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Study on the Opportunities, Challenges and Relevant Strategies on the Development of Low-carbon Economy in China CAO Junjie1, LI Shuguo2 1. Economic Development and Research Center, Shandong University of Technology, Zibo, Shandong province, 255049 2. School of Economic, Shandong University of Technology, Zibo, Shandong province, 255049 Abstract: In the recent years, energy shortage and environmental pollution is the focus problem in the world. Because of the sustainable growth of the total amount of carbon emission, and as developing country and the major energy consumption, China need to explore a low-carbon road adapting to the development of China. Generally, the opportunities of which China develops low carbon economy coexist with the challenges of this. The urgent affair is to adopt countermeasures to promote the sustainable development of low carbon economy according to the outstanding problems, such as high energy consumption, high emission and high pollution in the development of economy. Keywords: low-carbon economy, opportunities, challenges, countermeasures 1. Introduction With the rapid development of the economy and the progress in science and technology, the amount of energy consumption is increasing rapidly, the human emission of CO2 into the air is increasing the natural balance is broken, the CO2 concentration in atmosphere begins to increase and the issue of global climate which the above problems bring attracts a wide spread attention. In recent years, energy shortage and environmental pollution has become the focus problems in the world. Because of the sustainable growth of the total amount of carbon emission, and as developing country and the major energy consumption, China need to explore a low-carbon road adapting to the development of China. , 2. The Basic Connotation and Characteristics of the Low-carbon Economy In 2003, the British government put forward the concept of low-carbon economy in the energy white paper “Our energy future: creating a low carbon economy” for the first time. Since then, many scholars carried on a widely studied on the issue, but there’s no strict and unified definition so far. It is generally believed that low-carbon economy is based on low-carbon fuel and in the pursuit of minimizing the emission of greenhouse gases, especially carbon dioxide, and also an economic model of a high efficiency, low resource consumption and low emission in greenhouse gas and a transitional stage into a high level of no-carbon economy [1]. The essence of low carbon economy is energy efficiency and the structure of clean energy, the core of this is energy technology innovation and system innovation, and the goal is to mitigate climate change and promote sustainable human development [2]. Therefore, low carbon economy is an socio-economic development model based on clean development and efficient use of energy, with the basic economic characteristics of low power, low emission and low pollution, relying on technological innovation and policy measures and complying with the concept of sustainable development and controlling of the emission of greenhouse gas, and is a energy revolution in mitigating climate change. The background of proposing the concept of low-carbon economy is that human survival and development is facing the severe challenges of global warming, which also reflects people's worry about future living environment caused by climate change. So people actively advocate that low-carbon economy model gradually replace traditional "high-carbon economy" development model based on high energy consumption, high discharge and high pollution, and finally stride forward toward “no-carbon economy" or "zero-carbon economy" model. It can be said that this is another important progress following the agricultural civilization and industrial civilization of human society, and also the 292 fundamental change of human survival notions and development idea. Therefore, low-carbon economy is the inevitable result consciously adapting to ecological environment. As the main features of human society from the industrial civilization to ecological civilization, low-carbon economy is becoming an important model of the social and economic development and the people’s improvement of life quality over long period. The development of low-carbon economy is actually to reduce energy consumption of unit GDP and reduce overall energy consumption under the conditions of ensuring the normal development of economy, which is undoubtedly a profound low carbon revolution in energy economy, energy technology and consumer behavior on the human production and life, achieving the social and economic change from highly dependent on energy consumption to low energy consumption, sustainable development and the fundamental change from high dependence on fossil fuels to low-carbon, renewable energy in energy consumption structure. Developing low-carbon economy is not only the requirement of positive undertaking the responsibility of environmental protection and completing the national targets of saving energy and reducing consumption, but also an option of adjusting economic structure and achieving economic development and resources and environmental protection. 