Jun Pang: How can China cross the “climate change trap” on the road to carbon reduction?

Is climate change a trap set up by the West to restrict developing countries? At the current state of technology, it is true that carbon emission reduction will come at the cost of economic growth. In recent years, the US has withdrawn from the Paris Agreement on the grounds of “severe financial and economic burdens”.

As the world’s largest developing country, how can China’s dual-carbon goals (carbon peaking and carbon neutrality goals) be dual-tracked with its economic development? How can it achieve the world’s largest reduction in carbon emission intensity over a shorter period of time?

“Over the years, China has made a lot of achievements in improving energy efficiency and vigorously developing new and renewable energy sources” says Jun Pang, Dean of the School of the Environment at Renmin University of China and researcher at the National Institute for Development and Strategic Studies. He also pointed out in an exclusive interview with China News Service’s Ease Meets West that changes in economic structure will affect the total energy demand and energy structure, and that the implementation of a low-carbon approach can also bring more business opportunities.

Jun Pang is a professor and the Dean of School of the Environment at the Renmin University of China. His main research areas include resource and environmental economics, energy and climate change economics. He is currently a member of the Academic Committee of the Ecological Civilization Education Research Branch of the Chinese Higher Education Society, researcher at the Institute of National Development and Strategy of Renmin University of China, and researcher at the Institute of Ecological Civilization at Renmin University of China.

How did China achieve the world’s largest reduction in carbon emission intensity in the least time? How do its carbon reduction initiatives compare with those of the West?

From peak carbon to carbon neutral, the interval from 2007 to the 2050 target is 43 years for the US, 71 years for the EU and only 30 years for China’s commitment.

In terms of carbon emission reduction, China is facing some difficulties today that the West did not face in the past. When the West proposed its carbon reduction plan, it had basically reached the late stage of industrialisation, and the transformation of its industrial structure was more sophisticated, with many high-polluting, energy-consuming and carbon-emitting industries moving to developing countries. China, due to factors such as population, industry and technology, as well as some resistance to the international industrial division of labour, found it difficult to reduce carbon through industrial transfer. At the same time, China’s energy structure is dominated by coal-dominated fossil energy, making the task of carbon reduction even more daunting.

Although there are only 30 years to go, China has the determination and will to achieve the carbon peaking and carbon neutrality goals target on schedule, with specific actions including the following.

First, based on the national energy structure being dominated by coal, we will vigorously improve the efficiency of energy use and reduce carbon emissions per unit of GDP, while vigorously developing new and renewable energy sources. At present, China’s renewable energy development is among the world’s leaders, with the installed scale of hydropower, wind power and photovoltaic power generation among the world’s leaders, and the rapid rise of the new energy vehicle market, all of which are conducive to carbon reduction.

The fishery and light complementary power generation project in Helan County, Yinchuan City, Ningxia. (UAV photo) Credit: Hongyan Yuan

Secondly, in terms of governmental principles, China has proposed a dual carbon goals “1+N” policy system, with a clear timetable and roadmap. For different sectors such as energy, industry, urban and rural construction, and transportation, China has introduced peak carbon implementation plans for key areas, and is carrying out peak carbon steps in an orderly manner.

What’s more, compared to the West, China has adopted a synergistic approach to reducing pollution and reducing carbon. That is, while reducing greenhouse gas emissions such as carbon dioxide, it is promoting air pollution prevention and control, and increasing the synergistic reduction of traditional pollutants such as nitrogen oxides, volatile organic compounds (VOC’s) and sulphur dioxide.

　Finally, China has established the world’s largest carbon market, which is much larger in volume compared to the carbon markets of Western countries. In the future, the national unified carbon market can be used to incorporate different industries to form effective carbon reduction instruments for high energy-consuming industries through measures such as certified voluntary emission reduction (CCER) trading, carbon tax, renewable energy quotas, a renewable energy trading system and green power certificate trading system.

Line workers carry out construction work on the 800kV UHV DC transmission line of the Jinbei-Nanjing project in Yuanzhuang, Huabei, Anhui Province. The project is one of the 12 key transmission channels in the National Action Plan for Air Pollution Prevention and Control. Credit: Wen Wang.

In an international context such as the crisis in Ukraine, global energy prices have soared and European countries continue to face oil and gas shortages. Will this slow down the pace of countries moving towards dual carbon goals? What are the implications for the transformation of China's energy mix?

In the short term, the EU is heavily dependent on Russian gas resources and the crisis in the Ukraine has indeed hit the EU’s low carbon transition strategy to some extent.

Europe is facing difficulties in accessing Russian gas and is coming under pressure for winter heating. Energy security is clearly taking precedence over low carbon policies and an energy transition at this time. To address winter heating and other energy needs, countries such as Germany and Italy may restart coal-fired power generation or delay the closure of coal-fired power stations. This could even affect the EU’s target of reducing greenhouse gas emissions by 55% by the end of 2030 compared to 1990.

