Posted by: Dr Churchill | January 31, 2012

China places caps on CO2 and creates new green jobs

The World Meteorological Organization (WMO) published data show that the amount of greenhouse gases in the atmosphere hit a new record in 2011 and that the growth of the buildup is accelerating.

The WMO — an arm of the United Nations — issued its latest report on concentrations of carbon dioxide, methane and other gases.

“The atmospheric burden of greenhouse gases due to human activities has yet again reached record levels since pre-industrial time,” said WMO Secretary-General Michel Jarraud in a statement.

He warns: “Even if we managed to halt our greenhouse gas emissions today — and this is far from the case — they would continue to linger in the atmosphere for decades to come and so continue to affect the delicate balance of our living planet and our climate.”

And here comes the only visible solution to this problem of a warming planet…

Seven provinces and cities in China are to set caps on their greenhouse gas emissions, following a directive from central government. It’s the first time the Chinese government has called for any absolute caps on emissions, having so far preferred softer “carbon intensity” targets.

The move is a first step towards establishing carbon trading markets in China and further evidence of the country’s commitment to tackling climate change.

This January China’s National Development and Reform Commission asked the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, and the provinces of Hubei and Guangdong, to set “overall emissions control targets”.

The government hinted this move was coming last August, when it released a policy paper arguing that absolute caps were the only way to establish a working carbon market.

The new regional pilot projects are valuable steps towards a national carbon market. For them to work, the cities and provinces will need to settle on stringent targets to keep the carbon price high, and collect reliable emissions data to ensure the targets are being met.

By allowing companies and institutions to trade emissions, carbon markets ensure that greenhouse gas emissions are cut in a cost-effective way. Europe has so far led the way in carbon markets after establishing its Emissions Trading Scheme in 2005. China would be a major new player.

A national Chinese carbon market would be a big step towards a global carbon market, especially if the EU and Chinese markets could be linked.

Intensity cap

China has not yet set a national cap on its greenhouse gas emissions, citing the need to grow its economy. Instead it has set future limits on carbon intensity – the amount of greenhouse gases emitted per unit of GDP. Setting targets in this way allows emissions to grow while requiring industries to become more productive over time for a given level of emissions.

The current five-year plan, covering 2011 to 2015, requires the country to reduce the carbon dioxide emitted per unit of GDP by 17 per cent by 2015.

Yet the main reason CHina is doing this is economic. The wise elders have decided that the best way to create new jobs and boost their economy is to face the future boldly and go for the green growth…

Because China can make a net gain of 9.5m jobs over the next five years if it phases out its dirtiest, energy intensive industries and replaces them with renewable technology and other “green” businesses, according to an influential advisory body.

The potential for green growth was flagged up in a report that highlights the “Jeckyl and Hyde” nature of the environmental situation in China, which can claim both the world’s biggest investment in new energy and the most dangerous levels of pollution. The report was released this week by the China Council of International Co-operation on Environment and Development, which is headed by Li Keqiang – widely tipped to become the next prime minister – and includes 200 domestic and overseas experts and leading figures in the United Nations and other world bodies.

On the economics of a shift to a more sustainable development path, it is brimful of ambition and optimism. The council advises the government to spend 5.8 trillion yuan (£61bn) on measures to save energy, protect the environment and replace polluting industries with hi-tech firms. It estimates this would create 10.6m jobs, boost GDP by 8 trillion yuan and result in energy savings worth another 1.4 trillion yuan. These gains, it says, would far exceed the costs of eliminating the dirtier sectors of the economy, which are calculated as a loss of 950,000 jobs and 100bn yuan in output.

At their annual meeting, the council emphasised the need to shift track – a process that the government has tried to promote in its latest five-year plan. “The industrial sector is still the prime energy consumer and a major cause of pollution, so greening the sector is key for China’s green transformation,” Li Ganjie, vice minister of environmental protection and the council’s secretary general was quoted as saying by the China Daily.

On the environmental situation, however, the report painted a far bleaker picture for the next 10 years of worsening levels of toxic waste, ecological degradation and water shortages. At the release of the report, Achim Steiner, executive director of the UN Environment Programme, praised China’s $49bn (£31bn) investment last year in renewable energy, but said the country is also paying an alarming health cost for the past three decades of dirty growth. “They are paying a price first of all individually by premature deaths … Respiratory diseases and premature deaths in the hundreds of thousands,” he said.

The report – which was three years in the making – placed much of the blame on an obsession with GDP expansion, particularly at a local government level, which has resulted in lax implementation of environmental goals. “The blind pursuit of economic growth has now become a huge obstacle for China’s green growth,” it says.

It suggests the introduction of a carbon tax and new pricing mechanisms that would encourage more efficient use of scarce resources such as water. The central government says it is also trying to rebalance environmental quality with economic quantity, partly by setting new goals to reduce pollution.


Naturally these intensity targets are fine when a country’s economy is growing rapidly, as is the case with China. But a fixed national cap would be better once China’s emissions peak, which could happen in the 2020s or 2030s. A cap offers less uncertainty than an intensity target and over time it makes far more sense and it’s truly effective to have a fixed cap on CO2…

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