3. The Advantages and Good Opportunities of the Development of Low Carbon Economy in China At present, China has a good opportunity to greatly develop a low carbon economy because it is beneficial to saving energy and reducing dependence on imported energy and easing the pressure of environmental pollution, and has been paid more and more extensive attention by society and cause state policies encourage. Now there are many favorable conditions for the development of low-carbon economy in our country. 3.1There are many favorable conditions for the development of low-carbon economy in China. First of all, China is welcoming in an important strategic opportunity of low-carbon economic development. In the long run, exploring the path of low-carbon not only accord with the trend of low-carbon development in world's energy, but also are consistent with the goal of changing the growth mode, adjusting the industrial structure, implementing energy-saving and emission reduction and achieving sustainable development in China. We can use opportunities of low-carbon economy to make some key industries gain a competitive advantage in energy saving technology. Second, China's emissions space is larger. At present our industrial structure and consumption structure is in the stage of high-energy consumption, the level of energy-saving technologies and energy management is low, and efficiency of using energy is obviously low, but the space of achieve energy saving and emission reduction is lager by restructuring, technological innovation and improving management. Additionally, the potential of the technical cooperation between China and developed countries is great. Although there are still large gaps between China and developed countries in low-carbon technologies, the opportunities of international cooperation in low-carbon technologies are increasing. "United Nations Climate Change Framework Convention" stipulated that developed countries are obliged to provide technology to developing countries and "China-EU Joint Declaration on Climate Change "and other multilateral and bilateral agreements use development and cooperation in low-carbon technology as the cornerstone, which create the conditions that China can learn from and absorb the relevant technology. Finally, China has a comparative advantage and the advantage of backwardness in the development of low-carbon economy. When a large number of emission reduction technology are popularized and applied in China, the cost generally is lower than in developed countries. Compared with the old traditional industries countries, the cost to establish new equipment and new businesses is lower than the cost of renovation of old equipment, old business, and compared with Japan, U.S., EU and other developed countries, the Chinese can develop a low carbon economy in lower the cost[3]. 3.2Chinese Government's policy guide and stimulate the low carbon economy. In recent years, the Chinese Government unveils policies to transform the economic development mode, 293 develop circular economy, adjust industrial structure, save energy and reduce consumption, which well promote the development of low carbon economy and low carbon industries. By 2007, the country has already eliminated laggard generation capacity of 150 billion kilowatts, shut down the laggard cement production capacity of 52 million tons, and invested in a clean wind power generation and high-efficient generator. Also solar, hydrogen energy, nuclear energy, wind energy and biomass energy achieve a breakthrough in industry scale and application; the proportion of renewable energy growth has exceeded the growth in overall energy consumption. China's annual amount of renewable energy development and utilization exceeded 200 million tons of standard coal and annual production of hydrogen is nearly 9 million tons, which make China become the world's second largest producer of hydrogen under the United States. From 2004 to the end of 2007, the Chinese solar cell production increased by 77 times, which makes China the world's largest producer of solar cells; wind power generation in China has entered a stage of rapid development, and the wind power equipment R & D projects the nation arranged provide technical support to improve the localization rate of wind turbines; to the end of April 2010, China's installed capacity of wind power reaches 25 million kilowatts, as the second in the world; China's new wind turbine account for about 1 / 3 of the world. Meanwhile, the development of China's nuclear power has accelerated. At the end of 2009, the country already has 11 nuclear reactors with a total generating capacity of 9.1 million kilowatts; the approval under-construction nuclear power generating units in is 24 units with a total installed capacity 25.4 million kilowatts [4]. Low-carbon economy has become the trend of socio-economic development and low-carbon industry is booming as a sunrise industry in China. 