How to Develop a Low Carbon Economy in China

Introduction

            The transition to low carbon economies is one of the most universal trends that are reshaping national and international markets. The trend can be traced to the realization of global warming and its deleterious effects to the environment and suitability of future economies (Hertwich, Edgar , et al. 6277). The underlying notion is that thoughtful structural changes are needed to tackle the effects of climate change. Structural changes involve mechanisms that are focused on both mitigation and adaptation. Common mitigation policies being embraced by the international community entail the introduction of low carbon technologies. Low carbon technology development has to do with the implementation of sustainable energy systems that are friendlier to the environment (Foxon 2263). In order to achieve low carbon economies, governments and regional bodies are advocating the elimination of outdated production facilities and promoting technological innovations and new energy systems (Fankhauser 350). The transition to a low carbon economy is expected to alter the industrial structures and energy mix, and impact a multiplicity of sectors and employment paradigms. Indeed, the common definition of a Low Carbon Economy (LCE) exemplifies these changes by accounting for new technological, economic, and social systems of production and consumption that are aimed at conserving energy and reducing Greenhouse Gas Emissions (GHG) while conserving the momentum of social and economic development. Three major principles that underpin the development of a LCE are the decoupling of economic growth from pollutant energy sources, reduction of emissions per every unit of economic output, and reduction of resource consumption.

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            China has already shown substantial effort in the shift towards a LCE. The country has played a role in the backdrop of the climate change agenda since the financial crisis of 2008. Since then, the country has been working to develop a low carbon economy through the design and implementation of energy efficiency and emission reduction policies (Price, Lynn, et al. 2174). The nation’s interest in the move to clean energy was manifest as early as 2009 when President Hu Jintao revealed that China would begin to build environment-friendly infrastructure as a way of transitioning to low carbon economic systems. Hu claimed that the country would develop renewable energy technologies, increase carbon sequestration capacity in the forestry industry, and introduce new climate-friendly technologies. In the same year, the Chinese government set quantitative targets of carbon emissions. The same fervent attitudes towards a low carbon economy has epitomized by the current president. In 2020, President Xi Jinping’s administration announced that China would bolster its 2030 climate target and achieve carbon neutrality by 2060. Such quantitative targets represent China’s commitment to the development of a low carbon economy.

            In spite of a high commitment to the reduction of carbon emissions, china is still one of the largest GHG emitters due to its high production and consumption margins. The country emitted over 12 Giga tones of greenhouse gas in 2014, accounting for 30% of global emissions that year. Additionally, the current recovery activities are carbon-intensive and require large energy quotas from the existent fossil-fuel energy systems. China has consistently relied on coal power plants to feed its renewable energy industries and supply its hungry energy demand. Economic doubts arising from the COVID-19 pandemic have added to the list of uncertainties. China’s activities in the coal industry are a significant concern due to their incongruence with the Paris Agreement, which is a legally binding treaty.

            Accordingly, this study aims to assess how China can develop a Low Carbon Economy in the face of sustainability concerns, rising energy demands, and its growing participation in the global markets. The central research question is “How can china develop a low carbon economy? The paper uses secondary data analysis to assess the situation on the ground before engaging in an in-depth deductive discussion and preliminary construction of a suitable framework.

Literature Review

            Existing academic literature shows that China has committed itself to developing a low carbon economy. The level of commitment is expressly manifest in the country’s input in energy-saving developments and carbon emission reduction target (Zhang 6640). China set the first carbon emission reduction target initiative in 2006. It consisted a five-year plan of policies and actions for promoting industrial optimization, energy structure adjustments, carbon sink projects, carbon emission trading markets, and afforestation. Each of these aspects have largely contributed to the development of a low carbon economy.

