China’s Efforts to Constrain its Fossil Fuel Consumption
More than 80% of China’s primary energy consumption is provided by fossil fuels. Over the years, and notably since 2003, the government has promulgated a series of policies intended to constrain coal consumption, promote the use of non-fossil fuels, reduce air pollution, and enhance energy efficiency. These measures include improving the efficiency of coal-fired power stations and industrial plants, switching from coal to gas, testing carbon capture and storage or use, and boosting the share of low-carbon energy sources in the power sector. These strategies have met with a high degree of success, due mainly to the rigorous application of administrative policy instruments and subsidies. The country has great potential for the further deployment of wind and solar energy, as well as scope to boost the share of natural gas. The key determinants of the pace at which China reduces its use of fossil fuels in absolute terms are two-fold. First is the rate of economic growth. Coal has long been the swing fuel and an increase in economic growth has always boosted coal consumption. The second key variable is the mix of market and administrative policy instruments deployed. Whilst the continued introduction of market forces into the energy sector may be welcome on purely economic grounds, it is not evident that they will be effective at enhancing efficiency or reducing emissions for as long as the major energy producing and consuming enterprises remain in state hands.
KeywordsChina Coal Natural gas Renewable energy Electricity Fossil fuel
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