Climate Change Deals with China’s Economic Development Strategy

On December 20, 2009, just after the close of Copenhagen Climate Change Conference, Prof. Zhu Dajian, a well-known expert on Recycling Economics and Director of Institute of Sustainable Development and Management of Tongji University, delivered a speech for Wenhui Lectures, a brand journal produced by Wenhui Daily , one of the time-honored Chinese daily newspapers. The topic is what effects climate change will make on such issues as economic development strategy and people’s living quality of all countries including China. His main viewpoints are as follows: How to look upon the nature of climate change? Human economic activities result in the increased carbon emissions and global warming. This is the basic conclusion gained by scientists, and also the consensus reached by many countries in the climate conference. At present, what we have to discuss is the countermeasures. The rising of temperature leads to six kinds of harms, including the change of the sea level and the less productivity of agricultural crops. This phenomenon was caused by the economic development mode. Behind the mode is carbon emission. However, where is the carbon from? It comes from the emission of six types of greenhouse gases, mainly fossil energy. This is the reason why we advocate the use of renewable energy and improve the efficiency of fossil energy. Don’t simply treat climate change as an environmental problem. It is also the problem of economy and the development mode. What effects will the rising of temperature make? According to Chinese scientists’ research, the global temperature will rise by 1.1℃ to 6.4℃ in 2100 at the current speed, and in China, it will rise by 3.9℃ to 6.0℃. According to human’s affordability, scientists conclude that the increase of temperature can not exceed over 2℃. It would be unbearable if the increase is over 6℃, because the temperature then would be 43℃ (37℃ plus 6℃). What about the effects on economy? According to researches, China’s economic loss caused by climate change has increased significantly since 1995, with the maximum annual loss of 300 billion. Specifically speaking, because of the increase of temperature, human will suffer six harms such as drought, flood, rainstorm, sea level rising from 1m to 5m and the less productivity of agricultural crops, etc. The Asia and Pacific regions, from Japan, Korea to China, will be the area worst hit by the rising of sea level. Developing low-carbon economy is a “regretless strategy” China is one of the countries which are seriously affected by climate change. So we should take a comparatively lower-cost measure, just like the insurance, to prevent the disaster in advance. For example, China’s current carbon reduction cost is 10 dollars/ton; it is estimated, up to 2050, the cost will possibly increase at least to more than 200 dollars/ton. In The Economics of Climate Change published in 2006, an English economist pointed out that today’s 1% of input can save 5% to 20% of economic loss in 2050. Therefore, we think developing low-carbon economy is a regretless strategy. Because of its withdrawing from Kyoto Protocol, the United States largely lags behind Europe in green technology and new energy technology. They do worry about China’s development in this field. Gary Locke, Minister of US Department of Commerce once said that if U.S.A. continues not to take action, the silicon valley of green technology would be in Shanghai 10 years later. We must take our long look ahead to year 2050 About the climate problem, there are three different descriptions on targets in 2050: the first is that the increase of temperature doesn’t exceed 2℃; the second is the increase of intensity does not exceed 450PPM; and the third is that the total emission of CO2 will be 50% less than that of 1990, equally a little more than 2 tons emission per person. This data is a big challenge to China, and also America. At present, per capita carbon emission of China is 4.3 tons; while the global average level is 4.28 tons; America, 20 tons; European Union, a little more than 10 tons; and Japan, 9.9 tons. Now, the growth rate of global renewable energy is 1% per year. Take Europe for example, the proportion of renewable energy among the energy mix will account for 20% in 2020, 50% in 2050 and 80% in 2100. In China, this proportion, including hydropower, accounts for 9% at present; it was planned to grow to 15% by 2050, but now, it is expected to reach 20% at that time. However, currently, the most urgent affair for China is to make highly efficient use of fossil energy, because coal occupies a large proportion in the energy mix of China. To achieve the goal of cutting 50% of carbon emission by 2050 when the average growth rate of the global economy will be 3%, we have to improve the carbon productivity (the economic output of per unit dioxide) by over 10 times in 42 years (from 2008 to 2050), which is the progress same as the increase of American labor productivity in the period of 125 years from 1830 to 1955. Low-carbon development model is quite necessary for China Even if there is no Copenhagen conference, China has to choose the low-carbon development model. Otherwise, its economic growth won’t be sustainable and lack of green competitiveness. There are two reasons for China to take low-carbon development model: one is the pressure from outside, the other is its own development request. In my opinion, the