Download Research on the Route Choice and Supporting Mechanisms for

Research on the Route Choice and Supporting Mechanisms for
Developing Low-Carbon Economy in Traditional Industrial
Base—Case Study on Zibo
LIU Zhongyuan1, REN Qiping2
1 School of Economics, Wuhan University of Technology, Wuhan, Hubei, 430070
2 School of Economics, Shandong University of Technology, Zibo, Shandong, 255049
Abstract: the thesis is focused on the route choice and supporting mechanisms for developing
low-carbon economy in traditional industrial bases, taking Zibo as a representative. Firstly are outlined
the existing conditions and the challenges facing Zibo; secondly the thesis presents the experiences of
leading developed countries in low-carbon economy and gives some implications for Zibo. Thirdly,
analyzing the route choice for low-carbon economy and suggestions are give on the establishment of
supporting mechanisms.
Keywords: Traditional Industrial Base, Zibo, Low-carbon Economy, Route Choice, Supporting
Mechanism
1.
Introduction
As an emerging economic form and development mode, low–carbon economy includes low-carbon
industry and technology, low-carbon city and style life, etc. It presents itself to respond to the challenges
from climate change, energy safety and international competitions, characterized by low energy
consumptions, less emissions and pollutions. As a rising development mode, countries of the world have
been actively exploring on it and some have actualized low-carbon economy. In traditional industrial
bases, industry structures are characterized by high ratio of heavy and traditional industries with high
resources and energy consumption and serious pollutions. These industries become the main fields in
energy saving and emission reductions and certainly a nodus for low-carbon economy. Zibo area
emerged as resources exploring base and appeared as a heavy and chemicals industrial city and has been
a stylized traditional industrial base. Case study on Zibo will enrich the relevant searches and give some
enlightenment to other regions.
2.
Existing Conditions and Challenges Facing Zibo
2.1 Existing conditions for low-carbon economy
2.1.1 Advantageous location
In regional economy, Zibo is a center of the largest regional resource compounding center in Shandon,
rounded by comprehensive processing industry centre-Jinan in the west, Weifang famous for abundant
agricultural and labor resources in the east, Shenli Oil Field and petrochemical and comprehensive
processing base Dongying in the north. In view of transportation, Zibo lies in the center as the hub of
rail roads and high roads, facilitating the contact with the New Coastal Region of Tianjin and integration
with bohai coastal region economy. Also the sound location forms a platform for Zibo to introduce
high-efficiency ecological industries and develop low-carbon economy to upgrade industry structures.
2.1.2 Fast development of circular economy
Since the Eleventh Five-Year Plan, the production mode transformations, structure adjustment and
encouragement of comprehensive utility of resources, clean production and circular economy, the
resource utility efficiency has been greatly raised. Great progress has been made in energy saving and
emission reduction. Now, Zibo GDP rises 14.6% with energy consumptions 8.5% increase per annum.
As we focus on energy saving and emission reduction, we actively develop circular economy. Especially,
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Zibo has initiate pilot programs in extending industrial chains and selected key enterprises as examples
to give support in chemicals, building materials, metallurgical industry and paper processing. All these
have laid a good foundation for low-carbon economy.
2.1.3 Constantly strengthening of technological support
Zibo is listed as one of the first three national Spark Technology Concentration Zones. 837 scientific
research institutions are situated here, and Zibo has become important research bases for silicate,
chemicals, pharmaceuticals, metallurgy, new materials of Shandong province. In addition, there are 5
universities and colleges including Shandong University of Technology. Since the Eleventh Five-Year
Plan, 67 key technology projects on energy conservation have been included in the annual development
plans, more than 47 projects are listed in the provincial technology programs. Meanwhile, Zibo is
implementing energy-saving technology demonstration projects of more than 100 key projects in
relation with energy reserves, circular economy and clean production. In execution of the programs,
municipal funding of 14.3 million Yuan and provincial funding with more than 32.36 million Yuan has
been granted.
2.2 Challenges in developing low-carbon economy
2.2.1 Rigid constraints from heavy and chemical industrial structure
Zibo City has established an industrial production system with heave industries as the main body,
including 35 industries such as chemicals, pharmaceuticals, machinery, electronics, textiles, garments,
plastics, building materials, ceramics, and electric power industries. In recent years, due to the depletion
of resources, raw materials and energies need to be imported from outside, but the development mode
has not been fundamentally changed and industrial products are basically of upstream products.
Especially industries with short chains such as chemical, pharmaceutical, textile, metallurgical and other
industries face much more contradictions between growth and availability of resources. High
dependence on resources makes Zibo as one of the largest consumers of coal, electricity and oil in
Shandong. Comprehensive consumption in energy for ten thousand Yuan of production value of key
energy consumer enterprises is much higher than provincial and national average. During "12
Five-Year" plan period, Zibo City is to speed up the process of industrialization and urbanization, and so
inevitably increase the demand for energy and the gap between the supply and demand of resources will
persist.
