A New Path: China’s Low-Carbon Plus Strategy 9783111040066, 9783111038513

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Shaojun Zeng A New Path

Shaojun Zeng

A New Path

China’s Low-Carbon Plus Strategy

ISBN 978-3-11-103851-3 e-ISBN (PDF) 978-3-11-104006-6 e-ISBN (EPUB) 978-3-11-104018-9 Library of Congress Control Number: 2023937260 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the internet at http://dnb.dnb.de. © 2023 Walter de Gruyter GmbH, Berlin/Boston First Edition: Chinese Simplified Copyrights ©China Economic Publishing House 2019 Cover image: hh5800/iStock/Getty Images Plus Typesetting: Integra Software Services Pvt. Ltd. Printing and binding: CPI books GmbH, Leck www.degruyter.com

Foreword In addition to being widely accepted by countries across the world, low-carbon development has become an inevitable choice to tackle the increasingly serious problems of environmental pollution and climate change and to realize the sustainable development of human society. More and more countries not only adopt low-carbon development as a key national strategy, but also take green and low-carbon technological innovation as the commanding height of a new round of sci-tech and industrial competition in the future. Although the US withdrew from the Paris Agreement regardless of extensive condemnation, all signatories, including China and the EU, have been working hard to reach post-2020 solutions to climate change, in an attempt to achieve the goal of limiting global warming to 2 ℃. In short, green and low-carbon development has become an irreversible global trend. Since China launched the reform and opening-up in 1978, its robust economic growth has drawn worldwide attention. However, while becoming the world’s second largest economy, China is also the largest carbon emitter. In this context, China has been meeting its responsibilities as a great power to attend global climate change negotiations, signed the Paris Agreement in 2016, and announced its post-2020 actions on climate change. At the domestic level, China put forward the concept of “innovative, coordinated, green, open and shared development”, and decided to promote green and low-carbon economic and social transformation. The core of low-carbon development is to reduce energy consumption per unit of GDP and carbon dioxide (CO2) emissions per unit of GDP. In the Outline of the 13th Five-Year Plan (2016–2020) for National Economic and Social Development, the aforesaid two targets are set as obligatory targets for economic and social development during the 13th Five-Year Plan period, with a 15% and 18% drop respectively by 2020 from 2015 levels. Energy transition is a strong support for low-carbon development. The Energy Production and Consumption Revolution Strategy (2016–2030) released in 2016 serves as a medium- and long-term strategy for China’s energy development. In addition to reiterating the energy transition goals (e.g., limiting total energy consumption to no more than five billion tons of standard coal by 2020), this strategy also proposes to make clean energy the main source of energy growth in the future. This means that clean energy is to satisfy most of the new energy demand and play a key role in promoting low-carbon development. More than that, this strategy also sets out the medium- and long-term energy development goals matching with China’s intended nationally determined contributions under the Paris Agreement; that is, by 2030, China will limit total energy consumption to no more than six billion tons of standard coal, raise the share of non-fossil energy to about 20% in total energy consumption, reduce CO2 emissions per unit of GDP by 60~65% from 2005, and peak CO2 emissions around 2030 or the sooner the better.

https://doi.org/10.1515/9783111040066-202

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Foreword

Low-carbon development is the only way for China to ease its own environmental pressure, and also the inevitable choice for the country to participate in global governance and play a role as a responsible great power. Upon entering a new era of development, it is of strategic significance for China to promote low-carbon development, strengthen the driving force of low-carbon technologies, and achieve high-quality economic and social development. The research group led by Shaojun Zeng of the China Center for International Economic Exchanges, after in-depth thinking and research and being inspired by the “Internet plus” initiative, put forward the Low-Carbon Plus concept. The “Internet plus” initiative provides a new way of thinking for restructuring and industrial upgrading under the new normal, while the Low-Carbon Plus concept aims at guiding the horizontal integration of relevant sectors with Low-Carbon as the core, so that low-carbon development can be better implemented in an all-round way, and all sectors can start green and low-carbon reforms to improve their development quality and efficiency. After making a comprehensive analysis of the basic theories of the Low-Carbon Plus concept and the low-carbon development practices of major countries, the research group has drawn a roadmap for China to implement the Low-Carbon Plus Strategy. Concrete suggestions are offered for primary and secondary industries, construction, transportation, energy and other sectors to promote their own transformation and development by virtue of the Low-Carbon Plus concept. In addition, this study holds that both consuming and financial sectors should also support low-carbon development. The Low-Carbon Plus concept, with Low-Carbon as the foundation and soul, is an extension of low-carbon development and the theme of this book. As the research result of the Chinese think tank, this book provides a new perspective for low-carbon development, which is a helpful exploration for the country to vigorously improve its green and low-carbon work. Wenke Han, former Director of the Energy Research Institute of the National Development and Reform Commission September, 2018

Contents Foreword Preface 1 1.1 1.2 1.3 1.4 1.5 1.5.1 1.5.2 1.5.3 1.5.4 1.5.5 1.5.6 1.5.7 1.6 1.6.1 1.6.2 1.6.3 1.6.4 1.6.5 1.6.6 1.6.7 2 2.1 2.1.1 2.1.2 2.2 2.2.1 2.2.2 2.2.3 2.3

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General report: Study on the Low-Carbon Plus Strategy 1 Basic theories of the Low-Carbon Plus Strategy 2 Experience and enlightenment of low-carbon development in foreign countries 4 The basic situation of implementing the Low-Carbon Plus Strategy in China 5 General ideas and tasks of China’s Low-Carbon Plus Strategy 8 Key areas and paths of implementing the Low-Carbon Plus Strategy in China 10 Low-Carbon Plus Agriculture 11 Low-Carbon Plus Industry 12 Low-Carbon Plus Construction 13 Low-Carbon Plus Transportation 14 Low-Carbon Plus Energy 15 Low-Carbon Plus Finance 16 Low-Carbon Plus Consumption 16 Major policy suggestions for implementing the Low-Carbon Plus Strategy in China 17 Agriculture 18 Industry 19 Construction 20 Transportation 20 Energy 21 Finance 22 Consumption 23 Basic connotation and theoretical basis of Low-Carbon Plus Origin and development predicament of the “low-carbon” concept 24 Origin and development 24 Difficulties and problems 26 Basic connotation of Low-Carbon Plus 27 Deepening: Transformation of traditional industries 29 Convergence: Policy convergence 41 Expansion: Scope expansion 48 Theoretical basis of the Low-Carbon Plus Strategy 53

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2.3.1 2.3.2 2.3.3 2.4 2.4.1 2.4.2 2.4.3 2.4.4 2.4.5 3 3.1 3.1.1 3.1.2 3.1.3 3.2 3.2.1 3.2.2 3.2.3 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.4 3.4.1 3.4.2 3.4.3 3.4.4

Contents

Sustainable development theory 53 Man-land relationship theories 56 Synergistic theory 60 Realization path of the Low-Carbon Plus Strategy Innovative 62 Coordinated 64 Green 66 Open 67 Shared 69

