Download On the Functions for Government to Promote Low-carbon Economic Development

On the Functions for Government to Promote Low-carbon Economic
Development
ZHANG Fude
School of Law, Shandong University of Technology, China, 255049
[email protected]
Abstract: The externality of low-carbon economy and the public goods characteristics of climate and
environment determine that low-carbon economy can not be regulated spontaneously by market. The
government should exert dominant roles in the course of low-carbon economic development. Those
roles should be embodied in government's economical management functions. The government's
management functions in the low -carbon economy consists mainly in plan, guidance, supervising and
managing, service, appraisal, education, and so on.
Keywords: Low-carbon economy, clean energy, Function
1.
Introduction
Large amount of historical data shows that carbon dioxide in the atmosphere is the culprit for global
warming. Through burning of fossil fuels, we have made carbon dioxide concentration in the
atmosphere increase from 280ppm at pre-industrial to 387ppm at present. The critical point of which
carbon dioxide significantly impacts on climate is 350ppm. In the long run, carbon dioxide
concentration will be accumulating gradually. Its specific results will appear through an indirect form.
Exceeding the critical point does not mean that a major disaster will occur, but it implies a change from
"possibility" to "inevitability". At present, the situation about global warming is more urgent than
originally anticipated. Carbon dioxide concentration in atmosphere has already reached so dangerous
degree that it is time to take the necessary action to make it return to 350ppm or a lower level. Therefore,
it is imperative to develop low-carbon economy. Low-carbon economy is a new economic model based
on low energy consumption, low pollution, and low emission. Its essence is the efficient use of energy
and exploitation of clean energy. The basic approach of developing low-carbon economy is to innovate
energy technologies and reduction technologies of carbon emissions through system innovation and to
adjust industrial structure. The experience of Western countries is that the Government should set down
policies and take measures to develop low-carbon economy and lead the development of low-carbon
economy. The intent of this article is to illustrate Chinese government's dominant roles in low-carbon
economy and its function.
Government's economic management functions are some administration responsibilities and functions
that government should perform and exert when government supervises and administer the various
economic activities. These responsibilities and functions aim at optimizing resource allocation or
meeting some specific macroeconomic goals in the course of government's organization, leadership,
coordination of economic operation and social development. The key to low-carbon economy lies in low
growth, zero growth or even negative growth of carbon emissions, which can restore the carbon
unbalance of the earth ecosystem resulted from human-made global carbon increase. Therefore,
low-carbon economy evidently takes on positive externalities. The goal of low-carbon economy is to
alleviate or eliminate global climate crisis induced carbon imbalance of the earth ecosystem and
maintain the suitability of human existence. Suitable climate and environment is public goods. In the
market surroundings, because of positive externality of low-carbon economy, the external benefits from
the implementation of low-carbon economy can not be automatically transformed into internal benefits
of economic entities and the cost from the implementation of low-carbon economy can not be made up
either. At the same time, because the climate and environment possess the public goods characteristics,
the benefits of low-carbon economy can not be obtained alone by the economic entities. Carbon dioxide
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emission beyond criterion will not necessarily increase economic entities' production cost. Therefore,
the economic entities which regard the pursuit of profit maximization as their goal do not consciously go
for energy technology innovations or the use of clean energy. Market mechanisms can not adjust
spontaneously low-carbon economy conducts. Economic entities often do not have the inherent
incentive to reduce carbon emissions. The externality of low-carbon economy and the public goods
characteristics of climate and environment make the market fail to regulate low -carbon economy. This
requires the Government as an agent of public interest to bring into play its economic management
functions and to adjust and induce economic conduct of enterprises. The purpose of government
administration is to reduce the quantity of carbon emissions and to settle the environmental problems
resulted from intensive carbon emissions, which maintains social economy for sustainable development.
Consequently, the main goal of government in the low-carbon economy model is to overcome market
failures and induce enterprises to perform low-carbon economy conduct consciously. With the
low-carbon economy model, the market failure mainly attributes to the public goods characteristics of
climate and environment, economic externalities and price mechanism failure, which requires that the
implementation of government economic functions primarily aims at those aspects above mentioned.
What the government should do is to remedy the defect of market mechanism and encourage economic
entities to develop low-carbon economy consciously. Of course, we can only say that government leads
development of low-carbon economy, and should not become into the main body of low-carbon
economy. Low-carbon economy is essentially a market economy system, market regulation is still
fundamental. The fundament on which government leading functions in the low-carbon economy is
market mechanism. The laws and policies established by government for promoting development of
low-carbon economy should regard market as platform on which the functions are exerted. Government
can not go against the basic principles of market economy, only because of promoting the development
of low-carbon economy. The forms of government's promoting low-carbon economic development
consist mainly in the following items.
