China as a Low-Carbon Energy Leader: Successes and Limitations

Abstract

China has come to be seen as a global clean energy champion on account of its success in building the world’s largest fleet of renewable energy - wind power and solar photovoltaics (PV), as well as hydro-electricity. In addition, it has become a major player in international renewable energy markets. In other words, it has shown a remarkable ability to adapt to environmental challenges and market opportunities. In this way, China provides a counter-example to the neo-institutional argument that limited-access social orders possess less adaptive capacity than open-access orders. This paper briefly examines the central government’s efforts to promote the manufacture and installation of renewable energy capacity and the consumption of renewable energy since 2005, with a focus on wind power and solar PV. The strategies that have underpinned this success have relied on the deployment of massive political and financial capital, as well as the availability of human capital. Nevertheless, the many features of the institutional environment continue to undermine the efforts of the central government. These include the government’s continued efforts to maintain economic growth and the ability of local governments and enterprises to emasculate central government policies.

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