The status and future scenarios for China's

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1 The status and future scenarios for China's energy-related GHG emissions Lu Yongqi, Hao liming & Liu Binjiang Department of Environmental Science and Engineering, Tsinghua University, Beijing 10084, China Abstract As energy is the major source of GHG emissions, the assessment of the present situation and future patterns of GHG emissions from energy activities is carried out for China. The OECD/IPCC methodology is adopted to estimate emissions, while the LEAP model as the tool of energy supply and demand prediction. The investigation is conducted into the current energy GHG emissions, and two scenarios are assumed for future prediction, namely BAU scenario and Optimistic scenario, with the time horizon as , , BAU scenario attempts to reflect as much as possible the governmental policy and plan on economic growth, economic structure, population control and energy saving, describing the possible emissions pattern in the future. Under BAU scenario, in the year 2020, CO: emissions from energy source would be 2.5 times as much as in Optimistic scenario pays more attention to industrial energy efficiency, coal processing, biomass use and alternative energy, and with the assumption of the maximum enhancement in GHG control, a reduction of 20 of COz emissions in 2020 is estimated, compared with BAU scneano. 1 Introduction It is of common concern for the greenhouse effects both in individual countries and the international community, due to its potential to dramatically alter the earth's climate in a relatively short span of time. A

2 528 Air Pollution large amount of GHG emissions such as CO:, CH4 and N:0 constitute the major cause for the greenhouse effects. Energy use in China currently contributes 95 of the national CO] emissions, and over 80 of GHG emissions. As China is most likely to maintain rapid rates of economic growth well into the next century, the expanding energy use and production will be required. Beyond doubt, this will have an enormous effect on the level of GHG emissions. Therefore, it is very meaningful to outline and analyze potential emission scenarios, and provide information for decision-makers to formulate mitigation and control strategies on GHG emissions from energy activities in China. 2 Estimation methodology of GHG emissions 2.1 LEAP model for energy supply/demand analysis The prediction of energy supply and demand builds the basis for the estimation of GHG emissions from energy activities. Long-range Energy Alternatives Planning system (LEAP), a computer-based accounting and simulation tool, is employed to project the energy supply and demand situation, and assess the likely impacts of energy policies. LEAP is structured as a series of integrated program. The creation of energy scenarios by this model is featured with the "Bottom-up" approach. In spite of more data inputs required than in "Top-down" approach, the predictions appear to be in more detail and certainty, which is beneficial to the succeeding estimation on GHG emissions. In the modelling, the energy system is simulated with the five links, i.e., energy resources, production, transformation, transmission & distribution (T&D) and end-use. In accordance with Chinese statistical items, six sectors (agriculture, industry, transportation, construction, service and household) are grouped as energy end-users, and 12 processes (power generation, heat, biogas, gasification, coking, oil refining, coal briquetting, coal washing, oil & gas extraction, coal mining, T&D) are involved in energy transformation. 2.2 IPCC/OECD methodology for estimating energy GHG emissions The estimation methodology used in this study is based on the results of the OECD Experts Meeting, which have been adopted and distributed for

3 ; 529 worldwide use by IPCC. With prudent use of the methodology, the results will provide estimates on emissions comparable with other countries. The primary methodology for estimating CO] emissions from fossil fuel use as a major source includes four steps, which are: (a) the apparent consumption of fossil fuels by fuel product type; (b) the average carbon emission coefficient of fuels and the total carbon potentially released from the fuel use; (c) the amount of carbon sequestered in chemical products, and (d) the amount of carbon oxidized during combustion (OECD/OCDE*) Carbon sequestered in products is considered to subtract from total carbon in the fuels to estimate net carbon emissions. The non-coz emission coefficients arefirstbased on the data provided by OECD/IPCC, combined with the assumption of the same coefficients for sectors with similar fuel use features. The sectoral emissions are then the product of coefficient and energy consumption. 3 Analysis on China's energy supply & demand 3.1 Features of current energy supply and demand In China, coal dominates in the energy mix, for example since 1980, the coal has kept around 75 of the primary energy use, while the shares of high quality energies were small such as oil, gas and hydro power (State Planning Commission of PRC^). Such energy mix, it is believed, would not changed over a relatively long period in China. As most of coal is burned directly, electricity has a low share in energy use. From 1980 to 1994, the share of electricity remained lower than 30 in energy use, compared with 35 in the developed country. Moreover, the levels of energy use are low for per capita and high for per unit output value. In 1990, commercial energy use for per capita was equivalent to about 40 of the world's average levels, that for per unit of GNP was four times as much as in developed countries, and those for per physical unit of main products were higher than advanced levels (National conditions analysis group^). 3.2 BAU scenario of future energy supply and demand in China For the purpose of describing energy future that would arise most possibly based on the current policy and strategy of government, the Business-As-

