Translated text of the article 碳达峰、碳中和的经济学解读 [ Explaining the Economics of Reaching Peak Carbon and Carbon Neutrality ] Guangming Ribao June 22, 2021. Also distributed in Chinese by the PRC official Xinhua Press Agency.
In September 2020, General Secretary Xi Jinping proposed in his speech at the 75th General Debate of the United Nations General Assembly that “China will increase its autonomous national contribution, adopt more vigorous policies and measures, strive to peak CO2 emissions by 2030, and strive to achieve carbon neutrality by 2060.” On April 30, 2021, during the twenty-ninth collective study of the Political Bureau of the CPC Central Committee, General Secretary Xi Jinping pointed out that achieving an end to increases in carbon emissions and carbon neutrality is a solemn commitment made by China to the world, as well as an extensive and profound economic and social transformation that can never be achieved lightly.
Party committees and governments at all levels must implement this policy with such great determination that they scar any metal they grasp and leave scars the rocks they walk on [Ná chū zhuā tiě yǒu hén, tà shí liú yìn 拿出抓铁有痕、踏石留印] . They must make clear timetables, roadmaps and construction plans and promote economic and social development based on the efficient use of resources and green low-carbon development. During the “14th Five-Year Program” period, the construction of ecological civilization in China will enter a critical period in which carbon reduction will be the key strategic direction, synergistic reduction of pollution and carbon emissions, integrated comprehensive green transformation of economic and social development promoted. During this critical period China will move from quantitative to qualitative improvement of ecological and environmental quality and the mode of production and lifestyle of the whole society will undergo important changes. It is the duty of young scholars to pay attention to important real-life issues and actively contribute to the academic wisdom of carbon peak and carbon neutrality. For this reason, this edition brought together several young economists to discuss this topic and invites experts to comment on it for the benefit of readers.
- Zhang Zhiqiang, Associate Researcher, National Center for Strategic Research and International Cooperation on Climate Change
- Wang Ke, Associate Professor, School of Environment, Renmin University of China
- Wang Keying, Associate Professor, School of the Low Carbon Economy, Hubei University of Economics
Liu Lingna Postdoctoral Fellow, School of Economics and Management, China University of Geosciences (Beijing)
1. Background of China’s carbon peak and carbon neutral goals
Moderator: Carbon peak and carbon neutral are the buzzwords of today’s society and one of the key tasks of the country in the coming decades. Many young people around me are very concerned about this issue. Could you please tell us what is peak carbon and carbon neutral? What is the relationship between the two?
Wang Ke: Carbon peak refers to the historical peak of carbon dioxide emissions, after which it enters a phase of gradual decline. Carbon neutrality refers to the net zero emission of carbon dioxide, which means that the emission of carbon dioxide and the removal of carbon dioxide offset each other. Achieving carbon neutrality requires not only the reduction of carbon emission levels in each sector, but also the adoption of measures such as afforestation, negative carbon emission technologies and carbon offsetting to offset carbon emissions.
Zhang Zhiqiang: Ending increases in carbon emissions is a prerequisite for carbon neutrality. Only when an end to increases in carbon emissions is achieved can carbon neutrality be realized. The time and peak level of the carbon peak directly affect the time and difficulty of achieving carbon neutrality: the earlier the peak time, the less pressure to achieve carbon neutrality.
The higher the peak level, the faster and more difficult the technological progress and development model change required to achieve carbon neutrality. The time to reach the peak and the peak level should be determined by the constraints of the carbon neutrality vision. The lower the peak level, the lower the cost and difficulty of emissions reduction; the longer the time from peak to carbon neutral, the less the pressure on emission reductions.
Wang Keying: From the perspective of countries’ paths to their peak carbon – an end to increases in carbon emissions – carbon emissions will plateau and peak and then continue to decline as technology advances and carbon capture technologies and negative emission technologies become more and more widely used, entering a virtuous cycle and eventually achieving carbon neutrality. In terms of historical emissions, developed countries have created more total emissions, but most of them achieved an end to increases in carbon emissions in the second half of the 20th century or the beginning of the 21st century.
