China'S Promotion Of Global Climate Governance: Further Refinement Of Carbon Neutral Target And Breakthrough Of Energy Demand Side Reform

According to Xinhua news agency, on December 12, President Xi Jinping delivered an important speech entitled "carrying forward the past and opening up a new journey of global response to climate change" at the climate ambition Summit on December 12, announcing China's national independent contribution to a series of new initiatives.

On the basis of the plan announced in September this year to "strive for the peak of carbon dioxide emissions by 2030 and strive to achieve carbon neutrality by 2060", Xi Jinping further announced that by 2030, China's carbon dioxide emissions per unit of GDP would drop by more than 65% compared with that in 2005, the proportion of non fossil energy in primary energy consumption would reach about 25%, and the forest stock would increase by 6 The total installed capacity of wind power and solar power will reach more than 1.2 billion kilowatts.

"In the process of leading the global climate process, China has great momentum, riding the wind and waves." Zou Ji, CEO of the energy foundation and President of China region, commented: "President Xi Jinping announced a series of new measures for China's national independent contribution at the global climate ambition summit, and defined specific action goals including carbon intensity, proportion of non fossil energy, forest stock, wind and solar power generation capacity, etc., to guide the work of addressing climate change in 2030."

On December 14, a reporter asked a question on the carbon neutral target. Foreign Ministry spokesman Wang Wenbin said that China is an activist and doer in promoting global climate governance, and we will do what we say. We are willing to work with the international community to promote the effective implementation of the objectives of the Paris Agreement, and at the same time make China's contribution to the global response to climate change.

The road of energy transformation

China is the country with the largest carbon emissions in the world, accounting for 28% of the world's carbon emissions in 2018. About 90% of the carbon emissions come from the fields of power and heat production, industry and transportation. Its energy demand and emissions are still on the rise, and it has a long way to go to achieve carbon neutrality in 2060.

"If we follow energy policy research for a long time, it is not difficult to find that China has outlined clear goals for the future." Wang lining, chief engineer of petroleum market Institute of China Petroleum Economic Research Institute, told reporters.

He said that the proposed goal has two major characteristics. First, it has made clear the future goal, and the pace of energy transformation can be more firm.

According to the research of many institutions, China's carbon neutrality will reach more than 3 billion kilowatts by 2050. If according to this target, the installed capacity of wind and solar power will reach 1.2 billion kilowatts from 2021 to 2030, it will need to increase 800 million kilowatts in 10 years.

"It is true that many voices have pointed out that the target of 1.2 billion kilowatts may not be in line with the industry's previous expectations." An industry source told reporters, "but this goal is indeed a stable and technically achievable goal. If all kinds of conditions are met by then, it can completely exceed this goal."

He pointed out that as the learning curve of wind power generation falls to the natural trend, the technology is more mature and the cost is further reduced. If the wind power generation can be increased by 1.8 billion kilowatts in the 20 years from 2031 to 2050, that is, 900 million kilowatts will be increased every 10 years, and the installed capacity will probably exceed 3 billion kilowatts by 2050. In this way, the vision of a high proportion of renewable energy can be realized.

On the other hand, the goal of reducing carbon emission intensity by more than 65% is proposed to exceed the upper limit of 60% - 65% promised by China at the 2014 Paris climate conference. It also takes into account the impact of the continuous slowdown of economic growth, the global economic depression caused by the probable epidemic rate, and the rigid rise and slow decrease of energy consumption and corresponding emissions in the consumption sector on GDP expectations.

According to the energy foundation, if the pace of decoupling between economic growth and carbon emissions can be effectively managed, China is likely to exceed its carbon intensity target and even reduce its carbon intensity by 70% - 75% by 2030.