2.2.2 Serious shortage of resources
With regard to mineral resources, Zibo is abundant in types and some of which has big reserve, but after
years of development and utilization, higher-value coal, iron ore, bauxite mines in the area has depleted
and oil, natural gas , nonferrous metals such as copper, lead, zinc, cobalt and fertilizer raw materials
have been long supplied by outside sources. In the aspect of water resources, the average available water
per annum of Zibo City is 1.339 billion cubic meters, 345 cubic meters per capita, only equivalent to
73% and 13% provincial and national level respectively. Currently, shortage gap of water resources
amount to approximately 300 million cubic meters. As for land resources, cultivated land per capita is
only 0.75 mu , well below the province's 1.07 mu and 1.41 mu of the national average and also lower
than the internationally recognized 0.85 mu of food security line. The threat of food safety in quality and
quantity is further intensified.
2.2.3 Aggravated environmental pollutions
The industry structure with building materials, textile, pharmaceuticals as the pillar results in large
emissions of industrial wastes, air and water, and has brought about serious air and water pollutions.
Emissions of main pollutants have been kept at high level. This contradicts seriously with the
environmental capacity, and consequently the deterioration of environmental quality has not been
fundamentally checked. Meanwhile, garbage dumps pollutes the surrounding groundwater due to lack of
adequate anti-seep measures. Agricultural non-point source pollution has become increasingly
prominent. Large-scale livestock and poultry industries, sewage irrigation and irrational use of chemical
fertilizers and pesticides seriously affect the quality of agricultural products and environment.
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3.
Experience and Enlightenment from Developed Countries in Developing
Low-carbon Economy
3.1 Summary of the experience of developed countries in low-carbon economic development
3.1.1 Low-carbon economy as a national strategy
Britain is an advocate of low-carbon economy and actively promotes low carbon economy. United
Kingdom Ministry of Energy and Climate Change published in July 2009 white paper UK Low Carbon
Transition Plan, marking as the launch of transition towards low carbon economy. In recent years Japan
has released policies to favor low-carbon economy. In April 2009, Japan publicized a preliminary draft
—The Innovation for Green Economy and Society aimed at reducing greenhouse gases to strengthen
Japan's low carbon economy. Although the United States has not signed the Kyoto Protocol, in recent
years the United States attaches great importance to carbon emissions reduction, and in June 2009 U.S.
House of Representatives passed the American Clean Energy and Security Act.
3.1.2 Much attentions to R&D and promotion of low-carbon technologies
In R & D of low-carbon technologies, EU's goal is to pursue an international leader in developing cheap,
clean, efficient and low emission energy technologies. Britain and Germany are developing low-carbon
power plant technologies as the key approach of reducing CO2 emissions. Denmark has established its
national–specific green energy industries. Japan, as a vanguard of promoting a low carbon economy,
invests heavily every year to develop low-carbon technologies. According to the released figures by
Cabinet Office in September 2008, in science and technology-related budget, the cost in individual
research projects on environment and energy technologies is up to 10 billion yen, including the budget
of 3.5 billion yen for innovative solar technologies. Highly concerned about technological innovations
on efficient use of energy to reduce emission of greenhouse gases under market mechanism, the U.S
organize and coordinate R&D and industrializations of low-carbon technologies from national level, and
has established a low-carbon technology development plan, including establishment of specialized
national-level research institutions in low carbon economy and provision of technical guidance, R&D
funding and other assistances to related institutions and firms.
3.1.3 Developing renewable energy as an important measure for carbon emission
As the world leader in green energy, Denmark has developed renewable energy currently up to 30% of
its total electricity generating. Denmark has established a supply-demand-balanced energy system which
coordinates environment and economic growth, and fulfilled gradual reduction of CO2 emissions.
Britain has the most offshore wind power stations and ranks the first with total installed capacity in the
world, and at present electricity generated from land, sea and wind power stations of electricity is well
enough for 1.5 million homes. Germany's renewable energy is increasing with its share in national
consumption of energy rising from 3.5% in 2003 to 8.7% in 2008. In its power generation industry, input
of renewable energy has accounted for in 2008 17%. In Japan, geothermal, wind, biomass and solar
energy are taken as the key to develop renewable energy. Especially, solar energy development and
utilization is focused as the core and solar energy capacity is planed to be increased to 20 times the
present level.
