Wang Ke: Pathway of Low-carbon City Development under the Target of Carbon Neutrality

At the UN General Assembly by the end of Sep. 2020, Chinese President Xi Jinping announced China's targets of carbon dioxide emissions peaking by 2030 and carbon neutrality by 2060. Under the vision, the 5th Plenary Session of the 19th Central Committee of the Communist Party of China (CPC) set "green and low-carbon" as one of the main targets of socioeconomic development in the 14th Five-year Plan and the Vision 2035, and proposed the qualified local governments taking a lead in reaching the peak of carbon emissions and formulating the action plans of carbon emission peaking by 2030.

At present 60% of China's permanent residents live in cities and the urban carbon emissions account for over 70% of China's total emissions. Driven by the urbanization process in the next two decades, about 200 to 300 million people will become new urban dwellers. Thus cities are undoubtedly the major battlefield to achieve the target of carbon neutrality.

By far the low-carbon indicator has been taken into consideration in sharpening the competitive edge of cities. Since 2010 the National Development and Reform Commission (NDRC) has totally deployed three batches of pilot low-carbon cities, covering 81 cities in 6 provinces. After the target of carbon neutrality is clarified, low-carbon will be a rigid constraint in urban development, posing a severe challenge to those cities heavily dependent on high-carbon industries such as coal.

City's mission of carbon emission reduction under the target of carbon neutrality

The timeline "around 2030" means two complete five-year plan periods i.e. the 14th and 15th Five-year Plans. However, the term "by 2030" implies the deadline of 2029 so that the 14th Five-year Plan should be the only five-year plan to completely advance carbon emission peaking.

Attention should be paid to the below priorities during the 14th Five-year Plan period:

l Cities need to develop customized action plans on carbon emissions peaking in line with their respective characteristics.

l Pursuant to the requirements of modern environmental governance system, the management system with extensive engagement should be established, which clarifies the rights and responsibilities of all stakeholders including government, enterprises and the public, and offers smooth channels of engagement.

l Based on the summarized experiences of low-carbon pilot projects and peaking progress, the pragmatic peaking guidelines and exemplary cases should be compiled that meet the peaking requirements in the new situation and comply with the characteristics of cities.

l Cities need to find the most suitable development pathways. They should restrain the high-carbon investment and explore an industry development path with even lower emissions by pooling of necessary production elements and talents.

A low-carbon city means the city tries to reduce the greenhouse gas (GHG) emission from production and livelihood as far as possible within a defined scope.

Low-carbon cities are evaluated by the absolute criteria and relative criteria:

l Total carbon emissions of a city cover all the emissions within the administrative region, and sometimes the emissions generated by inbound electricity and heat are included;

l Carbon emission per capita of the city;

l Carbon emission per unit GDP of the city, also known as the carbon emission intensity.

Low-carbon transformation pathways of cities

Normally speaking, industry, energy, construction and transportation are the four most critical sectors of carbon emissions. There are four pathways of low-carbon transformation:

l Low-carbon transformation of growth mode: it changes the mode of industrial development and boosts industrial growth by technological evolution and innovation;

l Low-carbon transformation of energy system: through energy production and consumption revolutions, it creates the clean and low-carbon energy supply system, reasonably controls total energy demand, and significantly improves energy utilization efficiency and management level;

l Low-carbon transformation of consumption mode: it changes people's lifestyle and consumption mode to cultivate green, low-carbon and economical consumption awareness and behaviors;

l Low-carbon transformation of urbanization mode: it reshapes the form of city and consolidates the construction of low-carbon infrastructure.

The environmental pollution and heavy carbon emissions resulting from the traditional development pattern turn out to be the bottleneck against socioeconomic sustainability that constrains the efforts on meeting people's growing needs for a better life. Therefore the city's carbon cap forms the retroaction mechanism to restructure all walks of life, attract new investment, create job opportunities and improve the urban environmental quality in a sustainable manner.

Experience of low-carbon pilot cities over the past decade

The overall carbon emissions in the pilot cities are well curbed and the carbon emission intensity has decreased significantly. Some of them are on the journey of emission peaking. However, three major issues and challenges remain exist:

l The carbon emission targets of some cities are not strictly constrained with certain flexibility;

l Some cities are in lack of end management and control measures with immediate effect;

l The general awareness of governmental agencies is not strong enough. The overall low-carbon targets of cities are not well connected with the objectives and actions of relevant authorities, which are inadequately provided with professional entities, manpower, technologies and supporting policies, and not highly accepted by industrial sectors.

Building of data and finance infrastructure required by low-carbon cities

With respect to the updated collaborative governance standards, the Ministry of Ecology and Environment (MEE) of the PRC redesigns the system functionalities and puts forward some new construction standards and requirements. Some progress has been achieved in the fundamental data of carbon emissions that quite a few cities keep compiling the checklists on carbon emissions and the nationwide carbon emissions trading markets include the power sector in the first place.

Based on the prophase carbon emission checklists and review of enterprises' emissions, optimization and improvement are needed in accordance with the new requirements to improve the data accuracy as much as possible. There are three ways to achieve better data quality by collaborative governance:

l As the collaborative control of air pollutants and GHGs is deepening, more detailed data of pollutants emission can help verify the GHG emission data, and vice versa;

l The introduction of blockchain and big data analytic technologies can greatly improve the precision, accuracy and timeliness of urban GHG emission data, and quickly respond to the city's decisions;

l The ecology and environment authorities are also trying to apply the CEMS to chimneys for direct monitoring of carbon dioxide emission data in a few crucial sectors like the power sector.

In view of the investment required in achieving the carbon neutrality target, the report of Research on China's Long-term Low-carbon Development Strategy and Transformation Pathways proposes four scenarios. Among them the 1.5℃-targeted transformation pathway needs an incremental investment of around CNY138 trillion, or over CNY3 trillion per annum. Compared with China's annual investment in fixed assets, the estimated amount is not big. However, it is more difficult than estimation whether such investment can be well financed in the real economic system.

Reflected by the actual operation mechanism of investment and financing, the establishment of carbon pricing mechanism is of utmost importance. The market-oriented mechanism can better advance the formation of a market of environmental factors, shape up the carbon price awareness of the whole society, and offers stable carbon price anticipations in a long run, thus influencing the investment and consumption behaviors and decision of stakeholders, and propelling the technological innovation and application of energy conservation and emission reduction. 

(The author is the research fellow of National Academy of Development and Strategy, Renmin University of China).