3.3China has a favorable international background in the development of low-carbon economy. Following Energy White Paper "Our energy future: creating a low carbon economy" pushed out by UK in 2003 , "Stern Report", led by former World Bank chief economist, Stern in 2006 called for transition into low carbon economy all over the world as soon as possible; in 2007 U.S. Senate proposed the "Low Carbon Economy Act", which show that low-carbon economy has gradually become an important strategic United States in the future; in December 2007, the United Nations Climate Change Conference held in Bali, Indonesia and formulated "Bali road map" about climate change, asked developed countries to reduce greenhouse gas emissions from 25% to 40% by 2020, which played a positive role in stride forward toward low carbon economy; in July 2008, G8 Summit, the eight countries said they would seek the other contracting party in "the United Nations Convention on Climate Change", and reach the long-term goal of global greenhouse gas emissions by 50% by 2050 together; in December 2009 in the conference held in Copenhagen, although the countries did not sign a legally international convention to reduce emissions as countries different opinion, but many countries have made the commitment to emission reduction. Therefore, the low-carbon economic development concepts and models become more and more global consensus and the world is engaged in a low-carbon revolution, and also our country can participate in the discussion and establishment of relevant international rules of the game, which is conducive to China's development of low-carbon economy. 4. China is Facing Many Unfavorable Conditions and Challenges in the Development of Low-carbon Economy China is in rapid process of industrialization and urbanization. With a substantial increase of energy and resource consumption the industrial growth brings and coal-dominated energy structure, lagging technical level as well as institutional mechanisms barriers, China is facing many challenges and adverse conditions in developing low-carbon economy. 4.1China faces great pressure of greenhouse gas emissions and energy security. First of all, China's rapid economic development led to rapid growth in energy demand and enormous pressure to reduce emissions. Currently, compared with many countries, China's carbon emissions intensity per GDP is relatively high, and the total amount of greenhouse gas emissions occupied second place in the world. As the increasing China's economic scale and coal-based energy structure, there was 294 the rapid growth in carbon dioxide emissions and the average annual growth is 2.6% in 2020, reach 8.145 billion tons, which will be the world's largest carbon dioxide emissions States over the United States[5]. Second, China is facing serious energy security problems. China’s possession quantity of energy per capita is below the world average level; China's oil, gas, coal mining reserves per capita were only 11.1%, 4.3% and 55.4% of the world average level [6]. With the rapid development of economy and society, China's demand for energy increases constantly. Since China became a net importer of oil since 1993, the import volume of oil continued to grow, which is restricted to oil-exporting countries in our economy and also brings some threats in China's economic security. These not only show the development of low-carbon economy in China has urgency, but also reflect the difficulty in developing low carbon economy. 4.2China's energy structure is irrational, so it is difficulty to get rid of the traditional high-carbon economic development model. At present, China still can not get ride of the traditional high-carbon economic development model of high input, high emission, high pollution, low output, low effectiveness and economic development show the features of extensive style with high dependence on energy and resources, which need to pay a very large amount of resources and environmental costs. This economic development model is closely linked with China's energy structure. China's energy structure of rich coal, poor oil, and little gas decides long-term presence of energy productive and consumable patterns based on coal. In China's energy Proved reserves, coal accounts for 94%, oil 5.4%, and natural gas 0.6% [7]. Coal-dominated energy structure determines the choice of low-carbon energy resources is limited. For example, in power, the hydropower accounting for only 20%, thermal power accounted for more than 77%; combustion of a ton will produce 4.12 tons of carbon dioxide, which is 30% and 70% more than that of oil and natural gas. So the threats of large-scale development of thermal power to the environment can not be ignored. With the rapid growth of China's energy consumption, the dependence on international energy is increasing, and the international energy and resource prices is rising constantly, production costs of the company is spiraling and the ability to resist risks is getting worse, which has seriously affected the stability of our economy development. 