Unlike developed countries, China has committed to the world’s shortest time – 30 years – to achieve from an end to increases in carbon emissions to carbon neutrality and to accomplish the highest reduction in carbon intensity in the world, which is a very difficult task. This means that there is almost no leeway for China as it moves from ending increases in carbon emissions to achieving net zero emissions. For this reason, first of all, we should take the initiative to make carbon emission reductions in the time window before the carbon peak, and try our best to reduce the peak; secondly, we should accelerate the transformation of the development model to reach the peak as early as possible. Some provinces, cities and industries with mature conditions can lead on reaching their peaks as a strategic initiative to successfully achieve carbon neutrality.
Moderator: It would take a tight schedule and a tremendous amount of work for China to a reduce its emissions so as to achieve peak carbon and then carbon neutrality. Why should we make this commitment? In other words, what is the background of China’s proposal to reach peak carbon and carbon neutrality? At present, which countries have carried out relevant work?
Wang Ke: Internationally, 178 parties around the world signed the Paris Agreement in 2016, which became the third milestone international legal text in human history to address climate change after the 1992 United Nations Framework Convention on Climate Change and the 1997 Kyoto Protocol, forming the post-2020 global climate governance landscape. The Paris Agreement invited all parties to submit their Mid Century Strategies (MCS) for long-term low greenhouse gas emissions in the mid-21st century by 2020 in order to promote the early global achievement of deep emission reductions. China’s goal of achieving carbon neutrality by 2060 align very closely with the requirements of the Paris Agreement. This is key to achieving the global goal of 1.5 degrees of temperature control and in demonstrating China’s role as a responsible power and in reflecting China’s determination to promote the improvement of global climate governance. This is an important contribution to building a community of human destiny.
From the domestic perspective, China’s previous crude growth model caused excessive consumption of resources and energy and serious damage to the environment and ecology of our country. Transforming our economy and reaching a development stage based on knowledge, technology and governance to improve efficiency and support growth is very urgent. It is in China’s own interest to strengthen our response to climate change and achieve green and low-carbon development transition as soon as possible. This will create a positive interaction between domestic low-carbon actions and global climate governance.
Wang Keying: At present, China’s development has reached a point of important strategic opportunity just as the international environment is becoming increasingly complex. Making proposals to cut back on emissions until they no long grow — reaching peak carbon and then carbon neutrality is a strategic decision that China has made. This decision will bring on extensive and profound economic and social changes and form a new way of development. Under the general trend of global economic and social energy changes, it helps to force China to accelerate the transformation of its development mode and build up a green and low-carbon economic system.
Zhang Zhiqiang: More and more countries are already actively participating in enhanced climate change actions such as carbon neutrality. For example:
- Twenty-nine countries signed the Carbon Neutral Alliance Statement in 2017, pledging to achieve zero carbon emissions by the middle of the 21st century.
- At the September 2019 UN summit, 66 countries pledged to achieve carbon neutrality targets and formed the Climate Ambition Alliance.
- In May 2020, 449 cities around the world participated in a zero-carbon race proposed by UN climate experts: as of January 2021, there are 127 countries have pledged to be carbon neutral by the middle of the 21st century.
- Currently, countries such as Bhutan and Surinam have achieved their carbon neutrality targets, and the UK, Sweden, France and New Zealand have written carbon neutrality into law.
- As of November 2020, 19 countries have submitted long-term low-emission development strategies (LTS) to the United Nations Framework Convention on Climate Change (UNFCCC), 11 of which include carbon neutrality targets in their LTS, and the total GHG emissions of countries committed to achieving carbon neutrality have reached 50% of the world.
2. What are the challenges and opportunities for economic and social development when achieving the carbon peak and carbon neutrality targets?
Moderator: As many scholars have said, the carbon peak and carbon neutral targets are not only a constraint on carbon emissions in the world, but also a change in the way of economic and social development. At this stage, China is in the late stage of industrialization, and unlike developed countries that have industrialized, China still needs to continue to promote high-quality industrial development. In this context, what challenges will achieving an end to increases in carbon emissions and carbon neutrality bring to China’s economic development?
