and sewage etc.) contributes to improving living condition,quality of life and poverty reduction in developing world Urban infrastructure is capital-intensive with strong inertia and irreversibility; wrong decisions will result in long term carbon lock-in. Lack of technical, financial and institutional capacities in comprehensive governance of urban infrastructure in most DCs

5 EE of urban infrastructure matter in China Rapid urbanisation (Chinas urban population and will double during 2000- 2030! ) Income rise will drive the demand for energy services Chinas 2009 stimulus package (586 bn$), nearly two thirds go to infrastructure and reconstruction Buildings and transport are the most important sectors for EE improvements Large investment will need to be mobilised Incremental cumulative cost for China in IEA 450 ppm scenario: $ 2100 billion (2008 dollar) over 2010-2030; of which half will be attributed to buildings and transport 5

6 6 1. Buildings : an extremely dynamic sector : China builds a Japan in just 3 years More than 15 bn m2 will be built in the next 2 decades 60% of existing buildings today have been built since 1996 60% of existing buildings in 2030 will be constructed after 2006 Source: Liu 2009; World Bank

7 7 Electricity demand in the buildings sector increased rapidly Source: NBS 2008

8 8 An example of BEE in Beijing An apartment building with 160 households, total floor area: 37 700 m2 ; with 60 mm EPS+double glazed window Efficiency standards need to be updated

9 security of energy supply -Half of oil consumption in China relies on imports (80% by 2030) -Constant rise in oil price -Transport accounts for 1/3 of national oil consumption in China Passenger vehicles could increase ten-fold in the next 25 years in China and transport oil consumption is expected to quadruple in 2030 relative to 2005. Air pollution: Emissions from motor vehicles have become the main source of air pollution in Chinas large- and medium-sized cities (Ministry of Environment, 2010) GHG emissions in road transport in 2030 would increase 5 fold in the BAU to exceed the total emission in EU by 2025. Urban transport bears a significant share of the total transport energy use and GHG emissions. Empirical studies show extremely high income elasticity of vehicle ownership and fuel consumption in China (LR income elasticity is nearly 3!) appropriate policy instruments are needed to tackle the challenge in energy demand and emission control in urban transport sector 2. Transport: a daunting challenge 9

10 Fast growing car market China is now the biggest car market in the world – 13.8m vehicles were sold in China in 2010 – 2010: China has 90 times more cars than in 1990 – 4m private cars in Beijing alone! CATs estimates a 6-fold increase in private car ownership in cities by 2030 Ambitious targets of electrical vehicles: 1 million EC by 2020 (but total vehicle population in China would then stand at 260 m according to Wang et al.2008) 10

11 Main drivers of emissions in Chinese cities Source : World Bank 2009 11

12 Ways of reducing CO 2 in urban transport – Operational – improve fuel economy by reducing energy use and emissions per vehicle km (vkm) driven – Strategic or TDM – optimisation of urban transport, ITS, reducing total vehicle km per passenger km (pkm) or per tonne km (tkm), through smart organisation of urban planning and transport infrastructure; land use-transport planning coordination in favour of mass transit – Multi-modal urban public transport: BRT; metro; NMT (e.g. cycling, walking), – Fuel switching : using alternative fuel ( CNG, biofuels, electric or hybrid cars, hydrogen?…) – Econ instruments: e.g. car license auction in Shanghai, congestion charge in London&Singapore, carbon (fuel) tax… – VCF for public transport (e.g. betterment tax in Hong Kong MRT financing) 12

13 13 3. Heating Heating area covers over 15 provinces; with 40% of Chinese population Urban heating in northern China (130 Mtce per year) accounts for one-fourth of building energy consumption in the nation, responsible for a significant proportion of GHGs and air pollutants (e.g. SOx,NOx…) emissions Energy efficiency improvement in buildings and DH contribute to energy security, air pollution reduction and climate change mitigation

14 14 Policy perspective Public policies to support local climate initiatives (5 provinces and 8 cities have been selected in the low carbon city pilot programme by the NDRC in 2010) and accelerate EE technological progress and penetration in urban infrastructure Establish citywise energy efficiency indicators in urban infrastructure and GHG emissions inventory to monitor the energy efficiency improvement in transparent MRV manner Gradually remove unnecessary energy subsidies to encourage investment in EE improvements, pricing reform and other fiscal incentives… Introducing sectoral approach in BEE in buildings, transport and DH sectors Enhance international (EU-China bilateral in particular) cooperation and joint venture capital with advanced countries in urban infrastructure decarbonisation R&DD

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