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China: Carbon Neutral by 2060

Nov 09-2020   



China is committed to becoming carbon neutral by 2060, which means it will slash carbon emission from a height of 8.5 billion tons to 1.5 billion tons in 2050, and then utilize the bio-system to absorb the latter, said Prof. Xu Jintao of the NSD in a recent forum in Shanghai. He’s PKU Bo Ya Professor, Deputy Dean of the NSD, and Director of the Institute of Environment and Energy Economy at PKU.

 

China’s commitment also includes capping carbon emission by 2030 and reflects the country’s efforts to do good for the world. China and the world as a whole shared the same trend in carbon emission: slow growth from 1990 to 2002 and fast pace from 2002 to 2010. Before 2002, China’s emission was on par with the global average; in 2006, it surpassed the US as the largest emitter. Right now, it accounts for 30% of global emission. A closer look reveals that its emission has been highly correlated to economic growth: the more the former, the higher the latter, and vice versa.

 

2002 marked China’s WTO accession and the starting point of its high growth in carbon emission. The analysis by Prof. Xu and his team found that China’s fast economic growth since 2002 was due to not only labor costs but also the so-called ‘pollution haven’ phenomenon. In becoming the factory of the world, China also began to host the polluting industries of developed countries. In other words, China paid an enormous environmental cost for its economic growth.

 

What China sets out to achieve is even more ambitious than the goals of the Paris Agreement. Many experts are confident because if the 2-3% emission growth achieved in 2017 and 2018 is any guide, China might have hit the height of emission in 2025. Technological upgrade and structural adjustment can also play a big role.

 

To reduce carbon emission, China should focus on adjusting its energy structure and reforming its factor market. While remaining hopeful about the positive impact of technological breakthrough, China can serve itself well by correcting the distorted factor market, including raising the price of the environmental factor. Prof. Xu believed that a carbon tax is superior to carbon trading because the former can do better in galvanizing local governments into action. For the electricity industry, a reduction of 85% of carbon emission corresponds to an effective carbon price of 500 yuan per ton, still lower than the USD126 per ton in Sweden.

 

Another major impetus will come from nature-based solutions (NBS), e.g. planting more trees, better management of forests, and substituting biofuels for the fossil ones. Afforestation of barren hill equals to a carbon cost of 13 yuan per ton. Re-making farmland into forests, the more expensive solution, entails a carbon cost of 130 yuan per ton. Even so, it’s still much lower than the 500-yuan cost for industrial firms, said Prof. Xu.

 

China: Carbon Neutral by 2060

Nov 09-2020   



China is committed to becoming carbon neutral by 2060, which means it will slash carbon emission from a height of 8.5 billion tons to 1.5 billion tons in 2050, and then utilize the bio-system to absorb the latter, said Prof. Xu Jintao of the NSD in a recent forum in Shanghai. He’s PKU Bo Ya Professor, Deputy Dean of the NSD, and Director of the Institute of Environment and Energy Economy at PKU.

 

China’s commitment also includes capping carbon emission by 2030 and reflects the country’s efforts to do good for the world. China and the world as a whole shared the same trend in carbon emission: slow growth from 1990 to 2002 and fast pace from 2002 to 2010. Before 2002, China’s emission was on par with the global average; in 2006, it surpassed the US as the largest emitter. Right now, it accounts for 30% of global emission. A closer look reveals that its emission has been highly correlated to economic growth: the more the former, the higher the latter, and vice versa.

 

2002 marked China’s WTO accession and the starting point of its high growth in carbon emission. The analysis by Prof. Xu and his team found that China’s fast economic growth since 2002 was due to not only labor costs but also the so-called ‘pollution haven’ phenomenon. In becoming the factory of the world, China also began to host the polluting industries of developed countries. In other words, China paid an enormous environmental cost for its economic growth.

 

What China sets out to achieve is even more ambitious than the goals of the Paris Agreement. Many experts are confident because if the 2-3% emission growth achieved in 2017 and 2018 is any guide, China might have hit the height of emission in 2025. Technological upgrade and structural adjustment can also play a big role.

 

To reduce carbon emission, China should focus on adjusting its energy structure and reforming its factor market. While remaining hopeful about the positive impact of technological breakthrough, China can serve itself well by correcting the distorted factor market, including raising the price of the environmental factor. Prof. Xu believed that a carbon tax is superior to carbon trading because the former can do better in galvanizing local governments into action. For the electricity industry, a reduction of 85% of carbon emission corresponds to an effective carbon price of 500 yuan per ton, still lower than the USD126 per ton in Sweden.

 

Another major impetus will come from nature-based solutions (NBS), e.g. planting more trees, better management of forests, and substituting biofuels for the fossil ones. Afforestation of barren hill equals to a carbon cost of 13 yuan per ton. Re-making farmland into forests, the more expensive solution, entails a carbon cost of 130 yuan per ton. Even so, it’s still much lower than the 500-yuan cost for industrial firms, said Prof. Xu.