Zhang Zhiqiang: In the context of an end to increases in carbon emissions and carbon neutrality, industrial restructuring has new connotations.
- We need to pursue creating a low-carbon industrial structure. The previous high-carbon industrial structure based on fossil fuels should be readjusted according to the carbon emission level. For the high-carbon emission industries such as electricity, iron and steel, cement and chemical industry, on the basis of the original large compression and elimination of backward production capacity, low-carbon transformation must be carried out.
- We need to create new industries. Technological innovation is contingent and uncertain, but the trend of cleanliness and low carbonization will not change over the long term. Emerging industries inherently have the advantage of low carbonization, especially the emerging service industry. In the choice of technology route, emerging industries do not have the historical burden of traditional high-carbon industries and can embark on low-carbon or even zero-carbon development direction at lower cost.
Wang Keying: Industrial restructuring is an effective way to reduce carbon emissions, but the industrial restructuring and carbon emission reduction in resource-based regions will face a more difficult challenge. For a long time, our dependence on resources has caused distortions in the industrial structure of resource-based regions. This has affected the normal evolution of the industrial structure. The proportion of secondary sector industries is often too high, and thus carbon emissions are high. The industrial restructuring of resource-based regions will be unsuccessful if emerging industries and low-carbon industries are not sufficiently developed to compensate for the negative impact of resource depletion or fossil energy withdrawal.
Wang Ke: Carbon neutrality implies the reconfiguration of the fossil energy-based energy system and related infrastructure, which will be a process of interest reorganization and a major challenge at the technical, economic and social levels. On the one hand, although the scale of China’s infrastructure is the largest in the world, the per capita level is still lower than that of developed countries. In particular, as the world’s largest developing country, China’s urbanization process continues. Growing cities have a greater demand than established cities for new infrastructure construction and renovation. At this stage of development, effectively controlling carbon emissions is more difficult and so a practical path to transformation needs to be found. On the other hand, industrial transformation is also very risky. Take the electric power generation using coal as an example. According to a financial analysis of existing coal power projects in 2019, nearly 70% of the country’s coal power units operate at a loss. If coal-fired power generation is gradually phased out through early retirement and lower generation hours, financial losses in coal power sector could become worse and even trigger systemic financial risks. This would harm the local economy and aggravate regional economic imbalances.
Moderator: Carbon compliance and carbon neutrality bring profound changes to the economy and society, and also bring great opportunities for energy transformation, technological progress, industrial restructuring and international cooperation, please tell us what specific opportunities exist?
Zhang Zhiqiang: In order to achieve China’s goals of reaching peak carbon and then carbon neutrality we need not only to overturn the post-industrial revolution energy consumption model based on fossil fuels, but also create new industries and industrial profit models. Developed countries have been able to continuously maintain their leading edge by using their advantages in creating technological and standards to set up market barriers and impose carbon tariffs. For example, the carbon border adjustment mechanism that the EU tried to impose this year aims to strengthen its own voice in the global climate change field by imposing a border adjustment tax on countries that have not implemented emission reduction mechanisms in the name of preventing carbon leakage.
There is huge room for growth in future investment under carbon neutrality, and achieving the goal of an end to increases in carbon emissions and carbon neutrality will help expand the scale of investment in China. According to the Institute of Climate Change and Sustainable Development of Tsinghua University, it is estimated that if the temperature rise target is controlled at 2 or 1.5 degrees Celsius, new investment of about 100 trillion to 138 trillion yuan will be needed in China’s energy system over the next 30 years. A Goldman Sachs study [Translator’s note: See the January 2021 Goldman Sachs Equity Research report Carbonomics — China Net Zero: The clean tech revolution End note ] predicts that by 2060, China’s clean energy infrastructure investment will reach $16 trillion (about RMB 10.4 billion), creating 40 million net new jobs.
