The Institutional Framework for China’s Energy Transition

Professor Philip Andrews-Speed, University of Dundee

How China manages its transition to a low carbon economy though the reform of its energy sector is of critical importance the whole world. Through an examination of the institutions of energy governance in China, this paper identifies a number of key features which are likely to determine the future evolution of its energy sector. At one level are the embedded institutions which have their roots in more than four thousand years of history and derive from the country’s origin as an hydraulic agrarian regime. These include the preference for conformity, the importance of  personal relationships, and attitudes towards truth.  The way that natural resources are governed is also coloured by traditional views on the relationship between man and nature, on self-reliance, and on the role of the state. At another level, analysis of the current institutional environment shows how the formal structures government, the Communist Party and the legal system operate in the context of these deeply rooted values to determine policy making and implementation in the energy sector. As a consequence, China’s national energy policy is characterised by, on the one hand, continuity and path-dependency, and, on the other hand, by incremental, short-term adjustments which are often unpredictable in nature and in their consequences.  Although the government’s aptitude for introducing new technologies and undertaking certain types of administrative measure play a positive role in the progress of its low-carbon strategies,  many features of the institutions of energy governance may act to constrain this progress.