Download Study on the Opportunities, Challenges and Relevant Strategies

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]. Bao Jianjiang, Miao Yang etc.. Low carbon economy: a new revolution of economic development
mode of human [J]. China Industrial Economy, 2008, (4):153-160.
298