Norms and flexibility: Comparing two mitigation policies implemented in Shanghai

Publication: Norms and flexibility: Comparing two mitigation policies implemented in Shanghai

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Authors: Iselin Stensdal

CNARC member: Fridtjof Nansen Institute (FNI)

Introduction: During China’s 12th Five-Year Plan period (2011–2015), attention to air pollution grew, as illustrated by State Council’s 2013 Action Plan on Air Pollution (Ministry of Environmental Protection, 2013). Climate change had been declared a national priority in 2007, and energysavin policies were important in the 11th Five-Year period (2006–2010) (Li & Wang, 2012). Fossil fuels are sources of both ambient pollutants such as PM, NOX and SO2 and greenhouse gas (GHG) emissions (Gu e al., 2018). Although not all measures to improve air quality will also mean a reduction in GHG emissions, GHG curbing measures such as improving energy efficiency and fuel substitutions bring lower ambient pollutant emissions (Wang & Hao 2012).

In line with the stricter national policies and targets for controlling emissions and curbing energy use, the 12th Five-Year Plan aimed for 17% reduction of carbon emissions/GDP (carbon intensity) and 16% reduction of energy use/GDP (energy intensity). Further, the Plan announced that a carbon emissions trading market would be established (12th Five-Year Plan, 2011). China’s national emissions-trading scheme (ETS) was the first policy-tool where carbon emissions were the ‘currency’. Seven jurisdictions, including Shanghai, were chosen as ETS pilot for testing local carbon-markets before the national market commenced in 2017.1 A major national energy-saving policy was 10,000 Programme (in full: ‘10,000 Enterprises Energy-Saving and Low-Carbon Actions’), mainly targeting industry.

Shanghai, a megacity with more than 20 million residents, is China’s financial centre, but still has considerable industry, accounting for about 63% of carbon emissions (Pan et al., 2017). During the 12th Plan period, Shanghai implemented various measures for saving energy, reducing emissions and improving air quality, like speeding up the replacement of old production equipment and replacing coal fired boilers. This article focuses on how the Shanghai government approached enforcement of the 10,000 Programme and the ETS pilot in the 12th Plan period.

Both policies were important for supporting the local reduction targets of carbon and energy intensities of 19% and 18% between 2011 and 2015 (Shanghai government, 2011). However, they differed in policy output – the extent to which companies met the requirements from these policies. All companies participating in the ETS surrendered the stipulated amount of allowances by the deadline, achieving full compliance every year: Shanghai was the only of the seven pilots to achieve this. In the 10,000 Programme, however, some 15% to 17% of companies failed to fulfil the requirements – whereas the two neighbouring provinces Jiangsu and Zhejiang had over 1,100 companies in the 10,000 Programme each, with only a 2–8 % annual failure rate. (to read more please go to the download link)