essential reason is not the outside pressure but China’s own need. Whether Copenhagen conference opened or not, China has to reduce the use of fossil energy. Otherwise, our life and economic development won’t be sustainable, thus will largely weakening China’s international competitiveness. The pressure comes from the total and per capita carbon emission amount. According to the relevant researches on the related international organizations and individuals’ participation of low-carbon life, China has exceeded America to be the world’s number I since 2007 in total amount of carbon emissions. Per capita emission amount in China is 4.3 tons at present, which is also higher than the global average of 4.28 tons. Of course, China has the right to plead. The problem of carbon emissions has implicit and historical reasons. The implicit reason is that a large proportion of China’s carbon emission is for producing products for developed countries. Researches show that one third of China’s carbon emission is for developed countries. At present, there is an argument about the issue who should be responsible for carbon emission, the producer or the consumer. According to the historical factors, China should not be responsible for the past emissions for developed countries; among them, the United States is the biggest beneficiary. However, China should take immediate action as seen from its own development perspective. The amount of carbon emissions should follow the Kaya Identity: CO2emission=population ×GDP/population ×energy/GDP ×CO2/energy Now that the first two items cannot drop down, China has to work on the latter two items: the energy consumption of per unit GDP and per unit CO2, the carbon dioxide intensity of per unit GDP if combined. We proposed to reduce the emissions by 40% to 50% below 2005 levels by 2020. According to the Kaya Identity, if GDP grows at the rate of 8%, the GDP of 2020 will be 3.17 times that of 2005. Even if the intensity falls down, the total carbon emissions will increase by 70% to 90%. China will face increasingly severe challenge in future. The severity doses not come from the out pressure but from its own development model. So China has to shift the economic model, giving priority to applying alternative energy and improving energy efficiency. Three ways to realize low-carbon economy: building low-carbon city; developing low-carbon industry; and promoting low-carbon life Three ways to realize low-carbon economy: building low-carbon city, developing low-carbon industry and promoting low-carbon life. To build low-carbon city, each city needs to take three typess of space into consideration: the space for buildings, the space for agriculture and forest, and the space of for the nature. The latter two types of space can absorb the carbon emit by the first type. Low-carbon city should have enough space for agriculture and forest and nature. So the first thing we should do when planning and constructing city is not to plan the development zone, but to fix the carbon space. Just in this way we can increase the low-carbon capacity of urban development. To develop low-carbon industry, efforts should be made in three aspects. The first is to apply renewable energy more and more instead of the conventional fossil energy. The second is to improve energy efficiency in three areas: industry, transport and architecture. Take Shanghai for example, improving the energy efficiency can help cut the carbon emissions by 80% to 90%. The third is to largely develop low-carbon space, including water area, forest space and ecological space. All these efforts will lead to expansion of three green industries: renewable energy industry, efficiency improvement, energy-saving and emission reduction industry, and ecological infrastructure industry. The last way is to promote low-carbon lifestyle. At present, there are three carbon consuming groups. The first group is the developed countries, whose per capita emission is more than 10 tons. They account for one fifth of the global total population and live in big houses and drive cars with large displacement. They are high consuming group of carbon. The second is middle carbon-consuming group, which is put forward only in my research. In this group, the per capita emission is higher than the global average amount of 4.2 tons, but lower than the average amount of the developed countries. This life style of the middle class can meet the basic need and is comparatively comfortable. The third type is the poor with low-carbon consumption. Their material needs should be met. So they should increase rather than reduce carbon consumption. In my opinion, the basic strategy of the current low-carbon life should be narrowing high carbon-consuming group, enlarging and stabilizing middle carbon-consuming group and decreasing the group of the poor with low-carbon consumption. I think this strategy meets the principle of sharing the common but differently shouldered responsibility. Life quality to be improved; carbon emissions to be cut What is the target of per capita carbon emission for China’s economic development? Obviously, it will lead to big problems if we follow America with per capita emission of 20 tons or taking Europe and Japan’s 10 tons emission, because this goal also can not show that China won’t follow in developed countries’ steps. China’s current per capita emission is 4 to 5 tons, but economic development will increase by several times. To achieve a green