How China Will Need to Transform Its Economy to Achieve Its Ambitious Pledges on Climate Change
Sandrine Jacquot, Online Staff Writer
November 16, 2020
With the climate crisis becoming increasingly more urgent, can China as one of the world’s biggest economies find a way to balance clean environment policies and profit?
On September 22nd 2020, President Xi Jinping announced during a remote address to the United Nations General Assembly that China will aim to achieve carbon neutrality before 2060, with peak carbon emissions around 2030. In this address, the world’s biggest carbon dioxide emitter did not outline concrete steps they would take, however its ambitious pledge generated plenty of interest in the international community.
In order for China to achieve this bold pledge on climate change, it will drastically need to revolutionize its economy. The Chinese economy is not ready for a shift to green policy, as it has spent decades building infrastructure and a manufacturing industry reliant on coal and oil. Because of recent manufacturing pressures induced by Covid-19, China has increased its use of coal and oil after the temporary pause earlier this year. With the economic downturn caused by Covid-19, energy conservation has likely been sidelined as China focuses on re-strengthening its economy.
China is the world’s second largest economy and produces roughly 28% of the world’s emissions. China burns about half the coal used globally every year and is showing no signs of slowing down as they are currently constructing new coal power plants. Along with coal, China produces or imports hundreds of millions of crude oil barrels each year. With the tensions between China and the United States during Covid-19 threatening economic growth, China is continuing to invest in coal and oil, two sources that combine to make up 77% of the country’s energy use.
Despite evidence that building and investing in renewable energy sources are cheaper than coal, China continues to spend and invest in coal as an energy source because it employs a significant amount of their population. It stands to reason that China would continue to invest and spend on non-renewable energy sectors and industries that emit pollutants because it benefits their economy by creating jobs, economic growth, and increasing their exports.
Paradoxically, China leads the world market for electric vehicles, solar panels, and wind turbines. China has 45% of the world's electric cars and 99% of the world's electric buses. In China, clean energies account for roughly 22% of their energy consumption mix. Additionally, two-thirds of the world’s solar panel cells are manufactured in China. The battle between the clean energy sector and the non-renewable energy sector in China is fracturing its economy, pitting industries against one another, and pulling at both ends of the same string.
Investing in non-renewable energy sources and a more ‘green’ economy will benefit China in the long-run economically, environmentally, and socially. Investing in clean industries would create more jobs and would increase export production on renewable energy items such as solar panels, boosting their international trade. Because of China's economic importance in the international economy, their shift towards green industries would change the behaviour of economic markets and investors, as they would divest from fossil fuels and instead invest in clean technologies.
Although it would be difficult, it is possible for China to achieve its goal to be carbon neutral by 2060 if it significantly decreases its reliance on coal energy and accelerates the progress it is making on renewable energy and electric vehicles. Working towards this goal would completely transform the economy; it would change the way people ate and produced food, as well it would change their commute, and it would alter the way they consumed energy. Achieving this would not be cheap either, estimates of a transformation are around $5.5 trillion over the next few decades.
It is widely known that a significant portion of the world’s goods come from China. To incorporate green policies, China would need to change how these goods would be produced. What would the implications of a green China be on the world’s economy and consumption patterns? There would need to be a shift in employment from the coal and oil sector to the renewable energy sector, however this shift could be considered inevitable. Prices of goods may also increase as production would initially be more expensive and not as efficient without government subsidies. If people truly want to see a clean Chinese economy, consumers will need to learn to accept slightly higher prices on imported goods from China.
Many view there to be a dilemma between the economy and the environment, presented through the contradicting desire for cheap goods quickly and the desire for sustainable living. However, the environment and the economy does not have to be a trade-off. Integrating green policies into the economy can benefit both the environment and the economy.
China and countries around the world need to learn how to adapt and survive the inevitable global paradigm shift on consumption, production, and environmental thinking. Creating goals is only the first step to adapting economies to the climate crisis.