We also hear of and are astounded by the key climate and energy goals as they are announced by the Chinese Government. For example, China has committed, in the most recent iteration of the key document that China uses to plan its economy – the 12th Five Year Plan (2011-2015) – to:

  • Endeavour to reduce its carbon intensity per unit of output by 40–45 per cent by 2020, compared to the 2005 level

  • Increase the share of non-fossil fuels in primary energy consumption to around 15 per cent by 2020

  • Increase forest coverage by 40 million hectares, and forest stock volume by

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  • 1.3 billion m3 by 2020 from the 2005 levels.

It is clear that these targets are to be taken seriously. The Plan notes that these should be regarded as binding targets.

Demystifying China’s green success

The critical question is – which policies and other incentives are driving the installation of renewable energy on the ground, and why?

It is helpful to look at policy as a set of levers that bring about the required outcome or behavioural effect through either regulation and the rule of law (the sticks), or through creating incentives, whether market-based incentives or through direct subsidisation (the carrots).

China employs both carrots and sticks, and it employs these policy tools in each of the three key green economy areas; carbon market policy, supply side energy policy and demand side energy efficiency policy.

Keep reading this article online at EcoGeneration Premium to learn more about:

  • Carbon market policy in China
  • Supply-side and demand-side policy in China
  • Chinese feed-in tariffs
  • Renewable energy concessions in China.

Dominic Adams specialises in climate change and carbon finance at Norton Rose law firm. Dominic graduated from the University of Newcastle, achieving a first class honours in law.