China Subsidies

China—partial estimate 15.42 billion; complete estimate is not available

The amount of subsidies that China provides to its fossil fuel industry has long remained a mystery. However, in September 2016, the US and China agreed upon a fossil fuel peer review process. The review was intended to stimulate a reform of such subsidies, which both countries saw as a needed step in combatting climate change. China released a list of its major subsidies as highlighted below:

China’s Self Report identified nine fossil fuel subsidies in need of reform, amongst them, subsidies supporting extraction and refining, for electricity and heat generation, and for end-user transportation and household consumption. The table below includes estimates of the fiscal cost of these nine subsidies, how long they have been in place, and the proposed method to reform them. A lack of data meant estimates of fiscal costs could only be provided for three policies.

China was not even able to estimate the annual cost of six of the nine policies it identified as subsidies, citing a rapidly changing policy environment. The remaining three totaled around US$15.42 billion—almost all of which was directed to lowering petrol prices. The government’s submission to the peer review set out a framework for “rationalizing” subsidies, without setting a timeline, simply tagging some policies as short-medium term and some as medium-long term.

“Although the production and consumption of non-fossil energy is booming worldwide in recent decades, it can be predicted that for a long time in the future, production and consumption of fossil fuels is still dominant,” said the Chinese government document, adding that: “The excessive total fossil fuel consumption in China is, to a certain degree, linked to the unsatisfactory system and mechanism relating to energy subsidies.”

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“Us and China Release Fossil Fuel Subsidy Peer Reviews,” Karl Matiesen, The Guardian, September 15, 2016

“China to Reform Fossil Fuel Subsidies,” Liu Shuang, China Dialogue November 16, 2016

China Survey

71% of people interviewed gave their support to their government curbing greenhouse gas emissions and contributing to the Paris Agreement.

Concern about climate change among people in China—the world’s biggest carbon polluter—has plummeted in the past five years, according to new research. The Chinese were the least concerned among 40 nations surveyed.

A recent US Pew Research Center report shows that only 18% of Chinese citizens are seriously concerned about the issue, a drop of 23 points since 2010. China ranked as the country where citizens were least concerned about the issue among 40 nations participating in the study.

Nevertheless, more than two-thirds of Chinese people support a global deal on reducing greenhouse gas emissions, the research states.

Bruce Stokes, the co-author of the report, said there was “frankly, no explanation” for the drop, but suggested as a possible reason that “there must not be as much public discussion about climate change in China as there are in other parts of the world”.

In 2010, China overtook the US to become both the biggest producer and biggest consumer of energy in the world. Its government has been applauded by some for its commitment to reduce its greenhouse gas emissions per unit of gross domestic product by 60-65% from 2005 levels and to see its emissions peak by 2030.

Despite their lack of concern about climate change, when asked which domestic issues they found most problematic, Chinese participants consistently named air pollution near the top. Air pollution is thought to cause thousands of deaths every day in the country, with coal accounting for two-thirds of China’s energy consumption.

Despite the apparent absence of anxiety in China, 71% of people interviewed gave their support to their government curbing greenhouse gas emissions and contributing to the Paris Agreement.

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Climate change concern among Chinese citizens plummets, research finds, The Guardian, Emma E Howard, November 5, 2016

China Strategies

China: (1) Strengthen Country’s Paris Agreement pledge (2) Greater use by the business sector of non-fossil fuel electricity; (3) Greater reductions in the use of coal-fired power by the business sector

China’s INDC targets include:

A commitment to peak carbon dioxide emissions by 2030, at the latest;
Lower the carbon intensity of GDP by 60% – 65% below 2005 levels by 2030;
Increase the share of non-fossil energy carriers of the total primary energy supply to around 20% by 2030,
Increase its forest stock by 4.5 billion cubic meters, compared to 2005 levels.

China’s INDC emission reduction pledge to the Paris Agreement is not ambitious enough to limit warming to below 2 degrees Celsius, let alone the 1.5 degrees limit in the Paris Agreement.

