Based on the analysis from this research project, the following considerations and recommendations are presented for China’s formulation of goals and pathways for its long-term low carbon development strategies.

12.1 China Should Formulate Domestic Long-Term Low-Carbon Development Strategy

Climate change is the greatest threat facing the sustainable development of human society. It has become a universal consensus internationally to protect the ecological safety of the earth and to address this challenge cooperatively. The core of climate actions is to mitigate anthropogenic GHG emissions – primarily CO2 emissions from fossil fuel consumption. This has been the driver for the revolutionary reforms of the energy system and the low-carbon transformation of economic development patterns around the world. Developing advanced energy and deep decarbonization technologies are in the center stage for global technological innovation, thus the center of competition for every nation’s advanced technological core competitiveness. Furthermore, a country’s ability to develop advanced technologies in the energy and economic low-carbon transition would become a manifestation of a country’s economic, trade, and technological competitiveness. Establishing and forming of a clean, low-carbon, safe, and efficient energy system and a green, low-carbon and circular economy have become a fundamental feature of modern energy and economic systems.

The 19th National Congress of the Communist Party of China set the goal and overall strategy of building China into a great modern socialist country by the middle of this century. Xi Jinping’s thought on ecological civilization is an important guidance for realizing the harmonious development between human and nature and building a beautiful China. It’s also crucial to embark on the path of green, low-carbon and circular development, promote coordinated governance and comprehensive strategies of the economy, society, environment and climate change, and accelerate low-carbon transformation of energy and economy, which is the ultimate solution to advancing ecological progress and sustainable development. China’s policy and best practices in ecological civilization and low-carbon transition of the energy and economic systems will provide Chinese wisdom and experience to the world’s energy and economic low carbon revolution, making new contributions to boosting global ecological progress, protecting eco-safety of the Earth, building a community with a shared future for mankind, and spurring new progress of humanity.

The Paris Agreement has set the global climate goal of limiting global temperature rise to well below 2℃ and striving to keep it below 1.5℃. This is the political consensus and shared vision of all nations around the world based on the scientific assessment of the IPCC, and is the long-term goal of the global climate governance. Urgent actions on emission reduction are needed to achieve the goal, which involves a global net zero emission of GHGs – or global carbon neutrality - in the second half or even the middle of the century. The Paris Agreement also requires Parties to submit their long-term low greenhouse gas emission development strategies by 2020 in a joint effort to achieve long-term global emissions reduction targets. Currently, 121 countries have announced their goals and vision of achieving carbon neutrality by 2050. Many countries and cities have also vowed to go 100% renewable from 2030 to 2050, together with timetables for the phase-out of coal and coal power and the banning of gasoline vehicles.

The willingness and actions for deep decarbonization worldwide during and after the pandemic may be weakened in the short run, but the urgency of low-carbon energy and economic transition in the medium and long term will be ever more apparent. The international community places high expectations on China to announce ambitious long-term low-carbon development goals and strategies. Following President Xi Jinping’s instruction on addressing climate change to “promote domestic development and build international reputation”, China should pursue a pathway of long-term emission reduction to keep global temperature rise well below 2℃ and ideally below 1.5℃ compared to pre-industrial levels, coordinate domestic sustainable development and global climate governance, define the goals and measures for low carbon transformation by 2050, and incorporate them into the overall strategy and planning of China’s socialist modernization by the middle of the century.

By the middle of the century, China will achieve the long-term goal of deep decarbonization, build a clean, low-carbon, safe and highly efficient energy system based on new and renewable energy, and largely phase out fossil energy. This will effectively curb the discharge of conventional pollutants from the source, and ultimately ensure the compliance with the PM2.5 targets in key polluting regions in China as the potential of end-of-pipe control diminishing. The clean energy system, primarily consisting of new and renewable energy by 2050, will ensure that most cities achieve the PM2.5 concentration less than 15 μg/m3, and more than 80% of cities achieve the high standard value of less than 10 μg/m3. Meanwhile, the advent of smart renewable energy supply system will provide the fundamental safeguard to national energy security, and decouple economic growth and social development from resource use and environmental impacts.

