Op-Ed Contributors

Hard times call for green economy

By Hu Shaowei (China Daily)
Updated: 2010-03-24 07:48

Nation should stop leaning on traditional energy sources and develop cleaner, more efficient industries

Tough economic issues at home and abroad, coupled with the global financial recession, has made the highly anticipated restructuring of China's economy a very urgent matter.

Developing a low-carbon economy has become an irreversible global trend as a forcible tool to deal with the looming threats of global warming, a direction that many countries intent on a green economy are currently exploring.

For the world's most populous country facing severe challenges to sustain its economic momentum, a shift from building up the gross domestic product to a low-carbon model will help the country keep abreast of the global trend while maintaining national growth. It will also serve as the only road to a sustainable economic growth and social progress.

Labeled as the "lifeline of the modern industry", energy has brought about more negative impacts on the environment than any other industry. At a time when the environment continues to worsen, many nations in the world agree that we should develop new and less-pollutant energy sources.

But we should not simply equate a low-carbon economy to new energy. A low-carbon economy involves a wider range of sectors, from the exploitation of new and renewable energy, to the development and utilization of low-carbon technologies, and the establishment of a green economic model to supplant the old model.

China is rich in coal but lacks in oil and gas. Its progress has been sluggish in the development and utilization of new energy. In 2008, the proportion of coal in the country's primary energy consumption declined to 68.7 percent from 95 percent. The proportion of oil and natural gas rose to 18 percent and 3.8 percent respectively from 3.37 percent and 0.2 percent. Hydro, nuclear and wind power consumption increased to 9.5 percent from 1.61 percent.

The numbers are similar in China's energy generation industry, with traditional energy the primary target. Over the past eight years since 2002, China's energy production of coal and oil has remained at about 76 percent and 12 percent respectively. In its secondary tier of energy production and consumption, thermo-power is still a primary product. It's thus necessary for China to develop its own low-carbon model.

Given that traditional manufacturing and other sectors still take a large portion of industries, the country's adjustment of its economy is unlikely to lead to the breakup of these sectors in the national economy. The country also cannot undercut these sectors excessively within a short period of time. China is now at a stage of accelerated industrialization and urbanization. It is also facing upward trends in population growth and consumption. Traditional industries are still needed to support the country's measures to improve infrastructure nationwide.

The country's comparatively low per capita income has made a materialistic life very desirable for Chinese people with a spiritual life a remote and untouchable goal.

Compared with developed countries, which are intent on developing a low-carbon economy and reduce carbon emissions, China's low-carbon economy should aim to reduce carbon emissions in industries across the nation. To this end, the country should not only aim to cultivate and develop some new industries, but also strive to push to reform and upgrade traditional industries, including the service sector and sectors related to food, clothing, shelter and transport. To promote a low-carbon model, the country should focus on energy conservation and emissions reductions. The development of a cyclical economy and new energy industries are also needed and efforts should be made to increase the proportion of cleaner energy to facilitate the process.

China should, in a long-term and broader perspective, map out a strategy to achieve a low-carbon economy and try to integrate the green economy into the country's general economic structure. To attain the grand target, the country should push for the transformation of government functions and improve the current mechanism on officials' performances appraisal in a bid to ease overburdening on local governments for the pursuit of GDP.

The nation should step up legislative measures to guarantee a low-carbon economy and its development. Taxation should be put in place to impose necessary fees on the exploitation of resources. A complete tax system should be framed to preserve limited resources.

The government should also devise a way to fund various measures to conserve energy and promote sustainable development. Great efforts should be made to promote innovation and the application of low-carbon technologies to improve energy efficiency and reduce consumption.

To accelerate the establishment of a low-carbon economic model, great efforts should also be made to optimize China's industries. Despite its impossibility to surmount its ongoing stage of industrialization, the country can still adjust its internal industrial structures, reduce the proportion of high-pollutant sectors in the national economy and eliminate those backward production technologies in a bid to develop a low-carbon economy through industrial structural optimizations.

The author is a senior economist with the State Information Center.

(China Daily 03/24/2010 page8)