A green energy building with nearly zero-carbon emssions in Chengdu, Southwest China’s Sichuan Province Photo: VCG

Carbon neutrality means a major shift in the development paradigm, and China is expected to become a parallel runner and even leader of this new paradigm, according to a research report.

The report was written by a panel of seven experts, and was released recently at a high-level workshop on Pathways to Carbon Neutrality in China, co-hosted by Tsinghua University PBC School of Finance, the World Bank Group and the London School of Economics and Political Science (LSE).

China aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.

In the next 40 years, China should make a green transformation of its economic development, in a coordinated and balanced manner, which is an arduous task, said the report.

It noted that carbon neutrality, however, offers a huge opportunity for China. "Going carbon neutral does not mean sacrificing economic growth, on the contrary, it can boost growth in many ways, especially in important areas of employment, efficiency improvement and economic transformation and upgrading," said the report.

A well-designed and well-coordinated green transition can drive both short-term economic recovery and more inclusive and sustainable growth in the medium to long term, help find new drivers of growth, and reduce China's dependence on fuel imports so as to improve its energy security, said Manuela V. Ferro, World Bank Vice President for East Asia and Pacific.

With a clear strategic direction, strong savings and investment, as well as scientific and technological capabilities, China has the potential to lead the global shift to a new paradigm of green development, the report stated.

The paradigm shift of China is the growth story of the 21st century, said one of the report writers, Professor Lord Nicholas Stern, Chairman of the Grantham Research Institute at LSE. "What we try to do is set out the story."

To achieve carbon neutrality, the report suggested that China could reshape its energy landscape, strengthen the clean use of coal, gradually reduce the proportion of coal consumption, develop new energy, and promote the green transformation of transport, manufacturing and urbanization.

The Chinese government should provide incentives to lead the market, especially to foster carbon prices, said Zhu Min, another writer of the report and former deputy managing director of the International Monetary Fund.

Zhu added that China's carbon emissions trading system has a very good price transmission mechanism. On July 16, 2021, the national carbon market officially launched online trading, covering 4.5 billion tons of greenhouse gas emissions annually, making it the world's largest carbon market.

The report noted that it is necessary to build a macro regulation system for zero-carbon finance, increase fiscal support, enrich policy toolkits, implement structural monetary policies consistent with the goal of carbon neutrality, and establish a regulatory and disclosure management mechanism.

China also plays an important role in strengthening international cooperation to promote the global carbon-neutral transition, and in supporting developing countries as well as Belt and Road countries to achieve green take-off, the report added.

Xinhua