The goals, scenarios and implementation pathways of China’s medium- and long-term low-carbon development should, on the one hand, be grounded on the country’s national conditions, capabilities, and modernization process with a outlook to ensuring the realization of China’s goals for socialist modernization in the new era, and on the other hand, enable China to undertake its international responsibilities and contributions for ecological safeguard of the Earth and the common cause of humankind in in tandem with its growing comprehensive national strength and international influence. Its responsibilities and process should be different from that of developed nations. The goal and vision of China’s low-carbon transition could be achieved through long-term efforts that would be widely recognized by the international community and would enhance China’s competitiveness and influence.

12.2 The Long-Term Low-Carbon Development Strategy is a Goal-oriented Comprehensive Development Strategy

Development lies at the heart of the long-term low-carbon development strategy that prompts the transition towards green, low-carbon, and sustainable economic and social development and the harmonious co-existence between people and nature. Therefore, China’s long-term low-carbon development strategy should not only ensure the realization of developing China into a great modern socialist country that is prosperous, strong, democratic, civilized, harmonious, and beautiful by the middle of the century, but also follow the pathway of deep decarbonization towards the goal of limiting the global warming well below 2℃ and ideally within 1.5℃. In other words, the long-term low-carbon development strategy is oriented toward the both the goal of building a modern socialist country and the global climate target of long-term emission reduction. It is a crucial component of the overall goals and strategies of China’s socialist modernization in the new era, and is incorporated into overall all development strategy. China’s domestic and international imperatives can be coordinated to rejuvenate the Chinese nation and, in the meantime, enable China to contribute in new ways to global ecological civilization and to building a community with a shared future for humankind.

The long-term low-carbon development strategy should provide holistic coordination of the goals and visions of economic development, social equity and prosperity, resource conservation and efficient utilization, ecological and environmental protection and climate change. It should aim for collaborative and integrated governance to create a win–win situation for sustainable development, rather than a single strategy of emission reduction. The long-term low-carbon development strategy should not only strengthen energy and economic transformation and implement advanced technological innovation policies and measures, but also pay more attention to the implementation of nature-based solutions (NbS). By protecting, restoring, improving and enhancing the functionality of ecosystems, improving climate resilience, strengthening carbon storage of forests, grassland, wetlands, and agricultural land, reducing carbon sources and increasing carbon sinks, this would provide synergetic co-benefits in creating opportunities for economic growth and employment, improving the environmental quality of water, soil and air, ensuring food safety, and protecting biodiversity. Such efforts are guided by the notion of ecological civilization, which prioritizes ecology and promotes the harmonious co-existence between human and nature. NbS offers an important way to tackle climate change and promote coordinated governance and development of the economy, society, environment, and climate change, paving the way for building a beautiful China. Thus, it’s vital to integrate policies of climate adaptation and mitigation with those of resource-saving and environmental protection to enable comprehensive management of ecosystems such as mountains, rivers, forests, farmland, lakes and grasslands. Vigorous steps should be taken to enhance afforestation, protect natural forests, return farmland to forests and grasslands, build forest shelterbelts, comprehensively control desertification, preserve water and soil and carry out other ecological projects to reduce carbon sources and increase sequestration. NbS is of great significance for achieving carbon neutrality in the future. In China, the annual increase of carbon sinks such as forests could reach around 700 million tCO2 by the middle of this century. NbS will play an important role in offsetting the remaining greenhouse gas emissions from industrial production, land use, land use changes and other hard-to-abate sectors.

12.3 Long-Term Low-Carbon Development Strategy Should Demonstrate the Coordination of the “two Stages”

The characteristics of China’s current industrialization and urbanization stages makes it more challenging for China to achieve deep decarbonization by the middle of this century compared with developed countries. The targets and pathways of low-carbon transformation should be formulated in coordination with the overall goals and tasks of the “two stages” of socialist modernization.