leap and make advantage of late start, China should not model itself on the developed countries. Shanghai’s current per capita GDP is 10 thousand dollars which will grow to 20 thousand dollars in ten years. We need to think over if it is possible for China to control the per capita carbon emission to be lower than 10 tons. When the target is fixed, it will be easier to make the choice of lifestyle. Now, there is a misunderstanding on living. Everyone values “possession” and thinks possession equals to modern life. They want to own cars, houses and luxurious appliances. In fact, except possession, we can rent or share these facilities. If we want to live the low-carbon life of high quality, we have to change our notion from pursuing possession to pursuing sharing. All these life styles can meet our life quality, but the produced amount of carbon emissions is quite different from each other. This mode is essentially distinguished from that in poor times. In order to improve the life quality of Chinese people, the emissions of carbon must be dropped down. We cannot just choose one from the two options. China should strive to act as the leader of the sixth global economic long wave Low carbon economy is more positive in another perspective. Economy has long-wave period, and a leading industry will emerge every 30-50 years. There are five economic long-wave period in the past namely textiles, steel, electric, oil, IT. Someone estimated that green industry may play a leading role in the sixth economic long-wave period which will reach peak value by 2020; it means there will be a lot of opportunities in the future. China lost the previous five chances and just played a role as follower. All the countries and regions take to new energy and green industry now, the USA feel left behind now, and the European Union regards it as economic competition, Japan issued policy for solar industry and regards it as one of crucial elements to the development of the country. So, we are wondering whether China could play a leading role in the green reform. Premier Wen Jiabao mentioned that solar energy and hydraulic energyFrom this point of view, we are more determined to take the path of low-carbon economy. should be the first choice. Special efforts should be made in solving the problem in middle management What I talked above is the general viewpoints of low carbon economy, to realize it, we need to do in the following aspects: Firstly, I just talked about the low carbon economy from the perspective of the public. Actually, low carbon economy will bring more opportunities than challenges to the companies and governments. For example, Chinese government always input fixed assets in the construction of infrastructure such as cities, roads, bridges and airports. The developed countries only have a few opportunities to develop low carbon economy owning to their already well completed infrastructure. As 400 millions of rural residents in China are willing to migrate to urban areas, we need to improve the urban and industrial infrastructure, particularly in an environmental protection way, which is actually our opportunity of green investment. A lot of people would feel happy to accomplish this task, but one problem lies in the middle management. Decision-makers, we researchers and the public, all think it is high time for us to develop low carbon economy, but the middle management pay more attention to GDP growth and this result in moving the green investment into traditional action. Thus, China may lose the chance again. So I think we should advocate low carbon economy among all three levels of top, middle and low management. Secondly, it is about the conception transmitting as we talked in Wenhui Lectures. China needs to further advocate the learning-oriented society to promote low carbon economy. We shall pay more attention to localized low carbon technology such as using the coal with less pollution and low cost. After all, 70% of energy demand for industrialization of China mainly will depend on coal in the next 20-30 years. We should study more about low carbon and local technologies to make it economically acceptable, environmentally friendly and beneficial to employment. We shall try our best to employ more people for economic development and management instead of saving labor because China has abundant human resources. The USA substitute natural resources for human resources because of the shortage of the later. Can we China follow this way? China needs to substitute human resource for natural resource, so the Labor-Intensive industry will take the lead in China in next 20-30 years. Low carbon economy is actually a problem of national strategy; so it is more important for us comparing to the worry of eating fewer beefsteaks, pork chops, and driving less. Because of the advantages of low carbon emission and being cheaper, more and more people change to buy small emission cars. To their surprise, this will result in larger amount of emission due to the larger total amount of emission caused by more energy consumption. In conclusion, the government shall pay high attention to control the total amount. Turn low -carbon economy from a “slogan campaign” into a “system campaign” Early this year in UK, a foreign expert asked me the amount of the per capita CO2 emission in China. According to our research, the most direct understanding on modernization in the mind the public is “Today’s United States is the future of