A review of China`s energy policy

In 1992 China`s primary energy production reached 1075 million tons of coal equivalent by far the largest in the developing world. Because coal is the primary commercial fuel, rapid growth of carbon dioxide emissions is certain. Thus the attitude of the Chinese government toward energy and environmental issues becomes increasingly important to those involved in the study and analysis of global climate change and energy issues. This report is intended to provide a basic understanding of the development of China`s energy policymaking over the past four decades. The paper first reviews institutional development and policymaking and then describes the transition to the market-oriented system. While energy has consistently received a great deal of attention from the central government, the institutional basis for setting and implementing policies has shifted often. Reforms during the past 15 years have been incremental, piecemeal, and occasionally contradictory, but overall have freed a large portion of the energy industry from the strictures of a planned economy and laid the basis for broad price liberalization. Responsibility for energy planning is now dispersed among a number of organizations, rendering coordination of energy development difficult. Economic reform has rendered obsolete most of the policy-implementation means of the planning era. Although the new tools of central control are not fully effective, the trend toward decentralized decisionmaking has been strengthened. The report ends with a summary of energy forecasts used by Chinese policymakers, highlighting current policy goals and the issues that will shape future policy.