Nonetheless, the commitment and effort is internationally considered ambitious and bold. In fact, China’s current policies are estimated to overachieve the target levels implied by its NDC. Its most effective policies surround the restriction of coal consumption, which has recently been predicted to have already peaked. Two future developments in coal consumption that will further strengthen the policies include:

Continued coal abatement China’s recent decreases in coal consumption would continue at a similar rate, allowing carbon dioxide emissions to reach the NDC peaking target around ten years early.
Stalled abatement scenario would mean reaching a stability in total coal consumption after the recent decrease and remain constant from the 2020 – 2030 period.

I would suggest stronger a connection of already existing and planned non-fossil electricity along with greater coal restriction. This would involve greater connection with businesses, particularly state-owned enterprises in heavy, resource-intensive industries. Globally, we need to consider the shift of industrial services moving away from China to other developing countries such as Indonesia, as this would allow China to reduce its own emissions but not total global emissions.


China Renewable Energy

China—No 100% 2050 Commitment
Benchmark: 29% of electricity from renewables by 2030

China has not made a commitment to reach 100% renewable energy by 2050; however, its renewable energy target is to produce 20% of its electricity from clean sources by 2030.

China has planned to invest 2.5 trillion Yuan (292 billion pounds) into renewable power generation by 2020, allowing for wind, hydro, solar and nuclear power to contribute toward half of new electricity production. In January 2017, the National Energy Administration and Reform Commission stated that solar will receive 1 trillion Yuan of spending, as the country seeks to boost capacity by five times. Experts have estimated that this is equivalent to about 1,000 major solar power plants. The NEA has not disclosed any further details on how the funds will be allocated.

Looking at current efforts, China has added 3.5 gigawatts of new solar generation in 2016, alone—equivalent to Germany’s total capacity in just one year. At this stage, wind power only accounts for 4% of total energy capacity, and solar represents 1% of China’s electricity in 2016. Greenpeace Beijing has estimated that current installation rates show that every hour China erects enough wind turbines and solar panels to cover a soccer field.

Chinese solar fields have been architectured into images of Panda Bears, the national symbolic animal, with the aim of creating greater awareness and promotion of the development of renewable sources of energy. The Panda power plant in Datong, Shanxi hosts an estimated 1,500 acres of solar panels and is estimated to generate 100 megawatts of energy at a time. The giant formation of the panda can be seen from air and will be connected to the grid in the upcoming months.

Last month, the Chinese province of Qinghai ran on 100% renewable energy (solar, wind, and hydropower) for the week of June 17th to 23rd. The week was part of a trial conducted by the State Grid Corporation of China, which is investigating the long-term viability of renewables across the grid. The total amount of energy produced amounted to 1.1 billion kilowatt hours of energy, sustaining over 5.6 million residents.

Although China has erected hundreds of renewable energy projects in the past year, it has not fully considered the integration capacity of renewable sources of electricity onto the national grid. Greenpeace estimates that 9% of all solar energy and 19% of wind energy generated never makes it onto the grid. Gansu province is even estimated to have over 45% of its wind energy lost. As a result, China must organize a greater efficacy in the way it builds transmission lines from the renewable power plants. China states that it has already recognized this problem and will focus on constructing renewables in a smarter way while focusing on areas where consumption is most abundant.

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China Success Project

China—National Cap and Trade Program

President Xi Jinping announced last week that China will push ahead with an ambitious plan to build the world’s largest market for carbon emission permits. This national cap-and-trade program will expand from the seven regional pilot emissions trading systems established in the country’s 12th Five Year Plan (in 2011). The program designated 5 cities (Beijing, Chongqing, Shanghai, Shenzhen and Tianjin) and 2 provinces (Guangdong and Hubei) where government-set ceilings of pollution were divided into emission permits, issued, and sold to businesses. By selecting polluting industries, participating factories and firms become inclined to lower their emissions—at first to meet their allocated quota, and if successfully done, to sell or save leftover permits at market prices. In this manner, China’s government can over time lower the allowed emissions, making permits scarcer and magnifying price pressures on companies to cut pollution. Cap and trade, in effect, generates greater accountability to what is now an economic externality.

Operation and Evaluation of the Seven Pilots:

The seven pilot projects were limited to covering carbon dioxide and, in terms of industry coverage, set to include high polluting industries; firms involved in heat and electricity production, iron and steel, nonferrous metals, petrochemicals, pulp and paper, glass and cement. Each of the pilot schemes were uniquely designed based on local characteristics and were monitored, reported and verified by third party auditors.

