Voluntary energy efficiency agreements in China: history, impact, and future

Panel: 3. Energy use in industry: The road from policy to action

This is a peer-reviewed paper.

Authors:
Jiang Yun, China Energy Conservation Association, China
Lynn Price, China Energy Group, Lawrence Berkeley National Laboratory, USA

Abstract

The first Energy Efficiency Agreements in China – modeled after voluntary or negotiated agreements in Europe – were initiated through a pilot program with two steel mills in Shandong Province in 2002. Following the pilot program, the Chinese government initiated the Top-1000 Energy-Consuming Enterprises Program, in which the 1000 largest energy-using enterprises were assigned mandatory 2010 energy-saving targets. Also following the pilot program, over 500 voluntary Energy Efficiency Agreements have been signed in China. Many of these agreements are between city-level governments and local enterprises, but agreements between national-level government agencies and large enterprises are beginning to be seen also. The China Energy Conservation Association has made a concerted effort to disseminate information regarding the use of such agreements throughout China in order to engage governments and enterprises. This paper will review the history of the adoption of this policy mechanism in China, describing how it is similar to but also differs from the use of such agreements in Europe. The paper will provide an initial assessment of the impact that these agreements have had on energy use and related carbon dioxide emissions, in both quantitative and qualitative terms, and will include a discussion of other benefits that have been realized. Finally, the paper will discuss the prospects for continued adoption of voluntary agreements under China’s 12th Five Year Plan, which covers the period 2011-2015, making recommendations for improving the use of this policy mechanism in China.