The 19th National Congress of the Communist Party of the People’s Republic of China set forth goals and overall strategies for realizing socialist modernization in the new era. It comprehensively analyzed the international and domestic environment and the conditions for China’s development, and developed arrangements and roadmaps for the two stages. In the first stage of 2020 to 2035, to achieve socialist modernization on the whole, China needs to reach the goal of a fundamental improvement in the domestic ecological environment, fulfill its international commitments on emission reduction, promote high-quality economic and social development, and solidify the technological, industrial, policy and market groundwork for achieving deep decarbonization by 2050. In the second stage of 2035 to 2050, on the path to building a great modern socialist country and a beautiful China, China needs to achieve deep decarbonization that is consistent with the goal of limiting global temperature rise well below 2℃ and striving to keep it below 1.5℃ and pave the way for achieving net zero emissions of all GHGs as soon as possible after 2050.

In the first stage (2020–2035), China’s emission reduction targets and measures are mainly based on the internal demand and planning for domestic sustainable development, including resource conservation, environment protection and air quality improvement, in an effort to strengthen the policy lever of CO2 emission reduction for maximized synergies. This strategy is formulated based on the integrated assessment of domestic and international circumstances. In the second stage (2035–2050), with China’s advancing modernization, growing comprehensive national strength and the increasing urgent need to reduce global emissions, China should give more prominence to the 2℃ pathway and proactively take on international responsibilities that echo China’s growing comprehensive national strength and international influence. From the perspectives of enhancing international competitiveness, impact and torchbearer role in the process of low-carbon transformation, China should continue to ramp up its emission reduction efforts and achieve the deep decarbonization goal of near zero emission by 2050, which mirrors China’s comprehensive national strength and international influence as a leading modern socialist country.

12.4 Goals and Transition Pathways for the 2050 Long-Term Low-Carbon Development Strategy Should Be Clarified

China’s Energy Production and Consumption Revolution Strategy (2016–2030) published in 2016 unveiled the tentative target of non-fossil energy comprising over half of primary energy consumption in 2050, which is used as assumptions for the reinforced policy scenario in this study. Under the reinforced policy scenario, CO2 emissions will amount to 6 ~ 6.5 billion tons by 2050, still far from achieving the 2℃ target. China’s long-term low-carbon strategy for the middle of the century should use the 2℃ target as guidance for emission reduction, aligned with the current policy of energy conservation and carbon reduction and the 2030 NDC targets and implementation plan to peak emissions by 2030, after which China should continue to accelerate absolute CO2 emission reduction, transit from the reinforced policy scenario to the 2℃ scenario, promote the development of carbon capture and storage (CCS) technology and increase carbon sinks from agriculture and forestry to enable a deep decarbonization pathway that is in line with the 2℃ target.

The deep emission reduction pathways for achieving the 2℃ target by 2050 entails near-zero CO2 emissions, implying that the net CO2 emissions should be reduced to about 2 billion tons, which is equivalent to the projected world average of 1–1.5 tons of per capita emissions by 2050, equivalent to about 80% reduction from the peak of CO2 emissions around 2030. Non-CO2 GHG emissions should also peak around the same time with CO2 emissions. Emission reduction efforts should be continuously strengthened so that by 2050, all GHG emissions will be reduced by 70% from the peak. The total energy consumption should also peak around 2035 at somewhere below 6.5 billion tce and, in 2050, should be reduced by more than 20% from the peak level. Non-fossil energy should account for more than 70% of primary energy consumption, and about 90% of the total electricity generation would come form non-fossil electricity, building a near-zero carbon emission energy system mainly comprising of new and renewable energy with the safety of energy supply fundamentally guaranteed and the emissions of conventional pollutants controlled at source. By 2050, China would see a ten-fold increase in GDP compared to 2005, an over 80% reduction in energy intensity per unit of GDP from that of 2005, and an over 95% drop in CO2 intensity, and be able to decouple sustainable economic and social development from CO2 emissions. To enable the deep decarbonization to achieve the 1.5℃ target by 2050, China needs to further strengthen economy-wide emission reduction of all GHGs, peak CO2 emissions around 2025, achieve net-zero emissions of CO2 and reduce all GHG emissions by 90% by 2050. After 2050, China needs to ramp up efforts to strengthen emission reduction of non-CO2 GHGs, increase carbon sinks, and use negative emissions technologies such as BECCS and CDR to achieve net-zero emissions of all GHGs and carbon neutrality at the earliest time possible. This would require more arduous efforts, larger investments and incur greater costs.