Shanghai”. We imitated this pattern. The demonstration effect rising in consumption is more powerful than any other fields. It is very difficult to launch low carbon economic growth without reform of economic system. However, it is very easy to play a “green show or low carbon show” once in a while, taking the activities of many celebrities in World Environment Day; but we do need a system if we would like to do something for low carbon economy from the bottom of heart. We are afraid that the public may forget the conception of low carbon economy soon after Copenhagen Climate Change Conference no matter how enthusiastic they were about it at the meeting. The crucial point is that we must issue policies to put it into action with reasonable system. This is the real work of turning the development of low carbon economy from a slogan campaign into a system campaign. Let’s get back to the topic of green economy, China government channeled 4 trillion RMB for the recovery of economy after the financial crisis, but we are all wondering which kind of demand is effective to achieve it. Are they the projects of home appliances going to the countryside, investment in steel or cement industry? It is green investment only if we invest in areas such as intercity railway and ecological protection. The traditional Roosevelt's "New Deal", which preferred to invest in infrastructure, is not a green Deal. Now we have a new direction to develop green economy which can tackle both climate and economic crises. The major problem is that we still develop economy in a traditional mental way without thinking of what are the benefits of green economy. So, we can not only concentrate on environment protection, it will be triple win if we take low carbon economy as the development pattern because it will lead to economic growth, environmental benefits and employment increase. But the hope is far away from reality. Four difficulties at Copenhagen conference It is not who win or lose but compromise of member countries the success of the Copenhagen conference; the final agreement is concluded based on China’s part compromise and US’s smaller compromise. For example, China is willing to reduce emission without any request to developed countries offering financial support, and all the guidelines are under supervision of China itself, while it offers transparent information on emission reduction to the world. The United States expressed that developed countries could offer USD100 billion to developing countries for emission reduction and fitness by 2020 without mentioning the specific amount that the USA will afford. The first difficulty is about the two agreements. Kyodo Protocol is compulsive and promissory to developed countries concerning the standard of emission reduction but United Nations Framework Convention on Climate Change (UNFCCC) is not. The biggest controversy was that the developed countries put forward that these two agreements should be combined together as one. This proposal indicates their purpose that all big countries have to reduce emissions. The second difficulty is the mid-term emission reduction goal. Developing countries brought forward that developed countries should reduce 25%-40% of emission by 2020 comparing to that of 1999, but developed countries did not promising anything. The European Union agreed to reduce 20%, and they agreed to reduce 30% if other countries agree to reduce emission as well. The USA agreed to reduce 17% of emission comparing to that of 2005 and discard the standard of 1999. The emission reduction goals promised by the member countries in the accord are empty; they are to be fixed in Mexico Conference next year. The third difficulty is the expense. The developed countries promised to help developing countries in emission reduction by offering capital, but the total amount that can be collected in a short term is less than 30 billion US dollars, and it will increase to 100 billion US dollars by 2020 as planned. The forth difficulty is willingness or compulsion of developing countries in emission reduction. Developing countries are not compelled to reduce emissions according to the Second Commitment Period of Kyodo Protocol. But the European Union and the USA request all big developing countries to reduce emissions compulsively. All the developing countries including China did not accept this scheme. The emission reduction program of developing countries should meet their national conditions and be adopted in willingness; however the obligation of emission reduction implemented by developed countries should be compulsive with ineluctable responsibility. I ever estimated that there might be the best, moderate or worst result of Copenhagen conference. The best result is that developed countries will reduce emissions by 25%-40% at least which will meet the demand of the primary plan of the United Nations. The moderate one as mentioned in the speech of Premier Wen Jiabao is locking the common awareness and the previous promise including the target. The worst one is the present result: an agreement without specific index for each country but only some valueless principles and empty tables for emission reduction. Plan for the migrating of 700 million farmers into rural areas Dai Xingyi (Professor of Department of Environment Science and Engineering, Fudan University): To be frank, I doubt a little about climate warm-up, but I do support emission reduction with firm determination. China now