Who drives China's renewable energy policies?

Responsible researcher: Viviane Pires Ribeiro

Paper Title: Who drives China's renewable energy policies? Understanding the role of industrial corporations

Authors: Wei Shen

Intervention Location: China

Sample Size: Not specified

Big theme: Environment, Energy & Climate Change

Variable of Main Interest: Renewable energy

Intervention Type : Renewable Energy Policy Process

Methodology: Qualitative analysis

Using the wind and solar industries as a case study, Shen, W. (2017) argues that after a decade of rapid development in these renewable energy segments, a strong policy community is forming that largely controls and shapes renewable policy processes. from China according to your preferences. Within this community, although direct confrontation with central government authorities is still rare in the authoritarian political tradition, major corporations have more room to negotiate over the political agenda, to face external skepticism and criticism, and to ally with local governments to increase their influence in the policy process.

Assessment Context

China's wind and solar energy sector has witnessed spectacular growth over the past decade. In recent years, for example, the total installed capacity for wind and solar energy generation in the country has reached very high levels. Meanwhile, the manufacturing capacity of renewable energy equipment has also witnessed enormous growth. Chinese companies have become the world's leading manufacturers of solar panels and wind turbines and have acquired a significant share of global markets.

After a decade of massive expansion of investment in renewable energy and industrial capabilities, government regulators appear to no longer be the only players that matter in this sector. Instead, corporations such as state-owned electricity companies, major investors in wind and solar farms, and leading manufacturers of wind turbines or solar modules are gaining prominence in the political process. The rise of corporate powers due to enormous market expansion has significantly changed this state-led political process, leading to a new form of government-industry relationship.

Intervention Details

Unlike previous studies, Shen (2017) presents an alternative view of who drives China's renewable energy policy process. The study focuses on corporations and asks whether and in what ways these actors can influence the formation or implementation of policies in the renewable energy sectors. In this sense, the author argues that these sectors consist of various interests between different bureaucratic and industrial segments, which form a closely intertwined policy network, where constant contestations of interests and alliance-building efforts can be observed during their intense day-to-day interactions. a-day. These intrastate and interstate industrial power dynamics are crucial to understanding who drives the country's renewable energy policies.

To deal with these complex dynamics, the article adopts a conceptual framework drawn from policy community (PC) theories. The aim is to reveal and explain how coordinated efforts were exerted by industrial actors to guide or hinder the development of policies and policy changes in China's wind and solar energy sectors. This research is a qualitative analysis based on intensive field investigations, stakeholder interviews and document analysis. Eighteen formal interviews with government officials and industry professionals were conducted during several field trips between 2013 and 2015 to China. In addition, more than 100 formal policy documents plus a large number of media reports and literature covering the period 2005 to 2016 were analyzed as supplementary data to the interviews.

Methodology Details

Using the wind and solar industries as a case study, Shen (2017) establishes a conceptual framework to analyze the relationship between state, industry, and corporate policy influence in China's renewable energy policy subsystem. Next, the authors provide a historical account of the emergence of leading companies and an explanation of their efforts to foster a political community alongside regulators. The emergence of the policy community in the country's renewable energy sectors is presented with particular reference to relationships between companies and state regulators at the central level.

Subsequently, local government-industry dynamics are examined. The main argument is that the successful implementation of renewable energy policies does not just depend on the 'command and control' tradition, in which orders from Beijing are taken by provincial leaders and then passed on to county or city bureaucrats. village. The traditional vertical governance decision chain has been influenced by the increasing involvement of corporate actors who wish to see their investment projects being built efficiently across multiple locations.

Results

Analysis carried out by Shen (2017) shows that most previous studies on China's renewable energy development have focused on the 'powerful central state' as the main contributor to China's impressive achievement as a world leader in building its wind technology and solar and electricity generation facilities. Their main arguments are that it was the party-state political elite who selected the renewable energy industry as a strategically important sector for national economic and social well-being and it was state officials who created the supporting policies that ultimately analysis, stimulated technological catch-up and market expansion. Therefore, the success story of the country's renewable energy development is often considered a good example of the advantages of 'developmental states' that often emphasize the production side of the economy and adopt a coordinated state-led approach to promoting economic development. and technology transformation.

After a decade of great expansion, the main policy stakeholders are concentrated in the hands of a few bureaucrats, investors in wind and solar farms, and manufacturers of wind turbines or solar panels. Frequent negotiations and communications can be observed between these actors, who have the capacity to initiate and shape renewable energy policies. The PC's main policy objective is the continued expansion of wind and solar farms as its strategic preference. To achieve this goal, the PC has an established platform for sharing information. Being able to successfully redefine and defend the narrative of renewable energy as a politically and economically crucial industry with tremendous strategic value for China.

The successful implementation of renewable energy policies also depends on the increasing involvement of corporate actors who want to see their investment projects being built efficiently across multiple locations. At this local level, the main corporate actors are usually organizations such as state-owned energy companies, equipment manufacturers and network companies. Project managers, financiers or engineers at these organizations work closely with local state officials on a daily basis. Due to their lower official or corporate classification, their roles in the political process have often been overlooked in previous studies, but they are crucial gatekeepers who possess significant power to shape the outcome of central policies through daily coordination, negotiations, and confrontations, often around individual projects.

Public Policy Lessons

The main finding of the study conducted by Shen (2017) is that influential corporations, such as leading manufacturers of wind turbines and solar panels or state-owned electricity companies, have played an important role in the renewable energy policy process, framing strategic preferences and priorities policies, negotiating and coordinating with state actors, both at central and local levels. Therefore, in the domain of China's climate governance, instead of a traditional perception of a state-led mode of governance in which state officials are often considered the only crucial actors in guiding climate-related policies, the study reveals that The process of government autonomy in policy is increasingly constrained by the growing industrial interest groups that possess considerable resources and institutional power in China's renewable energy policy subsystem.

Two theoretical implications can be drawn from the study. First, the rise of the political community and a more active role of corporations in the political process does not mean a weakening of the state. Inclusive capabilities would ultimately empower all CP members, state and non-state, to achieve more effective institutional arrangements. Second, it rejects a static view of the CP, as power struggles observed within or outside the CP can constantly shape political orientations and even divide existing coalitions.

The empirical implication of such power dynamics is enormous, as it would affect the future of the renewable energy sector in China. One of the distinguishing features of the Chinese renewable energy sector is that major developers of wind and solar farms, such as state-owned utilities, often also invest in fossil fuel projects and consequently belong to other interest groups that can oppose renewable energy. Currently, renewable PC faces little pressure from traditional energy sectors only because it is currently a complementary and profitable market. Such a situation would change significantly if the renewable energy market continues to grow and eventually confronts existing fossil fuel industries head-on. It is almost certain that a new configuration of power among key actors would emerge, leading to new coalitions that would replace existing ones.

Finally, China's renewable energy sector may be a special case in terms of the cooperative and inclusive nature of its state-industry relations. Therefore, its compatibility with PC framework may not be applicable elsewhere. This is mainly because renewable energy is a newly emerging but rapidly expanding industry, so cooperation is crucial for both relatively inexperienced regulators and market participants to avoid mistakes. In this way, China's renewable energy sector, even as a special case, can still add value in understanding the complex and rapidly changing relationships between state and industry in China's reform era.

References

Shen, W. (2017). Who drives China's renewable energy policies? Understanding the role of industrial corporations. Environmental Development , 21 , 87-97.