Establishing positive and clear long-term low-carbon goals and strategy not only provides top-level planning for China’s long-term low-carbon development, but also conforms to and promotes the global climate governance process, and reflects the “common but differentiated responsibilities” between developing countries such as China and developed countries. Aiming at deep decarbonization with zero CO2 emissions by 2050, China will fundamentally form a clean energy system with new and renewable energy as the major energy source and reduce conventional pollutants from the source which will help maintain the PM2.5 concentration below the standard of 1 5 μg/m3 in key polluting regions and even below 10 μg/m3 in more than 80% of cities, contributing to the construction of a Beautiful China.

China’s 2050 deep decarbonization goal will require large investment for the transformation of energy infrastructure and the large-scale grid integration of renewable energy that involves construction of energy storage facilities and smart grids. Specifically, the total investment required for the 2℃ pathway is around 100 trillion RMB during the period from 2020 to 2050, equivalent to 1.5–2.0% of GDP annually; and the 1.5℃ pathway requires around 138 trillion RMB investment for the energy system over the next 30 years, which is more than 2.5% of GDP annually. The rapid transformation of energy and power technology system would initially increase the cost of energy and electricity supply in the short-term, which would decline in the long-term. In addition, the rapid transformation would result in early retirement of traditional energy infrastructure including coal-fired power plants and incur economic losses from stranded assets. Wholistically speaking, the low-carbon transformation of energy and economy under the 2℃ or even 1.5℃ scenario is technically feasible and economically viable, but needs to overcome obstacles in areas such as technology diffusion, financing mechanism, and management system. The development of advance energy technologies and transformation of the energy system will foster new drivers of economic growth and employment, accelerate electrification of end-user sectors such as industry, transportation and building, enhance energy efficiency, promote the digital transformation of industries and society, and enable China to spearhead global economic and social transformation.

China’s long-term low-carbon emission strategy should also strengthen regulation and control of non-CO2 GHGs such as methane, nitrous oxide and fluorine gases, so as to achieve economy-wide deep reduction of all GHGs emissions. At present, non-CO2 GHGs account for 16% of the total GHG emissions. As the costs of initial emission reduction are relatively low, it is possible for non-CO2 GHG emissions to peak around the same time with CO2 emissions. However, the marginal costs for achieving deep emission reduction would increase steeply. Deep reduction of non-CO2 GHG emissions by 2050 would be more difficult than CO2 reduction. Therefore, it requires R&D of groundbreaking deep emission reduction technologies and proliferation of GHG removal and other negative emissions technologies such as CDR, in order to offset the remaining non-CO2 emissions under the future scenario of deep decarbonization.

12.5 China Should Enhance and Update its 2030 NDCs

China’s NDCs under the Paris Agreement include: by 2030, the CO2 emissions per unit of GDP should fall by 60–65% from the 2005 level; the share of non-fossil fuels in primary energy consumption should increase to around 20%; the forest stock should increase by 4.5 billion m3 on the 2005 level; and total CO2 emissions should peak in around 2030 and making best efforts to peak earlier. These targets were formulated based on China’s 2020 NDCs, which China pledged during the 2009 Copenhagen Climate Conference. With the efforts made during the 12th and 13th Five-Year plan periods, by the end of 2019, China’s CO2 emissions per unit of GDP fell by 48.1% from the 2005 level, which exceeded the target of 40–45% by 2020; the forest stock increased by 1.3 billion m3 compared to 2005, ahead of the 2020 timeframe; the proportion of non-fossil fuels reached 15.3% by 2019, exceeding the target of 15% by 2020. These progress and achievements laid the groundwork for the implementation of the 2030 NDCs, setting the stage for the further enhancing and updating the 2030 NDCs.