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The situation of Low-Carbon development in China and other Countries 70 Global carbon emissions and responses 70 Overall situation and trends of global carbon emissions 70 China’s carbon emissions 76 GHG emission reduction: World in action 79 Decoupling of China’s development from carbon emissions 84 Energy conservation and emission reduction is an arduous task 84 An empirical analysis of the decoupling between China’s development and carbon emissions 88 Feasibility analysis of decoupling between China’s GDP and carbon emissions 93 Low-Carbon development practices and experiences in major countries 94 UK: Implementing proactive Low-Carbon development policies 94 Technologies 97 US: Bellwether of Low-Carbon technologies 99 Germany: A sound legal system for Low-Carbon development 103 Japan: An innovative system for Low-Carbon development 108 Summary of Low-Carbon development experiences in major countries 112 Enlightenments from foreign Low-Carbon development practices to China’s Low-Carbon Plus development 113 Low-Carbon Plus Finance: Building a green finance system 114 Low-Carbon Plus Energy: Building a modern energy system 115 Low-Carbon Plus Industries: Building a green supply system 116 Low-Carbon Plus Consumption: Recommending a low-carbon lifestyle 117

Contents

4 4.1 4.1.1 4.1.2 4.1.3 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7

5 5.1 5.1.1 5.1.2 5.2 5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.2.7 5.2.8 5.2.9 5.3 5.3.1

Overall thinking, targets and main tasks of China’s Low-Carbon Plus Strategy 119 Overall thinking and goals 119 Guiding ideology 119 Basic principles 119 Targets 120 Main tasks 120 Implement the Low-Carbon Plus Agriculture strategy in an all-round manner 121 Implement the Low-Carbon Plus Industry strategy in an all-round manner 121 Implement the Low-Carbon Plus Construction strategy in an all-round manner 122 Implement the Low-Carbon Plus Transportation strategy in an allround manner 123 Implement the Low-Carbon Plus Energy strategy in an all-round manner 123 Implement the Low-Carbon Plus Finance strategy in an all-round manner 124 Implement the Low-Carbon Plus Consumption strategy in an allround manner 125 Research on the Low-Carbon Plus Agriculture strategy 126 Basic connotation and significance of Low-Carbon Plus Agriculture 126 Basic connotation 126 Significance of Low-Carbon Plus Agriculture: Necessity, potential and feasibility 127 Restricting factors of Low-Carbon Plus Agriculture 129 Difficulties in manifesting and realizing the value of GHG emission reduction 129 Consumption supporting mechanism has yet to take shape 130 Inertial restriction of traditional production and consumption patterns 131 Scarce Low-Carbon facilities 131 Lagging development of a Low-Carbon culture 132 Insufficient financial support 133 Underdeveloped organic agricultural market 133 Lack of supporting policies and weak risk aversion 134 Complexity and high risk 134 Strategic conception of Low-Carbon Plus Agriculture 135 Strategic principles of Low-Carbon Plus Agriculture 135

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5.3.2 5.3.3 5.4 5.4.1 5.4.2 5.4.3 5.4.4 5.4.5 5.4.6 5.4.7

6 6.1 6.1.1 6.1.2 6.2 6.2.1 6.2.2 6.3 6.3.1 6.3.2 6.4 6.4.1 6.4.2 6.5 6.5.1 6.5.2 6.5.3 6.5.4 6.5.5

Contents

Strategic goals and priorities of Low-Carbon Plus Agriculture 140 Strategic thinking and development mechanism of Low-Carbon Plus Agriculture 141 Measures and suggestions for promoting the development of LowCarbon Plus Agriculture 146 Set up a Low-Carbon agricultural fund 146 Formulate policies on subsidy, investment and financing 146 Strengthen the construction of infrastructure and demonstration projects 147 Establish a unified certification system for agricultural carbon emissions 148 Strengthen the innovation and promotion of Low-Carbon agricultural technologies 149 Manifest the indirect benefits of carbon emission reduction 149 Develop Low-Carbon Plus Agriculture by combining the solution of “Three Rural Issues” and the construction of beautiful countryside 150 Research on the Low-Carbon Plus Industry strategy 151 Basic connotation and significance of Low-Carbon Plus Industry 152 Basic connotation 152 Significance of Low-Carbon Plus Industry 152 A major transformation of international manufacturing 153 The wave of reindustrialization in the developed world 153 Smart Low-Carbon manufacturing is leading the transformation of manufacturing methods 154 Current situation and problems of Low-Carbon Industrial development in China 155 Current situation 155 Problems facing the Low-Carbon Development of Chinese industry 156 Sources of industrial carbon emissions and Low-Carbon technology system 161 Sources of carbon emissions from manufacturing 161 Technology system for Low-Carbon manufacturing 163 Key tasks of China’s Low-Carbon Plus Industry strategy 164 Upgrade industrial structure through Low-Carbon Industrial transformation and improvement of both quality and efficiency 164 Build a Low-Carbon industrial technology system 166 Form a Low-Carbon industrial energy system 167 Improve the regulatory system for Low-Carbon industry 167 Adjust foreign trade policies 168

Contents

6.6 6.6.1 6.6.2 6.6.3 6.6.4 6.6.5 6.6.6 6.6.7 6.6.8 7 7.1 7.1.1 7.1.2 7.2 7.2.1 7.2.2 7.2.3 7.2.4 7.3 7.3.1 7.3.2 7.3.3 7.3.4 7.4 7.4.1 7.4.2 7.4.3 7.4.4

Recommendations for implementing the Low-Carbon Plus Industry strategy 168 Do a good job in the top-level design 168 Formulate and improve the policies 169 Improve the governance model 169 Coordinate the relationship between international trade and LowCarbon Industry 170 Quicken the development of Low-Carbon Plus Industry by relying on Internet Plus 171 Adhere to the path of Low-Carbon urbanization 171 Promote the progress of Low-Carbon technologies 172 Strengthen the security function of institutional innovation 174 Research on the Low-Carbon Plus Construction strategy 177 Connotation and basic characteristics of Low-Carbon Plus building 177 Connotation of Low-Carbon Plus building 177 Basic characteristics of Low-Carbon Plus building 178 Barriers to the development of Low-Carbon building in China and analysis of causes 179 Society: Misconceptions about Low-Carbon building 179 Policy: Lack of economic incentives 180 Regulation: A weak regulatory mechanism 181 Third parties: Independent intermediaries are underdeveloped 181 Development of Low-Carbon buildings across the world 182 The US: Perfect policy system to ensure the development of green buildings 182 Germany: Building energy passport 185 Japan: An innovation system for promoting the development of LowCarbon buildings 187 Enlightenment of the Low-Carbon building development in other countries for China 189 Key areas and pathways for implementing the Low-Carbon Plus building strategy 190 Promote Low-Carbonization of construction and form an architect-led operation mode for the whole industrial chain of construction 191 Promote the industrialization of Low-Carbon Plus building 192 Improve the market environment for implementing the Low-Carbon Plus building strategy 193 Encourage the development of passive ultra-low energy buildings 195

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7.5 7.5.1 7.5.2 7.5.3 7.5.4 8 8.1 8.1.1 8.1.2 8.1.3 8.2 8.2.1 8.2.2 8.3 8.3.1 8.3.2 8.3.3 8.3.4 8.3.5 8.4 8.4.1 8.4.2 8.4.3 8.5 8.5.1 8.5.2 8.5.3 8.5.4

