Download The Study of “Low-carbon Economy” Content, Theoretical Foundation and the Path

The Study of “Low-carbon Economy” Content, Theoretical
Foundation and the Path
1.
LI Weina1, XU Hao1, HUANG Shunkui2
Lingnan (University) College, SUN YAT-SEN University, P.R.China, 510275
2. Economic College, Jinan University, P.R.China, 510632
[email protected]
Abstract: With the practice of dealing with global warming, “low carbon” concept has been firmly
established. However, the “low-carbon economy” has no uniform, standardized system of definitions,
and the study of theoretical basis is obvious deficiencies. Based on literature review, this paper
discriminate a comprehensive analysis of the content of low-carbon economy, building a low carbon
economy model to explain the theoretical basis of the low carbon economy. Finally, path selection,
aimed at low-carbon economic development potential of providing guidance.
Keywords: low-carbon economy, low emissions, cycle, sustainable
1. Introduction
Climate change is one of the most complex challenges that the human face in the new century, as the
effect of it on the ecological environment, economic development and even the social stability and
security becomes increasingly prominent, facing the global financial crisis, many countries have
considered the transition towards the low-carbon economy as the only to accelerate the sustainable
economic development, create green jobs and ensure energy and climate security, there out, the concept
of the “low-carbon economy” enjoys popular support. Its impact not only finds expression in the wide
range of policies involved, and what’s more, it can trigger and guide the underlying transformation and
promotion of energy structure, industrial structure, technical structure and the pattern of social
consumption. Therefore, to carry on a study and analysis towards the connotation and theoretical basis
of the low-carbon economy, not only has theoretical significance, but also has practical value.
2. Literature Research Review
Low carbon economy is an economic model that the global responses to the climate warming [1]-[4]. Very
long ago the foreign scholars have already had many researches on the impact to economy from the
climate change [5]. The first time put forward the "Low carbon economy" was in the UK Energy white
paper :Our energy future - creating a low carbon economy in the United Kingdom in 2003. The
connotative definition of "Low carbon economy" included: change the energy structure renew the
energy infrastructure, enact the energy policy to achieve the goal of greenhouse gas emissions; reduce
natural resource consumption and environmental pollution to get the approach and opportunity of
obtaining more economic output and creating higher standards of living and better quality of life;
provide opportunity of development, application and export advanced technology; create new business
and employment opportunities. The White Paper did not present a clear concepts of "low carbon
economy" and a indicator systems of measure method, but it set down detail long-term goal of low
carbon economy developmental pattern in order to change The United Kingdom into a low carbon
economies and thus actively promote the "low carbon economy" development in the global.
The report The Stern Review on the Economic of Climate Change calculated the economic, expense and
cost resulted by climate change by economic model and thus he called upon every country taking action
earlier, avoiding market failures by means of policy adjustment in which the core is equity and risk so as
to promote comprehensive economic growth and development opportunities, finally achieving low
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carbon economy growth model and transiting to low carbon economy [6]. The World Bank published a
report entitled Development and Climate Change in 2010, the report explained the relation between
environmental and economic, social, energy, ecology, technology, financial and state institutions;
revealed how to reduce the carbon footprint in cities through the data, analysis the costs and benefits
from environmental changes. The World Bank report and the Stern report analysis the possible benefits
from developing low carbon economy as soon as possible and emphasized the importance of institution
and technological innovation in the development of low carbon economy and finally they deepened the
connotation of low carbon economy[7].
Overall, the international community's attention to global warming is also the appeal to low carbon
economy, but there is not a unified definition of "low carbon economy" or "low carbonize" because of
the different meaning of "low-carbon economy" proposed by each country.
In recent years, the research on low carbon economy is in the initial stage in China. Some experts and
scholars synthetically refined the connotation of low carbon economy which means an effective way to
response to climate warming result form carbon-based energy consumption. Fu Yun regarded low
carbon economy as a green economic development model [8]. Ren Li emphasized the particularity of
development of low carbon economy in China [9]. These scholars and experts get to a common view in
the following two aspects: first, low carbon economy is characterized by a series of low carbon activities
in the economic system; second, low carbon economy is a green economic development model form
high carbon energy era to low carbon energy era. But they just described the development form and
pattern of low carbon economy in a broader sense; they did not have a comprehensive summary of low
carbon economy including the deeper meaning.