The Paris Agreement requires all Parties to submit their reports on the implementation and update of NDCs and actions by the end of 2020. Currently, 114 countries have announced that they will enhance and update their NDCs; the EU has pledged to increase the 2030 emissions reduction target from 40% to 50–55%. The international community is eyeing China for its enhanced and updated NDCs for 2030, and the expectations are running high.

China adheres to the new development concept in a new era, promoting ecological progress, enhancing policies for the establishment of a green, low-carbon, circular industrial system as well as a clean, low-carbon, safe and efficient energy system. Building on the targets and policy measures of strengthened energy conservation and CO2 emissions reduction during the 14th Five-Year Plan period, the 15th Five-Year Plan would keep and reinforce the trend and pace of the low carbon transition. By 2035, China would attain goal for the first stage of modernization, with a modern country taking shape. If we assume that China’s GDP will double over the next 15 years and the per capita GDP is calculated at the current constant price of USD 20,000, then the average annual GDP growth rate is expected to be about 4.8% over the next 15 years. The average annual GDP growth during the 14th Five-Year Plan period might slow down compared with that of the 13th Five-Year Plan period, but is still expected to exceed 5%. From 2020 to 2030, China’s annual GDP growth rate will remain at around 5% on average, and its energy intensity per unit of GDP will continue to decrease at relatively high rate of no less than 14%. By 2030, China would keep its total energy consumption under 6 billion tce, fulfilling the total energy consumption target set by the Energy Production and Consumption Revolution Strategy (2016–2030) while sustaining economic growth. New energy and renewable energy will continue to grow rapidly. While meeting the rising energy demand, the development potential of renewable energy would be further released, and its share would increase rapidly to about 25% by 2030, exceeding the NDC target of 20%. By then, the proportion of primary energy in power generation would increase from the current 45% to about 50%, which is in line with the China’s target of generating 50% of the total electricity from non-fossil fuels by 2030 as stated in the Energy Production and Consumption Revolution Strategy (2016–2030). Owning to the dual effect of energy conservation and substitution, by 2030, CO2 emissions per unit of GDP would fall by 65–70% from the 2005 level. The installed power generation capacity of hydro, wind and solar energy would reach approximately 500 GW respectively, producing new sources of economic growth and creating new jobs. Under this circumstance, CO2 emissions would enter a peak plateau by 2025 and reach a stable peak by 2030. According to forestry development plans, China’s forest stock would amount to 21 billion m3 by 2030, an increase of 5.5 billion m3 more than that in 2005. In 2030, there is potential and possibility for all NDC targets to be over-achieved and achieved ahead of schedule.

Based on the above analysis, China should further enhance and update the 2030 NDC targets, which would promote low-carbon transformation and high-quality development of the energy system and the economy, respond to the expectations of the international community, and advance the global climate governance.

12.6 China’s Goals and Policy Measures for Addressing Climate Change Should Be Strengthened in the 14th Five-Year Plan

China is the first country to have contained the Covid-19 pandemic and achieved economic recovery. The global spotlight is on how to embody the concept of green and low-carbon development and how to strengthen targets and policy guidance for energy conservation and carbon reduction in the 14th Five-Year Plan. They are also expected to become the “weathervane” for the world’s realization of post-pandemic high-quality and sustainable green recovery. The 14th Five-Year plan period is a key stage for China to accelerate economic transformation and upgrading and promote high- quality development. The 14th Five-Year Plan should be aligned with the short- and- long-term efforts to enhance China’s 2030 NDC targets as a whole. It’s recommended to strengthen climate goals and measures in the 14th Five-Year Plan and to include a dedicated plan for addressing climate change in it to specify the goals, tasks, policies and actions.

