PROGRAM | Energy and Environmental Policy

By: Jun Tian Chair: John Byrne

ABSTRACT

Climate change and sustainable development are both challenging issues for developing countries, as they need to allocate their limited financial, human and technical resources to more immediate and urgent needs such as education, sanitary and infrastructure construction. Policy objectives on climate change and development may be conflicting in the short term but they could also be complementary. This dissertation explores potential synergies between climate change mitigation and sustainable development policies and proposes to integrate policy objectives of climate change mitigation and sustainable development in developing countries.
Particularly, this dissertation focuses on China as China is currently undergoing a fundamental change in the social economy and China already became the largest GHGs emissions in the world. This dissertation investigates, at the national level, whether China’s sustainable development policies climate friendly and whether China’s climate change mitigation policies contribute to national sustainable development. Integration of climate change mitigation and sustainable development policy objectives in the development and implementation of CDM program is examined, which is partially because that CDM is designed with twin objectives on emissions reduction and sustainable development, and partially due to the fact that China alone accounts for more than half of the global CDM market.
Both qualitative and quantitative methodologies are applied in this dissertation. Qualitatively, this dissertation reviews current status quo of social economic development, as well as challenges for climate change and sustainable development policies. Then this dissertation discusses China’s climate change mitigation policies and sustainable development policies from the perspectives of policy objectives, budgeting and institutional governance. Balancing regional differences and sustainable energy development as two important issues that integrate climate change mitigation and sustainable development policies are carefully examined. The results turn out that there are only moderate integration of climate change mitigation and sustainable development in the energy sector.
Quantitatively, this dissertation discusses China’s CDM program development, implementation, and management. Despite the rapid increase of projects, China’s CDM projects are concentrated in Wind (41%) and Hydro (36%) projects, but revenues from CERs (certified emission reductions) to date are mainly from HFCs (46%), Hydro (16%), and Wind and N2O projects (12% respectively). Provinces with abundant hydro and wind resources, mainly Yunnan, Sichuan and Inner Mongolia, which are also with lower GDP per capita, host far more CDM projects than any other provinces, but CER revenues to date are from Zhejiang, Jiangsu and Shandong provinces, where higher GDP per capita generated. An examination on capacity building identifies that the capacity on monitoring and verifying emission reductions in China remains weak. Regression analysis for 2005~2011 projects and 2005~2012 projects finds out there is no indication of climate change and sustainable development objectives in the development and implementation of China’s CDM projects.
The analysis results indicate that the integration of climate change and sustainable development policy objectives at the national level is weak. There is moderate integration in the energy sector, but further integration is needed in the process of setting policy objectives, budgeting and institutional governance for better integrating climate change mitigation and sustainable development policies at the national level.
With regard to China’s CDM program, it is understood that project development and registration of CDM projects is largely influenced by overseas CERs buyers who would eventually pay for emission reductions resulted from project implementation, while what the Chinese government could do is to select projects that are more beneficial for sustainable development. However, the regression analysis shows there is little integration of climate change mitigation and sustainable development objectives in CDM implementation. Currently China is engaged in developing domestic carbon scheme, where the lessons and experiences learned from the CDM market should be applied to better integrate climate change and sustainable development objectives.

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