Contents

Recommendations for implementing the Low-Carbon Plus building strategy 196 Strengthen the guidance by standards 196 Strengthen policy incentives 198 Enhance regulatory capacity 199 Clarify ownership of property 200 Research on Low-Carbon Plus Transportation strategy 202 Connotation of Low-Carbon Plus Transportation 203 Difference and connection among Low-Carbon, green and circular transportation 203 Essence of Low-Carbon Plus Transportation 203 Characteristics of Low-Carbon Plus Transportation 207 Low-Carbon transport development experiences of foreign countries 208 Japan: An energy-poor country 208 The US: A country rich in resources 210 Problems confronting China in its development of Low-Carbon Transportation 212 Existing traffic layout design is not reasonable enough 213 Investment keeps increasing year by year, but research and development fail to make remarkable progress 215 Development of NEVs should be further promoted 217 Differences in carbon emissions between regions 218 Inadequate policies and regulations 219 Research on the key issues in China’s development of Low-Carbon Plus Transportation 219 Low-Carbon Plus Transportation and high-speed rail strategy 219 Low-Carbon Plus Transportation and development of automobile sector 223 Low-Carbon Plus Transportation and development of logistics 225 Policy recommendations for China’s Low-Carbon Plus Transportation 226 Low-Carbonization of vehicle power sources 226 Promote all-round Low-Carbonization of traffic operation 227 Attach importance to Low-Carbon technology innovation and talent cultivation 228 Take Low-Carbon as the focus of transportation investment 229 Appendix: Case study of Low-Carbon Transportation in Shenzhen 231

Contents

9 9.1 9.1.1 9.1.2 9.1.3 9.2 9.2.1 9.2.2 9.2.3 9.2.4 9.2.5 9.3 9.3.1 9.3.2 9.3.3 9.3.4 9.4 9.4.1 9.4.2 9.5 9.5.1 9.5.2 9.5.3 10 10.1 10.1.1 10.1.2 10.2 10.2.1

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Research on Low-Carbon Plus Energy strategy 236 Background of establishing a Low-Carbon Plus Energy system in China 236 Clean energy is developing rapidly around the world 236 Traditional energy landscape has been changing 237 Low-Carbon Plus gives impetus to energy transition and socioeconomic development under the new normal 238 Difficulties and problems existing in China’s Low-Carbon Energy development 240 A huge room for development 240 Abandonment of wind, photovoltaic and nuclear power is a serious problem 241 Reform of the electric power system is not effective enough 242 Difficulties in nuclear power absorption and spent fuel disposal 243 Coal overcapacity reduction faces challenges 245 Experiences and practices of Low-Carbon Energy development in other countries 246 The UK: Clean energy development is badly needed to govern serious pollution 246 Denmark: European super grid leads to a boom in wind power development 248 Germany: New energy rush amid the game of abandoning nuclear power 251 Japan: Forced to restart nuclear power after Fukushima nuclear accident 256 China’s road map for building a Low-Carbon Plus Energy system 258 Low-Carbon Energy outlook of international organizations 258 Route for constructing the Low-Carbon Plus Energy system in China 262 Recommendations for building a Low-Carbon Plus Energy system in China 265 A rational understanding of global Low-Carbon governance 265 Principles for developing Low-Carbon Plus Energy 266 Suggestions for developing Low-Carbon Plus Energy 267 Research on Low-Carbon Plus Finance strategy 270 Scope and definition of China’s Low-Carbon Plus Finance strategy 270 Connotation of Low-Carbon finance 270 Importance of developing Low-Carbon finance 271 Typical development models of green finance across the world and enlightenment 272 Overview of the international carbon emissions trading system 272

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10.2.2 10.2.3 10.3 10.3.1 10.3.2 10.3.3 10.3.4 10.4 10.4.1 10.4.2 10.4.3 10.5 10.5.1 10.5.2 10.5.3 10.5.4 10.5.5 10.5.6 10.5.7 10.5.8 11 11.1 11.1.1 11.1.2 11.1.3 11.1.4 11.2 11.2.1 11.2.2 11.3

Contents

Main trends of international carbon emission trading 274 Development of a Low-Carbon oriented credit system across the world 276 Challenges and opportunities of developing a Low-Carbon oriented credit system in China 277 Challenges in green credit development 277 Opportunities for banks to transform their credit business 277 Development of green financial bond and green credit asset securitization 284 Main obstacles in the implementation of Low-Carbon credit policies 286 Basic thinking and tasks of developing Low-Carbon Plus Finance 287 Basic thinking of developing Low-Carbon Plus Finance 287 Main tasks for developing a carbon finance market 289 Main tasks of developing Low-Carbon credit policies 291 Recommendations for the development of Low-Carbon Plus Finance in China 292 Government is ought to delegate power and strengthen regulation 293 Cooperate with financial institutions to develop new financial products 293 Foster a carbon finance intermediary service system 294 Strike a balance between a single market and regional differences 295 Strengthen corporate social responsibility and create conditions for the development of Low-Carbon finance 295 Enhance the abilities of international negotiation and risk management 295 Give banks the incentive to implement green credit 296 Improve the operability of green credit 297 Research on Low-Carbon Plus Consumption strategy 298 Definition of Low-Carbon Plus Consumption 298 Origin of Low-Carbon Consumption 298 Connotation of Low-Carbon Consumption 299 Characteristics of Low-Carbon Consumption 300 Significance of promoting Low-Carbon Consumption 302 Opportunities and challenges of implementing the Low-Carbon Plus Consumption strategy 304 Opportunities 304 Challenges 305 Low-Carbon Consumption practices in foreign countries 308

Contents

11.3.1 11.3.2 11.3.3 11.3.4 11.3.5 11.4 11.4.1 11.4.2 11.5 11.5.1 11.5.2 11.5.3 11.5.4 11.5.5

UK: Make full use of incentive policies 308 Germany: Enact strict laws 309 Japan: Promote the idea of Low-Carbon Consumption 310 US: A combination of tools 312 Denmark: Take advantage of green technology 313 Strategic path and main tasks for implementing the Low-Carbon Plus Consumption strategy in China 315 Strategic path 315 Main tasks 317 Recommendations for implementing the Low-Carbon Plus Consumption strategy 319 Build a Low-Carbon Consumption culture in all aspects 319 Establish and improve the Low-Carbon Consumption governance mechanism 321 Promote the application of Low-Carbon technologies and products 324 Strengthen infrastructure construction for Low-Carbon Consumption 325 Accelerate the identification and certification of Low-Carbon products 327

Bibliography List of figures List of tables About the author Index

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329 335 337 339

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Preface My interest in and research on low-carbon dates back to 2005. At the end of 2004, Russia’s accession made it possible for the Kyoto Protocol, the most important agreement to implement the United Nations Framework Convention on Climate Change (UNFCCC), to enter into force. Since then, carbon trading based on the Clean Development Mechanism (CDM), a flexible emissions-reduction mechanism between developed and developing countries, has taken off with vigor and vitality. In 2006, I led a team from Qingneng Consulting to complete what is believed to be China’s first wind power CDM project: Jiangsu Rudong Wind Farm CDM Project. Subsequently, I was recommended by the former Climate Department of the National Development and Reform Commission (NDRC) as a member of the expert group of the National Clean Development Mechanism Project Review Council. Thanks to this experience, I applied for a postdoctoral position at the Clean Development Mechanism Research and Development Center of Tsinghua University in 2007. It was a great honor for me to be enrolled by my supervisor Prof. Wang Ming. It is since then that I embarked on the road of academic research on Low-Carbon and emission reduction. Two years later, I graduated from the Postdoctoral Research Station of School of Public Policy & Management, Tsinghua University, with the research report on “China’s Public Policy and National Strategy to Cope with Global Climate Change: An Investigation Based on the Clean Development Mechanism”. In the same year, I was lucky enough to pass the exam and became one of the first five researchers recruited by China Center for International Economic Exchanges (CCIEE). At CCIEE, a Chinese high-end think tank, the most important thing is to transform from an academic researcher to an applied policy researcher. But no matter what happens, I’m convinced that I am a person with a dull nature. I cannot and do not intend to become an encyclopedic economist. Instead, I keep alerting myself that I must concentrate on the research on resources and environment, especially new energy, and the national strategies and policies dealing with climate change. In 2015, when Mr. Peiyan Zeng, Chairman of CCIEE, proposed to set up a special research project on “Low-Carbon Plus Strategy” among the national major foundation programs of the year and appointed me as the project leader, I thought it might be an affirmation of my dedication to my own research direction. Through one year’s efforts, especially under the direct leadership of Mr. Dexiu Ma, project director and Vice Chairman of the National CDM Project Review Council, some experts from Shanghai Jiao Tong University (SJTU) were invited to join this research group, in addition to the researchers from Chinese Academy of Social Sciences (CASS), Tianjin University of Science and Technology (TUST) and Beijing Institute of Technology (BIT). The research task was successfully completed and then reviewed at the end of 2016, receiving high appraisal by the participating experts. According to the law of publication, the year 2017 was a period of “precipitation”, so that the research results would accept more application evaluation and measurement. https://doi.org/10.1515/9783111040066-204

