Natalie Bruner
published 14 December 2020
China, the world's largest polluter, emitting 28% of the world’s greenhouse gas, made the most ambitious climate goal in the world at the UN General Assembly in September; to become carbon neutral by the year 2060. If China reaches this goal, there will be more economic incentives in the green economy, and the world will be spurred into a global race to decarbonize.
Achieving net-zero emissions by 2060 will not come cheaply to China, but many experts think that it will give China’s economy a long-term edge. The estimated cost is $14.725 trillion over the next thirty years. Despite the costs, He Jiankun, the Chairman of China’s Committee on Climate Change and his team, are optimistic that it will repay itself pointing out that clean energy jobs produce 1.5 to 3 times that of traditional energy jobs. Additionally, Hector Pollitt, head of modelling at Cambridge Econometrics shows in his analysis that China's GDP will go up because of this change. In the past, countries viewed cutting carbon as an “expensive chore," but with China’s investment in green industry, it is becoming the more economically feasible choice.
China has been winning the race in the new "green revolution" by investing heavily in green energy and technology. China is currently the second-highest spender in clean energy. Chinese companies have built over 70% of the world's solar photovoltaics and a third of the world's wind turbines. China holds three-fourths of the world's manufacturing capacity for lithium-ion battery cells and most of the supply chain for electronic vehicles. Therefore, China is in a good position to meet growing global demands for clean energy and technology. This new edge in the green energy sector will cause China to become a world leader economically forcing other countries to scramble to catch up.
China’s decision to commit to net-zero carbon dioxide emissions is coming at a strategic time. Just a week before, the European Union (EU) decided to toughen up on their Paris Agreement goals and they committed billions of dollars towards a green stimulus package. Additionally, the EU has plans to tax imports that rely on carbon-heavy emissions. This will give China substantial trade benefits as more of the world begins to set these standards.
The demand for clean energy is increasing rapidly. By 2050, it’s estimated that half of electricity will be from renewable resources. Large oil corporations such as BP and Shell are working to move away from oil. Renewable resources are cheaper than fossil fuels in many parts of the world. Furthermore, as more renewable energy sources and technologies are produced, costs will fall until the point that renewable energy and vehicles will be worth more than non-renewable. For example, Exxon, once the world’s most valuable company, has had its shares fall significantly.
If China achieves its goal of reaching carbon-neutrality by 2060, the world will be spurred into a global race to decarbonize and control green energy and technology. This could leave countries like the United States, the biggest investor in fossil fuels, in the dust, since the price of green technologies and energy will decrease below the cost of fossil fuels, barriers to trade through high taxes on carbon-emitting items, and growing environmental costs to using fossil fuels. Other nations should invest in the direction of green energy and technology to remain competitive in the world economy.
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