"In this process, the key challenges we have to face are how fast the research and development and application of low-carbon technologies, the speed of structural adjustment, and the ability to solve the social justice and transformation pains brought about by structural adjustment," Zou Ji said

At the same time, only when the emission intensity of power generation declines rapidly, can accelerating electrification help China achieve its carbon neutral goal. The development of China's photovoltaic and wind power industry is quite mature, and continuing to expand the market scale is conducive to the sustainable development of the industry. More importantly, like the photovoltaic, energy storage and new energy vehicle industries, under the accelerated transformation scenario, China can give full play to the scale advantage of the domestic market and lead the world in emerging technology industries such as hydrogen production electrolyzers.

Not only should the proportion of new energy systems be reduced in the development of coal. "China should continue to promote electricity market reform, optimize the investment environment for renewable energy, and reduce the demand for coal-fired power through cleaner and innovative solutions." Liu Yujing, a senior financial analyst of new energy, told reporters.

Huge zero carbon investment market

Traditionally, China's economic development is driven by the troika investment, consumption and foreign trade. In the process of transformation to high-quality development, China's goal of "2060 carbon neutrality" fits perfectly with the optimization of economic structure.

On December 14, S & P global rating said that if consumption's share of GDP could reach the level of developed economies, China's carbon emissions could be reduced by more than 30% in the next 20 years. "Carbon neutrality is not easy," Shaun Roache, chief economist for Asia Pacific at S & P global ratings, told reporters. China needs to achieve economic transformation, including the transformation of production content and mode. "

"Suppose that China's consumption as a share of total expenditure rises from less than 40% at present to 55% in 2040, while investment declines by the same rate. With the growth of residents' income and the increasing importance of consumption to the economy, the demand for services will also rise relative to the demand for goods. " Shaun Roache said.

Optimizing the economic structure is also conducive to reducing high energy consumption activities, increasing low energy consumption activities and realizing energy transformation. For example, if capital and labor force shift from the production of steel, cement and capital goods to the provision of education, health care and leisure services, the level of energy consumption per unit of GDP may decline.

S & P global Proctor believes that optimizing the economic structure can reduce the level of carbon dioxide emissions by about one-third before 2040. According to its model, if China pursues the "two degree" target, the reduction in emissions can be further expanded.

In fact, the goals proposed by China can not only serve as an example for developing countries, but also serve as a spur for developed countries to achieve their goals. At the same time, compared with the 70 years from carbon peak to carbon neutral in developed countries, China has only 30 years, which means that its difficulty and strength will be unprecedented, and it will also bring opportunities in many fields.

China's zero carbon energy transformation will generate huge investment markets in seven areas, including renewable resource utilization, energy efficiency, electrification of terminal consumption, zero carbon power generation technology, energy storage, hydrogen energy and digitization.

"By 2050, the market size of these seven fields will reach nearly 15 trillion yuan in the same year, and contribute 80% of the cumulative emission reduction for China to achieve zero carbon emissions." "At the same time, between 2020 and 2050, about 70 trillion yuan of infrastructure investment will be directly or indirectly leveraged," said Chen Ji, director of the Rockhill Institute

He believes that historical experience shows that when the market share of new disruptive technologies reaches about 3%, capital will begin to withdraw from traditional enterprises. The fossil energy industry is facing a growing risk of asset grounding, and more and more investors are reassessing their portfolios and priorities to accelerate the withdrawal of fossil energy related fields.

Among the seven areas mentioned above, there are nearly 20 technological innovations, which are currently in different stages of development, forming a broad space for investment.

He said that in this process, the government needs to design step-by-step and interlocking policy actions to guide the overall development of the industry through such measures as scientific research support and encouragement of demonstration projects, guidance of industrial policies and establishment of industrial standards. The main driving force for the medium and long-term development of products and services is to improve the efficiency of production and service in the medium and long-term.

At the same time, there is a strong synergy between the investment fields. Zero carbon power, green hydrogen and energy storage are the "foundation" of zero carbon on the demand side; Zero carbon investment in industry, transportation and construction sectors is an important "fulcrum". These technological innovations on the demand side will change the way of energy utilization, promote the formation of new industrial chains and generate new profit pools. Digital technology is the "accelerator" of the whole zero carbon ecological development, and optimizes energy supply, operation and consumption through information technology.

?