Haven’t done a Green Hops for a long time, so there are lots of developments over the past weeks to catch up on!
http://www.bigleaguekickball.com/about/ Order Soma online overnight FedEx delivery Ten-Year New Energy Development Plan Closed to being Unveiled
State media is reporting that the National Energy Administration has finalized a 10-year new energy development plan that will require a cumulative investment of 5 trillion yuan ($740 billion) to realize. The plan, which is a strategy to help China realize its goals to achieve 15 percent of its primary energy mix from non-fossil sources and also to reduce its carbon intensity by 40 to 45 percent by 2020, will be sent to the State Council for approval.
This plan seems to be the long-awaited new energy stimulus plan that GLF blogged about more than a year ago with baited breath, and in fact seems to provide almost double the investment dollars. I would, however, strongly caution against assuming that this investment estimate will translate to direct funding by the central government. Most likely, just like the economic stimulus package of 2008, this amount represents a total investment amount that will be provided by a combination of central, provincial and local governments in addition to the private sector (see my presentation at CSIS earlier this year).
That said, the details released so far are still impressive. Important to note is the comprehensive breadth of sectors that fall under the “new energy” concept-its not just renewables such as wind, solar and biomass, but also energy efficiency, nuclear, smart (and strong) grid, transportation, unconventional natural gas, and more efficient use of fossil fuels.
A notable winner of this plan is natural gas, a hitherto minor energy resource for China (see picture). The NEA estimates that natural gas will account for 8 percent of China’s energy needs by 2015 at 260 billion cubic meters, compared to just 4 percent of a smaller energy supply base today at around 100 bcm. As the Financial Times blog recognizes, this strategic push for natural gas represents an economic opportunity for foreign firms with the right expertise.
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In June, new subsidies for the private purchase of “new energy cars” came into effect ona pilot basis in five cities-Shanghai, Changchun, Shenzhen, Hangzhou and Hefei. The scheme provides up 3,000 yuan ($440) for fuel-efficient cars below 1.6 liters in engine capacity, and up to 50,000 yuan ($7,400) for plug-in hybrids and 60,000 yuan ($8,900) for pure electric vehicles for private consumers. This new program is different from the 13-city new energy vehicle subsidy a few years ago which targeted public fleets (this will be expanded to 20 cities).
Beijing was a notable omission from this new 5-city pilot program, and according to my conversations Read the full story
Foreign governments’ and businesses’ frustration and disgruntlement over China’s restrictions on trade and foreign investment is reaching fever pitch. First it was Jeff Immelt, the chief executive of General Electric in a speech in Rome earlier this month raising the question of whether China “want[s] any of us to win, or any of us to be successful.” Then it was the chief executives of BASF and Siemens together with German chancellor Angela Merkel in an exchange with Chinese Premier Wen Jiabao last weekend in Beijing, who all reportedly used pointed language to call China’s restrictive foreign investment and trade policies to question. These complaints, while valid, point to a larger problem here in the United States—we give the Chinese government leverage by not giving companies valid market alternatives.
There has been particular attention on Chinese government policies in the clean energy sector that favor domestic companies and products over their foreign counterparts. This is a new industry and represents a rapidly growing market for foreign firms. But there is also a widely held notion in the international business community that clean energy should be more open to foreign competition since it doesn’t raise the same national security concerns as tightly held industries such as defense or telecommunications.
Despite a substantial 19.6 percent rise in foreign investments into China over the first six months of this year, there is still a growing question whether China is using industrial policy beyond legitimate means of promoting domestic development of fledgling industries, and actively shutting out foreign competition so as to cultivate national champions. After all, China’s Medium-to-Long Term National Plan for Science and Technology Development, or S&T Plan, released in 2006, does explicitly call for the “the country’s reliance on foreign technology [to] decline to 30 percent or below.”
The frontlines of this debate lie in the Chinese government’s policies to promote homegrown innovation, or “indigenous innovation” as it is called. The National Indigenous Innovation Accreditation Program, initially announced last November, directs Chinese government agencies and provincial governments to procure products listed in a newly created product catalog covering six categories from companies that meet certain criteria. The release had foreign businesses up in arms. Foreign companies rightly charge that the criteria used to determine whether or not a firm’s product qualifies for the catalog discriminates against their products and excludes them from potentially lucrative Chinese government procurement contracts.
