Air Pollution Control Equipment Services, Emissions

China climate change report sets out options

17 August 2009 – A new study by some of China’s top climate change policy advisers has urged the government to set firm targets to curb greenhouse gas emissions so they peak around 2030.

Reuters reported that the study, ‘2050 China Energy and CO2 Emissions Report’, proposes setting relative and then absolute targets for limiting China’s emissions of the greenhouse gases from human activities that are stoking global warming.

The “relative” targets could involve carbon intensity goals, curbing the amount of emissions needed to create each unit of economic worth.

Later, it says, the government could apply absolute caps on emissions, also allowing for the emergence of a “cap-and-trade” market so companies could buy and sell emissions rights, domestically and internationally.

Movement to such a carbon-trading market should be cautious, the study says. “Once allocation of pollution rights is handed to the government, that may create room for rent-seeking, so ultimately it becomes impossible to effectively allocate rights.”

The report devotes a chapter to the potential benefits and costs of a “carbon tax.” Such a tax, applied to fossil fuels such as coal, gas and oil, “would play a clear role in curtailing our country’s future carbon dioxide emissions.”

A tax of 100 yuan ($14.60) on every tonne of carbon from 2010, which would rise to 200 yuan on every tonne in 2030, could by 2030 reduce emissions by up 24 per cent less than they would have been under a “business as usual” scenario.

The study examines proposals to deepen market reforms of the energy sector and force coal-users to pay more for the estimated environmental costs. It also encourages reforms to encourage more investment and private capital in clean energy.

In the study, Jiang Kejun of the Energy Research Institute says that if China continues a “business as usual” approach focused on economic growth and does little to curb emissions, its carbon dioxide output from fossil fuel alone could peak at the equivalent of 3.5bn tonnes of pure carbon a year by 2040. That does not include greenhouse gas emissions from other sources, such as livestock and land-use changes.

If China adopts policies to promote “low-carbon development,” emissions could reach 2.4bn tonnes of carbon a year by 2050.

Under an “enhanced low carbon scenario” of even more stringent steps, they could reach a maximum of 2.2bn tonnes a year in 2030 and fall to 1.4bn tonnes in 2050.

“An enhanced low-carbon growth strategy would be difficult but doable,” Jiang told Reuters.

The U.S. Oak Ridge National Laboratory has estimated China emitted 1.8bn tonnes of carbon from burning fossil fuels in 2007, compared with 1.6 bn tonnes from the US. (Emissions are also measured in CO2, with each tonne of carbon equal to 3.67 tonnes of CO2).