China and the European Union must drive the transformation to a global low carbon economy
A unique group of leading Chinese and European organisations believes China and the European Union (EU) must work together strategically to drive a global low carbon economy.
Their report, Changing Climates: Interdependencies on Energy and Climate Security for China and Europe, states that collaboration has the potential to deliver economic, as well as environmental, benefits to both regions. The report is being presented to an audience of Chinese officials, business leaders and NGOs in Beijing, China, on Thursday 28 February 2008.
Bernice Lee, Head of Chatham House’s Energy, Environment and Development Programme and an author of the report said: “Changing Climates is about the opportunities presented by the twin challenges of securing energy supply and addressing climate change. Our research identified pathways for strategic collaboration between China and the EU that will not only help both achieve their own targets but also unlock the potential of a low carbon economy.”
The pathways for change cover three broad areas: energy efficiency, energy generation, and markets and investment. Overwhelmingly the report concluded that by playing a proactive role in the transition to a low carbon economy China could achieve its strategic aspiration to become an innovation-based economy, secure market access and opportunity and deliver its own energy needs.
Three examples demonstrate the powerful transformative role China and the EU could play if they worked together.
Markets for low-carbon energy products are likely to be worth at least $500bn per year by 2050. China’s clear advantage in manufacturing has an opportunity to develop that advantage in low-carbon products such as energy efficiency lightbulbs. The EU – China’s largest trading partner – presents a ready and needy market for such low carbon products to meet its own energy efficiency targets. Experience shows that by defining shared standards for key products China and the EU could use their bilateral trade relationship to effectively set the global standards for such products.
Similarly the creation of a low-carbon free-trade agreement could establish a global precedent for the treatment of climate-friendly technologies which could be extended to other markets. China produces four-fifths of the world’s energy saving light bulbs, with exports worth US$1.5bn in 2006. It is estimated that lifting duties into the EU could help save 23 million tonnes of CO2 each year.
Chinese coal use is well documented and unique, making up 40% of the world’s coal consumption. China’s plans for increased electricity generating capacity are also well known: 1200GW of new capacity is planned. What is less reported is that the EU also plans new generating capacity of a similar nature: 800-900 GW. Carbon lock in that would be catastrophic in climate change terms could be avoided by ensuring new power stations in China are fitted with the same emissions reduction technology and the same efficiency of generation as their EU counterparts.
Reducing energy consumption within Chinese buildings would also bring significant benefits especially as, by 2020, China will probably have built new building stock equal to the entire existing building stock of the EU-15 in 2002.
Buildings currently account for nearly 20% of final energy consumption in China. More ambitious standards for new buildings and refurbishing old ones could reduce energy consumption in buildings annually. The report suggests a reduction of 600-700 million metric tonnes in CO2 emissions could be achieved by 2030.
“The EU and China must set aside national and regional self interest in order to benefit from their mutual interests in energy and climate security. Doing so will generate efficiencies in scale and economics that will put a global low carbon economy within the world’s grasp, with China and the EU at the helm,” Ms Lee concluded.
The Changing Climates; interdependencies on Energy and Climate Security for China and Europe Steering Committee includes representatives from Chatham House (Royal Institute of International Affairs), E3G (Third Generation Environmentalism), the Chinese Academy of Social Sciences (CASS), the Chinese Energy Research Institute (ERI), the Institute for Sustainable Development and International Relations (IDDRI) and the Potsdam Institute for Climate Impacts Research (PIK).
A note about the project
The Interdependencies on Energy and Climate Security for China and Europe Project is an independent initiative of European and Chinese research institutions. The project aims to identify the mutual interests, challenges and opportunities for China and the EU in energy security and climate security over the next 25 years; and to produce high-quality independent analysis on the priorities for future collaboration to meet both regions’ climate and energy security goals.
The Steering Committee includes representatives from Chatham House (Royal Institute of International Affairs), E3G (Third Generation Environmentalism), the Chinese Academy of Social Sciences (CASS), the Chinese Energy Research Institute (ERI), the Institute for Sustainable Development and International Relations (IDDRI) and the Potsdam Institute for Climate Impacts Research (PIK).