3.1.4 Progressive policies to stimulate the development of a low carbon economy
Economic instruments include a carbon tax, subsidies and tax allowances. Carbon tax is taken as an
effective instrument in developed countries. In recent years, the U.K., the U.S, Japan, Germany,
Denmark, Norway, Sweden and other developed countries levy carbon tax on fossil fuel; and
government will subsidies firms and activities which is conducive to low-carbon economic development.
Denmark encourages renewable energy to enter the market, granting a favorable price to "green" power
and offshore wind power, giving subsidies for biomass power. Tax incentives are now widely used in
developed countries. In U.S. 20% to 30% of the cost of renewable energy-related equipments can be tax
deductible, individuals and renewable energy-related businesses can enjoy a 10% to 40% tax cuts.
3.2 Enlightenments to Zibo in development of low carbon economy
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Zibo City should attach great importance to low-carbon economic development with a strategic eye,
actively learn from the experience of developed countries and gradually establish a low carbon economy
strategy and a policy framework.
3.2.1 To establish an overall strategy giving priority to low-carbon economy
Zibo must pay great attention to low-carbon economy, and take a low-carbon economy as an important
initiative to establish a resource-saving and environment-friendly society. Zibo should include
low-carbon initiatives into the Twelfth Five Plan, promote energy saving and cultivate low-carbon
farming, processing industries and services with a basket of financial, monetary and industrial policies.
At the same time we must publicize low-carbon ideology and advocate recycling and low-carbon
consumptions.
3.2.2 Making further efforts to develop and commercialize renewable energies
Zibo City should take the development of new and renewable energies as an important task, diversifying
energies and their supplies to ensure the availability the resources and building Zibo-specific energy
industry and energy-related equipment industry.
3.2.3 To strengthen development and innovation on low-carbon technologies
Government should increase long term investments in research institutions and integrate technical
resources, coordinate and promote fundamental and generic technologies researches, carrying out
exchanges and interactions with enterprises. Governments should play an important role in linking
enterprises, fundamental research and industrial developments.
3.2.4 Providing incentives and assistances to enterprises in developing low-carbon economy
The Government should adopt a low carbon industry plan to induce enterprises into low-carbon
economy through favorable tax and financial facilities. At the same time, local enterprises should be
encouraged to participate in innovations on low-carbon technologies striving to make breakthrough in
clean and efficient energy technologies to shape our advantages in international carbon emission
markets.
3.2.5 Adoption of strong and effective policies
Zibo City should strengthen supporting policies, implementing favorable taxes, financial subsidies and
other measures, which are all successful experience from developed countries. Zibo City should
consider the introduction of a carbon tax to reduce the carbon emissions; which will raise industrial
energy efficiency and competitiveness. In addition, carbon emissions trading system is conducive to
balance the interests between the various enterprises and between different regions, while the emission
reduction efficiency is raised.
3.2.6 Encouraging forestations to increase carbon sinks
We should vigorously plant trees and pay much attention to building silviculture base, particularly the
biomass energy forests. This will create more social benefits when the carbon is absorbed and
atmosphere is improved.
4.
Route Choice of a Low Carbon Economy for Zibo
4.1 Speeding up the adjustment of industrial structure to improve energy efficiency
Zibo City should speed up the adjustment of the existing industrial structure, changing from the "heavy"
style to "light" style; curb energy-intensive industries and eliminate backward production capacity;
actively develop emerging strategic industries including new materials, energy equipments and
energy-saving equipments. Government should help business to acquire a consciousness of reducing
emission of CO2 and actively adopting advanced technologies, developing low carbon technologies to
raise their energy efficiency.
4.2 Developing new energies to optimize energy structure
Zibo should gradually reduce the coal consumption, accelerate the development of natural gas and
renewable energy, especially large-scale biomass energy on the basis of large raising farms, also
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popularize the use of biogas in rural areas to transform the current single structure of energy to raise the
proportion of high-quality energy sources while building infrastructure such as intelligent electric grids
compatible to renewable energies.
4.3 Developing circular economy to reduce resource consumption and carbon emissions
Efforts should be made to conserve resources by conservation of building materials and utilizing waste
residues in cement processing; increase the recovery rate of mining, ore dressing and smelting recovery
rate; vigorously promote the utilization of tailings and waste rocks; especially in key sectors of energy
improve management of raw materials, water and other resources. Efforts should also be made to
prevent pollutions and implement the whole-process controls, prolong industry chain as per specific
industry, encourage recycling of waste materials and drive enterprises for zero discharges; Speed up the
constructions of reclaimed water facilities, utilization of municipal wastes, sludge reduction &
utilization to reduce the amount of wastes before final disposal. In renewable resources productions,
attention should be paid to recovery and recycling of wastes, remanufacture waste electrical and
mechanical products and establish waste collection and sorting systems.
