China releases national plan to cope with climate changes (2014-2020)

On 19 September, the State Council approved the 2014-2020 National Plan to Cope with Climate Changes, which was produced by the National Development and Reform Commission (NDRC). The plan states multiple goals on greenhouse gas emission and China’s energy structure before 2020.

The highlights of the Plan include lowering the emission intensity by 40% to 45% and increasing non-fossil fuel to 15% of the primary energy by 2020. In addition, China will increase its forest area by 40 million hectares and raise its forest storage by 1.3 billion cubic meters between 2005 and 2020, the Plan says.

Up till 2013, the carbon emission intensity had decreased by 28.56%, and there is not much pressure to accomplish the rest of the goal of 40%-45% in the years until 2020. However, the non-fossil fuel only takes up 9.8% of the primary energy sources which is rather far from the 15% goal to be achieved by 2020. A domestic expert in climate changes told ICIS that the targets in the plan would provide substantial opportunities to the renewable energy companies, especially those who are closely associated with the carbon market.

Xie Zhenhua, the deputy director of NDRC, said last Friday that NDRC would focus on the carbon allowance allocation, trading regulations and reward and penalty mechanism of the national carbon market based on the experience of the existing pilot schemes. And NDRC would prioritise the spot market and carry out researches on carbon finance derivatives. These regulations will guide China in tackling climate changes and developing carbon trading schemes in the next few years.

Carbon intensity means the emission of carbon dioxide induced by each unit of GDP growth. Kun Yang