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This book should have been published as scheduled in 2018, but I was sent to Guiyang National Economic and Technological Development Zone as the deputy director for more than a year, so that the book’s publication had to be shelved. At the urging of my editor and colleagues in the research group, the editing work for the publication was finally resumed. In retrospect, the fruitful research results of this project should be attributed to the personal guidance of Peiyan Zeng, the strong leadership of Dexiu Ma and the combined efforts of the members of the research group. Through the coordination of Dexiu Ma, the research group held an expert seminar in March 2016. Experts and scholars from the Research Office of the State Council, the Chinese Academy of Engineering (CAE), the former Department of Climate of the NDRC, the National Centre for Climate Change Strategy and International Cooperation (NCSC), the Institute of Energy of the NDRC and Tsinghua University put forward good opinions and suggestions on the research strategy, framework and innovation points of the project. After the new research program was formed, Dexiu Ma reported it to Peiyan Zeng in May 2016, and listened to the latter’s instruction. In July 2016, this project was identified as an annual major commissioned project of the NDRC. As the project leader, I was also invited to attend the “Tsinghua—Harvard International Low-Carbon Seminar” held in Tsinghua University in August 2016, and shared the preliminary results of this research with the participants. For the publication of this book, I would like to thank the leaders and colleagues of CCIEE for their concern and full support, as well as Ms. Li Yan, the responsible editor of China Economic Publishing House, for her long-time follow-up and patient editing work. Some lurking errors were corrected under her advice. Mr. Wenke Han, former director and researcher of the Institute of Energy of the NDRC, wrote a Foreword to this book, which makes all the members of the research group feel honored. Of course, I would like to thank Zhang Wei and Zeng Kaichao for their daily support for the publication of this book. The research division of this project is as follows: Shaojun Zeng and Yueshan Han write the general report; Guiyang Zhuang analyzes the basic connotation and theoretical system of Low-Carbon Plus; Qigui Zhu reviews the situation of low-carbon development at home and abroad; Shaojun Zeng and Yueshan Han, again, introduce the overall thinking, goal and main task of Chinese Low-Carbon Plus Strategy. Haiying Gu, Jin Zhang, Yan Chen, Kui Sun, Xiaojun Hu, Haitao Yin and Lai Yang respectively takes charge of the strategies of Low-Carbon Plus Agriculture, Low-Carbon Plus Industry, Low-Carbon Plus Construction, Low-Carbon Plus Transportation, Low-Carbon Plus Energy, Low-Carbon Plus Finance, and Low-Carbon Plus Consumption. Shaojun Zeng and Yueshan Han are responsible for the post-processing and compilation of the report. In the publishing stage, if the editor requires any deletion or modification, it should be subject to the consent of the person in charge of the project and the opinions of project members. Shaojun Zeng and Yan Chen are responsible for making such deletions or revisions. I’ve also listed all their institutions below:

Preface

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Dexiu Ma, Invited Vice President of the China Center for International Economic Exchanges, Deputy Director of the 12th CPPCC’s Subcommittee of Education, Science, Culture, Health and Sports, and Secretary of the Party Committee of Shanghai Jiao Tong University. Qigui Zhu, Professor of the Antai College of Economics & Management, Shanghai Jiao Tong University. Guiyang Zhuang, Researcher of the Institute of Urban Environment, Chinese Academy of Sciences. Haiying Gu, Professor of the Antai College of Economics & Management, Shanghai Jiao Tong University. Jin Zhang, Associate researcher and Deputy Director of Industrial Planning Department of the China Center for International Economic Exchanges. Yan Chen, Associate researcher and Deputy Director of Information Department of the China Center for International Economic Exchanges. Kui Sun, Deputy Director of Communication Department of the China Center for International Economic Exchanges. Xiaojun Hu, Lecturer of the Energy Research Institute, Shanghai Jiao Tong University. Haitao Yin, Associate Professor of the Antai College of Economics & Management, Shanghai Jiao Tong University. Yueshan Han, Lecturer of the College of Marxism, Tianjin University of Science and Technology. Lai Yang, PhD candidate at the Center for Energy & Environmental Policy Research, Beijing Institute of Technology. Besides, this project also fully reflects the practical effect of the cooperation between the academic institutions of higher learning and the think tank policy research team. It is the full cooperation between the academic research teams of SJTU, CASS, TUST and BIT, and the applied policy research team of CCIEE, which ensures that the results of this project not only conform to academic norms, but also have strong practical operability. Of course, whether this research is truly innovative in theory and practice remains to be judged by readers and tested in practice. Shaojun Zeng Xian Nong Altar, Beijing June 2023

1 General report: Study on the Low-Carbon Plus Strategy Exploring a path of sustainable development more suited to China’s national conditions is a major proposition for the great rejuvenation of the Chinese nation under the leadership of the Communist Party of China (CPC). While finding ways to maintain the harmonious coexistence of man and nature, and coordinate economic development with environmental protection, China took the lead in presenting the wholly new concept of “ecological civilization”. In its report to the 17th National Congress held in 2007, the CPC firstly unveiled this concept and incorporated “ecological environmental protection” into the macro-control system for “promoting the sound and rapid development of the national economy”, which is in line with the Party’s Scientific Outlook on Development. The 18th CPC National Congress held in 2012 restated “ecological civilization” and wrote “ecological progress” into the “five-in-one” overall plan for the development of socialism with Chinese characteristics, pledging to vigorously press ahead with ecological construction, build a beautiful China, sustain the development of the Chinese nation, and put into practice the philosophies of green development, circular development and low-carbon development. In 2013, the Third Plenary Session of the 18th CPC Central Committee gave the following instructions, “To promote ecological progress, we must establish complete and integrated institutions and systems with which the ecological environment is protected. In addition to implementing the most stringent source protection system, damage compensation system and accountability system, we also need to improve the environmental governance and ecological restoration system”. In 2015, the Fifth Plenary Session of the 18th CPC Central Committee adopted the Proposal on Formulating the 13th Five-Year Plan for National Economic and Social Development (2016–2020), which introduces the concept of “innovative, coordinated, green, open and shared development”, and expounds on the vision of “adhering to green development and improving the ecological environment”, intending to build a strong nation with wealthy people and to promote the construction of a beautiful China through green, low-carbon and circular development. All of the above requirements have set the direction for conducting a study on the Low-Carbon Plus Strategy, and provided a solid theoretical basis for doing so. This report holds that the study on the Low-Carbon Plus Strategy is in essence a strategic study on a development paradigm. From a global perspective, low-carbon development is now widely accepted as an important path for reshaping the international political and economic system. In case of China, tackling global climate change and cutting greenhouse gas emissions (GHGs) is not only a crucial means to perform its responsibilities as a major power, but also an inevitable course for relieving its own environmental and energy pressure. For this reason, the study on the LowCarbon Plus Strategy—an innovative path for realizing ecological civilization—possesses both theoretical value and practical significance. This strategy is important as a https://doi.org/10.1515/9783111040066-001

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1 General report: Study on the Low-Carbon Plus Strategy

guideline for China’s transition and upgraded development, a guarantee for benefitting people’s livelihood, a means of expanding domestic demand and a carrier for comprehensively deepening the reform. On this basis, conducting a study on the LowCarbon Plus Strategy may encourage interdisciplinary communications, coordinate innovative activities, help to build an upgraded version of the Chinese economy, and support China to rise up to the challenges of the third industrial revolution, play a leading role in certain industries across the globe and stand out from the encirclement of traditional developed countries and other emerging developing countries.

