By Julian Wong Dec.4.2009
In: climate change, green hops, wind
2 comments

Green Hops: BASIC Instinct, New Energy Plans, Natural Gas Deals

Green Hops is back after a six month absence!

Climate Negotiations

Days after China announced its carbon intensity target, and not to long after both China and India committed to the “full transparency” of their mitigation actions and to “stand by these commitments,” it seems like they have both take a few steps back.  Over the past weekend, China convened a high level meeting with climate negotiators of Brazil, South Africa and India (together with China, dubbed the BASIC countries) to align around a document outlining a list non-negotiable positions as we head into Copenhagen climate conference next week.  Based on various media reports (The Hindu, Reuters, The Economic Times) and other rumors GLF is hearing, the document, which has not been released publicly and which GLF has not been able to get its hands on, likesly contain the following stated positions:

1.  No legally binding emisssions cuts;
2.  No external review and verification oif actions not supported by financial or technological assistance (although they will be willing undertake “auditing, supervision and assessment” of domesitcally-binding efforts on their own, adn that the results of this exercise will be publicly available);
3.  No use of trade barriers under the auspices of climate change, e.g. carbon tariffs;
4.  No to halving global greenhouse gases by 2050;
5.  No to setting a 2020 deadline for a peak in world emissions;
6.  Developed countries must commit to 40 percent emissions of 2005 levels reductions by 2020; and
7.  International financial assistance for developing countries mitigation and adaption actions must be upped from $10 billion per year to $100 billion per year.

#4 and 5 go to the “Shared Vision” element of the Bali Action Plan, the road map agreed to by the world’s governments that has led us to this Copenhagen climate conference, and can be best explained by the implications that such goals would have on developing countries’ obligations to start taking on absolute emissions cuts (rather than cuts in carbon intensity or from business-as-usual growth trajectories).

It was originally suggested that the four countries were also saying no to committing to limit global temperature rise to 2 degrees Celsius over pre-industrial times, but that has since been clairified by India as an acceptable goal and would have been a striking about turn since all four countries previously agreed to that goal at the Major Economies Forum in July.

On #7, the docuiment recognizes that carbon markets are part of the financing arrangements and, therefore, accepts that private funding will play a role, thus seeming to provide a consolation to developed countries position that international financial assitance would have to come in some combination of public AND private money.

New Energy Development Plans

The final approval for China’s New Energy Development Plan (新兴能源产业发展规划) will likely be delayed till after Copenhagen (Chinese link only), but will reports suggest that revised targets will fall on the high end of the ranges that analysts were speculating on throughout the year.  For solar, the target for installed capacity will be 2 GW by 2011 and 20 GW by 2020 (previous target was 1.8 GW by 2020); for wind, the new target will be 35 GW by 2011 and 150 GW by 2020 (previous target 30 GW by 2020); and for nuclear, the new targets will be 12 GW by 2011 and 86 GW by 2020 (previous target was 40 GW by 2020).  The plan, drafted by the National Eenergy Adminsitration, has to be reviewed by the NDRC before being submitted to the State Council for approval.

There’s a more specific timetable for the New Energy Vehicle Adjustment and Promotion Plan (汽车产业调整和振兴规划), which has been submitted to the State Council for final approval and is expected to be made official next March (Chinese link only).  The goals of the plan have already been well publicized, though–the production of 500,000 “new energy vehicles” by 2011.  New energy vehicles include hybrid electric vehicles, plug-in hybrid electric vehicles and pure electric vehicles.  Shanghai Automotive Ind. Corp., or SAIC, China’s top automaker, is not waiting till March.  It is going ahead with plans to build a new plant in Hebei province to make electric and hybrid buses.

The Fickle Winds of CDM

The week’s Executive Board meetings, Chinese wind projects have been experiencing increased scrunity.  In two previous EB meetings, 26 Chinese wind projects had their CDM application delayed but eventually approved on a delayed basis after clarifications were sought.  It is simply not the case that any of these projects were rejected. However just today, GLF has received word that 10 Chinese projects were officially rejected by the EB [UPDATE: Reuters confirms].  At issue was the concept of “additionality”, which the FT article explains reasonably well.  Just don’t trust its numbers.