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            Scholars have pointed to the close association between energy consumption and economic prosperity. As the fast developing country globally, China consumes massive amounts of energy, leading to significant GHG emissions (Wang 122). Hence, the country faces a dilemma regarding its economic development milestones and emission reduction goals. One of the most effective solutions in solving the dilemma is advocating energy conservation. China encourages energy conservation through its Energy Conservation Law, which was instituted in 2005. Energy conservation has also been implemented in heavy industries through the Ten Key Energy Conservation Projects, which foster energy efficiency in industrial processes Ke, Jing, et al. 571). The 1000 enterprises program is another key energy efficiency initiative (Zhou, Nan, Mark, and Lynn 6446). Collectively, the Ten Key Energy conservation Projects and the 1000 enterprises program had reduced energy consumption by the equivalent of 132 Mt of coal by 2009.

            In addition to energy consumption initiatives, China has also boosted its transition to a low carbon economy through energy restructuring. The Chinese regime instigated the restructuring process by revising the Renewable Energy Law and implementing the Golden Sun Demonstration Project, which was aimed at increasing the use of clean solar thermal power (Wenjie, Zhang, et al. 674). In the recent decade, China has experienced a record increase in non-fossil based energy production. The share of non-fossil based energy to fossil-based energy production eventually reached 20% in 2017, proving that China’s energy restructuring efforts were effective. Primary non-fossil-based energy systems include nuclear, hydro, solar, and wind. Another effort in the energy restructuring agenda has been the reduction of coal consumption. Although China’s coal consumption has reduced slightly, the country relies on coal-fired power plants, which contribute to a large proportion of the country’s GHG emissions.

            The economic prosperity of China relies on energy-intensive industries, particularly those that result in carbon emissions. Nevertheless, since China is a developing country, the government has significantly invested in the development of a holistic development plan that accounts for the adjustment of economic development along with the industrial structure. For instance, in 2007, china began identifying energy intensive industries with the goal of improving energy efficiency through the replacement of small thermal power plants with large plants. Furthermore, the Chinese regime provides support to key strategic industries in order to optimize the industrial structure along with energy systems. This is evident in projects such as the piloting of carbon industrial parks and evaluation indices for evaluating carbon outputs in industries.

            As part of its sustainable financial policies, China has created a carbon emission trading market. The first of its major carbon emission trading schemes was launched in 2013 to facilitate reduction in carbon emissions in enterprises (Cong, Ren, and Alex 414). Moreover, between 2008 and 2010, the National Development and Reform Commission (NDRC) selected a few districts to experiment its carbon emission trading pilot program. The objective of this exploratory exercise was to prepare the country for the institution of a real carbon market. The first carbon trading market began in 2013 in Shenzhen and a few others were launched in 2015 and 2017 (Zhou et al. 515). The national carbon emission trading market has positively influenced China’s carbon emissions and increased the country’s momentum towards a LCE. Other nationwide strategies for advancing the LCE cited in literature are low carbon cities, circular economies, carbon sinks, afforestation, and carbon emission reduction targets.

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            While china has made considerable strides towards the development of a LCE, several problems remain. The most noteworthy problems relate to the country’s current low carbon pathways, absence of top-level plans, concentration on short-term goals and the lack of uniform policies. A larger share of implemented policies are short-term; this has led to an overlap in policing as far as the development of an LCE is concerned. There is evidence of repetition in policies in multiple pathways, such as carbon emission tasks and carbon cities. What is more, China lacks a nationwide carbon trading market that incorporates many industries. Hence, there is a need for the establishment of a transparent carbon verification system. Another gap in the development of an LCE is the unsuitability of uniform policies across different local regions. Since China is a large country with complicated socioeconomic and natural conditions, national policies are unsuitable for some regions.

Data and Methodology

            Data for this study primarily consisted of emission levels, economic growth indicators, energy consumption, and emission controls for China and major world economies. Data was sourced from online open source databases. The data points selectively covered the last three decades and were mainly presented in raw figures and percentages. Times-series data was included to allow comparisons of variables across time.