Wang Ke: To achieve carbon neutrality, we need to improve the efficiency of production factor inputs through technological progress and structural adjustment, and accelerate the development of strategic emerging industries, high-end manufacturing industries and modern service industries with high growth potential that are knowledge and technology intensive, consume less material resources, and have high overall efficiency. Therefore, carbon neutrality will boost booster or catalyze China’s economic transformation and bringing our economy up to a whole new level. Moreover, a large number of continuous huge investments related to the R&D, demonstration and promotion and application of low-carbon technologies will provide new momentum for economic growth while enhancing China’s international competitive position in the field of low-carbon technology revolution.
Wang Keying: China’s green finance will also grow faster. Currently, China’s green finance has made some progress, green credit, green bonds and other financial products have taken shape, but far from meeting the green financing gap needed to achieve the goal of an end to increases in carbon emssions and carbon neutrality. The future investment in clean power generation equipment in the power industry, the electrification process in the transportation industry, the low-carbon transformation of new energy vehicles and aviation and shipping equipment, the large-scale investment in low-carbon equipment in the manufacturing industry, the low-carbon infrastructure construction, and the investment in carbon capture and storage all mean huge green investment and financing needs, which will undoubtedly bring huge opportunities for the development of green finance in China.
3. What support can economics provide to achieve the goal of carbon peak and carbon neutrality?
Moderator: The study of an end to increases in carbon emissions and carbon neutrality involves many disciplines in natural and social sciences. Nowadays, there is a lot of interest in “carbon neutral economics”. What support can economics provide to achieve the goal of an end to increases in carbon emissions and carbon neutrality?
Wang Ke: Economics is the science of allocating scarce resources. Achieving carbon neutrality means that carbon capacity becomes a scarce resource, and carbon neutrality economics starts from allocating carbon capacity as a scarce resource. The process of allocating carbon capacity is a process of clarifying and allocating property rights of global greenhouse gas capacity resources. Within a sovereign state, this property right can be defined compulsorily through state coercion, and then implemented through a choice of relevant policy instruments such as finance, taxation, or emissions trading. The allocation of carbon capacity at the global level can currently only be determined through transnational negotiations and consultations.
Many developed countries achieve a natural peak after their GDP per capita exceeds $20,000, and then go through a long plateau period and gradually enter a carbon emission decline path, which takes 50 to 60 years from peak to carbon neutral. China will achieve its carbon peak at a much lower level of GDP per capita, with a lower peak and lower emission trajectory, and the transition time from carbon peak to carbon neutral of only about 30 years. Whether China can come out of this process with a carbon emission reduction path of higher quality than that of developed countries based on our study of the experience of developed countries in reaching the peak is an important question before us and an area of economics that we need to focus on.
Zhang Zhiqiang: Carbon neutral economics inherits the analytical framework of modern economics and explains the mechanism of the role of natural capital and social capital in resource allocation by studying the relationships between supply and consumption, between cost and benefit, between discounting and intergenerational transfers, between a particular system and the appropriate path for it, between industry and technology, between the domestic and the international and other relationships involved in achieving carbon neutrality. Understanding these relationships will help guide the way to solutions to the climate crisis the world faces today.
The economics of carbon neutrality in the main addresses these three issues:
- The coupling mechanism of natural and social systems based on human activities. In studies of the exchange of material and energy between humans and nature, carbon is used as a general indicator that reflects natural capital as ecological value in the whole process of economic and social development.
- Realizing the dynamic iteration from high carbon to zero carbon emissions will reallocate resources related to the energy system, the production and consumption system and the environmental system. The carbon trading mechanism based on price signals and the fiscal mechanism, oriented by carbon tax, will work together to proactively guide the whole society towards low carbonization.
- The study of national governance mechanisms — that is, based on the principle of common but differentiated responsibilities and the principle of respective capabilities, the responsibilities and obligations that developed and developing countries will need to assume should be clarified.
At the same time, the balance of interests between the present and future generations should also be considered. The present generation has the obligation to leave for the next generation an environment better suited for sustainable development.