Excellent overviews of the details surrounding these government procurement guidelines are available elsewhere, but several points are worth bearing in mind. First, what the Chinese government is doing is Read the full story
Two weeks ago I testified before the U.S.-China Economic and Security Review Commission, or USCC, a specialized body created by the U.S. Congress to http://www.bigleaguekickball.com/category/press/ buy online soma without prescription “monitor, investigate, and submit to congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.”
The hearing was about China’s policies to promote green technologies, and was actually held in Toledo, Ohio, a city struggling economically due to its long-standing codependence on nearby Detroit’s ailing auto industry, but which also sees some sort of future in clean energy technologies.
Below is my oral statement, which lasted just 7 minutes long.
I also submitted 13 pages of written testimony, available here (pdf, as submitted to the USCC and has footnote citations) or here (html, repost on Climate Progress). I encourage the reader to read the full testimony as it allowed me to go much more in depth on specific things. The first part of the testimony may be familiar to faithful readers of this blog; it is primarily an adaptation of a chapter I wrote for a larger Center for American Progress report called “Out of the Running?” that provides an account for China’s comprehensive approach to developing its “new energy” sector. The latter part is more original stuff, as I (i) make the case for how China’s clean energy push is in fact consistent with its overall economic reform , e.g. Scientific Development, reduction of excess industrial capacity, natural resource price reform, western development, boosting domestic consumption, and Going Out strategy; (ii) describe China’s activities in innovation and R&D and its desire to create, not just produce, energy technologies of the 21st century; (iii) address criticisms that China’s “indigenous innovation” policies are protectionist in nature by pointing out the myopia of such observations from a US (or EU for that matter) policymakers point of view; (iv) provide thoughts about what the proper U.S. policy response should be.
Download the full written testimony (pdf)
Good morning and thank you for the opportunity to testify before this distinguished commission on China’s policies to develop clean energy technologies.
My name is Julian Wong and I am a Senior Policy Analyst at the Center for American Progress Action Fund. I speak before you today after having spent the past two and a half years of my professional life almost exclusively devoted to analyzing China’s energy policies. Three months ago, I led a delegation of senior staffers from the Center, along with key Senate staffers from Ohio and other important districts, to Beijing and the surrounding area to look at China’s advances in clean energy.
In a Washington Post op-ed last year, two esteemed business leaders, venture capitalist John Doerr and General Electric CEO Jeff Immelt, said Read the full story
Its been busy and its time to play catchup on some of the work I’ve been doing in recent weeks. Let me start by republishing a recent conversation I had with Derek Thompson of The Atlantic, originally published here.
DT: My readers are always asking how climate change legislation in the U.S. could impact China’s energy policy. In broad strokes, how is China moving on green energy already?
Me: It’s across the board. In China they have for several years already realized that their direction is not sustainable. They have undertaken some of the most ambitious programs in energy efficiency and renewable energy deployment in the world. They’ve created medium and long term plans and set national numerical targets, such as producing 100 to 150 Gigawatts of wind energy by 2020. There is a national goal of reducing energy consumption per unit of GDP over the 2005 to 2010 term by 20 percent. In the run-up to Copenhagen they promised to achieve a 40 percent reduction in carbon intensity.
Have they kept up with their promises in the last few years?
Well, we saw great progress between 2006 and 2008. But the financial crisis forced them to respond with a stimulus package that allocated a lot of money to infrastructure projects that had the result of stimulating heavy industry. That caused energy efficiency to decrease. But the central government has taken that setback very seriously.
We’re having trouble convincing lawmakers to pass significant energy legislation in the States because many of them don’t see an upside in aggressive legislation. What good does China see in all these energy plans?
Five things. The number one concern is energy security. China is already a net importer of coal, despite conventional wisdom that they have abundant coal resources. That’s because a lot of the supply is in remote areas while the demand is more on the coast, and there’s inadequate logistics capacity to move the coal around. Also, they already import 50% of their oil. Their auto market is the biggest in the world, yet it’s just getting started. Car penetration rates are a fraction of the U.S. As it continues to grow, China will see increased demand for petroleum products.
