China's Transition to a Low-Carbon Economy: 2006-2010

China achieved major progress in low-carbon development during the period of the 11th Five Year Plan (2006-2010). The increasing trend of energy intensity and carbon intensity of the economy as seen prior to 2005 was reversed to a sharp decreasing trend, leading to a 19% decrease in energy intensity and 21% decrease in carbon intensity in five years. The enhanced energy efficiency, mostly due to efficiency improvement in power and manufacturing sector, is the major driver of the decrease in carbon intensity of the economy. The development of renewable energy, despite its impressive growth rate, played a minor role because of its small share in the energy mix of the country. Energy consumption and energy-related carbon emissions per unit of area in building continued to grow at a lesser rate, which, combined with the fast growth of total building volume, led to fast growth in total energy consumption and carbon emissions in the sector. Similar trend is observed in the transportation sector whose total energy use and carbon emissions continued to grow fast despite slight improvement in energy efficiency. Agricultural energy use experienced a slight change and forestry made a major contribution to carbon sinks. Policy and institutional innovations helped build a solid system of rules for low-carbon development. Improving cost effectiveness of the system remains a major challenge for the next five year plan period.