The impact of Covid-19 pandemic on the global industrial chain as well as supply and demand will create uncertainties for the future economic development and energy transition. While securing steady progress of its economy and society, China needs to follow the new concept of development, accelerate industrial transformation and upgrading and the high-quality development, endeavor to develop the digital economy and high-tech industries technologies, and spur the transition of an economy driven by scale and speed to one that centers on quality and efficiency. During the 14th Five-Year Plan period, China should aim for a drop in energy intensity per unit of GDP of at least 14% and a cap of total energy consumption at 5.5 billion tce while securing an annual GDP growth of over 5%. As wind, solar and other renewable power become increasingly cost-competitive with coal-fired power generation, non-fossil energy during the 14th Five-Year Plan period could maintain an average annual growth of about 7%, the average annual growth rate during the 13th Five-Year Plan period. There is considerable potential for the development of corresponding energy storage systems and smart grids. By 2025, non-fossil energy would account for 20% of primary energy consumption. With the rapid development of new energy and renewable energy, new power demand during the 14th Five-Year Plan period can be mostly met by the increasing power supply from non-fossil fuels to effectively curb the rebound of coal power supply and coal consumption. During the 14th Five-Year Plan period, newly built coal-fired power plants should be strictly controlled, unless they are built for peak shaving, district heating and other essential needs. The dual effect of energy saving and energy mix improvement could reduce the CO2 intensity per unit of GDP by 19–20%, and reduce the total CO2 emissions to less than 10.5 billion tons at the end of the period.

It’s important for the 14th Five-Year Plan to keep the targets of energy-saving and CO2 emission reduction stated in the 12th and 13th Five-Year Plans. In particular, the binding target for the reduction of CO2 intensity per unit of GDP should be kept and highlighted because it’s a landmark for China’s NDC commitment under the Paris Agreement. Based on this, China could implement and realize the phased NDC arrangements of cutting CO2 emissions per unit of GDP by 60–65% from the 2005 level. It would showcase China’s consistent climate policies and positive attitude of continuously reinforcing policy actions, and help China respond to the international community’s concerns and expectations for China to continue to drive the global cooperation on climate change.

The 13th Five-Year Plan put forward the expected goal of holding total energy consumption under 5 billion tce at the end of the period, and this goal will be achieved. During the 14th Five-Year Plan period, it is recommended to set total CO2 emissions cap target to buttress China’s efforts to implement and fulfill its commitment of peaking CO2 emissions in around 2030. In fact, setting the targets for total energy consumption and non-fossil fuels as a percentage of primary energy consumption would be sufficient to control total CO2 emissions. Adding CO2 cap target would better underscore China’s policy determination and new actions for tackling climate change. During the 14th Five-Year Plan period, CO2 peaking activities should be conducted at the regional and sectoral level, and developed provinces and cities in the eastern coast and energy-intensive and high-carbon emission industries should be encouraged to set their peak targets first. Furthermore, the Ten-Year Action Plan for Peaking CO2 Emissions should be formulated and executed in a way that seamlessly connects with the 14th Five-Year Plan and ensures regional coordination, both near and long term, thus providing the policy safeguard for an earlier peak of CO2 emissions.

12.7 China Should Improve Policies and Institution Building for Addressing Climate Change

Institutional building for addressing climate change is a fundamental guarantee for China’s long-term low-carbon development strategy, as well as a critical component of the institutional building for ecological civilization. China should establish a sound system of laws, regulations, and fiscal, taxation and financial policies and implementation mechanisms.

Climate legislation should be strengthened to secure the implementation of climate strategies, mechanisms and policy systems and the realization of long-term emission reduction targets. The enactment of dedicated laws is conducive to providing clear legal guidelines for nationwide climate actions, and to ensuring the realization of long-term strategic goals and measures against climate change. It’s essential to strengthen and enhance the fiscal, financial and taxation policy framework to underpin the long-term low-carbon development, and governments should increase financial input and tax incentives to create an investment and financing mechanism that favors a low-carbon transition. It’s also crucial to establish green investment guidelines, improve the green credit mechanism, issue green securitization products and green bonds, and put in place green credit incentives and guarantee mechanisms to encourage enterprises, financial institutions and private investors to invest in green growth.