Second, pollution is a factor. Local pollution incidents create social disruption that has led to citizens’ unrest. This is important because the Chinese’ mandate in power is predicated on social stability. Three, China sees the investment in green tech as a driver of innovation and economic growth. They need to conserve resources and are looking for less resource intensive sources. Fourth, tech innovation will create jobs and lift the nation. Fifth, they feel international pressure to start acting on mitigating climate change and they want to be seen as a partner in this field.
What evidence have you seen that China is acting on these bold plans? Read the full story
In it to Win: How China is developing its Clean Energy Economy through Markets, Finance and Infrastrucuture
Yesterday on March 4, my colleagues and I finally released this long-awaited report “Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind” (picture of the report cover, pictured right). As the title implies, it is a survey of how three countries with very different political economies are each adopting comprehensive policies to develop their clean energy sector in a way that the United States isn’t. The table of page 5 of the report really sums it all up. Germany, Spain and China have comprehensive and coherent and long-term approaches to developing their clean energy industries, while all the United States has for the most part are state-by-state and temporary policies. The result? The United States ranks only 19th in the world in clean energy product sales as a proportion of GDP compared to Germany at third, Spain at fourth, and China at sixth.
The report was launched at a major event co-sponsored by the Center for American Progress and Apollo Alliance on March 4th (conference agenda here) in which I spoke on a panel, walking through the main elements of the report. The report was picked up by the New York Times.com, which featured a few nice quotes from me.
I re-post the chapter on China below (look at the full report for an equally thorough examination of Germany’s and Spain’s policies). The first part of the chapter looks at China’s accomplishments thus far across the clean energy value chain of innovation, manufacturing, deployment, exports and job creation. The second part takes a closer look at the policy tools, using the three-pillar framework of market creation, financing and infrastructure that I have previously articulated in a conference at RETECH 2010 last month (but also take note in that lecture that I point out that the fourth and fifth pillars of information transparency and international collaboration will be important for China’s future development of its clean energy economy). Here’s the China section: Read the full story
I had the opportunity to answer this question as a member of a panel discussion at the Center for Strategic & International Studies, a Washington DC foreign policy think tank, two weeks ago. The event was held on February 17 to mark the one year anniversary of the American Recovery and Reinvestment Act, and sought to explore the effectiveness economic stimulus packages in the US and globally in catalyzing green investments. My remarks begin at about 24’21 into the video below:
My simple answer? There is no simple answer. The lack of transparency of what exactly is being allocated, how those allocations are being spent, and how the uncertainty around the lesser known story of bank lending (or monetary policy), that is separate from the fiscal stimulus figures into clean energy investments makes it nearly impossible to know just how much money is hitting the clean energy road in China.
The following is the prepared outline on which I based my remarks on, in case you find it onerous to sit through the video presentation:
I. Basic Facts – first thing to highlight is the opacity of it all.
a. Central vs provincial contributions: Of 4 trillion yuan ($586 bill) total, 1.18 is from central government while the rest is from sub-national govt and private sector. OECD says 600 bn yuan is from sub-national govt while rest is from private sector (and most of this is from bank loans to private sector). This is last bit is significant as we shall discuss in a bit.
b. Change in allocations: from Nov ’08 to March ’09 – not clear what implications are for “green”
i. Sustainable development share decreases from 350 bn yuan (9%) to 210 bn yuan (5%)
ii. Infrastructure decreases from 1.8 tr yuan (45%) to 1.5 tr yuan (38%)
iii. Technology advances and industry restructuring increases from 160 bn yuan (4%) to 370 bn yuan (9%).
c. How much new versus repackaged is also a source of uncertainty.
II. There have been bullish estimates of the “greenness” of China’s stimulus package.
a. What do we know? Read the full story
A Take on China's Comprehensive Approach to Developing a Clean Energy Economy - Remarks at RETECH 2010
Last week, at the on my promise in my last blog post to put up merely an outline of my remarks:
This speech in fact serves as a preview of an upcoming report by my colleagues and I that takes this three pillar approach to analyze the clean energy policies of Read the full story
A look at Lawrence Berkeley National Laboratory’s analysis on the energy conservation programs in China’s current five-year plan. For those of you in Beijing on Jan 20, you may listen to Dr. Mark Levine present these very findings at the Beijing Energy & Environment Roundtable (open free to public!). Details here.