The average credit price ranged from $4.1 USD in Hubei to $12.4 in Shenzhen. The Chinese pilots encountered similar challenges to global ETS programs, in which low carbon prices and unsatisfactory trading volumes prevent the efficiency of the markets. Although the trading levels were very low, by July 2015, more than 38 million tons of carbon dioxide had been traded on the carbon markets. China Network Television reported in August 2014 that, as a whole, the pilot projects allowed for a 5% reduction in China’s carbon intensity in the first six month of that year. Demonstrating the success of the schemes, China’s national government projected a reduction of carbon intensity by 40 – 45% from 2005 levels by 2020.

The Chinese pilot programs have provided important insights for the scaling and expansion to a national market, with the trial and error demonstrating that it is possible to implement ETS in low-income environments, while revealing structural deficiencies such as illiquidity and over-allocation.


National scheme: progress and design

While the pilot programs have acted as important test runs for China, implementing a national market proves to add increasingly challenging issues. The National Development and Reform Commission, the government agency preparing the market, decided that instead of launching all eight industries originally planned, the market would first focus on three of the heaviest polluting industries: coal-fired power plants, cement, and aluminum. The narrow range of sectors allows for a more focused approach that will enhance success. Moreover, China’s statistics and enforcement regulations could prove to be unreliable and may skew outcomes of the markets.

Overall, a successful start to a carbon market will put China in a great position as an international leader for climate action. It should help China fulfill its pledge to the Paris Agreement to reduce CO2 emissions per unit of GDP by 40–45% below 2005 levels by 2020.

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China Checkup

China—Moving Forward

Ecofys Consultancy, an energy and climate consulting group, has determined China to be in good stead to achieve, and even surpass, its pledge for the Paris Climate Agreement. Earlier this year, China demonstrated positive developments in coal use as it canceled the construction of over 100 coal power stations. This effort is recognized as the country’s most significant yet. Coupled with slower coal use in India, both countries are predicted to reduce projected global carbon emissions growth by about two to three billion tonnes by 2030 compared to forecasts made just last year. Indeed, recent observations show that slower rates of greenhouse gas, particularly carbon dioxide emissions, are part of a larger sustained decline. Together, India and China would offset the relatively poor performance expected by the US, which is set to miss its Paris pledge.

According to the U.S. Energy Information Administration (EIA), International Energy Agency (IEA), Massachusetts Institute of Technology (MIT) and Tsinghua University, peaking carbon dioxide emissions around 2030 will reduce China’s emissions by at least 1.7 Gt, or 14%, from the most optimistic business-as-usual scenario.

According to Climate Tracker, China’s status is ‘Medium’.

China is on track to peak its carbon dioxide emissions between 2025 and 2030, but total greenhouse gases could continue to increase until at least 2030. Although China’s policies and actions appear set to achieve its INDC, the INDC itself is not yet ambitious enough to limit warming to below 2 degrees Celsius.

That being said, China’s president Xi Jinping, recently reaffirmed the country’s commitment to the Paris Agreement over a telephone call with incoming French president, Emmanuel Macron. This public acknowledgement shows China’s leadership on global climate action despite international fears of the US Trump Administration’s rollbacks, or even complete withdrawal from the pact. The US and China had previously worked closely to lead global climate action, however China refuses to let this hold them back in further progress. For this reason, it is possible that China will accelerate its actions toward the Paris Agreement, and even increase its pledge henceforward.

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China Emission Reduction Policy

2015-2020 Action Plan for the Efficient Use of Coal and 2016-2020 13th Five-Year Plan

In February 2015, the Ministry of Industry and Information Technology (MIIT) and the Finance Ministry released the 2015 – 2020 action plan for the efficient use of coal: aiming to decrease coal use by 160 million tonnes in the determined period. China’s federal 13th Five Year Plan (2016 – 2020) revealed further coal-related targets, including:

–    Ban on new coal-fired power plants until 2018
–    An annual cut in annual production capacity of coal of 700 Mtce; or, 14% of total production capacity
–    Closure of coal-fired power plants with the aim of reducing air pollution in urban areas.

