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Prospects for China’s economic growth and energy-environment governance by 2030

2015-11-20View Original

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◇Although the global economy has the potential to grow by another 50% over the next 15 years, the environmental and climate change risks associated with unsustainable patterns of economic growth are becoming apparent, casting a shadow over the long-term prospects for such growth. ◇China’s economic growth rate is set to fall to 5% by 2030, with its growth prospects depending on whether technological progress and improved productivity can offset some of the negative effects of resource constraints. ◇Compared to developed ** countries, the Chinese economy is more vulnerable to fluctuations in energy prices; the industries affected account for about 20% of GDP, which is several times higher than that in developed ** economies. ◇If efforts to reduce energy consumption and emissions are not intensified, nearly 50% of Chinese cities will still face the risk of substandard air quality by 2030. Structural problems in energy and the economy are the main reasons for not meeting the standards. ◇Under a scenario of continuous emission reductions, China’s primary energy consumption will continue to rise. In 2020, China’s consumption of primary energy reached 4.97 billion tons of standard coal, which is 1.5 times that of 2010, representing an average annual growth rate of 4.3%. After 2020, the growth of primary energy consumption gradually slowed down, with an average annual growth rate of 2.6% from 2020 to 2030. By 2050, the total primary energy consumption will reach approximately 7.7 billion tons of standard coal. ◇Under the scenario of continuous emission reduction, the structure of primary energy in China has improved. In 2010, China’s total coal consumption was 2.2 billion tons of standard coal, accounting for about 68% of the total primary energy consumption. With the adjustment of the industrial structure, the growth rate of total coal consumption is gradually slowing down; by 2040 to 2050, it will reach 3.8 to 3.9 billion tons of standard coal, and its share of primary energy sources will also drop below 50%. Nevertheless, consumption will still be 70% higher than in 2010. ◇Due to urbanization and rising disposable incomes of residents, under scenarios of continued emission reductions, China’s transportation sector’s oil consumption is increasing at a rapid pace; it reached approximately 700 million tons in 2020 and is expected to reach 1 billion tons by 2050, accounting for about 20% of total primary energy consumption. ◇Under a scenario of continuous emission reductions, natural gas in China will see further development; its share in primary energy will increase gradually from 4.4% in 2010 to 8.2% in 2020 and 12.9% in 2050, with primary energy consumption reaching 310 billion cubic meters and 750 billion cubic meters respectively. ◇The continuous emission reduction scenario reflects the traditional approach of decentralized governance, and thus fails to achieve coordinated management of the economy, energy, and environment. Due to the close interrelationships among economic growth, energy security, and environmental protection, as well as the complexity of achieving balanced development, it is necessary to **integrate all available resources and efforts for comprehensive planning and coordinated implementation. The accelerated emission reduction scenario reflects this approach. ◇Under the accelerated emission reduction scenario, China’s energy-related carbon dioxide emissions will stop growing around 2030 and begin to decline as soon as possible. The carbon dioxide emission intensity per unit of GDP in 2030 is expected to be about 58% lower than that in 2010. ◇The economic impact of this emission reduction target remains within controllable limits; the carbon price required to achieve this target should range from 10 yuan per ton of carbon dioxide to 25 yuan per ton of carbon dioxide between 2020 and 2030, with an increase of approximately 8% per year on average. ◇To achieve a low-carbon energy structure, it is necessary to first control the total coal consumption; this consumption should cease to increase after 2020 and start declining as soon as possible. ◇Under scenarios of accelerated emission reductions, combined with stricter environmental governance measures, China can achieve a comprehensive improvement in air quality, simultaneously advancing multiple policy goals related to economic development, energy security, and environmental quality. (Source: “China and the New Climate Economy”, Institute of Energy, Environment and Economics, Tsinghua University)

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