4.3China's industrialization process determines the protracted nature of low-carbon economy. At present, China is experiencing rapid industrialization and urbanization during in which the share of secondary industry in the national economy is increasing and the tertiary industry of low energy consumption is lagging behind. And China is in the stage of heavy industrialization and the support of heavy industry is energy. Particularly, energy-intensive industrial sector become a pillar industry, and it is difficult to eliminate lagging production capacity and speed up structural adjustment in the short term. China also has some small and medium-sized enterprises of lagging technique and equipment, low resource utilization, heavy environmental pollution protected by the local government, which is difficult to be shut down; many local governments and businesses are still scrambling projects and the problems of high input and high consumption are not effectively resolved. The unit energy consumption of main products of China's electric power industry, steel industry, nonferrous metals industry, petrochemical industry, building materials industry, chemical industry, light industry, textile industry is 40% higher than that of international advanced level, vehicle fuel consumption level of motor is 25% higher than that in Europe and 20% than that in Japan, and heating energy consumption of unit building area is 2 to 3 times than that in the developed countries in which the climatic conditions is similar to China[8]. It also determines protracted nature and difficulty of energy reduction and transition to low carbon economy. 4.4The lagging development of low-carbon technology in China increases carbon costs. Technological innovation is the support to develop low-carbon economy. But our progress in low-carbon technology research and development is slow, still based low-end technology, and a number of investment projects of low-carbon technology depend on temporary appropriation of the government, policy loans and donations of the international institutions, and China did not form the mechanism of 295 stable government investment and the support of the financial sector invested to low-carbon technology projects is not enough. Recently released by United Nations Development Programme, "2010 China Human Development Report" points out that if China wants to achieve the goal of low carbon economy in the future, China needs at least more than 60 kinds of key technical support, in which 42 kinds is not mastered currently, which shows that 70% of China's core technology to reduce emissions need to import, incremental investments reach 14.2 trillion U.S. dollars and the cost to achieve low-carbon economy is huge [9]. 5. Conclusion According many constraints and challenges of the development of low-carbon economy in China, we must change the development idea and innovated development model to promote the sustainable development of China's low-carbon economy as soon as possible through a series of countermeasures and concrete measures. 5.1Innovate low-carbon economic system; make and carry out the development strategy of low-carbon economic. First, institutional innovation is the driving force for economic and social development. China should actively learn some experiences of developed countries, make laws and regulations to promote the development of low carbon economic, provide legal protection for the development of low-carbon economy, gradually establish and improve tax system of climate changing tax, energy tax and carbon tax, develop and complete carbon emissions trading system to promote the development of carbon trading as soon as possible, establish carbon fund system as soon as possible, and promote low carbon economy through the relevant institutional innovation. Second, develop and strengthen relative policies and measures for the implementation of the development of low-carbon economic, create policy systems of the development and utilization of low-carbon energy, including policy of renewable energy and energy conservation, the development, deployment and transfer policy of technology of carbon emissions reduction, low-carbon industry development policies and low-carbon consumption policies, to achieve the target of encouraging and supporting low-carbon economy. Third, China must make strategy of low-carbon economic development, design medium and long term planning of low-carbon economic development and make the adjustment of industrial structure, regional distribution, technological advances and infrastructure construction integrate into strategic plans to create conditions for restructuring of low-carbon economic. 5.2Develop system of low-carbon energy industry and change economic development mode positively. First, adjust the industrial structure, develop market access of high carbon industry and reduce the dependence on fossil energy. Not only develop low-carbon agriculture in the new way of organic, ecological and efficient agriculture, and develop low carbon industries, transform steel, cement and other traditional industries with high-tech, optimize energy structure, improve energy efficiency, reduce carbon dioxide emissions, but also build low carbon city, develop low carbon living space, provide the urban public transport systems of low-carbon [10]. Second, positively develop circular economy, make the reduction as the priority, promote recycling and efficient use of resources, continue to promote energy saving and emissions reduction, focus on controlling rapid growth of high energy consumption and high emission industries and accelerate the elimination of lagging productivity. Third, increase the degree of support of development and utilization of new energy and renewable energy, actively develop and use solar energy, wind energy, geothermal energy, nuclear energy, biomass and other clean energy and renewable energy sources, continue to reduce costs relying on the technological advances and increase proportion of wind power , hydropower, nuclear power. 