Transition Pathway towards China’s

Low-carbon Energy Economy

Yuyan Weng

The 40th Annual IAEE International Conference

Singapore, 21 June, 2017

Outline

1. Introduction

2. Methodology

3. Assumptions

4. Scenarios

5. Main results

6. Conclusions

Introduction

• China’s low-carbon development is not only a necessity for theconstruction of an ecological civilization, but also a core strategy toaddress global climate change.

Improvement in Energy Saving and Emissions Reduction

• During the 11th and 12th Five-Year Plan (FYP) periods, China hastaken kinds of measures and actions, and has made substantialprogress in carbon emission mitigation.

China-in-Global Energy Model (C-GEM)

Modeling objective:

– To study the impact of China’s low-carbon policies on the economy, energy consumption and emissions both of China and the world；

Model Type：– Multi-regional, multi-sector, computable general equilibrium model；– Recursive dynamic, 2015-2100；

Special Features:

– A state-of-the-art global energy, environment, and economy assessing model built byChina；

– Describes in detail the energy intensive sectors such as the Iron and Steel Sector,the Non-Metallic Mineral Product Sector, and so on；

– Describes kinds of new energy supply technologies including wind power, solar

power, biomass energy, and CCS technologies and traces emissions of air pollutants.

China-in-Global Energy Model

19 Regions

Type Sector Description

Agriculture Agriculture (AGR) Crops, forest, live stocks

Energy

Coal (COAL) Mining and agglomeration of hard coal, lignite and peat

Oil (OIL) Extraction of petroleum

Natural Gas (GAS) Extraction of natural gas

Refined Oil (ROIL) Refined oil and petro chemistry product

Electricity (ELEC) Electricity production, collection and distribution

Energy-intensive

Industry

Non-Metallic Minerals

Products (NMM)

Cement, plaster, lime, gravel, concrete

Iron & Steel (I_S) Manufacture and casting of basic iron and steel

Non-Ferrous Metals Products

(NFM)

Production and casting of copper, aluminum, zinc, lead, gold,

and silver

Chemical Rubber Products

(CRP)

Basic chemicals, other chemical products, rubber and plastics

products

Other Production

Food & Tobacco (FOOD) Manufacture of foods and tobacco

Mining(MINE)mining of metal ores, uranium, gems, other mining and

quarrying

Electronic Equipment (ELE) Electronic equipment

Textile Industry (TWL) Tex wap lea products

Transport Equipment (TEQ) Transport equipment

Other Machinery(OME) Other machinery

Other Industries (OTHR) Other industries

Construction Construction (CNS) Construction

Services

Transportation Services(TRAN) Water, air, land transport, and pipeline transport

Commercial and Public

Services (SER)

Commercial and public services

Dwelling (DWE) Dwelling

21 Sectors

GDP增速假定

GDP Growth Rate

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

China IMF-WEO

WB-GEP UN-WESP

OECD-EO EIA-WEO

OECD-EFS OECD-China EFS

EIU-ECF EU-EO

OECD-LBP ADB-ADO

IEA-WEO

The basic assumptions of China’s future GDP growth rate in this analysis.

On the basis of the study about economic structure of developed economies, this research

gives some estimation about the trend of economic structure of China in the future.

0%

20%

40%

60%

80%

100%

2015 2020 2025 2030 2035 2040 2045 2050

Agriculture Industry Service

Economic Structure

According to the World Population Prospects of the United Nations and National

Population Development Plan (2016-2030) released in January 2017,China’s population is

predicted to be 1.42 billion in 2020 and peak at approximately 1.45 billion around 2030.

Population Prospects

When the reduction rate of carbon intensity of one country reaches its growth rate of GDP,

the carbon dioxide emissions of this country will reach its peaking…...

Scenarios

Scenarios Explanation

4% of average annual reduction rate of carbon

intensity (CI-4%)

Compared with developed countries’ reduction

rate, this reduction rate is already relatively high.

Under this scenario, the carbon dioxide emissions

are expected to peak around 2030, realizing the

promise China made at Paris conference.

5% of average annual reduction rate of carbon

intensity (CI-5%)

This scenario simulates the future trend when

China keeps to continue the same efforts with the

past 10 years to reduce carbon emissions. Under

this scenario, the carbon dioxide emissions are

expected to peak around 2025, achieving to

realize the Paris promise early.

6% of average annual reduction rate of carbon

intensity (CI-6%)

This scenario is a more positive one which

surpasses the efforts China made in the past ten

years. Under this scenario, China’s carbon dioxide

emissions are likely to reach its peaking during

the Thirteenth Five Year Plan (13th FYP).

CO2 Emissions under Different Rates

of Carbon Intensity (CI) Reduction Scenarios

• Scenarios generated

using China-in-Global

Energy Model (C-

GEM)

• 4%/year is consistent

with China’s climate

pledge to achieve the

peaking of carbon

dioxide emissions

around 2030 under

“new normal”

economic growth.

• In current plans,

China is striving for a

5%/year carbon

intensity reduction.

0

2000

4000

6000

8000

10000

12000

2010 2015 2020 2025 2030 2035 2040 2045 2050

Car

bo

n d

ioxi

de

em

issi

on

s (M

illio

n T

on

)

4%/yr reduction in CI 5%/yr reduction in CI 6%/yr reduction in CI

Energy Supply under Different Rates

of Carbon Intensity (CI) Reduction Scenarios

0

10

20

30

40

50

60

70

2010 2015 2020 2025 2030 2035 2040 2045 2050

An

nu

al P

rim

ary

Ene

rgy

Co

nsu

mp

tio

n (

10

0 M

tce

/Ye

ar)

Coal

Oil

Natural gas

Nuclear power

Hydro power

Wind power

Solar power

Others

4%/yr reduction in CI

5%/yr reduction in CI

6%/yr reduction in CI

The Implicit Carbon Price to Enable the

Revolutionary Energy System Transition

0

20

40

60

80

100

120

140

160

2015 2020 2025 2030 2035 2040 2045 2050

Car

bo

n p

rice

(U

S D

olla

rs/t

on

)

CI-4% CI-5% CI-6%

GDP Impact for China’s Low-carbon Transition

-2.50%

-2.00%

-1.50%

-1.00%

-0.50%

0.00%

2020 2025 2030 2035 2040 2045 2050

Bill

ion

US

do

llars（

Co

nst

ant

20

11）

CI-5% CI-6%

Conclusions

Three scenarios are designed to simulate China's low-

carbon energy economy transition pathways according

to different transformation targets using the China-in-

Global Energy Model.

The strength and depth of China’s low-carbon transition

will have a significant impact on the time of emissions

peaking, the quantity of carbon emissions as well as the

total primary energy consumption.

The economic impact of the transition is under control,

but the transition cannot be achieved spontaneously and

requires a strong policy to push.