In Beijing, the last coal-fired power plant has been shut down in 2016 and replaced with a gas power plant.

These policies have already begun to produce effects. The latest data from the National Bureau of Statistics of China (NBS) has shown that the production of raw coal is down 10% from 2015. In addition, hydropower generation has increased by 12%, nuclear by 24%, and wind power by 26%, between January and August 2016, in comparison to generation in the same period of 2015.
Projections further suggest that overall coal consumption in China has already peaked in 2013, as statistics show that it dropped by 2.9% in 2014, and a further 3.6% in 2015. Studies suggest that this may be due to two major factors:

1.    A decline in economic growth
2.    A continued policy to lower coal use in order to reduce air pollution and national greenhouse gas emissions

A continued reduction of coal consumption of 160 million tonnes per year until 2020 suggests that the range of emissions will be below the assumed 2013 peak of coal consumption. Paired with China’s first target cap on total energy consumption at 5 billion tonnes of coal equivalent, as well as targets on air quality progress in cities, China’s set policies will continue to have a major impact on the nation’s greenhouse gas emissions.

Overall, China will meet its 2020 pledge and its NDC targets, but it is predicted that it will remain substantially above current emission levels (22-24% above 2010 levels by 2020 and 33% – 40% by 2030). Although China continues to implement increasingly stringent policies to curb carbon dioxide emissions, particularly from coal, emission reductions from other greenhouse gases seem to be neglected.

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China Extreme Weather Event

Typhoon Nepartak—A Category 5 Super Typhoon

From mid-June through July of 2016, China endured a series of extreme precipitation events, including the tail-end of Typhoon Nepartak—a Category 5 super typhoon—that triggered deadly floods across twenty-six of the nation’s provinces. Official reports published on July 26, 2016 claim that the series of disasters led to a total of 833 deaths, 270 people missing, and a total of 6.24 million residents displaced. The floods have been marked as the world’s second deadliest weather-related event of 2016 and damages, amounting to $22 billion, have been estimated to be the world’s fifth most expensive weather-related natural disaster on record outside of the US.

The climatic severity of these precipitation events and floods was caused by a multitude of factors including, the combination of El Niño and higher levels of atmospheric water vapor caused by global warming. In addition, urbanization and land use changes in cities have led to the enormous demand for housing and the drainage of lakes for further development. This has severely affected the natural drainage system, causing water logging and flooding in the inner city areas.

Although, these factors have drastically influenced the severity of the weather disasters experienced in 2016, China understands that it will continue to see more frequent flooding as Asia’s monsoon system changes as a result of climate change. Adaptation and mitigation to these changes are critical to reducing the vulnerability of those most at risk from precipitation events and flooding.

In the past, the Chinese government focused on environmental restoration, such as (a) afforestation of steep farmlands, (b) restoration of floodplains by removing embankments, (c) resettling farmers in at-risk areas by building new townships; and (d) strengthening river levees and dredging riverbeds. These strategies have not been enough to protect poor farmers and communities—the most vulnerable to flooding. In the early days of August 2016, President Xi Jinping emphasized the importance of early warning systems in flood-prone areas as well as the need for sustainable mitigation strategies focused on engineering solutions. The government is now conducting ‘sponge’ city pilots in 16 major urban centers, including Beijing and Shanghai, where drainage systems will be retrofitted for improved flood control and water conservation. Training of response and rescue personnel and improved access to villages are also required to reach those in risk situations. Community management, particularly by farmers, has been developed to aid flood control, gain greater resilience, and minimize losses.

The increased frequency, severity and unpredictability of weather events caused by climate change are a real threat to China’s population and economy—a fact that  will challenge the nation and keep pushing them to develop bold, new mitigation strategies that will create greater resilience in the face of greater risks.

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China Media Organizations

Historical Overview

Chinese media coverage of global climate change has become increasingly prominent; its growth described in three distinct phases: before and after the release of the February 2007 IPCC report, and later in the discussion and analysis of the Paris Agreement (particularly focusing on China’s role in curbing emissions, and its relation to the United States as a partner and competitor).