4 Table 1. The energy supply and demand, B AU scenario Commercial energy. Mtce Coal, Mt Oil, Mt Natural gas, Gnf Hydro power, TWh Nuclear power, TWh Other renewables, TWh Biomass. Mtce Fossil fuel use bv sector. Mtce Industry, Mtce Electric power, Mtce Building materials, Mtce Iron & steel, Mtce Light industry, Mtce Household, Mtce Agriculture, Mtce Transportation, Mtce Construction, Mtce Service, Mtce Total. Mtce Per capita energy use, kgce Energy use per 10*Y GNP, tee Electric power. TWh 1990 Quan Ouan Ouan Ouan

5 Air Pollution 531 Usual (BAU) scenario of energy supply and demand for the year 2000, 2010 and 2020 is generated. In the prediction, the data required are based on three levels, which include: (a) macro parameters, e.g., growth rate of economy, growth rate of population and industrial structure; (b) levels of sectoral development, e.g., financial or physical output, volume of freight traffic and area of cultivation land; and (c) energy intensity, e.g., consumption of fuels per financial and physical unit of products, per household or in other terms. (Hao & Liu'). According to these settings, the energy supply/demand and mix are predicted, as shown in Table 1. From the prediction, by the year of 2020, the total commercial energy use would be over 2,500 Mtce, with an annual net increase of 50 Mtce. However, it is obvious that energy mix is improved to some degrees, e.g., the share of coal in the commercial primary energy use would drop from 74 in 1990 to 64 in 2020, that of hydro-power would increase from 4.7 to 7.0, and that of nuclear power and other renewables would be up to 3.0 starting from nearly zero. In addition, the energy use per unit of GNP would go down notably, with a decrease of 70 by The industry sector continues to dominate fossil fuel use, though its share would decrease somewhat. The fuel use in electric power sector, primarily coal use, would rise sharply, sharing 27 of industrial energy use in 1990 to 50 in 2020, while the energy demands in other industrial sectors would increase moderately before 2010 and then level off. 4 Analysis on GHG emissions from energy activities 4.1 GHG emissions in China, 1990 In 1990, the emissions of GHG, primarily referred to as CO], CH* and N]0 were added up to 801 Mt of carbon equivalent in China while energy activity was the largest source of 82 of totals, as shown in Figure 3 (Hao et al/). The COz emissions from energy activities were estimated near 650 Mt of carbon, among which 86.8 was contributed by coal combustion, 11.8 by petroleum and remains by natural gas. The industrial sector accounted for nearly three-quarters of CO] emissions from the energy

6 532 Air Pollution source, followed by household sector with a share of 14.4 (see Figure 2). Within industry, the largest energy-consuming sectors were in order electric power, building materials, iron & steel, light industry, chemicals and energy production industry itself. Together, these six sectors accounted for 84 of CO] from the industrial sectors., Energy use B Cement Rice fields 82 IE Coal-bed methane D Animal O Other D Other industries D Household Agriculture D Construction E3 Electricity ID Transport Q Service Fig. 1 China GHG emissions 1990 Fig.2 Energy CO] emissions BAU scenario of future GHG emissions in China Based on BAU energy scenario above, future GHG emissions from energy activities are estimated (see Figure 3) and variances by sources of CO] emissions over time are assessed (see Table 2). cj o Fig.5 GHG Year 2020 emissions from energy activities, BAU scenario

7 Agriculture Industry Electric power Building materials Iron & steel Light industry Chemicals Machine Thermal power Energy production Others Subtotal Construction Transportation Service Household Total Table 2. Sectoral CO? emissions from energy activities, BAU scenario () MtC MtC MtC MtC

