China's Long Road to a Low-Carbon Economy. An Institutional Analysis

Executive Summary


China is the world’s largest emitter of greenhouse gases from energy use and so the future of the world’s climate depends to a significant extent on the willingness and ability of the country to make the transition to a low-carbon or at least a lower carbon economy. Many analyses have highlighted the technical and economic opportunities for achieving such a transition, but few have explored systematically those features of China’s society, polity and economy which may determine the transition path. This paper applies institutional theories to analyse the governance of energy in China in order to identify sources of adaptability and of resistance to change. 


The long and continuous history of Chinese civilisation has played a significant role in shaping certain attributes of government, governance and society that can be observed today, despite the recent overlay of Communism. Strong sources of resilience lie within the government itself and the way it operates, and these are complemented by the behaviour of powerful actors, notably the state-owned energy companies. Conversely, the government has shown the ability and the willingness to constantly adapt the institutions which govern the energy sector in response to pressing domestic needs and often by taking into account ideas introduced from outside China.


China’s path to a low-carbon economy under the prevailing institutions of governance will probably be characterised by (1) the construction of infrastructure to produce and deliver (relatively) low-carbon energy, matched by ongoing growth of high-carbon energy sources such as coal and oil; and (2) ever-increasing difficulties for the central government as it seeks to change the behaviours of local governments, industries and households across the country. 


Radical institutional change across the polity, economy and society in China will be required in order to accelerate the transition to a low-carbon economy, but it is difficult to identify such profound institutional changes taking place.


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