context: The dual control system comprises annual targets for energy consumption and energy intensity (energy consumption per unit GDP) for each provincial-level jurisdiction. Shifting the system to focus on emissions, first mooted in 2021, rather than energy will effectively introduce hard emissions caps for each province and the country as a whole. Xi Jinping 习近平 has called for accelerating this transition, which if complete by 2025 will allow China to set quantitative emissions targets for the 15th 5-year plan. The year and absolute quantity of peak emissions will therefore be specified.
Two major climate and energy policies were approved at the State Council executive meeting on 12 April 2024
- ‘Energy conservation and emissions reduction action plan 2024-25’
- ‘Work plan for accelerating the set-up of the carbon emissions dual control system’
The policies have been approved, but not published yet.
Shifting the dual control system from energy consumption to carbon emissions will usher in a profound socioeconomic and systemic transformation, say experts. It will, they say, open up enormous market opportunities in key sectors.
Under the energy consumption dual control system, energy consumption indices acted as hard boundaries on economic development, according to the State Grid Jiangsu think tank. But, under a carbon emissions dual control system, renewable energy will open up more room for energy usage for economic development. Local governments will be more active in developing renewables and firms’ demand for green electricity will grow, predicts the think tank.
The State Council meeting also called for
- integrating efforts in
- expanding effective investment
- renovation of old residential areas
- upgrading equipment
- consumer goods trade-in programs
- advocating green, low-carbon, simple and modest lifestyles
- giving full play to the economic, social and ecological benefits of energy conservation and emissions reduction
- basing efforts on the national reality
- adhering to the concept of ‘build the new system before destroying the old one’
Promoting equipment upgrades and consumer goods trade-in programs will bring both immediate and long-term benefits, according to Sun Ying 孙颖 Academy of Macroeconomic Research Energy Research Institute deputy director. These measures, says Sun, will
- strengthen energy conservation and emissions reduction
- promote effective investment
- promote green consumption
- forge competitive advantage in industry