Wang Keying: Now that there is a global consensus on the need to control the rise in global temperatures and to address climate change, countries have proposed their own carbon emission control targets and carbon neutral timetables. The costs and benefits of economic growth under different development models and emission reduction paths can be considered under the constraints of reducing the increase in carbon emissions so that peak carbon emission is achieved and and then a certain length of time to go from there to net zero emissions. This will provide a theoretical basis for the design of public policies and market-based modalities. Carbon markets and carbon taxes are two types of tools commonly used in economics to correct for the externalities of carbon emissions. Still awaiting more in-depth analysis by economists are the roles of markets and governments in the process of achieving carbon neutrality, balancing the short-term and long-term, local and overall interests and so forth.
4. Improving the institutional arrangements to promote an end to increases in carbon emissions and moving towards carbon neutrality
Moderator: From the news reports, we can see that several ministries in China are promoting carbon neutrality work. What kind of institutional arrangements are needed in the process of achieving the goal of carbon neutrality? In particular, how should the government strengthen the policy support for high energy-consuming and high-polluting industries such as industry, transportation, construction and electricity, which are in the basic position?
- We need to emphasize the importance of devising a strategy and to reach a strategic consensus as soon as possible that will clarify the strategic significance of carbon neutrality in achieving our goal of socialist modernization and to incorporate our carbon neutrality goal into the relevant major strategies and plans.
- We need to create an overall system for devising our policy on this issue. We need to pay attention to the dual role of positive incentive and negative restriction of financial instruments, reduce the cost of carbon emission reduction for enterprises and individuals by expanding financial expenditures, and conversely, eliminate enterprises and products that do not meet carbon emission reduction standards through financial restrictions. We need to build a green financial system, and guide the financial system to provide the funds required for carbon neutrality in a market-oriented manner; accelerate the construction and improvement of the carbon market.
- We need to strengthen the research and development of key carbon neutral technologies to provide the necessary breakthrough technology support for the development in the direction of low carbonization, cleanliness, decentralization and intelligence.
Zhang Zhiqiang: Carbon neutrality is a systematic project, involving all aspects of law, economy and society. From the legislative point of view, climate change legislation is still being actively promoted, and as the basis for the basic relationship between a low-carbon and zero-carbon society in the future, there is still a need to further build consensus, and accelerating the legislative process is the top priority for promoting carbon neutrality in the future. From an economic perspective, carbon neutrality is not only about the internalization of the cost of previous ecological and environmental damage, but also about adjusting the mechanisms through which the economy operates. This involves various fields of economic work, including traditional industries such as electricity, iron and steel, chemical industry and cement, as well as many fields such as finance, information, international trade and infrastructure. For basic industries such as industry, transportation, construction and electricity, we should promote the low carbonization orientation of stock investment, increase industrial structure adjustment, and gradually eliminate high energy-consuming, high-emission and high-polluting enterprises. We should promote the use of carbon markets and other mechanisms to accelerate the technological progress of enterprises and industrial upgrading.
Wang Keying: Different industries have different emission reduction characteristics and path options. For the electric power industry, the reshaping of the energy structure is the key; the difficulty of emission reduction in the industrial industry depends on the structure of carbon emissions. Carbon emissions from energy consumption can be controlled through electrification, while carbon emissions from the production process need to be addressed through the development of industrial technologies and carbon capture and storage technologies. In the transportation and construction industries, this requires work not only on the production side, but also will involve guidance of the demand side and the active participation of consumers.
Chen Ying, Deputy Director and Researcher, Sustainable Development Research Center, Chinese Academy of Social Sciences
As a key task in various sectors and fields, the carbon peak and carbon neutral target has become a topic of great concern and discussion in the whole society, which will surely bring profound economic and social systemic changes. Against this background, the Youth Forum organized by Guangming Daily with the theme of “The Economic Interpretation of Carbon Peaks and Carbon Neutrality” is timely and the discussions of the young scholars has been very inspiring.
First of all, the young scholars accurately interpreted the background of China’s carbon peak and carbon neutral goals from different international and domestic perspectives, which is very important. At present, there are still some misunderstandings or prejudices about the concepts and connotations of peak carbon and carbon neutrality in the society. Even though the two concepts are not identical. Some places there is the tendency to hurry up and build high carbon investment projects before reaching the carbon peak. Only by understanding the significance of an end to increases in carbon emissions and carbon neutrality from a strategic perspective and understanding that an end to increases in carbon emissions and carbon neutrality are two phases of the same goal can this misunderstanding be cleared up. From now on, we should be enthusiastically push ahead with economic and social transformation rooted in the carbon neutrality vision. That will enable use to take a high-quality pathway to ending increases in carbon emissions and lay a good foundation for moving toward carbon neutrality.