In the long term, countries will eventually move in a low-carbon direction. If the crisis in Ukraine persists, Europe may reconsider its path of energy transition. They would seek to reduce energy dependence on Russia and increase the diversity of energy supplies, or would increase the development of renewable energy sources, such as accelerating the development of solar energy, hydrogen, and other energy sources.

In October 2022, the second phase of the Tianjin LNG receiving terminal project is underway to ensure that the 5# and 6# storage tanks are put into operation before the heating season. Credit: China News, Jun Wang.

China is a vast country, and different regions differ significantly in terms of resource endowment, industrial division of labour, economic development and carbon emission levels. What are the different directions of industrial restructuring in the different regions of China? How does the design of the national carbon market take into account inter-provincial carbon equity issues?

Western China is rich in energy resources, especially new and renewable energy sources, but has a low level of economic development. Central China has more prominent labour-intensive industries, with a high proportion of heavy and chemical industries and a relatively developed level of economic development, and eastern China has a high level of economic development and tends to rely on external supplies of energy.

The industrial structure of each region in China should give full play to its resource endowments and comparative advantages in order to rationalise the industrial structure of each region and create a synergistic division of labour between regions within the overall economic development pattern of the country.

The eastern region should further strengthen the transformation of traditional industries and technological innovation, develop an export-oriented economy, such as high value-added high-tech industries and digital industries, and enhance international competitiveness. The central region, with a relatively higher proportion of heavy chemical industries, should accelerate industrial transformation and upgrading, guide the upgrading of high-consumption, high-emission and low-value-added industries to low-consumption, low-emission and high-value-added industries, and promote the development of tertiary industries. The western region can serve as an important base for China’s new energy industry in the future, providing quality clean energy to other regions.

One point is particularly important, namely to prevent the transfer of polluting industries across regions.

The design of a national carbon market should also take into account the issue of inter-provincial trade. In inter-provincial trade, provinces with more intensive energy industries or a higher proportion of heavy chemical industries tend to take over some of the carbon emissions for other provinces, provinces with developed economies and an industrial structure dominated by high value-added industries will transfer some of their carbon emissions to other provinces.

Therefore, in order to solve the problem of inter-provincial carbon equity, the first step is to fully consider the spatial distribution characteristics of carbon emissions and scientifically define the responsibility of each province to reduce carbon emissions. For high energy-consuming provinces, the issuance of quotas in the national carbon market should be skewed. If the quotas are too lenient, they will not have a binding effect; if they are too strict, they will have a great impact on the industries in these provinces. Therefore, carbon quotas should be moderate and give room for adjustment, allowing time for provinces to gradually adjust their energy mix.

Secondly, in the long run, the real effort should go beyond the carbon market, i.e. to help high-energy-consuming provinces upgrade their industrial and energy structures as soon as possible through financial, technical and human resource support. For example, carbon emission reduction funds can be raised through moderate carbon quota auctions to support traditional provinces in energy-saving renovation and industrial technology upgrading, so as to alleviate the regional inequity exacerbated by the inter-provincial distribution effect.

As an extensive and profound economic and social systemic change, are there any lessons to be learnt from the world’s journey to carbon reduction? What can China’s dual carbon goals transformation bring to the international environmental cause?

In the course of carbon reduction, developed countries have promoted emission reduction and pollution reduction by enterprises through legislative leadership, financial and tax incentives, and scientific research guidance, limiting the development of highly polluting and energy-intensive industries. At the same time, they have promoted a low-carbon culture and philosophy to the public, creating a good culture of low-carbon and clean energy for the whole of society.

China’s double carbon transformation will certainly contribute to international environmental protection.

For one thing, as the world’s largest emitter of greenhouse gases, China’s contribution to global emission reduction in the process of achieving carbon neutrality is indisputable. China has made a significant contribution to the world’s environmental protection efforts by vigorously promoting ecological civilisation, new energy development and low-carbon change.

　Secondly, the world can see that China is practising the concept of dual carbon goals. Other countries can learn from the experience of China’s actions and measures. At the same time, it will create an exemplary effect and an international trend of carbon reduction, which will put pressure on some negative countries to promote carbon reduction and ultimately contribute to global carbon reduction.

Aerial photograph of the millennium forest in Seyhanba. (UAV photo) Credit: Bing Han

Finally, China’s low-carbon drive could also lead to further business opportunities. For example, the vigorous development of renewable energy sources and the development of new energy vehicles all involve a digital transformation. This means business opportunities for some companies in new areas, and also helps to accelerate the country’s new energy technology innovation and even drive the development of new energy technology globally, bringing both economic and ecological gains.