There also had some scholars and experts thought that low carbon economy is an economic system that
covers the entire process of the production, circulation, distribution and consumption, it permeated into
raw material supply, product manufacturing, resource distribution and consumer consumption through
low carbon technologies, low carbon energy development and use, low carbon product and consumption,
they paid more attention to process of low carbon economy in the economy system [10]. They analyzed
the low carbon economy in a more macro-level, but they ignored the central role of technology and
institution to the low carbon economy and there was not have a concrete expression of the
characteristics of low carbon economy itself.
Overall, the studies of low carbon economy indicate that the low carbon economy is rich of different
kinds of content, but each of those connotations can not fully include the broad content of low carbon
economy which becomes one of the major reasons of lacking of a unified, standardized and system
defined connotation of low carbon economy.
3. Conceptual Model of Low-carbon Economy
By synthesizing the former research results, we consider that the low-carbon economy is based on the
premise of dealing with the global climate change, based on the economic model with the characteristic
of lower energy consumption, low discharge, low pollution, energy-efficient, high efficiency and
high-return; based on the economic pattern with the form of expression of low-carbon energy,
low-carbon industry, low-carbon technologies and the low-carbon markets; permeated in the economic
system of the whole economic cycle process including production, circulation, distribution and
consumption; related to the contradiction that involve technological innovation, environmental
improvement, institutional innovation , economic development and the progress of human society; it
strives to achieve the goal of unifying the triple objectives including the mitigation of climate change,
enhance economic efficiency and the sustainable development of human ultimately.
Based on the concepts and ideas of the low-carbon economy, the concept model of building low-carbon
economy is as shown:
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Figure 1
Conceptual model of low-carbon economy
From figure 1 we can see that low-carbon economy has rich content, has a wide range, which is the
unification of socio-economic complex, economic pattern, economic system and economic mode, and
the relationship between various aspects are complicated, they restrict each other and influence each
other. As a social complex, low-carbon economy not only involves the two core problems including
economy and environment, but also it involves the problems on the sensitive political cooperation and
games, only through institutional innovation it can improve the environment and promote the economy
to develop sustainable, to achieve the harmonious society. This requires the development of low-carbon
economy to achieve the goal of “three low levels” and “three high levels”, then mitigate the global
warming through “three low levels”, achieve economic benefits through “three high levels”, and finally
realize the coordinated development of social economy.
Specifically, in order to achieve low-carbon economy, low-carbon energy, low-carbon industry,
low-carbon technology and low-carbon market are needed. From the structure of energy consumption,
the share of global coal consumption is too high; due to China’s energy consumption is more dependent
on coal resources. In 2007, coal accounted of 27.8% in the global primary energy consumption, this
proportion in the developed countries is more or less 20%, while in China, and it was 69.5%. Therefore,
low-carbon energy saves energy by developing low-carbon technology and improving the energy
efficiency, by replacing the carbon-based energy that discharge higher carbon with new energy.
Low-carbon industry that is energy saving industry, develop advanced energy-saving technology
through research, it was used in traditional industries, to achieve the goal of energy saving and emission
reduction of the carbon-intensive industries; or cultivate the value-added products with low consumption
and low pollution and cultivate the new industries through the research and development of the products.
Low-carbon technology refers to the new technology that improves energy efficiency to stabilize or
reduce energy demand, and at the same time reduce dependence on coal and other fossil fuels. The
innovation capability of low-carbon technology is the fundamental driving force to achieve the
low-carbon economy. The low-carbon technologies that need to develop include the clean and effective
utilization of coal, carbon capture and sequestration, the exploration and development of gas resources
and coal bed gas, renewable energy technologies, clean vehicle technology and other new technologies
involving emissions of greenhouse gas. According to the estimation of experts, the technology of carbon
dioxide capture and storage will reduce the cost of mankind’s emissions to 30% of the total estimated
cost. Combine the use of the efficient and alternative energy with the increase of the utilization of
renewable energy and the sequestration of the carbon dioxide, it can effectively reduce the emission of
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greenhouse gas and slow down the pressures of climate change.