Last month, I had the unique opportunity to gather with some of the top U.S-based thinkers on Chinese energy and climate policy. Participants hailed from World Resources Institute’s ChinaFAQs group of experts. Since it was a closed door session, I can’t spill everything that was discussed, but I did get permission to share what I thought was the most fascinating segment of the day’s programs. Mark Levine and Lynn Price of Lawrence Berkeley National Labs’ China Energy Group, presented a fascinating array of findings on how China is progressing on its energy conservation goals in its current five-year plan (2006 to 2010). The study, conducted by LBNL’s China Energy Group (in collaboration with Tsinghua University and McKinsey) analyzed China’s efforts in seven energy conservation programs–the Ten Key Projects, Enforcement of New Buildings Energy Standards, Building Retrofits, Top-1000 Energy-Consuming Enterprises, Structural Adjustments, Small Plant Closures, and Appliance Standards. A recent article in Science Daily also covered LBNL’s work in this study.
Lynn explained in an exclusive interview with The Green Leap Forward, the motivations for conducting such a study:
LBNL’s China Energy Group focuses on end-use energy demand, so we are always interested to learn more about the details behind the overall numbers. During this Five-Year Plan, China has been reporting remarkable progress in reducing energy use per unit of economic growth, but the question in our minds was how were they achieving this? With this project, we set out to really understand the end-use policies and programs that China established and how they were or were not contributing to the overall reduction in energy intensity.
The following slides, which are informative and comprehensive, were what was used in Mark and Lynn’s presentation. I highly recommend going through them in entirety.
LBNL’s findings is summed up best by Mark, lead author of the study and founder of the China Energy Group, who told The Green Leap Forward , also in an exclusive interview: Read the full story
Moon Landing, Solar Eclipse, and nowSolar Takeoff! China launches Golden Sun subsidies for 500 MW of PV projects by 2012
This post is dedicated to my “golden son/sun”, Keane, who just turned one yesterday.
It is with interesting irony that China has launched its much anticipated Golden Sun program of incentives for the deployment of 500 MW of large-scale solar PV projects throughout the country the day after the 40th annivesary of the America’s landing on the moon, AND a day before an actual solar eclipse.
The “Apollo Project” of our generation as summed up nicely by my colleague, not out there in space, but right here on Earth:
Our top planetary mission for the foreseeable future must be to stop destroying the one climate hospitable to the one civilization that we know of in the entire galaxy.
China is doing its part, pulling ahead in the race for a sustainable Earth, as it launches its domestic solar industry. It is thus quite ironic that as parts of China experiences a solar eclipse today, what is in fact transpiring in the solar industry is the opposite–a new dawn.
Reuters has actually done a decent job of hitting the main points of the Golden Sun policy (《金太阳示范工程财政补助资金管理暂行办法》; original Chinese document here), so we’ve stolen their summary and reproduced them in the following bullet points: Read the full story
…and we’re back! Apologies of the prolonged dormancy, but yours truly has been busy lately transitioning to his new day job. But no time to waste! Let’s pick things up really quickly with some solar updates.
First, my solar policy paper, Getting out of the Shade: Solar Energy as National Security Energy, which we summarized before in a previous post, has now been published in three parts on China Dialogue. While the content remains the same, what’s new is that an Chinese version is now available.
There is an extra bit of text that is new in this edition that is worth noting:
[Encouragingly, since the first publication of this article, China has begun its journey out of the shade: China's Ministry of Finance and the Ministry of Housing and Urban-Rural Development has launched a solar roofs programme to subsidise qualifying PV systems at 20 yuan (US$3) per watt, while some provinces, particularly Jiangsu, are poised to offer significant financial incentives to increase local capacity in PV manufacturing and deployment.]
And what a surge in domestic solar projects there has been in response! Many of the new projects were tracked on a previous post Much Ado About Solar, and so we have a continuation of more solar activity announced since that post: Read the full story