ABSTRACT
The Chinese government implemented the national Energy Conservation and Emission Reduction Scheme (ECERS) in 2006, which covered both the energy production sector and energy end users. During the implementation in the 11th and 12th Five-Year Plan period (2006–2015), a range of problems emerged which diminished the quality and effectiveness of the scheme. During the closure of small coal-fired power plants, inadequate compensation and unfair treatment of laid-off workers needed to be urgently addressed. Fraudulent claims of cash rewards for unachieved energy saving and emission reduction was also a serious problem, which not only wasted financial resources, but also shook the accountability of ECERS. Small- and medium-scale renewable energy companies experienced considerable challenges compared with those under big energy state-owned enterprises (SOEs). There were also cases of provincial and local governments seriously violating the renewable energy law by giving priority to coal power, thus restricting power generated from renewable energy sources. The unfair competition and market environment was detrimental for the long-term sustainability of China's renewable energy development. In order to improve the transparency and efficiency of ECERS, the Chinese government introduced the third-party auditing organisations and the market mechanism, Energy Performance Contracting (EPC); however, they could not fundamentally eliminate false reporting and fraudulent claims of cash rewards. These problems seriously damaged the overall accountability of ECERS and pushed up the total cost of China's domestic energy saving and emission reduction, and therefore, deserve in-depth study and careful consideration.