Secondly, the young scholars analyzed more comprehensively the opportunities and challenges to economic and social development that will be brought by achieving the goal of an end to increases in carbon emissions and carbon neutrality, reflecting the depth of the discussion. As the largest developing country, China has to reach carbon neutrality from peak carbon through the fastest ever rate of reduction at the fastest speed ever. This will certainly be a tough fight and a big test for us. Of course, major opportunities often coexist with serious challenges, and only by taking the initiative to meet these challenges and making good preparations in all aspects can we better grasp the new opportunities for development.
The carbon neutrality target has opened up a new round of international technical and economic competition. Many countries are ready to take the initiative to put forward carbon neutrality targets and formulate corresponding long-term low-emission development strategies. In the future, competition and internalational interactions around carbon neutrality are likely to reshape the world economic landscape. China will need to catch up, both in response to international trend and from China’s own needs to achieve sustainable development.
Finally, the young scholars discussed “carbon neutral economics” from the perspective of economics supporting the goal of achieving an end to increases in carbon emssions and carbon neutrality, which is valuable. Carbon Neutral Economics is an unprecedented economic and social practice, and there will be many new theoretical and practical issues to be explored, to which economics can and must contribute.
Most developed countries in Europe and the United States achieved an end to increases in carbon emissions in the 1980s and 1990s, and intergovernmental negotiations on climate change were only opened in 1990. Although the an end to increases in carbon emissions in developed countries was influenced by the oil crisis, environmental policies and the widespread use of natural gas, it was mainly achieved naturally after their economic development had reached a mature stage and the manufacturing industry moved abroad.
The scientific, technological, environmental, economic, political and legal conditions we face today are very different from what they were at that time. Young scholars have the responsibility to make use of their wisdom to deliver an answer in this field suitable for our different times that is based on the new situation and new challenges at home and abroad.
Shi Minjun, a member of the expert group of the Ministry of Science and Technology’s “Global Change and Response” key project and a professor at Zhejiang University’s School of Public Administration.
This is a major strategic decision for the sustainable development of the Chinese nation and the building of a community of human destiny, which not only reflects the responsibility of a big country in addressing climate change, but also helps to promote the green and low-carbon transformation of China’s economic and social development.
On the one hand, China is facing the test of reaching the carbon peak and carbon neutrality at the stage of low per capita income, which is unprecedented; on the other hand, China’s energy demand is still strong, and its resource endowment of “rich in coal, poor in oil and low in gas” makes it difficult for China to rely on coal for energy consumption. In 2020, although China’s installed capacity of wind power and photovoltaic power generation has reached 400 million kilowatts, ranking first in the world, it only accounts for less than 5% of the country’s energy consumption. Even if the installed capacity of wind power generation and photovoltaic power generation can reach 1.2 billion kilowatts in 2030, the proportion of primary energy consumption will only be about 10%. At present, there are 49 nuclear power generation units in operation in China, with an installed capacity of 51027.16 MW and a cumulative power generation of 3662.43 billion kWh, which still accounts for only 4.94% of the total power generation and about 3% of the national energy consumption.
Facing such a huge challenge, China is still determined to achieve the goal of carbon peak and carbon neutral, not only because China has made a solemn commitment to the world, but also because of the inherent requirements of China’s sustainable economic development. Since the reform and opening up, China’s economy has developed rapidly and people’s living standards have improved significantly, but the traditional development model has paid a heavy price in terms of resources and environment, and it is necessary to change the mode of economic development and take a green development path with low energy consumption, less pollution and high quality.