2. The Forms of Government's Promoting Low-carbon Economic Development
2.1 Indirect macro-control.
In order to realize the total balance of resources, environment and social development and ensure
socio-economic sustainable, stable and coordinated growth, the government adjusts some of the
economic variables (expenditure, money supply) which it possess to influence the numerical value of
various variables in market, consequently to guide the various conductors in the market to act
automatically in favor of a low-carbon economy. That means indirect macro-control. It is a sort of mode
for government to intervene economy. With this mode, the government dose not directly use executive
orders to indicate a market entities what can do, or what can not do, and through regulation of all market
parameters government indirectly induce the market entities to act according to the government's will.
This is the biggest features for government to intervene economic performance through macro-control
functions.
2.2 Direct government control.
Direct government control mainly refers that the number of administrative agencies within government,
regarding putting low-carbon economy in order as theirs own responsibility, take direct control of or
interference with the behaviors of micro-economic entities (mainly refers to corporate) by the light of
laws and by means of a large number of enacted laws, regulations, orders and awards.
2.3 Direct management.
Government as independent legal entities directly participate and thus take guiding influences to
socio-economic activities by the means of setting up of state-owned enterprises or supplying with
community infrastructure and public services to society.
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To consider the way of government's promoting low-carbon economy, government functions in
low-carbon economy appears in the following main areas.
3. Government Functions in Low-carbon Economy
3.1 Planning functions.
On the condition of market economy, the market must play a fundamental role in allocating resources. It
is impossible for the instructing plan from Centralized government to allocate resources effectively. But
dose plans have no role? In fact, on the case of market regulation, rational individuals' decision-making
targeting at utility maximization may lead to collective irrationality and impairment of social welfare.
Insufficient information on which individuals' decision-making depend and limited rationality may lead
to wrong decisions. Therefore, Sometimes the market may fail. Deterioration of climate and
environment is the best example of failure of market regulation. On the condition of market economy,
the Government's plan is indispensable. Of course, these plans are not the mandatory plan in the planned
economy era, but the program of improving market economic development. The background of
low-carbon economy is deterioration of climate, which are the inevitable results from human
unrestrained, unplanned exploitation and use of carbon-intensive resources. In order to keeping balance
between environmental sustainability and social development needs, keeping balance of the interests
among different generations and maintaining sustainable development, low-carbon economy is
inevitable choice, and low-carbon economy is a kind of economic model that designedly and rationally
utilizes nature resources. In low-carbon economy, the Government's planning functions should be
strengthened. Government should make programs about major policy, directions and strategies of
low-carbon economy. Those programs are not only total programs on social economy, but also the
programs related to specific details. Government's programs about low-carbon economy are major
guidelines on society and economy development drawn up by government, after Government's
integrating whole information of society and economy development and analyzing the problems of
climate deterioration and shortage of resources at current society. Those programs can provide a realistic
blueprint for social development and point out the direction for the development of enterprises. At the
same time, such programs also strengthen the purpose of administrative actions and help Government
promote their own efficiency and effectiveness.
3.2 Guiding functions.
Under the confirmed guidance of developing low-carbon economy, on the basis of market mechanism
and rule of value and by means of indirect macro-economic adjusting lever and micro-economic
stimulating measures such as, taxes, subsidies, credit and so on, Government makes producers and
consumers who inappropriately exploit and harness energy bear the corresponding costs, makes
low-carbon economy behaviors of corporate and individuals match with economic benefits directly and
actively guide and encourage enterprises to conduct various kinds of economic activities in favor of
low-carbon economic principle. That is guiding functions. Government uses economic means to guide
enterprises to develop low-carbon economy that can stimulate businesses and individuals to carry out
the low-carbon economic activity, that is conducive to develop low-carbon economy in-depth and
sustainable.
3.3 Regulatory functions.
Regulatory functions are that government, by the means of administrative compulsory measures, such as
law enforcement, administrative orders, makes enterprises and individuals implement actions consistent
with the principles of low-carbon economy. In general the implementation of mandatory measures
consists in four steps: identification of regulatory standards - licensing - supervising implementation sanctions against offenders. A series of environmental management systems has been formed in the
course of environmental protection in China, mainly including assessment system of environmental
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impact, three simultaneous system, disposal charging system, disposal permit system, time limit
treatment system, environmental goal responsibility system. This series of systems act on controlling
environmental pollution and environmental protection. Likewise, those systems are also very necessary
in promoting low-carbon economy. Such systems as carbon disposal charging system, carbon disposal
permit, time limit treatment and so on can be regarded as mandatory measures to promote low-carbon
economy. Commonly at the beginning of development low-carbon economy, the use of mandatory
measures can bring about better effect.