In China, the vast majority of media is state-controlled, subjected to critical analysis, and often prone to censorship. Therefore, until 2006 China’s coverage of climate change—a sensitive topic—was minimal, and took the form of matter-of-fact translations from Western scientific reports with little to no comment or discussion. Moreover, few articles made direct links between Chinese carbon emissions and the greenhouse effect or climate change. As a result, public awareness of environmental issues was generally low. The release of the IPCC Working Group I Report on 2 February 2007 in Paris, along with official statements acknowledging climate change, generated a prevalent willingness, from the state and media, to engage in, report, and publicly interpret issues dealing with climate change. Within the months that followed, environmental journalism bloomed and became integrated in all of China’s major news services, featuring global environmental news, as well as exposing local problems through unique stories. Although coverage of climate change has been encouraged by the state, discussions that critically analyze government policies remain rare and controversial; therefore factories and companies bare the greatest focus of criticism. The last phase of climate change coverage started in anticipation of the COP21 Climate Summit in Paris, where China’s government further encouraged the coverage of negotiations, particularly its leading role with the United States in negotiating and setting agreements for reducing greenhouse gas emissions in the upcoming years. Further discussion has continued as President Trump’s position on climate change now threatens the relationships set by former President Obama.
Contact: 11B Fuxin Road, Beijing, China 100038

Broadcast Media

CCTV (China Central Television) is the official state television broadcaster for the People’s Republic of China carries the Communist Party voice.

Content Sample:

New study calls for action to make stagnant carbon dioxide emissions fall

Contact: Editor: Wang Lingxiao, Published: 31 Jan. 2017

The new study, published in the journal Nature Climate Change, warns that without accelerated deployment of technologies for capturing and storing atmospheric carbon, along with a sustained growth in renewables, allowing for a total reduction in greenhouse gases, the world could miss the target of remaining below 2 degree Celsius from pre-industrial levels, set by the Paris Agreement. Wind and solar are thought to be ‘insufficient’ to meet the goals of the Paris Agreement and are dependent on the slower-than-expected release of carbon capture and storage technology.

Print Media

Xinhua News Agency is the official press agency of the People’s Republic of China and is the biggest, most influential media organization in the country. It is a state-controlled institution. Its president, Mr. Ju Mengjun, is a member of the Central Committee of China’s Communist Party.

Content Sample:

Link to Climate Change Topics:
Warming temperatures projected to trigger starvation in deep oceans by 2100
Published: 24 Feb. 2017

20 scientists of the world’s leading oceanographic research centers published a new study warning that the deep ocean floor may face starvation by 2100 as a result of drastic ecological change caused by warming ocean temperatures, increased acidification, and low oxygen zones. The earth system models used to predict the deep ocean temperatures in areas show changes between 0.5 to 4 degrees Celsius across regions. The increase in temperature will increase the metabolic rates of organisms, meaning they will require more food, and with it less available, will face starvation. The North Atlantic is predicted to face the greatest changes first.

Contact: 11 Wall St., New York, NY, 10005, USA; Tel: +1 212-509-0291

Prominent Environmental Reporter: Ni Yuanjin

Online Media

Chinadialogue is an independent organization dedicated to promoting a common understanding of China’s urgent environmental challenges. The non-profit website, launched in July 2003, is funded by a range of institutional supporters and is based in Beijing and London.

EU and China can outflank Trump on Climate Change
Published: 17 Feb. 2017; By: Li Shuo and Maeve McLynn

In anticipation for this year’s G20 summit in Bonn, China has reaffirmed its commitment to climate action, looking to the EU as a partner to fill the political void left by the US under President Donald Trump. Last year’s G20 summit brought the US and China to jointly ratify the Paris Agreement, stimulating ratification for the rest of the world and demonstrating that political resources are powerful, and necessary, to advancing climate cooperation. China urges the EU to bring climate action to the forefront of their political agenda and to act as joint collaborators with China in spearheading mitigation strategies.