            The researcher chose the secondary data analysis approach because of its convenience and economic advantages over other methods. Secondary data analysis is the synthesis of already existing data or data that has been collected in the past for different reasons other than those driving the current research (Johnston 620). As opposed to the collection of primary data, the use of already existing data means the researcher will not go to the field and a lot of time will be saved. Additionally, some databases of amassed data are large, detailed, and reliable. In a time when large data is being archived across the world, secondary data analysis is timely.

            Secondary data analysis is an empirical method that follows a systematic process and applies research principles. The process starts with the exploration of what is already known and what remains to be discovered about a particular topic. Exploration is guided by the research question, which in this case is “How can china develop a low carbon economy? Next, the researcher proceeds to identify and evaluate the dataset. Data for this research was primarily sourced from databases such as the International Energy Agency, Our World in Data, and Greenhouse Gas Reporting Program (GHGRP).

Results and Discussion            

The transition from a High Carbon Economy to a LCE involves switching from energy systems that principally rely on carbon to sustainable energy systems that consume less carbon. Thus, it was essential to evaluate China’s present energy mix. Data revealed that most of the energy in China comes from Coal, which accounted for 58% of total energy generation in 2019 (Figure 1). Oil and liquid fuels comprised 20%. This shows China’s high reliance of high carbon based fuels.

The assessment of China’s current energy mix exposed the country’s high dependence of high carbon products. However, it did not reveal the overall national consumption of energy. Hence, the researcher conducted a review of the country’s energy consumption since through five decades (Figure 2). A plot of the time series consumption shows exponential increase in energy demand. China’s energy consumption rose from 130 million tons oil equivalent (Mtoe) in 1965 to 3014 Mtoe in 2015.

In terms of energy mix, China is showing increased effort in integrating renewables in its energy generation scheme. China’s investment in renewables increased from $53 billion in 2013 to $125 billion in 2015. This explains the country’s position as the largest national market of renewables. Even so, coal remains the dominant energy source.

China’s dependence in coal has significantly lead to urban air pollution. The International Energy agency estimates that approximately 80% of China’s emissions were contributed by the combustion of coal in 2018. China relies on coal plants to fuel its growing energy demand. Besides, a majority of coal plants burn coal inefficiently, leading to emissions (Figure 4). The country, is nevertheless implementing ultra-low emissions technology in its coal power plants.

Common estimates of China’s emissions project the country’s emission levels will reach a plateau phase in 2025 (Figure 5). Therefore, energy efficiency improvement and faster de-carbonization of the economy will be achieved in the decades preceding 2050. China hopes to reduce its reliance on coal and increase independence on renewable energies.

Despite that, China’s demand for energy will continue to grow in the near future as the government continues to pursue social development. Projected urbanization and industrialization will drive emissions without rapid changes in energy efficiency and supply structures. There is an urgent need for top-level planning in the long-term development of a LCE. Policy overlap is a considerable problem in the establishment of carbon cities, and this is mainly caused by a crude framework of certification and quantification for low carbon cities. Possible solutions to such overlaps are reasonable low carbon theories, such as low carbon indicator models that expose city carbon profiles. Furthermore, China’s economy needs consistency in the development low-carbon policies, industrial planning, and urban energy systems planning. Top-level planning should extend to the carbon trading market and carbon verification mechanisms. China needs rational assessment methods to coordinate the association between national and local governments. Carbon intensities should be evaluated by physical outputs across local and national spaces. Additionally, the government should engage research institutions and public participation in the adoption of low carbon lifestyles.

Conclusion            

As one of the most highly developing countries in the world, China is devoted to adopting a low carbon economy. The country has shown strong commitment in the reduction of emission intensity and achievement of carbon emission intensities. Overall, it is evident that china is advancing towards a low Carbon economy. However, this shift is obstructed by the country’s high reliance on dirty energy sources such as coal, ineffectiveness of policies, lack of public participation, and lack of long-term planning. China should make unified policies and develop top-level planning strategies.

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