1.1 Basic theories of the Low-Carbon Plus Strategy Due to its inherent drawbacks, the traditional outlook on development that puts economic growth first has given way to the scientific outlook on development that highlights sustainable development. However, the limitations of this outlook, especially those about global climate change, force us to transform our thinking and innovate our development paradigm. The Paris Agreement reached in 2015 has released a signal to advance the low-carbon transition across the world, aiming to keep a global temperature rise this century well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 °C. The whole world should peak GHG emissions as soon as possible and realize net zero emissions in the second half of this century. By that time, the low-carbon concept had already become a global consensus and the future direction of joint efforts by human beings. Since it was first presented more than a decade ago, the low-carbon concept is now widely accepted, but its superiority is somewhat overshadowed by other prevailing concepts such as green development, energy conservation, environmental protection and ecological restoration. Given this, it is a pressing task to integrate the low-carbon concept with industrial restructuring, consolidate upstream and downstream industries that are both energy intensive, and further coordinate low-carbon development across the world. It is in this context that the Low-Carbon Plus concept has gradually taken shape to bind “Low-Carbon” to global economic growth, industrial transformation and environmental protection. This new concept, which injects new vitality into the old one, is greatly enlightened by the Internet Plus initiative. Just as “IT plus traditional industries” can create new growth points, Low-Carbon Plus may serve as a tool for realizing certain objectives of public policies. This study holds that the Low-Carbon Plus Strategy is to reconstruct traditional industries and deepen their transformation. “Low-Carbon” is the core, while “Plus” involves the key areas to implement low-carbon development, including industry, agriculture, construction, transportation, energy, finance and consumption. The LowCarbon Plus Strategy, which integrates low-carbon policies with the market, reflects the current “new normal” policies for steady growth, restructuring, improvement of people’s livelihood, risk prevention, green development, and ecological conservation.

1.1 Basic theories of the Low-Carbon Plus Strategy

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For example, the Low-Carbon Plus Poverty Alleviation takes low-carbon projects as tools for targeted poverty alleviation, and the Low-Carbon Plus Innovation sets LowCarbonization or low-carbon technologies as the basis or objective of the actions dedicated to mass entrepreneurship and innovation. The Low-Carbon Plus Strategy is an extension of theoretical study, that is, it extends the low-carbon applicable scope from economy to social, cultural, political and diplomatic spheres to further form a low-carbon society, low-carbon culture, lowcarbon politics and low-carbon diplomacy. As far as the low-carbon development path is concerned, low-carbon economy is the centerpiece, low-carbon society serves as the basis, low-carbon culture constitutes endogenous power, and low-carbon politics is the institutional guarantee. Low-carbon society and low-carbon culture, from an ideological dimension, implant the low-carbon concept into every aspect of social life. Low-carbon politics indicates that low-carbon and green indicators should be counted into the government performance appraisal, hence forcing government staff to pay more attention to low-carbon development. Low-carbon diplomacy means that China should build an image as a responsible great power dedicated to low-carbon development, which is conducive to improving its international status. It can be seen that Low-Carbon Plus not only extends the connotation and denotation of Low-Carbon, but also further develops and innovates low-carbon theory. The formation of a theory is generally ascribed to practice and demand, while the development and maturity of the theory will in turn push forward practice from a higher standing. This study holds that the sustainable development theory is the most essential theoretical source of Low-Carbon Plus; the ecological footprint theory, decoupling development theory and Environmental Kuznets Curve (EKC) provide theoretical support for Low-Carbon Plus; and the coordination theory and policy coordination mechanism serve as the theoretical basis for analyzing Low-Carbon Plus. To implement the Low-Carbon Plus Strategy, with “Low-Carbon” as its root and soul, we must stick to low emissions, low pollution and low energy consumption, transform traditional industries with low-carbon technology, and upgrade our consumption behavior and way of thinking with the low-carbon concept. To this end, we must fully implement the concept of “innovative, coordinated, green, open and shared development”, which was presented at the Fifth Plenary Session of the 18th CPC Central Committee. In a nutshell, Low-Carbon Plus is a development paradigm, which is guided by the sustainable development concept, for reducing high-carbon energy consumption and GHG emissions through technological, institutional and cultural innovation, industrial restructuring, transformation of consumption pattern and lifestyle, and lowcarbon or carbon-free energy development, and for achieving a win-win outcome of socio-economic development and environmental protection. Starting from the basic theories of Low-Carbon Plus, this study analyzes the low-carbon development status in China and other countries, summarizes the valuable experiences in foreign countries, draws a roadmap for China to implement the Low-Carbon Plus Strategy that centers on primary and secondary industries, as well as the sectors of construction,

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1 General report: Study on the Low-Carbon Plus Strategy

transportation and energy, explores the operation of a low-carbon financial mechanism and advocates low-carbon consumption, in order to ultimately fulfill the LowCarbon Plus strategic goals.

1.2 Experience and enlightenment of low-carbon development in foreign countries Climate change is a common challenge facing mankind. Since the Industrial Revolution, the labor productivity of human society has been greatly improved, stimulating the rapid development of economic society. However, human activities in the same period have caused a significant impact on the energy and environment on which we depend for survival. In recent years, violent typhoon, sandstorm, high temperature, drought, extreme precipitation and freezing weather have occurred frequently and done increasingly serious harm. Among the reasons for this, the global warming caused by excessive consumption of carbon-based fuels cannot escape blame. Extreme weather is like a mirror reflecting serious global issues such as energy consumption and pollution discharge. In order to realize net zero GHG emissions in this century—a goal set at the Paris Climate Change Conference (2015) and reaffirmed at the Marrakesh Conference (2016), all countries across the world should be clearly aware of the severity of energy pressure, GHG emissions and environmental pollution, conform to the trend of green and low-carbon circular development, formulate and implement a Low-Carbon Plus development strategy, and take effective measures to embark on the road of sustainable development. In the context of global warming, all countries should step up the implementation of a low-carbon development model featuring low energy consumption, low pollution and high efficiency. More and more countries have taken this development model as a key option for solving the increasingly serious problems of environmental pollution and energy shortage, and for paving the way for sustainable development. China should learn from the valuable experience of the international community in low-carbon development, and try to establish a low-carbon development system suitable to its national conditions. Through the analysis of low-carbon practice in the UK, US, Germany and Japan, this study finds that the UK is very adept at employing policy tools to save energy consumption and implement low-carbon development. The US is more technology-driven, that is, it prefers to raise energy efficiency and reduce carbon emissions by inventing and applying advanced technologies. In the case of Germany, its sound legal system not only supports its reduction of carbon emissions, but also promotes its industrial restructuring. Japan has been implementing an innovative low-carbon system, which centers on low-carbon industries, low-carbon energy, low-carbon transportation and lowcarbon construction, in a bid to build a low-carbon society in an all-round way. The main experiences of these countries in low-carbon development are summarized as follows:

1.3 The basic situation of implementing the Low-Carbon Plus Strategy in China

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(1) There must be long-term and stable supportive policies. The governments of these countries have introduced a series of low-carbon policies and bills in an attempt to mobilize and intensify the low-carbon actions on a society-wide scale. (2) Vigorously develop new and renewable energy sources. These countries attach great importance to developing new and renewable energy suitable for themselves, reducing the proportion of fossil fuel, and restructuring the energy mix. (3) Guide the public to develop the low-carbon economy. Ordinary people need to be fully aware of the significance of the low-carbon economy and volunteer to save resources and reduce emissions in their daily life, only in this way can there be possibilities for everyone to lead a civilized, healthy, green and low-carbon life. (4) Promote the R&D of low-carbon technologies. Technological progress is an important way to develop the low-carbon economy. In recent years, developed countries have achieved notable technological achievements regarding energy saving, renewable energy, and carbon capture and storage (CCS). (5) Increase economic incentives and financial support. Economic incentives, including preferential tax, price subsidy, loan and special fund, are widely adopted by countries across the world. For example, several EU countries set vehicle tax rates and implement taxation policies based on the fuel efficiency and environmental protection performance of vehicles, in an aim to vigorously support the development of new energy industries.

1.3 The basic situation of implementing the Low-Carbon Plus Strategy in China In the context of global climate change, low-carbon development, which features low energy consumption, Low-Carbon emissions and low pollution, has drawn more and more recognition from all over the world and become an inevitable choice to solve the mounting environmental and energy problems and achieve sustainable development of human society. Furthermore, the frequent occurrence of financial crisis and economic panic has provided a rare opportunity for implementing low-carbon development. Since the reform and opening-up in 1978, China has maintained rapid economic development and made remarkable achievements, becoming the world’s second largest economy. But the weak decoupling between China’s carbon emissions and economic growth is so evident, indicating that China’s economic success is highly dependent on energy consumption and carbon emissions. Extensive economic growth mode, overemphasis on economic scale and speed, and ignorance of social benefits and ecological environment effects have led to high energy consumption, high resource depletion and high pollutant discharge, and caused great damage to the ecological environment, which seriously threats the sustainable development of China. For this reason, China must learn from the low-carbon development experience of foreign countries and establish a low-carbon development system suited to its national conditions.

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In terms of the primary industry, the implementation of the Low-Carbon Plus Agriculture strategy in China is fraught with complexities and risks, because it is still hard to manifest and realize the value of GHG emission reduction in the domestic agricultural sector, the consumption support mechanism for low-carbon agricultural products has not taken shape, and the inertial consumption behavior of traditional agricultural products restricts the development of low-carbon agriculture. Moreover, there are undersupply of low-carbon agricultural facilities, insufficient financial support, immature market for organic agricultural products, absence of institutions and policies dedicated to low-carbon agriculture, and weakness in risk avoidance. In terms of the secondary industry, due to a huge industrial size, great share of heavy industry and low value-added rate, China’s industrial sector is characterized by high carbon emissions. The industrial energy consumption, total emissions and energy mix of China vary markedly from the world average level and the level of developed countries, and China has a scale of energy consumption and emissions far exceeding that of developed countries. As for low-carbon development, China has not fully practiced the concept of Low-Carbon Plus in its industrial transformation and upgrading, and its weak technological innovation capacity is a stumbling block in the industrial low-carbon transformation. In the stage of accelerated industrialization, the low-carbon transformation of traditional industries is an arduous task of China, since the standards and specialized guidance for Low-Carbon Plus Industry remain absent, the growth of international trade has increased industrial carbon emissions and carbon intensity, and the contradiction between sustainable economic development and environment becomes increasingly prominent. In terms of the construction sector, although China’s construction sector has undergone orderly and fruitful low-carbon transformation in recent years, there are still cognitive misunderstandings and policy misinterpretations. As for public awareness, many people like to equate “low-carbon” and “green” with “high-end” and “luxury”, and insist that low-carbon buildings are too expensive for ordinary people to afford. As for policies, most policies are either compulsory or restrictive instead of being motivating or encouraging. As for supervision and control, in addition to weak regulatory mechanisms, local construction administrations usually bear a high cost for inspection of building energy efficiency. As for third-party support, there are few independent and qualified institutions that are capable of running test, evaluation and certification of efficient low-carbon technologies, and the technical assessment institutions on the whole need to be standardized. In terms of the transportation sector, with rapid development and constant transformation of both economy and society, China’s transportation sector has embarked on the road of reform, and made great progress in highway and urban rail transit construction. But from a long-term perspective, China’s transportation sector is far from being fully modernized, since it lags behind in both traffic network laying and transport system construction. To be specific, the existing traffic design is unreasonable, the public transit facilities fail to match with urban development, and the

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density of the public transit network is diminishing on the whole. Superblocks and single-functional districts have caused separation of workplace and residence, as well as pendulum traffic. The urban traffic structure is characterized by enhanced motorization and weakened non-motorization. The urban traffic management has little to do with Low-Carbon because of inefficient operation of the overall traffic system, low energy efficiency of vehicles, and immature rail traffic development. The innovation and promotion of energy-saving and emission-reduction technologies are not enough, the R&D investment is insufficient, and the development of new energy vehicles needs to be strengthened. Since carbon emissions are not properly coordinated between regions, it is hard to introduce and implement the policies or regulations dedicated to low-carbon transportation, not to speak of measuring the effect of policy implementation. In terms of the energy sector, despite of economic slowdown and industrial restructuring, China retains its position as the world’s largest energy consumer, producer and net importer. And China’s energy structure continues to improve and remains promising on the whole, yet we still need to pay attention to the following problems: (1) Renewable energy, though accounting for a small percentage in energy mix, maintains fast growth in absolute terms, and the problem in its access and consumption has become increasingly prominent. (2) Low-carbon and clean use of fossil energy has not generated notable scale economies effect. (3) Among the traditional energy enterprises that have started transformation, some choose to go backwards after encountering different kinds of resistance. (4) The transformation of energy conservation and emissions reduction has been carried out comprehensively, but the general economic transformation is proved to have little potential. (5) Low-carbon cities and communities have been promoted on a pilot basis, but there are not enough successful cases for replication. (6) Although the concept of “Internet plus energy” is hotly debated, there are no breakthrough products and business models adapted to the domestic market. (7) Despite of a favorable foundation for energy conservation and emission reduction, the society on the whole should be fully aware of the significance of LowCarbon Plus in reducing carbon emissions, raising energy efficiency and improving people’s livelihood. In terms of the low-carbon mechanism, China has a small number of banks (e.g., Industrial Bank) starting low-carbon credit business, and the Equator Principles (EPs), which imply greater social responsibility, have not stricken a chord among the public. Even the banks offering green loans take a wait-and-see attitude on whether to adopt the EPs. This reflects the fact that Chinese financial institutions are not motivated enough

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to implement low-carbon credit policies, and the idea of environmental protection has not taken root, which is not conducive to China’s low-carbon development. In terms of the low-carbon consumption, after nearly 30 years of rapid development, China has become the world’s second largest economy and the largest carbon emitter. At present, the situation of low-carbon consumption in China is not optimistic: high levels of consumption have given rise to high-carbon consumption patterns, the idea of low-carbon consumption is not yet popularized, the price of low-carbon products is much higher than ordinary products, the low-carbon technologies do not have enough innovation and cooperation, and the high and new technologies applied to low-carbon consumption are even less. Nevertheless, China can learn from the low-carbon development experiences of other countries to build a low-carbon framework involving strategies, policies and technologies that is suitable for its sustainable development. To be specific, it should learn to leverage the positive impact of Low-Carbon Plus Agriculture, Low-Carbon Plus Industry, Low-Carbon Plus Construction, Low-Carbon Plus Transportation, LowCarbon Plus Energy, Low-Carbon Plus Finance and Low-Carbon Plus Consumption on the adjustment of global industrial structure and energy mix, transformation of economic development mode, and development of international trade and carbon transaction. And China should, for the purpose of promoting economic development, make effort in saving energy, optimizing energy mix, industrial restructuring, R&D of energy-saving and low-carbon technologies, increasing carbon sinks in forests and ecosystems, implementing low-carbon pilot projects, improving incentive and restraint mechanisms and policies, and strengthening international exchange and cooperation.

