Zhang Yu

JeniZhang13@163.com

COMPREHENSIVE efforst to accelerate decarbonization could deliver enormous benefits to China during its path towards carbon neutrality and will create an economic structural change driven by technological innovation, said Allan Xie, the Deloitte China Climate and Sustainability Leader.

“The economic structural adjustment costs associated with reducing China’s emissions profile are expected to be high, but the cost of inaction will be greater,” Xie told Shenzhen Daily in an interview at the BEYOND International Technology Innovation Expo on Friday.

A report from the Deloitte Economics Institute showed that leading on climate action is a 116-trillion-yuan (US$18.18 trillion) opportunity for China over the next 50 years, while the country might lose 180 trillion yuan in economic potential if no action is taken on climate change.

As China’s economy transitions to low-emission pathways, new investment opportunities emerge, said Xie. Meanwhile, the country is well positioned to play a role in the global process by exporting key technologies and know-how.

According to Xie, China will require billions of yuan in capital investment to achieve carbon neutrality. R&D and applications in new energy, zero-carbon construction, transportation and other industries, for example, will spur economic growth and job creation.

“China has become the world’s largest exporter of renewable energy products, producing 70 percent of the world’s solar photovoltaic modules. China’s global competitiveness would be further enhanced by the consolidation of technology advantages,” said Xie.

Xie predicted stricter regulatory limits and a wide range of product transactions in China’s national carbon market in the future.

“At the moment, only about 2,000 power generation companies are part of the market’s first trading group, but as the market grows in size and participants, more industries will be added,” Xie explained. “Financial institutions will have access to the market, which would improve liquidity.”

The national carbon market, the world’s largest in terms of the amount of greenhouse gas emissions covered, was launched in Shanghai on July 16, marking a significant step taken by China to reduce its carbon footprint and meet emission targets.