Natural Gas

China plans  for natural gas to account for 10% of its energy mix by 2020, up from 3% in 2005, and two recent deals can help China move closer to that goal.

State-owned Sinopec has signed a 20-year contract with Exxon Mobil to buy liquefied natural gas from Papua New Guinea.  The LNG will come from a project being developed by Exxon Mobil and other investors in Papua New Guinea’s central highlands.  The contract calls for Sinopec to buy some 2 million tons of gas per year, which it will import through an LNG terminal in China’s eastern port of Qingdao.  The terminal’s capacity is expected to be 3 million tons per annum in its first phase and 5-6 million tons per year in its second phase.

Last week, Royal Dutch Shell and PetroChina agreed to jointly develop shale gas resources in southwestern China’s Sichuan province.   The Shell-PetroChina announcement was  timely given the recent attention to shale gas as a specific initiative of US-China clean energy collaboration.  Shale is a sedimentary rock composed of very small particles of clay, mud and sand. It has a low permeability, meaning it releases trapped gas very slowly, and can be expensive to develop.  But is it is also emerging as a game-changing resource with new discoveries of its abundance in the United States.  China is believed to have sizable shale gas potential but, like in many countries, this potential is not yet well understood.   Private-sector deals like these will help enhance coooepration on shale gas development.  Shell already has joint venture with PetroChina on the Changbei natural-gas field which straddles Shaanxi and Inner Mongolia that has been pumping 10 million cubic meters of gas a day as of September 2008.

What Oversupply?

There has been loud alarm bells that polysilicon supply in China, as a result of frenetic investment to cover a shortfall in recent years, have created an over-capacity problem.  Yet, reports from the Ministry of Science & Technology seem to contradict this notion by claiming that China’s demand for polysilicon is expected to exceed its supply by more than 10,000 tons in 2009.   The good word of MOST notwithstanding, industrial overcapacity has been a theme in the past six months, and the European Chamber of Commerce in China has just published a study on the causes and impacts of excess capacity in six industrial sectors, including the wind components sector.

Eco-development

An eco-development plan for the Yellow River Basin in East Shandong province has just received State Council approval. According to the plan that was release in March 2008, Shandong would invest 1.5 trillion yuan ($219.6 billion) during the Eleventh Five-year Plan period (2006- 2010) to develop the delta in a “sustainable” way. [Isn't it a bit late to approve a five year plan just as we are entering the final year of that plan?]  The plans targeted regional growth of 15 percent annually during the five-year plan period while lowering the aggregate per-GDP energy consumption by 24 percent.   The plan is being crticized as a PR move by those who point out that the oil and chemical industries are the main drivers of the local economy in the region.

Meteorologist:  China should move on adaptation

While the United States continues the ridiculous debate on the science of climate change (see “Climategate” scandal, which is a result of hacked e-mails from a British research institute, but seems to be getting most play in the United States; but see also this excellent response by the U.S. scientific community organized by a colleague), little such doubt lingers in China, a country governed by technocrats with degrees in engineering and science.  China’s chief meteorologist, Zheng Guoguang, is now warning that unaviodable climate change will threathen China’s food security and that important steps must be taken for adaptation to impacts of climate chnge.  By the second half of the century, yields of key crops can be affected by as much as 37 percent, Zheng said on the Chinese website of the Chinaese Metereological Administration.  See also Bloomberg.

Photo Credit: Cinematical

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  1. The Green Leap Forward 绿跃进 » Copenhagen Kickoff Dec.7.2009@12:44 pm Reply

    [...] The Green Leap Forward 绿跃进   « Green Hops: BASIC Instinct, New Energy Plans, Natural Gas Deals [...]

  2. The Green Leap Forward 绿跃进 » How Did China Fare in Copenhagen? A Critical Analysis by Someone Not in the Room Dec.24.2009@12:30 am Reply

    [...] As a reference of China’s negotiating stance, I use a collection of three posts: “Green Hops: BASIC Instinct…“; “Copenhagen Kickoff” and “China in Copenhagen Day 4: Back to [...]

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