Efforts should be made to accelerate the construction of a national carbon market and harness the fundamental role of market mechanisms in promoting low-carbon energy and economy transformation. The 13th Five-Year Plan period has witnessed notable progress in the carbon market pilots in five cities and two provinces, which has generated positive impact across the world and paved the way for a national carbon market. Now, it’s vital to follow the direction of President Xi Jinping to launch a national carbon market, enhance policies and regulations, start the trading as early as possible, and expand its coverage from the power industry to the iron and steel, cement, aluminum, petrochemical, chemical, aviation and other energy-intensive industries as soon as possible, leverage the crucial role of market mechanisms in reducing GHGs emissions, and reduce economy-wide emission reduction costs. The market mechanisms should be combined with government regulatory measures to ensure the realization of national emission reduction targets. Market carbon price signals should be used to guide private investment and industrial technology upgrading so as to promote enterprises to conserve energy and reduce CO2 emission reduction. At the same time, carbon allowances should be properly distributed to shape a system for capping total CO2 emissions and a carbon emission monitoring, reporting and verification system at the corporate level. This would facilitate the institutional building for addressing climate change. A robust carbon market system with sound carbon pricing mechanism not only represents the fundamental institutions of China’s long-term low-carbon development, but also is an effective institutional tool for hedging and countering the “carbon border adjustment” that the EU and the US have planned to adopt in international trade. It would also enable China to actively play an influential and guiding role in the establishment and development of a global carbon price mechanism.

It’s important for China to deepen reforms and strengthen the leading role of the government in implementing the low-carbon transformation strategy. A target-oriented accountability for energy conservation and carbon reduction should be reinforced for governments at all levels, and targets for energy conservation and carbon reduction should be included in national and local five-year plans. It is also important to make innovations in the macro-control system for energy, establish and enhance energy legislation, and reform and improve the fiscal, taxation, and financial policy framework for promoting low-carbon development, the pricing mechanism for energy products, and the resource and environmental taxes and fees system. It’s crucial to strengthen the reform of the energy market mechanism, establish a uniform and open market structure and system that promote just, fair and effective competition, and strengthen the standards for energy-efficient technologies and energy efficiency labeling and policies for industry access. Guided by the national medium- and long-term strategies and goals, government binding targets, mandatory standards, fiscal, tax, and financial policies should be reinforced and integrated with market mechanisms to improve the institutional safeguard for energy revolution and low-carbon development.

China needs to strengthen the institutional building and policy support systems for technological innovation and industrialization of cutting-edge technologies, plan ahead the R&D and industrialization of revolutionary deep decarbonization technologies, leverage China’s huge market to support the technological upgrading of industries and the reform of the energy system via technological innovation, so as to sharpen the technological strength and market competitiveness of energy enterprises. Under the future 2℃ scenario of deep decarbonization, the marginal cost of emission reduction in most cases would feature a steep rise in a nonlinear pattern, which requires revolutionary and strategic breakthroughs in frontier technologies. It’s important to step up the R&D and penetration of deep CO2 emission reduction technologies such as large-scale energy storage and smart grid technologies in the case of large-scale grid integration of renewable energy, BECCS for negative CO2 emissions, technologies for the production, storage and use of hydrogen as a clean, zero-carbon and secondary energy source, and zero-carbon technologies for producing chemical, steel, cement, petrochemical and other raw materials. Moreover, it is necessary to ramp up R&D and demonstration of technologies for deep emission reduction of methane and other non-CO2 GHGs, so as to enable deep emission reduction of all GHGs. China should spearhead the R&D and demonstration of these revolutionary technologies, achieve technological breakthroughs and industrialization as soon as possible, and make these technologies mature and affordable, so as to play a leading role in driving the low-carbon transformation of the global economy and society.

