A new report sets out the current state of play of climate leadership for Chinese cities at "China Day," a side event at the climate summit in Cancun.

Climate Group's report, "China Clean Revolution Report III: Low Carbon Development in Cities," shows China's commitment, practices as well as the challenges of transforming to a low-carbon economy.

Mark Kenber, deputy CEO of Climate Group, told China.org.cn: "We can clearly see that in the closing months of 2010, China has been pushing to meet the 20 percent energy-intensity- improvement target and the 10 percent renewable-energy target the national government set in the soon-to-end 11th Five-Year Plan (2006-2010)."

In October 2010, the Central Committee of the Communist Party of China began to set the tone for the forthcoming 12th Five-Year Plan due to be announced in March 2011. Kenber believes the 12th Plan is expected to be more ambitious than the previous one.

"As the 12th Plan takes shape, we examine positive examples of how the private sector and major cities are beginning to collaborate, with the national government's backing, to pursue economic and industrial transformation on an unprecedented scale," he said.

From a carbon reduction standpoint, some observers suggested that the energy-intensity target for 2015 will be extended by a further 17-20 percent relative to 2010. Kenber said: "The Plan will attempt to underpin a clean revolution in China's economic development over the next decade."

The report stressed three key pillars of the 12th Five-Year Plan: restructuring China's economy and reshaping its industry, improving research and development in science and technology and establishing a resource-efficient and environmentally friendly society.

In Kenber's opinion, China is witnessing an unprecedented urban growth rate, which only looks set to accelerate. The country's urban population reached 620 million people in 2009, an increase of 36 percent since 2000.

In addition, the urban population is becoming wealthier, consuming more energy and resources per capita. Chinese cities currently consume three-quarters of the country's energy – a proportion that is set to rise to 83 percent by 2030.

According to the report, in response to the pressures of rapid urbanization, the government has been targeting energy intensity, and many cities have started to explore their own low carbon future.

"Under this anticipated trend toward more localized delivery of the 12th Five-Year Plan, the role of cities will be increasingly critical to success," Kenber said.

The report indicated that China should drive its energy efficiency in industrial processes and restructuring the local economy to favor low-carbon businesses.

"Lots of work can be done, including establishment of low carbon industrial parks, making new and existing buildings more energy efficient, making low-carbon transport widely available, pursuing transport-oriented development to improve access to public transport and so forth," Kenber said.

He also suggested that cities should increase the share of renewable energy generation, such as decentralized generation and building-integrated systems like landfill gas and ground source heat pumps.

"I'm deeply convinced that cities in China, if they can fully implement the future 12th Five-Year Plan, can develop much better than today," he said.

The Climate Group published its first China's Clean Revolution report in 2008. The report highlighted the emergence of Chinese low-carbon entrepreneurs and businesses that were beginning to lead the global market as China began an aggressive push to set itself on a cleaner development path.

At the peak of the global financial crisis in 2009, the publication of China's Clean Revolution II reported on the continued growth of low-carbon industry in China as the government focused on creating a new domestic market for low-carbon technologies.