With much attention to the emerging consequences of global climate change, the debate in the world over mitigation has intensified in recent years. In China, as in many other developing countries, energy is a key input to economic growth and social development. China aims to quadruple its GDP by 2020, while doubling its energy consumption. On the other hand, China’s Green House Gas (GHG) emission is the second largest in the world and the figure is projected to continue rising rapidly. While China's challenge is to overcome heavy reliance on coal and the negative environmental consequences of that reliance; and a low overall level of energy efficiency.

China has ratified both the UN Framework Convention on Climate Change and the Kyoto Protocol. As a non-Annex I (developing) country, China has no binding emission limits under the first commitment period (2008-2012) of the Protocol. China has rejected mandatory caps on emissions but has set an ambitious voluntary target to increase energy efficiency 20 percent by 2010 and use renewable energy 10 percent for supply by 2010 (16 percent in 2020).

In early 2007, the Chinese Ministry of Science and Technology and six other national ministries jointly issued China’s first National Assessment of Climate Change Impacts, which finds that few aspects of development will be immune from the emerging impacts of climate change. According to Government figures, climate change will harm China's environment and economy in the coming decades, possibly causing large drops in agricultural output. In the latter half of this century, production of wheat, corn and rice in China may drop by as much as 37 percent and the country's average temperatures would rise by 2-3°C in the next 50-80 years. It also said evaporation rates for some inland rivers could increase by 15 percent. China already faces water shortages, especially in the West and North of the country.

On June 4, 2007 China released its first national strategy on climate change called National Climate Change Programme (NCCP). Under the NCCP, a pilot among developing countries, China has set the broad vision for Government efforts on climate change mitigation and adaptation over the coming years. According to the plan, China would restructure its economy, promote clean technologies and improve energy efficiency.  However, major efforts are needed to turn this into local action.

The NCCP highlights three major targets to achieve by 2010: reduce energy consumption by 20 percent, increase renewable energy to 10 percent of the primary energy supply and increase reforestation by 20 percent. However, there is little evidence yet to suggest that these targets are being translated into local policies and actions that are producing the desired outcomes.

On June 14, 2007, China's Ministry of Science and Technology (MOST) set forth the six major objectives to be met by 2020, mainly on climate change related scientific research and technology development. Apart from work related to adaptation, the focus will be on raising energy efficiency, developing renewable and cleaner energy and exploring cleaner coal technology. To cope with climate change, MOST has spent US$600 million since 2006 on science and technology projects to combat global warming - almost twice that spent in the previous five years.

China has been an active participant in the Clean Development Mechanism (CDM) established under the Kyoto Protocol. China is by far the largest source of global CDM credits, accounting for over 60 percent of those generated to date. China’s dominance in the CDM market is due in part to its entrepreneurship in developing CDM projects, and to its relatively low-risk investment environment (compared with other CDM host countries).

UNDP, as the lead UN agency for capacity building for sustainable development, has a specific contribution to make in the overall response of the United Nations system and in helping China implement the UNFCCC within a sustainable development framework. UNDP’s integrated approach to combat climate change focuses on policy, technology and market for enabling environment, while strengthening human and institutional capacity through on the ground actions.

To support China’s target of improving energy efficiency by 20 percent by 2010, with support from GEF and donors, UNDP leads a landmark US$ 80 million End-Use Energy Efficiency Programme working with the government to improve national regulatory and enforcement frameworks, and to launch a series of Voluntary Agreements with Chinese steel, oil and gas and construction industries to integrate new technologies and policy measures. Of particular importance to UNDP is support to Township and Village Enterprises (TVEs) that are responsible for half of China’s emissions. With support from GEF, UNDP works with Chinese commercial banks to launch a new US$ 100 million Revolving Capital Fund to provide much needed credit to hundreds of TVEs for energy efficiency technologies.

Clean Development Mechanism in China: Towards 2012 and Beyond

As the second largest GHG emitting country in the world, the Clean Development Mechanism (CDM) represents a major opportunity for China to attract foreign investments in new technologies for emission reduction and credit generation to help meet the Kyoto targets.

UNDP has played a catalytic role in local CDM market development. Starting in 2003, with support from Norway, Netherlands and UNF, UNDP initiated CDM Capacity Development activities to help China build an enabling environment for CDM market development. UNDP helped write the national CDM law and regulations, conducted initial market analysis to identify priority sectors and regions, and facilitated a series of training for national and local CDM centers. UNDP China also helped the design of China’s first ever Kyoto-registered CDM project in 2005, a wind power project located in the dryland of Inner Mongolia.

Future UNDP capacity building activities focus on supporting strategies for the post-Kyoto era and designing new innovative partnerships for technology transfer and increased financing of mitigation solutions. This support also includes sharing of best practices with other countries, and to convening public-private partnerships to further catalyze this new green market, including exploration and possible piloting of climate exchange mechanisms.

With contributions from the private sector, UNDP supports the Chinese government to establish CDM technical service centers in 12 less developed provinces in Western China that include Xinjiang, Qinghai and Inner Mongolia and support the design of a series of CDM investment proposals that aim at achieving GHG reductions while also focusing on the achievement of development targets in line with the MDGs.

In China, UNDP places top priority on the challenge of integrating climate risks into local development plans and programmes, working with GEF support in coming years to improve GHG accounting and monitoring systems in industry and government, and national plans and actions for adaptation in key sectors, such as agriculture, water and coastal zone management.

In 2007, with support from Norway, UNDP China is launching a new programme to build local capacities for integrating adaptation policy frameworks into development investments in Western China. Apart from translating the national climate change action plan into local workable guidelines, some priority is placed on glacial melting in the Tibetan Plateau and associated risks to sustainable development in Tibet and the livelihoods of 500 million people downstream, in the Yangtze and Yellow River Basins.

UNDP leads a team of eight other UN agencies to design a new Climate Change Partnership Framework in China, a landmark inter-agency initiative to bring the full force of the UN to bear on China’s mitigation and adaptation challenges. Under the framework, UNDP will use its convening power to start a new International Climate Change Center to facilitate the exchange of international best practices and knowledge, including South-South Cooperation. In addition to high level policy oriented activities, the UN will work together to bring new technologies to China, including exploring the potential of clean coal.

This article was prepared by:
Yiyang Shen and Kishan Khoday
Energy and Environment Team
UNDP China

For more information:
Kishan Khoday
Assistant Country Director and Team Leader for Energy and the Environment
UNDP China
email: kishan.khoday@undp.org