The low-carbon economy depends not only on technological innovation, but also it needs healthy flow
in the form of “low-carbon” in the economic system, including low-carbon production, low-carbon
circulation, low-carbon allocation and low-carbon consumption. Firstly, it comes to the low-carbon
technology of production. Since the Industrial Revolution, the material life of mankind is increasingly
rich, which has brought lots of consumption of carbon-based energy; because of the blind expansion and
waste of resources, material goods have not been reasonable overall planning in the production process,
making resource allocation cannot be optimized; combined with the relatively backward science and
technology, the cost to develop low-carbon economy is high, the cycle of producing high value-added
goods is long and the risk is large, which will also result in the fail to achieve low-carbon of production.
Thus, low-carbon of production should depend on high-tech technology, the enhance of energy
efficiency and cyclic utilization of abandon resource in the process of production of physical materials,
to produce high value-added green products and achieve the effect of reducing emission, making carbon
use and carbon emissions adaptable with the socio-economic level and environmental carrying
capacities. Secondly, it comes to the low-carbon circulation. It is to enable the production factors and
products to achieve the optimal allocation of resources by free circulation. This requires the realization
of low-carbon of the infrastructure, including building the energy saving, environmental friendly and
efficient transport system, the overall balance use of surface air and ground track, develop modern
logistics, achieve the economies of scale and decrease the carbon emissions in the circulation of
products. In fact, the use of existing infrastructure is path dependent, as it will lead to lots of sunk cost
due to the abandon of the existing infrastructure, so the existing infrastructure has become one of the
main obstacles of the low-carbon circulation. Thirdly, it comes to low-carbon allocation. The
government has the ability to regulate the macro-economic; it needs the government to take advantage
of policy instruments including laws, taxes and financial transfer payment and so on to redistribute the
factor income, to carry out preferable policy and privilege to the new industry that energy saving and
environmental friendly, in order to achieve the low-carbon industry. In 2009, in the plan of adding 4
trillion to stimulate economic investment of China, a total of 580 billion are used to the projects related
with climate change including energy conservation, ecological engineering, the adjustment of structure,
technological innovation and so on. Meanwhile, the regulation of the carbon price and the
implementation of the carbon tax can be used to promote carbon saving to achieve the low-carbon of
distribution. Finally, it comes to the low-carbon consumption. The purpose of production of human is
consumption. The global financial crisis impel the human to reflect the previous economic growth
model, and determine the future of the economic recovery strategy, the expansion of the domestic
demand and consumption is an effective way to alleviate the economic crisis. Low-carbon consumption
is meant to achieve civilized consumption, moderate consumption during the process of consumption; to
pay attention to the spirit of consumption, cultural consumption in the consumption structure. It can
avoid the blind consumption and waste by the right, reasonable and sustainable consumption patterns,
which is not only can be helpful to save resource, but also it can reduce the footprint of carbon, train the
national low-carbon consumer awareness and achieve the low-carbon consumption.
4. The Theoretical Foundation
Based on the above description the basic theory of low carbon economy can be summarized as the
following aspects:
Closed Loop Theory. Closed loop theory means that energy works circularly in each subsystems of low
carbon economy until change into entropy which is the sum of energy that finally consumed, the greater
the entropy indicating the greater energy consumed by human being and the greater negative impact on
the environment. Loop theory is in terms of various subjects of low carbon economy whose activities
also have to be bound by the loop theory: the total entropy of the earth can not be reduced by and social
or economic activities whose role is only to accelerate or delay the increase entropy in the total.
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However, developing a low carbon economy can reduce the entropy and thereby reduce the carbon
footprint by the way of environmental protection and resource conservation on the fully consideration of
environmental impact and resource use.
External Effects Theory. External effect refers to the non-market effects result by activities of producers
or consumers to other producers or consumers in the actual economic activities. Beneficial effect is
known as the external economy while the harmful effect is the external diseconomy. The root causes of
climate change is market failure and the climate warming has a global external diseconomy because the
carbon emission not only make emitter easily avoid social costs but also can not be aware of the
harmfulness in the short term. Low carbon economy advocate to reducing carbon emissions which will
bring economic benefits in the long run, at the same time it will provide citizens with a good living
environment and save the follow-up resources for future generations will; it not only achieve the
sustainable development in the current economy but also promote the sustainable development of
human society, in general, low carbon economy is external economy.