4.4 Promoting low-carbon city transition and popularizing low-carbon style consumption
Zibo City should establish a low-energy-based growth, low-carbon emissions, high environmental
quality and high standard of living strategy for urbanization. Priority should be put on the issue of
energy, environment and adaptation to climate change in urbanization process. Zibo City should overall
consider the following as the key aspects, such as city buildings, transportations, household energies and
urban consumer life styles. Specifically, urban construction scale and timing should be controlled to
ensure the quality of urban constructions. Energy saving in daily life should be regarded as the first key
point. The building energy consumption should be an indictor in assessing energy-saving effectiveness
of buildings. Energy conservation technologies should be generalized to realize energy saving and
low-carbon constructions. Zibo also should reform the urban heating system to significantly reduce
heating energy consumption and develop public transport and non-motorized transport system as one of
the priority strategic areas.
5.
Supporting Mechanisms for Development of Low-carbon Economy in Zibo
5.1 Improving regulations, standards and strengthening governments role in organizing,
supervisions and examinations
Zibo should formulate and perfect pertaining regulations, including standard of energy-saving design,
criteria of assessing buildings energy saving efficiency and the standards of building heating and cooling
temperature control. Moreover, all the standards should be effectively enforced. Performances
assessment should be reformed with low carbon economy achievements included in the comprehensive
appraisal and annual assessment systems. The accomplishments in low-carbon economy should be the
key indictors in evaluating leading bodies and leading cadres in tenure, state-owned enterprise managers.
Accountability system and "one-vote veto" system should be adopted in assessing related governments
and leaders.
5.2 Reforming the energy pricing mechanisms
Zibo should encourage voluntary emission reduction through voluntary carbon trading, subsidies and
credit support. The participants who undertake a reduction amount above a certain baseline can trade
with each other under the governments’ arrangements. So a price system reflecting supply and demand,
scarcity and environmental damage can be formed.
5.3 Formulating a green tax system to enforce tax incentives
Zibo should adjust the fees and tax in resources developing and including resources costs and damaging
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costs in energy prices and actively study the feasibility of a carbon tax. Financial supports should
pointed to energy saving, renewable energy and innovations on low-carbon technologies. Adequate
funds should be invested in low carbon R&D and favorable tax should be granted those engaged in
low-carbon research and innovations according to the product’s energy efficiency, environmental
performance and technical maturity.
5.4 Building a technology support system to support technological innovations and applications.
Polices should be formulated to encourage enterprises to form their own innovation systems and
facilitate them in united research programs with high educations and research institutions. Efforts should
also be made to cultivate talents, build key labs and invite foreign capitals into new energy industries.
Variety of means and measures are to be adopted to promote investments from outside. It is most
important to continuously implement self-dependent projects and establish requirement of
nationalization of major projects to promote equipment localization and self-dependency.
5.5 Setting up awareness of low-carbon economy and accelerating talents team buildings
Zibo should initiate a campaign of energy savings and emission reductions and publicize concepts of
clean production and green consumptions; Induce the public to give priority to products which can be
recycled or with environmental labeling. To strengthen the training and educations is required to enforce
the capability of implementing low carbon economy and energy savings. Vocational educations should
be adjusted to focus on cultivating intermediate and low level technical operators to meet the demand of
enterprises of renewable and energy saving industries. The vocational schools should train directionally,
recommend and sent all kinds of general staff and can be granted allowances and subsidies for this. The
governments should encourage enterprises to introduce technological and managerial talents, closely
cooperate with domestic and foreign well-known institutions so as to form their core R& D teams.
6.
Conclusion
Low-carbon economy presents not only challenges but also opportunities of to traditional industrial
bases, while low-carbon economy is the inevitable choice for them. Firstly, it is necessary for us to
greatly reduce carbon emissions, promote clean production and eliminate backward production capacity
to improve energy and resource efficiency through all kinds of policy instruments. Secondly, Efforts
should be made to transform traditional industries through information and high technologies from
resource-dependent style to processing trade to realize in-depth, efficient and comprehensive use of
resources and gradually change heavy-model industrial structure. Thirdly, we should accelerate the
development of strategic industries and high technologies such as energy-saving, environment-friendly,
new materials and new energy industries. Finally, we should change ideology and innovate on
institutions to transform living and development modes.
References
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[2]. Deng Tianren. Inevitable Choice for Shaoguan Sustainable Development Strategy: Developing
Low-carbon Economy. Modern Commerce 2010 (6), p215-216
[3]. Liu Hao, Xiao Xiangxiong. The Measures of How to Develop Low-carbon Economy in China.
Science & Technology Review 2010 (10), p18
[4]. Ni Wai, Zeng Gang. Research on City Development Path in a perspective of Low-carbon Economy:
case study on Shanghai. Inquiry into Economic Issues, 2010(05), p38-42
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