3.4 Service functions.
In the course of government's promoting low-carbon economy, service functions are also very important,
for it provides low-carbon economic development with supports. The Government's main service
functions are to provides low-carbon economy with technical support and information services.
Low-carbon economic can not develop without advancement of science and technology. Government
should support technology research on low-carbon economy and enhance capability of independent
innovation. Government can also introduce foreign advanced technology and build technology platform
of low-carbon economic development. In information services, Government should establish sound
service system of information consultation, build information sharing system, speed up exchanges about
knowledge of low-carbon economy and technology, ensure flexibility, timeliness and effectiveness of
information exchanging among different businesses and industries.
3.5 Evaluation functions.
On the basis of evaluating the level of low-carbon economic development, the situation of regional
low-carbon economic development can be monitored and predicted, problems identified and developing
direction corrected. Evaluating the level of low-carbon economic development can also provide with
policy making services for the development planning and regulatory policies of low-carbon economic
development. Low-carbon economy is a kind of economy depending on policies, so how to measure
effect of the promoting policies of low-carbon economy and How to evaluate the performance of
Government's promoting low-carbon economy are fundamental work for low-carbon economic
development. Only in this way can the policy optimized continually, and will remarkable results for
Government's promotion be achieved. Currently, the Government should speed up to establish,
implement and improve the low-carbon GDP accounting system, so that the Government can evaluate
the real socio-economic status, which is a critical link for developing low-carbon economy and
abandoning the extensive economic in which the ecology is demolished and the resources are wasted.
Second, we must reform the evaluation mechanism about government performances. In the past the
evaluation of civil servant performance places so much emphasis on GDP growth rate, fiscal revenue
and other economic indicators, that a considerable number of administer leaders, in order to achieve the
short-term performance effects, pulse on large projects and exploit vigorously, compete GDP growth
rate for the cost of carbon intensive emissions and climate-environment impaired. We have paid a heavy
environmental cost for doings above. Therefore, to develop low-carbon economy, we must reform the
existing evaluation system for performance; establish a set of assessment criteria reflecting the
coordinated development between economic growth and environmental resources.
3.6 Educational function.
At micro-aspect, in order to serving the turn of economic model, the economic behavior fashions of
enterprises and the life-style of publics must be changed fundamentally. If only depending on exteriorly
mandatory measures, the changing of fashions of behavior and life is difficult to be effective, it must
rely on the changing of entities in values and moral standards. Only when the economic behavior
fashions of enterprises and the life-style of publics are supported by more internal moral, the action of
entities would be done initiatively and consciously. In this way low-carbon economy would run in order
and in effect. Value conception and consciousness of ethics and morality can not do without education.
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To develop low-carbon economy, the government must first play the basic role of public education. The
government should make full use of broadcast television, newspapers and magazines, Internet and other
modern propagandizing tool to make public aware of the ponderance of global warming problem,
enhance awareness of environmental crisis, popularize knowledge of low-carbon economy. The
government should advocate moderate, health and low-carbon consumption. The government should
stress on low-carbon education in general education. Resources conservation, clean use of energy and
other knowledge should be incorporated into the textbooks of general education at all levels. At the
same time, in the adult education, low-carbon knowledge should be also brought into all levels and types
of training for specialized personnel, managers and entrepreneurs. In short, the government should take
advantage of various forms of publicity and education activities to develop and enhance the
environmental awareness and low-carbon awareness of all members of society, rear low-carbon
economic concept, mobilize the whole society to broadly participate in low-carbon economy activities.
These activities will make low-carbon economy recognized and supported by all social members. These
activities will create a good social atmosphere for the development of low-carbon economy.
4. Conclusion
The market fails when it regulates low-carbon economy, which is determined by the externality of
low-carbon economy and the public goods characteristics of climate and environment. The market
failure needs government to play a main role during promoting low-carbon economy. Those roles, of
course, are embodied in government's functions. The government's management functions in the
low-carbon economy consist mainly in plan, guidance, supervising and managing, service, appraisal,
education, and so on.
References
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[2]. Hu Tu Yang. Low-carbon economy and the development of China. Impact of science on society.
1(2008), P11 (in Chinese)
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and Technology Industry. 3(2008), P58 (in Chinese)
[4]. Wang Tao. The future of China's low-carbon economy. Low-carbon economy. Beijing: China
Environmental Press, 2008:64 (in Chinese)
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