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Local Implementation of Energy Conservation Policies in China

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Abstract

This chapter examines China’s national energy policies and the way in which local governments implement policies to reduce energy consumption. It illustrates how Chinese government officials often opt to “kill two (or more) birds with one stone” by choosing implementation pathways that balance local priorities with national energy targets, and how they are more likely to faithfully implement energy conservation policies and projects that also address salient business, economic, safety, pollution, and political legitimacy interests and concerns in their localities. Local governments are less likely to strictly implement energy conservation policies without “bundling” potential and employ foot-dragging measures such as seeking loopholes in the implementation guidelines.

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Fig. 31.1
Fig. 31.2
Fig. 31.3

Notes

  1. 1.

    The concept of interest and policy bundling was first discussed in Kostka and Hobbs (2012), and some sections in this chapter draw on this earlier work. The sections on political and economic incentives and state capacities draw on Kostka (2017).

  2. 2.

    The renewed attention by national leaders on energy efficiency was triggered by an increase in energy intensity. Between 2002 and 2005, China’s energy intensity increased at an average of 3.8%, reversing a long-term trend of continuous energy efficiency improvements (Zhou et al. 2010).

  3. 3.

    The majority of these “hard” binding targets have been granted “veto power” (yipiao foujue) status, meaning that, if these targets are not met, all of a local leader’s other achievements will be rendered null and void. This is a powerful incentive in the context of stiff competition between local cadres for promotion to upper-level positions.

  4. 4.

    Most of the targets have reportedly been or “almost” been met. Under the 11th FYP, China reduced energy intensity by 19.1%, slightly short of the 20% national energy target. The energy intensity targets for the 12th FYP were met with energy intensity decreasing by 18.2% during the period between 2010 and 2015.

  5. 5.

    For a discussion of the “environmental implementation gap” in China’s highly decentralized and fragmented governing structure, see Lieberthal and Oksenberg (1988), Economy (2004), Van Rooij (2006), Kostka and Hobbs (2012, 2013), Ran (2013), and Kostka and Nahm (2017).

  6. 6.

    At each level, local governments are also given flexibility as to how to allocate targets during the five-year planning period. For instance, in one county in Hunan, leaders set the same annual energy intensity targets of −3.43% per year over the entire planning period, while in the neighboring county, energy intensity targets started high with −5% for the first year and declined to −3.5% over time. Leaders selected this descending method because they believed there would be, progressively, lesser room to achieve additional energy savings (Kostka 2016).

  7. 7.

    It is important to underscore that not all cadres are responsive to the political incentives outlined in the cadre evaluation system. A recent study based on 898 local Party secretaries’ biographies shows that county-level cadres face only a slim possibility of being promoted to the municipal government (Kostka and Yu 2015). The study suggests that the importance of political incentives in the cadre evaluation system might be overstated.

  8. 8.

    “Interest bundling” is somewhat comparable to “logrolling” in American politics, which occurs when legislators trade votes in exchange for cooperation on other issues (Johnson 2005). The main difference between interest bundling and logrolling is that bundling occurs most often in policy implementation rather than during policy formulation. For energy efficiency bundling, local officials and enterprises cooperate on energy efficiency in exchange for compensatory benefits for the enterprises on other issues.

  9. 9.

    These provincial efficiency standards were created by large provincial enterprises themselves to give them room to take their own interests into account. Although it seems counterintuitive for enterprises to willingly draft tough standards, especially when they are sufficiently stringent to lead to cost increases, many large enterprises have incentives to create high efficiency standards to squeeze small producers out of the industry and increase their market share. One manager of a large magnesium enterprise cited this as a major reason for supporting strict standards.

  10. 10.

    Interviews conducted by the author in Taiyuan, Shanxi, 2011, reveal that top provincial leadership admitted that Shanxi province experienced negative growth, which triggered the change to sideline energy efficiency policies in favor of maximizing GDP.

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Kostka, G. (2019). Local Implementation of Energy Conservation Policies in China. In: Yu, J., Guo, S. (eds) The Palgrave Handbook of Local Governance in Contemporary China. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-2799-5_31

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