8 534 Air Pollution According to Figure 3, CO] shares about 93 in the energy GHG emissions over the time horizon. As China's energy use increases rapidly, the related CO: emissions would reach 1,572 Mt of carbon by 2020, 2.5 times as much as that in The growth rates of GHG emissions would be 4.24, 2.94 and 1.82 in the three decades, while those of fossil fuel use would be 3.52, 3.01 and This indicates the favorable impacts of government policy to some extents. In Table 2, industrial sector would contribute roughly constant three quarters of total emissions. To a large degree, this could be attributed to the sharp growth of emissions from power generation, primarily coal-fired power, with its sustained increase of demand. 5 Enhancement in mitigating energy-related GHG emissions Most settings for BAU scenario are derived from present policy levels and trajectories. As for BAU scenario concerned, however, the environmental implications are staggering in spite of the improvement in energy efficiency achieved to some extents. Optimistic scenario is thus created to estimate the potential minimization of energy GHG emissions. The corresponding enhancement in policy and technology is on the basis of the following implications, With the accelerated industrial modernization with scale economies and especially industrial structure shift in the stage of economic transition, still there is a great potential in energy saving. The energy intensities of major industrial products could reach levels more closely approximating advanced international rates in early 90's. In the light of the newly-amended Law on Air Pollution Control, the washed coal production and supply for industrial boilers would be spurred on, with a capacity of coal washing reaching 950 Mt in In view that the town & village mines that provide all the coal use of rural residents at present will be phased out progressively over time, an increasing amount of biomass would be used as a substitution. Currently, together with about 150 Mtcefiielwood,a half of 250 Mtce crop waste is available as potential fuels. In compliance with the adjustment of national energy development strategy and the fact that the south-west China has been planned to built as a hydropower base, the development of hydro-power could be further underlined in future.

9 Air Pollution 535 # In order to relieve the pressure on transportation and environmental pollution, the development of nuclear power base in eastern coast areas with rapid economic development and shortage of energy has been formulated as a part of national energy strategy. With the increasing investment and advancing technology, the exploration of oil & gas resources would be strengthen furthermore. Besides, given the domestic oil price approaching the international, the importation of oil and natural gas would be essentially enlarged. Table 3 sums up the potentials of GHG emission reductions by the enhanced measures above. The results appear that GHG emissions could be reduced by 319 Mt of carbon by the year 2020, a decrease of 20 in comparison with BAU scenario, see Figure 4. Instead of increasing near 2.5 times between 1990 to 2020, GHG emissions would increase by lower than twofold. Table 3. Potential of CO] emissions reductions compared with BAU Ootm.- RAH Ontm-RATJ Ontm.-BA U Industrial energy use. Mtce 1018-K Emissions reduction. Mt C Coal washing. Mt Emissions reduction. Mt C Biomass sunnlv. Mtce Emissions reduction. Mt C Hvdronower. TWh Nuclear power. TWh Emissions reduction. Mt C Natural gas imnorts. Grn^ Production. Gnv* C Emissions reduction. Mt C Total reductions Mt C s ^^^r^z» ^*^ L--^ (D # BAU scenario O 400 *_ Op tin. scenario u ^ o S Year Fig.4 Comparison of CO] emissions in BAU and Optimistic scenarios

10 536 6 Conclusions In the study, the estimation of energy GHG emissions is carried out more reliably and comparably by the use of LEAP model for energy future prediction and OECD/IPCC methodology. The current energy use and GHG emissions are investigated to give the base situation of scenarios. According to the current policy and plan associated, BAU scenario is constructed to simulate the most probable patterns of future energy and GHG emissions. The results show that the coal-dominated energy mix would be improved to some degrees and energy savings would be notable, however, CO] emissions would be still as high as 1572 Mt of carbon, near 2.5 times more than in Under Optimistic scenario, the further measures for emissions mitigation are adopted, such as industrial energy saving, coal washing, biomass use and alternative energies. As a result, a further reduction of 319 Mt of carbon is achieved, compared with BAU. Acknowledgments The energy plan and GHG emissions estimation are the results of studies supported by UNEP under project FP/ (3022) and GEF project - China: Issues and Options in GHG Emissions Control. References [1] OECD/OCDE, Estimation of Greenhouse Gas Emissions and Sinks, OECD Experts Meeting, Paris, [2] State Planning Commission of China (eds.), '95 Energy Report of China, Beijing, pp , [3] National Conditions Analysis Group, Opportunity and Challenge, Science Press, Beijing, pp , [4] Hao, J.M. and Liu, B.J., Incorporating Energy Planing by Air Pollution Control and Prevention, the third Symposium on China Mainland-Taiwan Environmental Protection, eds. Y Qian & J.M. Hao, Beijing, pp , [5] Hao, J.M., Xi D.L. & Lu Y.Q., Estimation of Greenhouse Gas Emissions and Sinks in China, Subreport of GEF Project: China Issues and Options in GHG Emissions Control, Washington, 1994.