consumes 3.1 billion tons of standard coal annually, and it is difficult to imagine what it will be if one day we consume 6 billion tons of standard coal in this land. China is in the primary stage of socialism now and this will remain for a long period of time; however, its per capita amount of carbon emissions is higher than world’s average level. How about the situation when we move to next social stage? How much carbon energy we will consume to serve the public, especially those come from countryside. It is estimated that there might be 600-700 million farmers settling into cities in next 30 years. It is the most important thing that how to entitle them a decent life. After getting a clear understanding on this problem, we will know what to support and what to reject. Equal rights in carbon emissions while the rich come first Chu Dajian: We mentioned just now that how much carbon fuel we may consume. According to the China’s Eleventh Five-year Plan made in 2005, energy consumption per unit GDP should be reduced by 20% in five years. This is really good, but I think the key is that everyone has equal right to emit carbon dioxide; the emission of the poor can be increased while the amount of the rich should be decreased. We need structural adaptation to restrict the increase of carbon fuels consumed by the rich. Low carbon economy is more positive in another perspective. Economy has long-wave period, and a leading industry will emerge every 30-50 years. There are five economic long-wave period in the past namely textiles, steel, electric, oil, IT. Someone estimated that green industry may play a leading role in the sixth economic long-wave period which will reach peak value by 2020; it means there will be a lot of opportunities in the future. China lost the previous five chances and just played a role as follower. All the countries and regions take to new energy and green industry now, the USA feel left behind now, and the European Union regards it as economic competition, Japan issued policy for solar industry and regards it as one of crucial elements to the development of the country. So, we are wondering whether China could play a leading role in the green reform. Premier Wen Jiabao mentioned that solar energy and hydraulic energy should be the first choice. We feel it means to develop low carbon economy in this perspective. What is your opinion? The initial task is applying the traditional energy in a way of fewer emissions Dai Xingyi: I am expecting green economy too because it will bring a bright future for us human beings. But I am not so optimistic about it since new energy is more expensive than traditional energy. So, it is harmful to economic development if we force to popularize new energy. However, new energy is meaningful to the future, so we need national policy for adaptation. Chu Dajian: to this problem, I have ever delivered a speech titled The Present Obstruct of Energy Mix Rebalancing. There is a misleading now; to develop low carbon economy is a tendency, not the same as developing new energy. I have the same opinion with you concerning the problem of new energy, and I have even stronger worry. Why? New energy will play an important role in China after 2030 but not the years from 2010 to 2020. We should concentrate on traditional energy to develop low carbon economy, because the proportion of new energy will be only 20% of total energy consumption by 2020 according to new energy plan of European Union, and that of China is only 15% including hydraulic energy. We should focus on using traditional energy clearly with low carbon emission. 85% of attention is paid to energy efficiency to develop low carbon economy, but it is a big problem that no policy issued for energy efficiency including industrial, traffic, architectural energy efficiency, etc, which is needed and feasible to develop green industry. And we should attach importance to the problem of solar and wind energy production capacity surplus. Wrong decisions and bad management by the governments will lead to the waste of energy Dai Xingyi: The current major measure in reducing carbon emissions is to use the traditional energy rationally. In terms of techniques, we have the reason to be optimistic in my opinion. The cleaner coal application technology in China has leaped into the front ranks of the world. But in reality, I think we should restrict energy waste in the process of developing economy. Actually, the wasted energy should have been used to improve the people's daily lives. This is the question worthy of most interest for governments and academics. For instance, roads repairing in some places are too frequent for certain reason. It is a worry that there will be many difficulties in the path of low-carbon economy. Dai Xingyi: In fact, the government shall choose the way of living on behalf of the public, because individuals often can not choose it. Why? For example, now in Shanghai, we see a lot of repeated efforts are made in building roads, repairing roads, selling cars, and then repair roads again. I feel it is the old way taken by the United States. Individuals have no choice to decide. More and more people buy cars, so do I; other people live in a big house, so do I wish. People always follow others. What kind of lifestyle is suitable for China on earth, especially for such a crowded city as Shanghai? The governments need to consider further in planning the urban development and guiding the public opinion.