Roundtable: How will countries respond if the US withdraws from Paris?
Contact: Chinadialogue Suite 306 Grayston Centre 28 Charles Square, London, N1 6HT, UK
Tel: (+44) (0)20 7324 4767

Prominent Environmental Reporter: Shi Yi

China Subnational Best Practices


Hebei Province Clean Heating Project—In 2003, district heating represented about 5.3 to 6.1 of total coal consumption in China and in 2008, the heating sector consumed a total of 145.4 million tons of raw coal. With continued urbanization and rising levels of quality of life in China, the effort to minimize the carbon intensity of district heating is necessary for low-carbon development. Hebei is a northern province adjacent to Beijing, in which national law requires district heating due to cold climatic conditions. The province has previously received World Bank funding and support for initial district heating reform as requested by 2003 central government policies, and now continues further subprojects to improve efficiency and environmental performance. The recently approved, January 2016, Clean Heating Project aims to modernize heating systems in Chengde, Xingtai and Zhangjiakou municipalities and Pingshan County through improved heat metering to promote efficiency and conservation; developing the use of waste heat from power plants and industry, and; transitioning to alternative sources of energy, primarily natural gas. The modernizing efforts for district heating will strengthen heat supply security, reduce air pollution, and allow for greater flexibility in sourcing energy from renewables, including geothermal and biomass. Currently, coal remains the cheapest energy source, however, ground-source heat pumps and other alternatives are gaining dominance.



Tianjin Urban Transportation Improvement Project—Tianjin is a northern city adjacent to Beijing. As part of the greater Sino-Singapore Tianjin Eco-City Project, the urban transportation improvement project aims to provide greater public service transportation, as well as promoting walking and biking in the urban core, in order to make transportation in Tianjin greener and safer. Travel patterns by urban residents have changed as urbanization has led to greater urban sprawl and development of improved road infrastructure. By 2012, private car ownership had reached 1.9 million, representing a three-fold increase since 2006, and private motorized trips accounted for 15.6 percent of total trips. The bike mode share in Tianjin dropped by 15 percent during that same period. As a result, congestion has worsened and heavy pollution plagues the city with about 66 percent of days with below-standard air quality.

The Tianjin Urban Transport Improvement Project is comprised of five main components:

1.    Redevelopment of streetscapes in Heping and Nankai districts, including pedestrian and bike networks
2.    Improving metro access through interconnection facilities, such as bike parking, bus connection, park and ride, etc.
3.    Launching a public bike sharing system pilot in the core urban area
4.    Development of a bus infrastructure, including parking, bus stops, lines, etc.
5.    World Bank technical assistance for sustainable green urban transport development:

Ningbo—Ningbo is a fast-growing port city in northeast Zhejiang province. The Ningbo Sustainable Urbanization Development Project follows an overarching eco-city, low-carbon framework aiming to improve the use of urban public space, mobility and reduce flood risk for particularly susceptible Ningbo counties. The project was approved in July, 2016 with a completion date in 2021, and is comprised of three main components:

1.    Urban regeneration by salvaging built assets and conserving embodied energy in existing buildings, as well as creating a higher quality, vibrant urban core that promotes greater urban facilities and prevents sprawl.
2.    Urban transportation to improve mobility within the urban network by enhancing transport capacity, reliability and service quality.
3.    Flood risk management through a decentralized approach, in which vulnerable counties will implement measures to their specific threats.

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Promotion of Clean and Low Carbon Cities (China)—China’s cities continue to absorb about 13 million rural residents each year. This rapid urbanization coupled with high economic growth and growing purchasing power, has put tremendous pressure on all forms of public services, including energy, housing, transport, and waste. Recognizing this mounting challenge, China’s cities have launched eco-city and low-carbon city initiatives. In fact, over 80% of all prefecture-level cities in the country have launched at least one eco-city project. A trend that has been largely supported by the National Development and Reform Commission (NDRC) who officially announced, in 2012, that eight cities and several areas in five provinces would pilot low-carbon growth under national government guidance. Other cities have begun the initiatives independently thanks to China’s decentralized governmental structure that gives cities a high level of autonomy in political, financial and administrative matters. Municipal governments have demonstrated a desire for low-carbon transformations, understanding that such policies support the creation of livable, efficient, competitive, and sustainable urban areas. Outlined are three examples of projects that have been implemented under the overarching goal of developing a low-carbon framework.


The National Development and Reform Commission is an ‘inter-ministerial’ organization launched in 1998, in charge of establishing ands implementing national economic and social development strategies, including climate action and environmental frameworks for provinces and cities alike.

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