Symbiotic Evolution Theory. Since 1879 the German scientist Berry put forward the "symbiosis" theory,
the research about symbiosis has gone beyond the scope of biology, extended to the ecological, social,
and economic fields and achieved fruitful results. The symbiosis between human society and nature is a
objective law that any economic system and low carbon must be followed. Mankind has created
unprecedented wealth and accelerated the process of economic globalization in 20th century which, to
some extent, promoted economic development, but it also bring about world attention problems such as
global warming, environmental pollution, resource depletion, ecological imbalance, how to maximize
use of resources and protect environment become the focus of common concern and thus promote the
arrival of low carbon economy era. This fully demonstrates that human society, resources and
environment exist a mutual dependent relationship. If the harmonious relationship was destroyed, to a
certain degree, the old pattern will be substituted for a new one which lead to direct or indirect
improvement in internal or external so that there will be a sustainable development of human society.
Alternative Conversion Theory. Specifically, the implication of alternative conversion theory in low
carbon economy is the alternative and converted function under special boundary conditions in variables
of subsystem level in low carbon economy which include production system, consumption system and
environmental system. Make use of low carbon energy and low carbon technologies can reduce the use
of carbon-based energy in low carbon economy, thereby reduce the carbon emissions and carbon
footprints in the environmental system and achieve the alternative and conversion between energy and
economy.
5. The Paths of Analyzing Low-carbon Economy
Since the reform and opening-up, the industrialization of China has lead to compressible and complex
environmental issues; the environmental carrying capacity has reached the limit, which is the
superimposed result of the old and new environmental problems. As a result, in the choice of the path of
low-carbon economy, we must not only take into account the unresolved issue, but also should adopt
new solutions to new environmental problems, and the specific paths are as follows:
Firstly, achieve the transformation of the energy consumption structure and look for new economic
growth point. At present, the countries around the world are trying to carry through a new round of
completion by energy conservation and the reduction of emissions, whoever can achieve the goal of
environmental protection and energy, and whoever is the most promising to the new economic
high-point. Cultivate and develop the new industry is the effective option. Take the environmental
protection industry for example, it is not only can improve the regional environmental quality, but also it
can help to solve the unemployment, increase the revenue of the government, which is the effective way
to win both in achieving the growth of industrial economy and energy savings.
Secondly, the government improves the institution building of market by taxation and price policies.
Taxation, carbon trading, ecology and environmental compensation are the control measures for the
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government to regulate resources and environmental problems, therefore, the government should
address the old problems including the signals failure of the market price, the delay of the environmental
energy tax, the escape of the tax of occupying the environmental resources, and at the same time, to
actively promote the implementation of the carbon capture, to solve the new problems by new
technologies, to enhance the possibility of the transformation of economic growth mode from the aspect
of macroeconomic regulation.
Finally, promote the cooperation of energy saving between enterprises. If enterprises can achieve the
cooperation in the field of energy saving, it not only allows the enterprises to get profits and the space of
competitive advantage, but also it can promote the sustainable development of industries; not only
achieve the rapid economic development, but also can ensure the implementation of environmental
protection and energy saving. Therefore, the enterprises should be guided to cooperate and innovate on
the aspects of energy saving by the government, and the enterprises should also cooperate with other
enterprises through various channels, to achieve the win-win development of socio-economic and
resource environment.
6. Conclusion
Sustainable development of the world economy is facing tow pressure: environmental load and energy
supply, transform to the low-carbon economy is an irreversible trend for all countries. In order to solve
this global problem, to confirm the concept of low-carbon economy is important. Through building a
low carbon economy model, the paper defines a precise and broad concept of low-carbon economy, and
explains it’s theoretical. At last path selection was proposed. In the future, government need to enhance
the independent innovative capacity, increase the R&D investment of low-carbon technology, accelerate
the pace of technology to production, establish the low-carbon technology system, and build the policy
incentives as the strategic strategy.
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