China Passes Resolution on Climate Change

January 1, 0001


On August 27, 2009, the Standing Committee of the 11th National People’s Congress (China’s top legislative body) adopted its first resolution on climate change, ahead of the international climate change conference in Copenhagen, and proposed amendments to China’s Renewable Energy Law.

The “Resolution to Actively Respond to Climate Change” affirms China’s commitment to the basic framework of the UN Framework Convention on Climate Change, the Kyoto Protocol, and the principles of “common but differentiated responsibilities” and sustainable development.

The Resolution states that China will continue to participate in international negotiations on climate change and implement international conventions but also reiterates China’s right to economic development and the responsibility of developed nations to take the lead in reducing emissions and assisting developing countries with financing and transfers of technology. The Resolution opposes trade protectionism measures as a means of fighting climate change.

With respect to domestic policy, the Resolution encourages energy saving and emissions reductions by promoting energy-efficient technology and products, perfecting the structure of energy production and consumption, encouraging and supporting the use of clean coal technology, developing use of renewable and clean energy, promoting nuclear energy, developing a recycling economy, eliminating obsolete technologies, and further advancing forestation and carbon sequestration.

The Resolution also supports the development of a green economy, and encourages development of policies to maximize efficiency and lower energy consumption. The Resolution states that climate change measures should be included in China’s national development plans, including industrial, tax, finance, credit and investment policies.

The Resolution states that its goals will be implemented through amendment of laws and regulations on environmental protection and climate change, such as the Energy Conservation Law, Renewable Energy Law, Circular Economy Promotion Law, Law Promoting Clean Production, Forest Law and Grasslands Law, as well as the supervision of their enforcement. In this connection, the Standing Committee published amendments to the Renewable Energy Law of 2005 for public comment. The amendments expand the sources of funding for the renewable energy development fund contemplated by the current version of the Law to include surcharges on renewable energy electricity prices. The draft provides that the fund will be managed by the State Council Finance, Energy and Pricing authorities and will be used for research and development of technology and standards, rural projects, independent grids and localization of equipment production.

The Chinese government has allocated RMB 210 billion ($30.8 billion) of China’s RMB 4 trillion ($586 billion) fiscal stimulus plan to ecological and environmental protection. Given these positive policy developments and financial support being put in place, China now presents significant business development opportunities for the global renewable energy and clean technology sectors.