To meet the challenge, China must come up with a better carbon emission reduction path than developed countries have produced. Since the time and peak level of carbon peak will directly affect the time and difficulty of carbon neutrality, China must integrate the goals of reaching peak carbon and then carbon neutrality, strengthen the top-level design of carbon peak and carbon neutrality from three levels: technology-level, economy-level and system-level. We need to clarify our path to peak carbon and to carbon neutrality, strengthen the policy incentives and guidance on low-carbon technology innovation and green transformation of industry, and guide the whole society towards its green and low carbon transformation.
The economics of climate change has received attention from mainstream economists in recent years, and one of the important symbols is that American economist Nordhaus won the 2018 Nobel Prize in Economics for his contributions to the field of climate change. Based on cost-benefit analysis, economics can play an important role in many areas such as the formulation of public policies such as carbon emission reduction and the design of governance mechanisms for the low-carbon transition of economic and social systems. Several young scholars specifically mentioned how economic theory can provide support for achieving both an end to carbon emissions increase and the carbon neutrality goal. This reflects the young scholars’ concern for real-life issues and shows their good academic sensitivity. They have discussed carbon neutral economics, a new research area worthy of active exploration by young scholars.
Three Chinese academics offered their views on this issue in a recent letter to Science magazine:
- 1University of Technology Sydney, Sydney, Australia.
- 2Hubei University of Economics, Wuhan, China.
- 3Tongji University, Shanghai, China.
Science 09 Jul 2021:
Vol. 373, Issue 6551, pp. 170
In 2017, China’s Hebei province rapidly shifted from coal to gas, but the resulting energy shortages led to a reversal of the coal ban.
PHOTO: THOMAS PETER/REUTERS
China has pledged to achieve peak carbon dioxide emissions by 2030 and carbon neutrality by 2060 (1, 2). Although a national road map has not yet been announced, many cities, companies, and institutions in China have been proposing carbon reduction plans that rely on rapidly transitioning from fossil fuels to other types of energy (3, 4). Such extreme changes could backfire. China’s energy plans are most likely to succeed if they are inclusive, gradual, and tailored to the needs of each region.
Radical carbon-neutral targets can lead to unsustainable energy transitions with potentially dangerous unintended consequences. For example, millions of rural residents in China’s Hebei province were reportedly left with no heating in the winter of 2017 as a result of a rapid switch from coal to gas in an attempt to reduce pollution (5). In mid-December of 2020, factories in China’s Zhejiang province were forced to close temporarily to meet unrealistic energy consumption targets (6).
China should promote equitable energy transitions that do not leave behind disadvantaged groups or those employed by vulnerable sectors of the economy (7, 8). Energy transition action plans should include strategies to protect the economic and social welfare of the nearly 4 million people who work in fossil fuel mining and many more who work to support fuel supply chains (9). Existing policy debates pay insufficient attention to the social and economic challenges involved in transitioning human capital along with energy (10).
The energy transition process also needs to be implemented over time rather than in rapid bursts. Energy transition paths should balance human needs and social stability, a lower share of fossil fuels, and energy security. The energy system has strong transition inertia; a radical energy transition path that is not capable of practically and cost-effectively meeting people’s basic needs will do more harm than good.
Finally, transition plans need to adapt to regional heterogeneity. Because of the tremendous geographic differences in China, not all regions will be able to achieve energy transitions at the same pace. Regions with more economic development and resources may be able to afford earlier neutrality. Regional heterogeneous targets should be established to account for such differences. Adopting market instruments, such as energy production capacity permits (11) and an emissions trading system (12), can help to minimize the costs of transitions.http://www.sciencemag.org/about/science-licenses-journal-article-reuse
This is an article distributed under the terms of the Science Journals Default License.
References and Notes
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- ↵Reuters Staff, “China’s top steelmaker Baowu Group vows to achieve carbon neutrality by 2050,” Reuters (2021).Google Scholar
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- ↵National Bureau of Statistics of China, “Communiqué on the Fourth National Economic Census (No. 3)” (2019); www.stats.gov.cn/english/PressRelease/201911/t20191120_1710328.html.Google Scholar
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- ↵“China’s emissions trading scheme,” IEA (2020); www.iea.org/reports/chinas-emissions-trading-scheme.Google Scholar
Below is the text of the Guangming Daily article translated above.
王 克 中国人民大学环境学院副教授