Thursday, 10 December 2009, 5:00 pm | 30 views
Feng Wang
Feng Wang is a Chinese student who is enrolled in graduate
study on environmental economics and carbon management at the
Illinois Institute of Technology. As part of the coverage on COP15,
TOC will be featuring opinions from all over the world on Climate
Change.
On
mitigating Climate Change, the Chinese government has offered a
reduction of CO2 intensity per unit GDP by 40-45% from the 2005
level by 2020.
Although many climate experts are unhappy with this “soft”
effort, the promised reduction is actually a realistic goal for
China and other developing countries in similar situations.
Why?
I think the answer lies on the growth characteristics of Chinese
economy. No matter how big the national economy, China is a
developing country; it has to develop its economy in order to meet
the demand of their people’s pursuit on lifting living standards at
least for fifty years.
In terms of ethics, the pursuit for a better living standard is
moral but not a sin. As Adam Smith points in his book The
Wealth of Nations:
It is not from the benevolence of the butcher, the brewer, or
the baker that we expect our dinner, but from their regard to their
own self-interest. We address ourselves, not to their humanity but
to their self-love, and never talk to them of our own necessities
but of their advantages.
Hence, it is for the best interest of Chinese people to
prioritise economic growth in the nation’s development strategy.
This pursuit is not so-called growth mania. On the
contrary, it is for the amenity of the 1.3 billion strong
population in China.
However, as China is not the only country in this world, the
Chinese pursuit of prosperity and happiness cannot be done at the
expense of other people and other nations. China has to follow a
principle of development which is accepted by the majority of
nations and races in this globe.
The Chinese government is constrained by the limited supply of
natural resources while it has to address the growing demand on
these resources due to population boom. The most urgent problem is
thus how to improve the efficiency of utilising these natural
resources in order to reach the equilibrium between meeting
people’s demand on the lift of living standards and making our
living environment as sustainable as we could.
The reduction on CO2 intensity per GDP unit is exactly an
effective approach to address this problem. The following chart
depicts past trajectories of China’s GDP, CO2 intensity, and CO2
emissions from 2000 to 2006, and also projects their trends up to
2020. As projected in the chart, China’s CO2 emissions will reach
13,718 million tons in 2020 if the goal of CO2 intensity per GDP
Yuan[1] is achieved.
As a result, this effort on reducing CO2 emissions in China will
avoid roughly 9,000 million tons of CO2 emitted into atmosphere in
2020 when compared to the emission under the scenario of keep
Status Quo. Detailed information and reasoning can be found in the
following explanation and assumptions.
Explanation on the source of data: All data for Chinese carbon
dioxide emissions are retrieved from Energy Information
Administration (EIA) of Department of Energy (DOE), United States
of America. The data on Chinese GDP from 2000 to 2006 is retrieved
from China Statistical Yearbook 2007. The Chinese reduction target
on Climate Change is published on China Climate Change Info-net,
which is directly under the supervision of National Leading
Committee on Climate Change, China.
Those data for CO2 intensity per GDP Yuan from 2000 to 2006 are
calculated based on the formula of the definition[2]. For all
projected trends on Chinese GDP, CO2 emissions and CO2 intensity up
to 2020, following assumptions are made:
Chinese GDP figure in 2007 and 2008 actually are not assumed
since they can be found on website of National Statistical Bureau,
China;
The assumed annual growth rate of Chinese GDP in 2009 is 9%;
The assumed annual growth rate of Chinese GDP in 2010, 2011, and
2012 is 9%, 8%, 7% respectively. From 2013 to 2020, the average
rate is assumed at 6%. According to this assumption, the Chinese
GDP in 2020 will be 63,985 billion RMB Yuan[3];
According to the reduction target on CO2 intensity by 2020 on
2005 level, there will be a 40 to 45 percent decrease on CO2
intensity per GDP Yuan in 2020. Therefore, take the lower end at 40
percent reduction, the CO2 intensity per GDP Yuan in 2020 will be
60 percent of that in 2005.
The CO2 intensity per GDP Yuan in 2005 is 0.2963 (plug in the
current official exchange rate of USD to RMB Yuan, the number is
close to CO2 intensity per GDP US dollar as published on website of
EIA), thus we got 0.1778 as the CO2 intensity per GDP Yuan in 2020,
again plug this number into the formula of CO2 intensity
calculation, the projected Chinese CO2 emissions in 2020 will be
13,718 million tons, roughly twice than that of 2006;
The projected Business-As-Usual (BAU) Chinese emissions in 2020
will be 22,864 million tons, roughly 3.5 times than that of 2006.
However, due to the advancement on technology and economic
structure, the actual CO2 intensity per GDP Yuan might be lower
than that of 2005 in a range somewhere between 13,718 million tons
and 22,864 million tons.
The GDP calculation of this projection is based on RMB Yuan
since there was an exchange rate adjustment between US dollar and
RMB Yuan in period of 2005 to 2008. In addition, it is rather
complicated if there is a further exchange rate movement up to
2020. Therefore, the method by using per GDP US dollar to measure
CO2 intensity may not be effective one under this situation.
In a nut shell, as a result of China’s solution on Climate
Change, China might avoid to emit at most 9,000 million tons of CO2
into the atmosphere in 2020 if Chinese economy can keep the annual
average of GDP growth at 6 percent from 2013 to 2020.
Unfortunately, the result of this projection is seemed not very
promising on our human’s collective effort to reduce the aggregate
CO2 emissions worldwide. In any case, this is likely the best
realistic approach to address the dilemma between economic growth
and Climate Change for developing countries.
As Rome is not built on one day, the accumulation of CO2
concentration in atmosphere has start almost a century ago, we
certainly cannot expect we could solve the problem within a decade
or two, the time scale we might need is probably half a century or
even longer.
—-
[1] Yuan is the China’s official currency, also known as RMB
Yuan. According to Yahoo Finance, the official exchange rate of USD
to Chinese Yuan is 1 to 6.83 in December 4, 2009.
[2] CO2 intensity per GDP Yuan = the amount of CO2 emission/ GDP
Yuan
[3] It is roughly equal to US $ 9,368 billion, two thirds of the
U.S. GDP in 2008 according to the official exchange rate in
December 4 of 2009 from Yahoo Finance.
