China's Engagement in Global Energy Governance
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PARTNER COUNTRY SERIES China’s Engagement in Global Energy Governance PARTNER COUNTRY SERIES China’s Engagement in Global Energy Governance Julia Xuantong Zhu INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 29 member countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports. The Agency’s aims include the following objectives: n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, through maintaining effective emergency response capabilities in case of oil supply disruptions. n Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. n Improve transparency of international markets through collection and analysis of energy data. n Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. n Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Secure Sustainable Hungary Together Ireland Italy Japan Korea Luxembourg Netherlands New Zealand Norway Poland Portugal Slovak Republic © OECD/IEA, 2016 Spain International Energy Agency Sweden 9 rue de la Fédération 75739 Paris Cedex 15, France Switzerland Turkey www.iea.org United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are also participates in available online at www.iea.org/t&c/ the work of the IEA. Page02_2016_A4_Q.indd 1 18-01-2016 12:03:43 © OECD/IEA 2016 China’s Engagement in Global Energy Governance Table of contents Foreword ............................................................................................................................. 5 Acknowledgements .............................................................................................................. 6 Executive summary............................................................................................................... 7 Page | 3 From outsider to insider, follower to influencer .......................................................................... 9 China’s perspectives on global energy governance ........................................................................ 9 China’s participation in global energy governance ...................................................................... 12 Implications of China’s engagement in global energy governance .............................................. 17 Drivers of change ......................................................................................................................... 19 Energy interdependence between China and the world .............................................................. 19 China’s evolving views and practices in global governance ......................................................... 22 Transition in global energy governance ....................................................................................... 24 Energy security ............................................................................................................................. 28 Energy markets and long-term security ....................................................................................... 28 Energy emergency and short-term security ................................................................................. 31 Energy and economic growth ...................................................................................................... 34 Energy investment and trade ....................................................................................................... 34 The Belt and Road Initiative .......................................................................................................... 35 Energy technology ........................................................................................................................ 38 Energy and sustainable development ......................................................................................... 40 Climate change ............................................................................................................................. 40 Low-carbon energy ....................................................................................................................... 42 Energy efficiency ........................................................................................................................... 46 Energy access ................................................................................................................................ 47 Case study: IEA – China engagement .......................................................................................... 50 IEA and its changes ..................................................................................................................... 50 Brief history of China – IEA co-operation ..................................................................................... 52 A new era of co-operation ............................................................................................................ 56 Further engagement ..................................................................................................................... 58 Looking forward ........................................................................................................................... 60 Annex 1. China’s government institutions overseeing energy issues ..................................... 62 Annex 2. China’s bilateral energy co-operation mechanisms ................................................ 64 Annex 3. China’s energy co-operation with specialised multilateral entities ......................... 65 Annex 4. China’s energy co-operation with comprehensive multilateral entities .................. 66 Annex 5. IEA Association Declaration 2015 .......................................................................... 68 Acronyms, abbreviations and units of measure ......................................................................... 71 References .................................................................................................................................... 73 China’s Engagement in Global Energy Governance © OECD/IEA 2016 List of figures Figure 1 • Key government bodies overseeing energy issues ...................................................... 16 Figure 2 • Growth of gross domestic product (GDP), energy production and consumption ....... 19 Figure 3 • Residential energy consumption per capita ................................................................. 19 Figure 4 • Energy consumption by fuel ......................................................................................... 20 Page | 4 Figure 5 • Energy Intensity (total energy consumption/GDP) ...................................................... 20 Figure 6 • Net energy imports ...................................................................................................... 21 Figure 7 • Primary energy demand and GDP outlook by selected region, 1990-2040 ................. 25 Figure 8 • Oil and gas sector pricing reform ................................................................................. 31 Figure 9 • Worldwide participation in IEA Technology Collaboration Programmes..................... 38 Figure 10 • Natural gas demand and supply in developing Asia, 2040......................................... 46 List of tables Table 1 • International energy co-operation in China’s five-year energy plans ........................... 10 Table 2 • Development of China’s engagement in global energy governance ............................. 13 Table 3 • Chinese non-governmental participation in specialized energy mechanisms .............. 16 Table 4 • Development of China’s oil industry ............................................................................. 21 Table 5 • China’s presence in international energy industry associations ................................... 22 Table 6 • Petroleum reserves in China .......................................................................................... 32 Table 7 • China’s climate change commitments ........................................................................... 40 Table 8 • Development of non-fossil electricity in China, 2014 ................................................... 42 Table 9 • Unconventional gas development in China ................................................................... 45 Table 10 • Traditional use of biomass for cooking, 2012.............................................................