Will climate commitment constrain China’s economic growth?
- By Qi Ye
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E-mail China.org.cn, January 20, 2015
If China's carbon emissions are to peak in 2030 as indicated in the Sino-American joint statement, its GDP growth rate must somewhat match the combined reduction rate of its energy intensity and carbon density. In other words, carbon emission increases generated by its economic growth has to be offset by the benefit of higher energy efficiency and use of low-carbon energy. Faster growth of energy efficiency and low-carbon energy use will open up a greater prospect for China's GDP growth. In this sense, the carbon emission peak in 2030 will pose as a constraint on the speed and quality of China's economic development.
To what extent will this new climate commitment affect China's growth?
History in other countries shows that the combined reduction rate of a country's energy intensity and carbon density is usually less than 5 percent. Since the Chinese government is firmly committed to meeting its carbon emission target for 2030, it should be already expected that China's growth rate will not exceed 5 percent in 15 years.
In 2012, the World Bank and the Development Research Center of the State Council of China released China 2030, a report on China's economic outlook, following a two-year-long joint study and research of the Chinese economy. The report predicted that China's economic growth will drop from the current 7% to around 5% in 2030. This rate coincides with what is required if China's carbon emissions are to peak in 2030. Some economists estimate that the Chinese economy will maintain its 7% to 8% high growth in the coming two decades. This might be pertinent economically, but if we factor in China's climate commitment, such a fast growth rate would almost be impossible.
Now we have a clear answer to the question we raised earlier. Will China's carbon emissions peak in 2030? The answer is yes, but with conditions. An important prerequisite is that its economic growth must not exceed 5%. In short, for China as a whole, climate commitment may constrain China's economic growth rate, but not necessarily growth itself. And the impact of energy conservation and reduction of carbon emissions in various regions and provinces in China will probably be determined by their varied conditions, especially their levels of economic development.
Qi Ye is Professor of School of Public Policy Management of Tsinghua University, Senior Fellow at Brookings Institution and Director of Brookings Tsinghua Center for Public Policy.
For more, see http://www.chinausfocus.com/energy-environment/will-climate-commitment-constrain-chinas-economic-growth/
