Sustainable growth is the smart way forward, by Climate Action Commissioner Connie Hedegaard
As two of the world's biggest economies, China and Europe are facing common global challenges: how to face climate change? How to make our economies less dependent on oil and gas imports and less vulnerable to oil price spikes? How to realise economic growth in a world with a growing population and an increasing pressure on natural resources and raw materials? It is encouraging so see that in answer to these challenges both Europe and China are turning to clean technologies and are giving climate action a central place in their respective economic growth strategies.
Climate action is one of the main priorities of the EU's 2020 growth strategy. The EU's 27 member states have committed to reducing emissions by 20% below 1990 levels (30% if the other major economies take on their fair share of a global emissions reduction effort), increasing the share of renewables in the EU's energy mix to 20% and improving energy efficiency by 20%. This has been laid down in binding legislation, including individual targets for the member states. So the EU is well on track to achieve the emissions reductions which we have pledged under respectively the Kyoto Protocol, the Copenhagen Accord and the Cancún agreements.
Climate change is not only a long-term threat; it is already happening as we see more and more extreme weather events. Northern China, for instance, is going through the worst drought in sixty years. Consequences are not only felt by local farmers, who are in lack of drinking water and see their harvests fail. Consequences are felt around the world, as food prices are soaring.
The current emission reduction commitments and pledges by developed and developing countries are not sufficient for keeping global warming below 2°C – the goal that Prime Minister Wen Jiabao agreed to in Copenhagen in 2009. For that, global emissions need to be halved by 2050. The EU is willing to do its fair share as a region of developed countries and reduce its emissions by 80-95%. Earlier this month, the European Commission published a roadmap on how we could achieve this goal in a cost-effective way. Based on comprehensive economic modelling, the 2050 Low-Carbon Roadmap provides a pathway for the EU's key economic sectors to jointly move towards a low-carbon economy.
The EU cannot stop climate change alone, as it is only responsible for about 12% of global greenhouse gas emissions. If we want to avoid dangerous impacts of climate change, the EU's efforts will need to be met by similar efforts by other major economies. Therefore, it is good news that in the newly adopted 12th five years plan China is putting measures in place for implementing emissions reductions, with cap-and-trade pilot projects and regulating energy consumption and carbon emissions of industries. As Environment Minister Xie Zhenhua recently said: "the purpose of the carbon trading scheme is to maximise the reduction of the emissions at the lowest costs to achieve sustainable development rather than to add burdens for the enterprises".
There is certainly a big potential for developing a carbon emissions trading system in China. China is already the largest beneficiary of the Clean Development Mechanism under the Kyoto protocol, through which developed countries offset emissions by investing in emission reductions in developing countries. Transfers between the EU and China under the CDM will amount to billions of euros until 2012. However, CDM projects are not delivering emission cuts on the scale needed. China and other emerging economies could benefit from a more systematic approach in key emitting sectors such as power, iron and steel, cement and oil refining. This could generate revenues for more ambitious global climate action and support China's policies on renewable energy and energy intensity.
The European Commission is willing to support China in establishing carbon emission trading systems. There has been cooperation between China and the EU on this issue over the last months. The EU's Emissions Trading System which has been operational for more than 5 years now, shows that it is the most cost effective way to reduce emissions, while still leaving flexibility to economic operators.
Greening our economies not only provides an answer to the threat of climate change, but also to other global challenges. By using low-carbon technologies, we can reduce our need for fossil fuels and other scarce natural resources. The EU has put energy efficiency and renewable energy at the heart of its economic development. The 2050 Low-Carbon Roadmap shows that Europe could bring down energy consumption by 30% by 2050 through increasing energy efficiency. And turning to electrical vehicles and renewable energy sources would allow us to halve our imports of oil and gas by 2050 – a saving representing 3% of the EU's GDP. Our analysis shows that stepping up global climate action could increase savings on fossil fuel bills. The same applies to China – being one of the world's biggest importers of fossil fuels.
There is certainly a need for further energy savings in China – as highlighted in the new five years plan. In the next years we will need to turn to innovative technologies that are improving energy efficiency of industrial processes. Putting a price on carbon emissions provides an important incentive to companies to invest in clean technologies.
Windmills, solar panels, electrical vehicles, energy-efficient building materials and technologies and smart grids will be crucial areas for future economic growth. Investments in sustainable energy are rapidly increasing. According to a report of the United Nations Environment Programme (UNEP), investments in clean energy have seen an annual growth of 33% over the last decade. UNEP forecasts that a shift to a green economy could create millions of new net jobs worldwide. So going green does not go at the expense of economic growth.
Shaping a clean, climate-friendly society does not mean saying goodbye to nice cars, good food and foreign travel. It is about maintaining and improving our quality of life while ensuring pollution does not undermine economic growth. It is about building energy efficient homes. It is about more intelligent ways of producing, and it is about smarter cities with cleaner air and less pollution, less noise and less congestion.
China and the EU can prove to the world that green growth is not just a vague utopian vision; it is the smart answer to many of the challenges the world is facing. By leading the way, we can motivate others to move to more ambitious climate action.
EU Commissioner for Climate Action