Part 2: ChallengesThis piece was written in collaboration with Cui Xueqin, Fu Sha, and Zou Ji.In 2009, China’s Twelfth Five-Year Plan set a goal to cut the country’s carbon intensity by 17 percent by 2015. Responsibility for achieving portions of this target has been allocated to provinces and cities. This three-part series explores the vital role of China’s municipalities in reaching the national carbon intensity goal. Part 1 presented low-carbon city targets and plans developed to date. Part 2 explores some challenges related to designing city-level low-carbon plans and mechanisms to track progress towards them. Part 3 will present some possible solutions to these challenges.Despite the work by major Chinese cities to move city planning onto a low-carbon trajectory, several challenges remain. Notable among these are the unclear relationship between low-carbon city planning and other planning processes, a lack of methods to account for city-level greenhouse gas (GHG) emissions, and a lack of approaches to address GHG emissions from electricity transmission. See China resorts to blackouts in pursuit of energy efficiency and China U-turn on enforced power cuts in Hebei ↩︎ The relationship of low-carbon planning to other city planning processesNearly a decade before Chinese cities began developing low-carbon plans, they began preparing energy conservation plans and emissions reductions plans to address traditional, non-GHG pollutants. Current research and practice on low-carbon city planning has not clarified how it relates to, or goes beyond, these existing planning processes. In some cases, therefore, low-carbon strategies and plans have struggled to exceed the scope of the traditional energy conservation plans, although targets of these plans have changed from energy intensity to carbon intensity. Thus, some key low-carbon opportunities, such as economic restructuring and the promotion of high value-added industries, which do not help to reduce energy consumption but are beneficial in cutting carbon intensity, have been overlooked.Our research team, which is collaborating with WRI on the Asian Development Bank Qingdao Low Carbon City Project, has proposed that master plans for municipal low-carbon development be positioned as a link between the municipal five-year plan (FYP) and the thematic plans covering specific sectors. The municipal low-carbon plans would serve to elaborate on the guidelines and principles of low-carbon development as stated in the FYP, and to integrate them with the relevant thematic plans in a systematic manner. In this way, the low-carbon development master plan can become a tool to ensure integration of low-carbon considerations into mainstream development plans, affecting decision-making on investment projects, local public expenditures, land uses, technological options, and other items on the development agenda that are traditionally driven by mainstream development plans.City-Level GHG Accounting MethodologiesCity-level GHG inventories are a prerequisite for municipal low-carbon planning processes. They provide a baseline against which to set a low-carbon development target, and help officials identify emissions “hot spots” that they can then formulate policies to address. This element, however, is missing from most current low-carbon development plans in Chinese cities.While several foreign institutions, such as ICLEI, have developed city GHG inventory accounting methodologies, these were developed in accordance with the municipal management and statistical system in western countries, and have proven difficult to apply in the Chinese context due to differences between Chinese and western cities described below.Emissions from urban power consumptionOn a related note, though most Chinese cities rely heavily on electricity generated outside municipal boundaries, most of the low-carbon plans prepared to date fail to account for these indirect GHG emissions. Guiyang is a rare exception. A GHG inventory conducted by a research team at Renmin University found that GHG emissions associated with imported power accounted for over a quarter of Guiyang’s total emissions in 2009. As China becomes more urbanized, cross-border electricity transmission will become more important, and indirect GHG emissions corresponding to imported electricity will grow. Failing to address these emissions in municipal plans will provide local governments with improper incentives to overlook electricity saving actions, thus leading local governments to miss significant mitigation opportunities.Unique Aspects of Chinese Cities in Low Carbon DevelopmentTo a certain extent, the challenges described above are exacerbated by unique characteristics that distinguish Chinese cities from cities in other countries, particularly in the industrialized west. As a result of these differences, existing approaches may not be appropriate for Chinese cities, highlighting the need for innovative solutions.Different types of emissions targetsInternationally, cities have tended to set absolute emission reduction targets, whereas Chinese cities focus on emissions intensity goals. This reflects the fact that Chinese cities are rapidly urbanizing and wish to maintain high economic growth rates, which would make absolute reductions extremely challenging. Intensity targets have special implications both for methodological issues and for the types of policies that Chinese cities might choose to adopt. For example, accounting methodologies must track a denominator (such as GDP) as well as total GHG emissions, and policy selection might give weight to approaches such as industrial and product restructuring.Different key areas of emission reductionIn contrast to megacities in developed countries, Chinese cities’ emission reduction efforts over the next several years will focus on industry, due to the high proportion of GHG emissions from the industrial sector. This is not to say that other sectors are irrelevant; with the expansion of urbanized areas, growth in vehicle ownership, growth in construction areas and the improvement of living standards, emissions from the construction and transportation sectors, for example, will continue to grow rapidly. However, mitigation costs in these two sectors are relatively high, so Chinese cities are likely to continue to look to industry to meet their GHG goals.Different greenhouse gas accounting systemsChina’s current statistical system is not adequate to undertake comprehensive low-carbon development planning. Specifically, the current Chinese energy accounting system emphasizes only industrial energy use, and data on other GHG sources are not readily available. Despite the importance of managing emissions from the transportation and building sectors, for example, China does not have adequate statistical systems to quantify the emissions from these sectors. It is therefore more difficult to set specific emission reduction goals for these sectors in China than in cities elsewhere.Some of China’s municipal low-carbon plans have adopted the IPCC national inventory methodology without adjusting it for application to cities, while others have employed foreign methodologies that are not well suited to the Chinese context, for the reasons described above. This compromises the quality of the GHG estimates on which the low-carbon city plans are based, and limits comparability between cities.On the other hand, adjusting the energy accounting system will take time. In the meantime, China should develop a simplified GHG accounting methodology to support the planning and development of low-carbon cities in accordance with requirements of 12th FYP. To address this need, our team has developed a simplified city level energy-related CO2 inventory methodology which is suitable for Chinese cities. Details of this methodology will be discussed in Part 3 of this series.Different policy instrumentsA number of developed countries use market-based policies to reduce GHG emissions, but China still relies on command and control mechanisms. In achieving its energy and carbon intensity goals, the Target Responsibility System is a widely used approach in China. Under this system, the people’s governments at various levels and provincial governors, mayors, and county heads are responsible for the achievement of energy and carbon intensity targets.This approach, while effective, has much higher direct economic costs and indirect social costs than market instruments. Additionally, local governments’ pressure to meet their targets may lead to extreme actions, such as the intentional citywide blackouts that occurred at the end of last year.1 Many Chinese policy choices in the planning process have developed characteristics that should be integrated into China’s administration management system requirements in order to overcome the shortcomings described above. As the market grows, China will be able to adopt more economic instruments to control GHG emissions in the future.Different growth speedChinese cities are developing at a very fast pace. This will lead to some uncertainties when planning a low-carbon city, making it difficult to project future development scenarios, to set and disaggregate emission reduction targets, and to analyze technology and policy options. Chinese cities should consider these uncertainties when they formulate low-carbon development strategies and set low-carbon development goals.These unique characteristics of China’s cities demand tailored methodologies and low-carbon planning tools. Some approaches under development by Renmin University and our partners will be featured in the final part of this series.This post is the work of an Open Climate Network partner. The World Resources Institute is not responsible for the content or opinions expressed by the author.