5.3Actively develop and promote low-carbon technologies and strengthen international economic and technological cooperation. 296 Technological innovation is the key to develop low-carbon economy. China's overall technical level and the development of low-carbon technology are low, which seriously restricts transition from high-carbon economy to low carbon economy. Therefore, China must increase the scientific and technological input, make plan for low-carbon technology development, promote development and application of low-carbon technology through a variety of incentive mechanism, and give priority to research carbon capturing and storing technology and other technology with the effect of large-scale emission reduction to provide technical support for the transition of economic development mode. At the same time, actively participate in international cooperation and exchange of low-carbon technologies, promote transfer of low-carbon technology to China, enhance the introduction, digestion and innovation of low-carbon technologies; China should actively participate in international energy technology markets and carbon trading markets and provide some incentive measures for the export of low-carbon technology and products. 5.4 Play the government’s role in supervising and managing emission reduction and raise the level of cognitive awareness of low carbon economy. First, the government must strictly control greenhouse gas emissions of companies, improve the market access system accordingly, reduce energy-intensive products into market, establish and improve quality control system of energy and energy-related products, speed up the establishment and emendation of energy consumption standard in the process of low carbon energy consumer , fully use carbon taxes and emissions trading system, set a reasonable carbon-emission price and make enterprises to undertake the social costs because of climate change brought by greenhouse gas emissions. Second, actively carry out widely propaganda and education, and raise the level of awareness of low carbon economy. Related departments should use television, radio, Internet, newspapers, video and other media to propagandize and popularize the knowledge about climate change and low-carbon economy to make the cadres and masses to realize the importance and urgency of addressing climate change, gradually form the ideas of low-carbon production and consumption in the whole society and change the traditional way in obtaining natural resources and unreasonable consumption habits. Author in brief: Cao Junjie (1964 -), male, man, Shandong Heze City, Agriculture and Rural Economic Research Institute, Center for Economic Development, Shandong University of Technology, director, Professor, Master of Economics, Master Instructor, mainly engaged in the economic and ecological cycle economic theory. Postal Code: 255049; Address: School of Economics, Shandong University of technology, Zibo City, Shandong Province, Tel: 0533-2788829; 13668831667 E-mail: [email protected] Shu-guo Li (1985- ), male, Linyi City, Shandong Province, 2009 Agricultural Economics and Management Graduate of Shandong University of Technology Center for Economic Development. Postal Code: 255049; Communications Address: Zibo City, Shandong Province, Shandong University of Technology School of Economics. Tel: 0533-2788829; 13581044847. E-mail: [email protected] References [1]. Duan Hongxia. The study in driving mechanism of low-carbon economic development [J]. Contemporary Economic Research, 2010 (2):58-62. [2]. Zhuang Guiyang. The analysis on ways and potentiality of China's low-carbon economy development model [J]. International Technical and Economic Research, 2005,8(3):79 ~ 87 [3]. Jiang Kejuan. Cost advantages of China's development of low-carbon economy [J]. Leaves, 2009 (05):11-19. [4]. Zhou Dadi, etc.. China meets technology bottlenecks in the goal of low-carbon economy [EB / OL]. [2010-05-17]. Http://news.163.com/10/0517/07/ 66S9UPUE000146BD.html. [5]. Fu Yun, Ma Yonghuan etc.. Development Patterns of Low Carbon Economy [J]. China's population, Resources and Environment, Vol.18 No.3 2008. , , 297 [6]. Study Group of Energy Strategy, Chinese Academy of Sciences [M]. Strategic Research Reports on China, Sustainable Energy Development, Beijing: Science Press, 2006. [7]. Jin Yueqin, Liu Rui. Low-carbon economy and transformation of China's economic development model [J]. Inquiry into Economic Issues, 2009, (1): 84-87. [8]. Xing Jijun, Zhao Gang. China Should Vigorously Develop Low Carbon Economy [J].Forum on Science and Technology in China, 2007, (10):87-92. [9]. United Nations Development Programme. Human Development Report of China 2010: Low carbon economy and sustainable future of society [EB/OL]. [2010-06-27]. Http://news.163.com/ 10/0627/00/6A575MNL000146BD.html. [10]. 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