01 February 2019 - 12:20
The Chinese wall against carbon
China reduces its dependence on carbon
For many years, China has been making efforts to reduce its dependence on carbon. Counteracting the serious damage to water resources and the atmosphere caused by the excessive reliance on carbon is one of the main medium-term development goals set out by the Chinese President Xi Jinping’s government. This also explains China’s participation in the promotion of the Paris Climate Agreement, approved in December 2015, as well as its recent request to renegotiate certain aspects of the pact, making it less burdensome on the economies that have just begun their development process.
From an economic point of view, overcoming dependence on carbon responds to a recognised global trend: financial institutions and bodies such as the World Bank have announced their gradual withdrawal from carbon-based projects. This trend coincides with Beijing’s changing development standards: from its highly pollutant manufacturing processes to its leadership in high technology and digital economy, in line with President Xi’s Made in China 2025 plan. On a social scale, attention to the environment and fighting polluting emissions have become necessary due to a gradual increase in real standards of living that are incompatible with the urban and rural damage caused by decades of rapid economic growth. According to official data from Beijing, in 2013 China had already doubled its peak carbon consumption: since then, Chinese consumption of carbon has fallen by several percentage points each year, with the exception of 2017 when, according to estimations from observatories such as the Global Carbon Project, consumption rose by roughly 1 percent. Last year, Chinese consumption fell by some 150 million tons compared to 2015, and by 420 million tons compared to 2013.
This is a significant result made possible by a vast series of political, financial, scientific and technological measures. At the beginning of last year, Beijing commenced the challenging process of carbon emancipation, especially that used for heating public and private buildings. This process was especially enforced last winter and caused significant difficulties, especially in the northern regions of the country. However, the emergency situation pushed forward the integration process of the large energy companies that began in 2015 to rationalise and consolidate state companies characterised by higher profitability and competitiveness. Last year the Chinese government supervised the fusion of the nation’s main carbon producer, Shenhua Group Corp. Ltd., and one of the five main energy producers in the country, the China Guodian Group Corp., giving rise to the world’s largest energy company.
In order to further accelerate the reduction in national carbon dioxide emissions, which equal roughly 30 percent of global output, last December Beijing opened the largest Cap and Trade market in the world: the new system currently only involves the national energy industry, that alone includes roughly 1,700 factories and plants, but in the future will be gradually extended to further economic sectors and industries. While this mechanism introduces many further uncertainties, from the beginning it has represented a market of 3 billion tons of carbon dioxide, nearly double the European figure of 1.75 billion tons. At the same time, new international agreements and initiatives have been introduced, such as that signed last March by the Asian Infrastructure Investment Bank and Beijing Gas Group Company for a project aimed at widening the natural gas distribution network, reducing pollution caused by carbon used for heating in China’s rural areas. Meanwhile Beijing continues in its long-term research: last February, for example, Chinese authorities approved a feasibility study into a project regarding a nuclear reactor based on Nhr-200-II technology; the new type of reactor will be used for the production of thermal energy to heat houses and public buildings in an attempt to drastically reduce the country’s dependence on carbon. Beijing is also increasing its use of renewable sources: last November, for the first time, the overall generating capacities of China’s photovoltaic sector exceeded 100 million megawatts, reaching 106.9 million megawatts. The data, relating to the first 11 months of 2017, represents an annual 72 percent growth.
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Generali approves climate change strategy. It will divest € 2 billion from coal.