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2015-07-16

Energy productivity not very meaningful

Comments on Frank Jotzo "China could outperform its carbon pledge", 16/07/2015

Firstly, it seems there is a typo in the fourth paragraph, that is, “Yet China could do better still. China is set to outperform its existing 2020 target of a 40–45 per cent improvement in emissions intensity compared to 2025.”

The last number should probably be 2005 instead of 2025.

Secondly, while the following sentence is understandable, I am not sure that it does not mask the shortcomings of a single factor productivity, particularly the huge differences in economic structures between different economies, such as the energy productivity:

"China’s energy productivity lags that of advanced economies."

China, as it is often called by many, is the world's manufacturing factory, as a result, it is not particularly meaningful to compare the so called energy productivity with the so called energy productivities of the advanced countries which are mostly services heavy, as opposed to industry heavy of the Chinese economy.

Thirdly, some of the arguments, while understandable in terms of impact on emissions, may not be particularly strong for China to adopt, if China has an overarching economic, urbanisation and climate change strategy/framework, or as the author put it "with overarching national policy priorities". For example, "If China’s government were to once again use large fiscal stimulus measures, it would need to avoid over-investment in infrastructure and thereby heavy industries."

Although China has made enormous progress in its infrastructure, the fact still remains that China's urbanisation is only about 50% and there is a long way to go simply for China to urbanise. There is no question that urbanisation means more infrastructure, and as a result, more investment in infrastructure will be needed.

When discussing climate change policy, it would be more helpful to put it into the appropriate framework.

I would bet that China is unlikely to sacrifice its urbanisation and hence investment in the related infrastructure purely for emission purpose.

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