The investment needed to mitigate climate change is smaller than people think. According to the Intergovernmental Panel on Climate Change (IPCC), the cost of halting global warming by 2015 would be equivalent to only about 0.12% of the global annual GDP. A United Nations Development Programme (UNDP) report says preventing carbon emissions from reaching dangerous levels before 2030 will cost 1.6% of the global annual GDP. From these statistics, China definitely has the financial ability to make a long-term investment in stopping climate change.
During China’s Ninth Five-Year Plan (1996-2000), the economic growth rate was 8.6% per year. During this period energy consumption increased by only 1.1% and emissions of major pollutants dropped. But since 2002, the GDP has grown by an average of 10.82% per year, with energy consumption increasing by 11.83% per year. Pollution also has increased. These statistics indicate that the economy is growing too quickly, putting excessive pressure on resources and the environment. The price being paid for growth is too high.
If we assume that average annual GDP growth from 2006 to 2020 will be between 7.5% and 8%, China’s GDP will be 4.65 to 4.98 times the size of the 2000 levels. By 2020, energy consumption would start to decrease and greenhouse emissions would be reduced by 10% to 20%. After 2030, the country’s total energy consumption has the potential to fall, with energy use relative to production falling by half. Water consumption would not increase and the percentage of water used in agriculture will fall. The money spent for environmental protection as a percentage of GDP would increase from 1.3% to 2.5%. Finally, emissions would fall by a third or more and forest coverage would reach 23% to 24%.
Reforestation will be one of the major investments in China’s battle against climate change. As a natural repository of carbon, forests have a huge capacity for reducing overall emissions. Since 1949, China’s forest cover has increased from 8.6% to 18.21%. Between 2000 and 2005, an average of 7.3 million hectares of forest were lost globally every year. China actually has increased forest cover by four million hectares a year. Global reforestation efforts account for an average gain of 2.8 million hectares of forest a year, of which 1.5 million hectares, or 53.25%, were planted in China.
According to figures from China’s State Forestry Bureau, between 1999 and 2005, the ability of China’s forests to capture carbon increased from 136.42 tonnes per hectare in the early 1980s to 150.47 tonnes per hectare at the start of the twenty-first century. Between 1980 and 2005, sustained increases in forestry resulted in absorption of 4.68 billion tonnes of carbon dioxide (CO2). Reductions in deforestation rates cut CO2 emissions by 430 million tonnes. In 2004, China’s forests absorbed 500 million tonnes of CO2, which represented slightly greater than 8% of the country's C02 emissions for the year.
Low-carbon growth represents an opportunity for China to transform its economy. A low-carbon economy is one of humanity’s core responses to climate change and is one of the most important global economic trends for the twenty-first century. For all these reasons, combating climate change and developing a low-carbon economy are critical for China.
China is currently seeing accelerating industrialisation. Between 1979 and 2007, industrial production rose on average 11.6% per year, multiplying 23-fold. But power-hungry and polluting industries still dominate. In 2005, China's industry consumption was 478 million tonnes of fuel, which represents a final energy consumption of 42%. This percentage is higher than both the country's final energy consumption in 1990 (36%) and the average final energy consumption of 22% in developed countries.
China should put itself at the forefront of global emissions reductions and use the global pressure to develop a low-carbon economy. This would require it to restructure its industry, promote high-technology, high-added-value manufacturing, increase the role of the service industry and reduce overall carbon use.
The issue for China is no longer whether or not to participate in international climate-change negotiations, but how to make its voice heard and to become one of the leaders in the process.
Participation in international negotiations on climate change and the low-carbon economy are of great international significance for China. It will be China’s first active and self-motivated participation in the formation of international rules that will shape the world’s development.
Since 1978, China’s economy has risen up, but only through passively accepting the international order controlled by the United States and other western countries. After 30 years of economic reform, China’s economic weight and international status has changed. As United Nations Secretary-General Ban Ki-moon has said, China is already a global power with global responsibilities, and will participate and cooperate on a range of global issues, including international peace and security, the UN Millennium Project, climate change, human health, environmental protection and sustainable development.
Conserving energy and resources, protecting the environment and reducing emissions will require self-restraint from China, but will benefit the whole world. China is already the world’s largest coal user and sulphur-dioxide polluter, the second-largest energy consumer and CO2 polluter, and is soon to overtake the United States for these dubious honours. These facts make China a target for global criticism. Faced with international pressure and environmental issues, China can no longer remain passive and under attack, but rather it should become an active leader. China must not hitch a lift, but instead take the wheel, participating in the formation of new international rules to ensure that it has room to grow and transform its economy.
The reduction of greenhouse-gas emissions and the development of a low-carbon economy are a huge opportunity for China. The country will become the largest renewable-energy market, bioenergy market, clean-coal market, nuclear-power market, carbon-exchange market, environmental-technology market, low-carbon economy, exporter of low-carbon products and low-carbon-technology innovator. We advocate that China considers making medium- to long-term commitments during the climate-change negotiations as to undertake clear obligations. Emission-reduction targets should be implemented in stages across different sectors. Public commitments to reducing emissions will create a huge and currently inestimable potential market for China. The shift to a low-carbon economy is a global trend – and China should keep a long-term strategic view of this situation in mind.
[Former UK prime minister Tony] Blair’s report proposes a roadmap for global emission reductions: for CO2 levels to peak by 2020, for annual emissions to be less than 35 billion tonnes by 2030, and less than 20 billion tonnes by 2050.
In accord with this, China could produce its own three-stage roadmap:
— Aim for carbon emissions to peak by 2020, and no later than 2030.
— After 2020, and no later than 2030, make large reductions in carbon emissions so that they reach 1990 levels.
— By 2050, achieve carbon emissions of one-half of 1990 levels.
This is not a simple matter of technical policy — it is a major political decision. Climate change is not a domestic issue, but instead a matter of international strategy with a global impact. More importantly, the positive involvement of countries such as China, Brazil and India will serve as role models and a moral standard for other nations, helping to form a post-Kyoto framework. China’s transition to a green economy will be a model for other developing nations and will be China’s contribution to the world.
Hu Angang is a professor of public policy and management at Tsinghua University and director of the Centre for China Studies, Chinese Academy of Sciences/Tsinghua University.
Guan Qingyou is a director of the energy and climate project at Tsinghua University’s Centre for China Studies. He holds a doctoral degree in economics.