12.8 China Should Take a Proactive Role in Responding to the New Situation of Global Climate Governance in the Post-Covid-19 Era

The world economy has been hit hard by the Covid-19 pandemic. The US’s attempts in reshaping the world economic order in the wake of the pandemic features a clear strategic intention to contain and isolate China across the board. Coping with climate change would be an important area of competition among major economies. China is also confronted with the arduous task of restoring the economy, securing people’s livelihood and shoring up weakness in the industrial chain, with a grim situation with uncertainties both at home and abroad. Though the current and short-term scourge of Covid-19 might weaken the global response to climate change and low-carbon transition, the long-term trend would remain unchanged and it would become increasingly urgent for the low-carbon transition. In the post-Covid-19 era, it has become a consensus of the international community to adhere to the policy of “green recovery and low-carbon transformation” and to enhance the NDC targets and international cooperation under the Paris Agreement.

China’s achievements in implementing its climate strategy and curbing CO2 emissions are globally recognized. China has made a historical contribution to the adoption and enforcement of the Paris Agreement, and has become the backbone of the developing countries in the climate tussle between developed and developing nations. Tackling the global climate crisis represents the shared interest of the entire humanity and the international moral high ground for major power competition. At present, global climate governance adheres to a multilateral mechanism featuring broad participation and consultation on an equal footing, and requires extensive communication and consultation between developed and developing countries. China has already exhibited increasing influence and coordination capability on climate change issues, and the international community also expects Chinese to further assume leadership and play a “bridging” role. Despite the plummeting relations between China and the US, there are still space and opportunities for the two sides to consult, negotiate and cooperate on climate change. Active participation in and promotion of global climate governance would help China build up the strategic support of developing countries. China should continue along the path of multilateralism in respond to unilateralism of the US and should expand its diplomatic advantage in the field of climate change, striving to resolve any challenges or pressure.

With the complex and hugely uncertain international circumstances in the post-Covid era, China must actively promote global climate governance and cooperation and should foster the institution building of a fair, just and win–win global climate governance system. China should uphold the principles of equity, common but differentiated responsibilities and respective capabilities, strengthen exchanges and communications with countries and nation groups with varied national conditions and in different stages of development, and promote comprehensive, balanced and effective implementation of the elements and provisions pertaining to mitigation, adaptation, funding, technology, capacity building and transparency in the Paris Agreement. China should strive to promote a conclusion in the negotiations on Article 6 of the Paris Agreement and an all-round adoption of the Paris Rulebook at COP26 and promote pragmatic cooperation of the international community. China should endeavor to make addressing climate change a pioneering and successful example of Xi Jinping’s thoughts on building a global ecological civilization and a community with a shared future for mankind.

Actively promoting South-South cooperation in addressing climate change is a key step for China to expand its strategic support in climate field and live up to its responsibility as a major country. In the green BRI development and project cooperation, China should adhere to green and low-carbon guidelines and standards, and strictly rein in the export of coal-fired power plants and other high-carbon projects. It’s important to fulfill President Xi Jinping’s pledge at the Paris Climate Conference to set up a 20 billion RMB South-South Climate Cooperation Fund to support and assist developing countries in capacity building, and ease the pressure from the international community for China’s funding contribution.

To sum up, amid the complex circumstances at home and abroad, China should maintain its strategic focus, ramping up the planning and actions on climate change at home. Follow the guidance of building socialism in the new era, China needs to coordinate short-term and long-term aspects, and domestic and international interests. China should specify the targets, policies and measures for energy conservation and CO2 emission reduction in the two documents which are due to be submitted to the UNFCCC Secretariat by 2020, namely, the report on the implementation and update of 2030 NDCs and the low-carbon emission strategy by the middle of the century, and in China’s 14th Five-Year Plan. On the domestic front, China should promote industrial transformation and upgrading and high-quality development, and foster a coordinated governance and win–win situation for economic development, energy security, environmental protection and addressing climate change. On the international stage, China should respond to the general expectations of the international community, resolve such pressures as emissions reduction and financing, thereby building up a reputation of a major developing country taking responsibility for a shared vision of the world and constantly improving its international competitiveness and influence.