Rationale for the Book
Chinaâs energy sector and its low-carbon transition are at once both important and interesting. Important in the short term because of the countryâs influence on the global supply and demand of energy raw materials and energy technologies, as well as the high levels of air pollution arising from the energy sector. Important in the long term on account of the global need to reduce carbon emissions. Interesting because China provides a laboratory to test and refine theories and analytical frameworks relating to sustainable socio-technical transitions that have been developed largely by scholars in the west.
China has become a major actor in the international energy arena since the beginning of the twenty-first century. It is now the largest consumer of commercial energy in the world, accounting for 23% of annual global consumption in 2017 (BP 2018). The country has large reserves of coal and continues to account for about 50% of world consumption. However, Chinaâs reserves of oil and natural gas amount to just 1.5% and 2.8% of the global total, respectively. The steady rise in demand for these two fuels has made it the largest net importer of oil and a substantial importer of natural gas. Net imports of oil exceeded 9 million barrels per day in 2017, or 71% of annual consumption. Imported gas supplied 37% of domestic consumption. In 2017, coal accounted for 60.4% of primary commercial energy consumption, with the balance provided by oil (19.8%), natural gas (6.6%), hydroelectricity (8.3%), other renewables (3.4%) and nuclear (1.8%). The size and mix of its energy consumption make the country the largest emitter of carbon dioxide (CO2), accounting for an estimated 27% of the worldâs carbon emissions from energy (BP 2018). At the same time, air pollution has worsened to such an extent that its mitigation remains a high political priority for the government, despite recent improvements.
In addressing these challenges, China has built the worldâs largest installed capacity of hydroelectricity, wind power and solar energy, as well as the fastest growing fleet of nuclear power plants. The government has combined massive investment in clean energy infrastructure with measures to constrain the production and consumption of coal and to drive down energy intensity. The simultaneous slowing and rebalancing of the national economy led to a temporary peaking of coal consumption and carbon emissions over the years 2013 and 2014 (Qi et al. 2016). Furthermore, Chinese manufacturers have taken the world by storm to become the largest suppliers of renewable energy equipment, notably solar photovoltaic (PV) equipment, as well as being the dominant constructors of hydroelectric dams. This rapid expansion of manufacturing capacity has been a key factor in driving down the cost of solar PV equipment across the world.
For these and other reasons, China has been seen a leader in the low-carbon energy transition. The country has been variously described as a ârenewable energy championâ (Lin 2018), as âthe next champion on climate changeâ (Wu 2017), as replacing âthe US as a champion of clean energyâ (El Chaar 2017), as a âglobal climate change mitigation championâ (Engels 2018) and as âthe largest force in global clean energy developmentâ (Timperley 2018). Such achievements are especially surprising given that only around ten years ago, during 2003â2006, national energy consumption was rising at an annual rate of more than 10%. Between 2003 and 2011, energy consumption and carbon emissions doubled (BP 2018). At that time, our prognosis on Chinaâs low-carbon energy transition was distinctly pessimistic (Andrews-Speed 2012). We argued that the nature of the institutions governing Chinaâs energy sector and their resistance to change would strongly constrain the pace of the transition, and that only a dramatic economic slowdown would allow carbon emissions to peak before 2020. As we have seen, the rate of increase of annual gross domestic product (GDP) did decline, from 10â14% between 2004 and 2011 (after a dip in 2009) to 6â8% after 2012. This ânew normalâ also encompasses a transformed economic structure, in which the service sector plays an increasingly important role, at the expense of heavy industry. These changes to the economy set Chinaâs energy sector on a new path that greatly enhanced the impact of the governmentâs clean energy strategies.
Nevertheless, Chinaâs low-carbon programmes have come at a high cost and continue to encounter obstacles. Thus, it would be dangerous to be overconfident about the future trajectory of Chinaâs carbon emissions. First, the leadership could decide to stimulate economic growth, a measure that would boost coal consumption, at least in the short term. Second, the institutions governing the energy sector might fail to deliver sustained emissions reductions, even at low levels of economic growth. Evidence for this second possibility can be seen in the continuing obstacles facing the central government as it tries to overcome resistance from actors with different agendas and as it struggles to react to unanticipated events. The leadership is fully aware of these challenges and has formulated an Energy Revolution Strategy 2016â2030, designed to accelerate progress to an âEcological Civilisationâ (Liu et al. 2018a).
These observations raise a number of inter-related questions concerning the governance of Chinaâs energy sector:
- 1.How were these successes in clean energy development achieved? Specifically, did these successes rely more on traditional governance styles and institutions, or on new approaches?
- 2.What have been the sources of the costs, unintended consequences and limitations of the recent and current policy approaches?
- 3.What are the implications for Chinaâs ongoing low-carbon energy transition?
In other words, the aim of this book is to âlift the veilâ on Chinaâs seemingly remarkable achievements.
Low-Carbon Transitions and Institutions
Much of the theoretically based literature that addresses contemporary socio-technical, low-carbon or sustainability transitions has its roots in western academic traditions. Many of these accounts emphasise reflexivity (Rotmans et al. 2001), societal participation and discourse (Chilvers and Longhurst 2016) and democratic processes (Kenis et al. 2016). While such approaches have value, they place insufficient weight on two key factors: power and institutions. Meadowcroft (2009) and others have criticised the transition literature for ignoring the role that political power can play in supporting, obstructing or distorting a transition. The distribution of power in any society depends, in part, on its institutionsâthe term âinstitutionâ being used to cover the formal and informal rules of a society, as well as its beliefs, expectations and behavioural norms.
Much of the literature on transitions has emerged from scholars in countries that are what North et al. (2009) would term âopen access social ordersâ, that is to say, in the more or less liberal democracies of North America and Euro...