1.4 General ideas and tasks of China’s Low-Carbon Plus Strategy The CPC Central Committee and the State Council attach great importance to addressing climate change, and they have achieved positive results in putting the low-carbon development theory into practice. But China’s low-carbon undertaking still lags behind the overall socio-economic development, which is attributed to objective factors (e.g., stage of development, basic national conditions, and technical strength), and to defective toplevel design, imperfect institutions and poor management. In view of the existing problems, China has, by following the problem-oriented and goal-oriented principles, come up with the following ideas and tasks for Low-Carbon Plus development: Guiding ideology: We must strictly follow the instructions made at the 18th CPC National Congress and the third, fourth and fifth plenary sessions of the 18th CPC Central Committee, and made by President Xi Jinping in his important speeches. In keeping with our commitments at the Paris Climate Change Conference, and in accordance with the Central Government’s major decisions and arrangements on green development, we need to make efforts that adapt to the new normal in economic and social development and bear in mind the overall and long-term needs of low-carbon development.

1.4 General ideas and tasks of China’s Low-Carbon Plus Strategy

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With focus placed on the transformation of the development mode, we should take the Low-Carbon Plus Innovation as the means to develop modern, green, safe and efficient sectors of agriculture, manufacturing, construction, transportation and energy. Besides, efforts also need to be made to vigorously develop low-carbon finance, popularize a low-carbon lifestyle, support the R&D of low-carbon technologies, and cultivate new growth models and new business formats. The sectors going through low-carbon transformation should carry out the supply-side structural reform at the same time, in order to mitigate climate change and lay a solid foundation for China—a traditional great power—to embark on a new path of low-carbon development. Basic principles of Low-Carbon Plus development: First, take into account both domestic and international situations. We should proceed from China’s national conditions to vigorously promote green and low-carbon development, take an active part in international cooperation to address climate change, and learn from other countries’ advanced low-carbon development models and measures. Second, respond to climate change and promote low-carbon development simultaneously. We should promote low-carbon development at home by holding the vision of addressing global climate change, which will ultimately benefit China’s economic transformation and upgrading in an all-round way. Third, exploration, innovation and pilot programs should be mutually reinforcing. By following the Low-Carbon Plus development law, we’d better create an open and inclusive environment for innovation in diversified technologies, mechanisms and models, and roll out the pilot programs related to new and low-carbon technologies in light of local conditions. Fourth, uphold government guidance and public participation. It is natural for the government to play a guiding role in realizing low-carbon development, fostering a valid incentive mechanism, and cultivating a favorable atmosphere for public opinion, but at the same time, the role of enterprises, the public and social organizations should be given full play, which will quicken the formation of a new pattern of low-carbon development featuring openness and sharing. Overall goals of Low-Carbon Plus development: A low-carbon industrial system will initially take shape by 2020 to drive economic development; there will be a sound market mechanism and system dedicated to low-carbon development; a sound technical standard system will be formed and internationalized; an open and shared low-carbon development environment will be fostered; GHG emissions will be better controlled; low-carbon energy will account for a larger percentage; international cooperation and capacity building in low-carbon development will be greatly improved; and the public participation will increase significantly to further deepen the reform and promote the economic transformation and upgrading. China’s Low-Carbon Plus development should be promoted from the following aspects: (1) Low-Carbon Plus Agriculture: Since agricultural GHG emissions does affect the solution to the issues relating to agriculture, rural areas and farmers, we should explore the “beautiful countryside” construction by following a Low-Carbon Plus

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1 General report: Study on the Low-Carbon Plus Strategy

path, and develop the systems, mechanisms and policies for Low-Carbon Plus Agriculture. In particular, we should give priority to reducing the use of pesticides and fertilizers, making full use of straw resources, and resolving the issues relating to agriculture, rural areas and farmers with low-carbon technologies and approaches. Low-Carbon Plus Industry: We need to optimize the industrial chain of lowcarbon manufacturing, advance the low-carbon transformation of manufacturing sector, support technological breakthroughs and innovation, foster innovative low-carbon business models, protect low-carbon intellectual property rights, strengthen environmental regulation, and coordinate the relationship between international trade, low-carbon manufacturing and economic growth. Low-Carbon Plus Construction: We should intensify efforts in formulating policies and developing models that adapt to Low-Carbon Plus Construction. And special attention should be paid to the property ownership of passive solar buildings and low-carbon buildings, development of integrated energy service model and innovative green financing model, and cultivation of public awareness of Low-Carbon. Low-Carbon Plus Transportation: We need to solve the crossover, spillover and coordination problems in low-carbon transportation from a holistic perspective, including transfer emissions, coordination of cross-regional carbon emissions, and life-cycle management of transport carbon emissions. Low-Carbon Plus Energy: We should organize researches and surveys of relevant domestic and foreign technologies, policies and industry status, predict future trends and choose appropriate technical routes, draw road maps for socio-economic development, and press ahead with institutional innovation. Low-Carbon Plus Finance: We need to explore the utilization of innovative financial instruments in the control of GHG emissions, for example, cultivating and promoting a carbon trading market, introducing green credit policies, reforming the investment and financing system, and formulating incentive policies to reward low-carbon households and communities.

1.5 Key areas and paths of implementing the Low-Carbon Plus Strategy in China As an emerging development model, Low-Carbon Plus is able to force technological innovation, system optimization and conceptual reform, thereby exerting a significant and far-reaching impact on global economic development. In order to implement the new development concept, we must establish the Low-Carbon Plus strategic thinking, and endow socio-economic development with low-carbon connotation and low-carbon attribute. All aspects, all processes and all links of the national economic and social development must go through the low-carbon transformation, so as to increase resource utilization ratio and total-factor productivity, lower the resource

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consumption intensity and the total discharge of major pollutants, and reduce GHG emissions. The supply-side reform should be continuously advanced to facilitate the thorough decoupling of carbon emissions from economic growth, achieve win-win outcomes between socio-economic development and environmental protection, and take the road of sustainable development. China’s implementation of the Low-Carbon Plus Strategy is bound to have a positive impact on the international community. This strategy is an inherent requirement for China to actively respond to climate change and pursue sustainable development, and an embodiment of China’s solutions, actions and wisdom. It will not only advance the construction of an ecological civilization and a beautiful China, but also lead the Chinese nation and the world at large towards sustainable development. The key areas and paths for China to implement the Low-Carbon Plus Strategy are as follows:

1.5.1 Low-Carbon Plus Agriculture Low-Carbon Plus Agriculture is the synthetization of low-carbon concept, sci-tech innovation, practical activities and a series of powerful policies for upgrading conventional agriculture. As for its concrete manifestation, Low-Carbon Plus Agriculture is to drive agricultural development with low-carbon concept, promote low-carbon technologies dedicated to agriculture, introduce incentive policies to stimulate the enthusiasm of stakeholders, and facilitate the transformation of traditional agriculture with high GHG emissions into modern agriculture with low emissions. As a new way of input, production, management and supply, Low-Carbon Plus Agriculture highlights the improvement of quantity, quality and economic benefit of agricultural products, and the cultivation of farmers’ low-carbon awareness and technological literacy, for the purpose of building a low-carbon agricultural complex, and ultimately promoting the construction of beautiful countryside and sustainable development of rural areas. The core of Low-Carbon Plus Agriculture refers to the positive effect of low-carbon technology on agricultural equipment. The implementation of the Low-Carbon Plus Agriculture strategy is an inevitable choice for mitigating or even curbing global climate change, and a realistic choice for China to reduce GHG emissions, transform its agricultural development mode and fulfil agricultural modernization. In the process of implementing this strategy, we must adhere to the principles of moderate Low-Carbonization, collective action, collaboration, and maximization of comprehensive benefits, as well as the principles conducive to the solution of the issues relating to agriculture, rural areas, and rural people and to the construction of beautiful countryside. In brief, the Low-Carbon Plus Agriculture strategy has three key points: put low-carbon technological innovation at the first place; strengthen policy making and construction of low-carbon agricultural infrastructure; build incentive mechanisms and adopt diversified approaches to realize Low-Carbonization and ensure agricultural production, output value and quality.

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Low-Carbon Plus Agriculture is in need of the support from diversified entities such governments at all levels, enterprises, NGOs, farmers, low-carbon agricultural technology research institutes and eco-bodies. And there shall be a variety of options for developing Low-Carbon Plus Agriculture, for example, replace thermal power with wind power, solar thermal electric power and concentrated solar power, popularize clean energy, and support agricultural carbon reduction; develop organic fertilizer production, straw utilization, biogas projects, ecological parks and non-commercial forests; increase the use of low-carbon alternatives, delay carbon emissions, and improve carbon sequestration in agriculture and forestry. In addition, the energy and environment trading centers should be improved to guide carbon trading, motivate enterprises to develop carbon sequestration in forestry and agriculture voluntarily, and reduce carbon emissions through carbon neutralization and carbon trading, and thereby offering support to the development of Low-Carbon Plus Agriculture.

1.5.2 Low-Carbon Plus Industry Low-Carbon Plus Industry is a new pattern of industrial development under the new normal of economic development. It is to practice the low-carbon concept at every link of industrial production, promote the evolution and upgrading of industrial development pattern, and give birth to a form of socio-economic development. As a practical achievement of low-carbon thinking, Low-Carbon Plus aims at solving the contradiction between industrial development and carbon emission reduction, promoting the continuous evolution of economic form, and ultimately driving industrial transformation and upgrading, improving quality and efficiency of industrial development. The essence of Low-Carbon Plus Industry is innovation of low-carbon raw materials, development and efficient utilization of clean energy, R&D of low-carbon and emission-reduction technologies, and pursuit of green GDP. The core content of the Low-Carbon Plus Industry strategy includes the technological breakthroughs in low-carbon raw materials and emission reduction, industrial restructuring and institutional innovation, as well as the fundamental shift in the concept of human survival and development. The key tasks of China’s Low-Carbon Plus Industry strategy are as follows: (1) Promote industrial restructuring and upgrade traditional industries through lowcarbon transformation, support the development of emerging industries, and build the Industry 4.0 of Chinese edition. (2) Develop a new model of Manufacturing Plus IOT, increase and improve the supporting facilities for the integration of the spot, enhance the global popularity of Chinese brands, achieve the goals of Industry 4.0, and implement the “Made in China 2025” plan. (3) Establish a set of low-carbon industrial technology systems, including a technological innovation system, an intermediary service system, a fund guarantee system and a talent guarantee system.

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(4) Form a low-carbon energy use system to raise the energy efficiency of existing equipment and improve the cascade utilization of energy. (5) Build a long-term regulatory mechanism for low-carbon industrial development, and establish a long-term guarantee mechanism for implementing the LowCarbon Plus Industry strategy by improving the price mechanism, market access mechanism, carbon trading market and low-carbon legal system. (6) Adjust foreign trade policies, correct or cancel preferential policies for industries with high energy consumption and high emissions, and strictly control the export of products with high pollution, high energy and resource consumption. (7) Slow down or curb the growth of carbon emissions through the balanced development of trade, industry and urbanization, improve the structure of traded commodities, and vigorously develop low-carbon trade.

1.5.3 Low-Carbon Plus Construction Low-Carbon Plus Construction, which is to apply the low-carbon concept throughout the construction sector and realize Low-Carbonization of the whole life cycle of buildings, refers to the green construction activities dedicated to saving energy, including the direct low-carbon activities and those that indirectly achieve “low-carbon” goals through innovative designs or transformations. The implementation of the LowCarbon Plus Construction strategy, which is of great significance to curb carbon emissions and develop a low-carbon economy, breaks a new path to economic transformation and upgrading under the new normal. This strategy will bring a revolution to China’s construction sector by eliminating the disadvantages that are not conducive to low-carbon development, and at the same time, it will also usher the construction sector in a new stage of transformation and upgrading. In order to implement the Low-Carbon Plus Construction strategy in China, we need to do the work in the following key areas: (1) Promote Low-Carbonization throughout the construction sector, form a designerled operation mode for the construction sector, plan for the development of lowcarbon buildings in terms of their full life cycle, and choose low-carbon technologies and materials from the outset that the construction is started, for the purpose of minimizing energy consumption and carbon emissions. After low-carbon buildings are put into use, we need to change our original lifestyle and consumption pattern and learn to reduce carbon emissions, which of course puts forward higher requirements for architectural design. (2) Expedite the industrialization of Low-Carbon Plus Construction, adopt the fabricated construction mode, insist on standardized design and mechanized construction, properly integrate the links of design, production and construction, and ensure that the completed buildings have the characteristics of sustainable development, for

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example, they are energy-saving and environmentally-friendly, and contain the maximum value throughout the life cycle. (3) Gradually improve China’s low-carbon building market environment, establish the systems for building energy consumption statistics, energy efficiency evaluation and labeling, and develop third-party evaluation mechanisms. (4) Encourage the development of passive ultra-low-energy buildings. To this end, we need to make full use of the market to adjust supply and demand, take administrative means and improve applicable laws and regulations with the help of the government, and eventually form a sound development pattern led by the government, operated by the market and participated by the public.

1.5.4 Low-Carbon Plus Transportation As a new transportation mode characterized by high energy efficiency, high intelligence, low energy consumption, low pollution and low emissions, Low-Carbon Plus Transportation is designed to drive the low-carbon development of the entire transportation sector through all-round innovation, inject new vitality into China’s economic transformation and upgrading, and find new growth points. The main paths for implementing the Low-Carbon Plus Transportation strategy are as follows: (1) Low-Carbon Plus High-Speed Rail. High-speed rail boasts low energy consumption, great potential of energy saving, and significant effect in emission reduction, thus bringing new opportunities for China’s low-carbon transport development. To be specific, the rapid increase in electrification rate makes railroads consume more electricity instead of oil, which has an obvious crowding-out effect on railway oil consumption. The development of high-speed rail will accelerate the lowcarbon development of large-scale transportation systems, revitalize China’s basic industries, and change people’s mode of travel. (2) Low-Carbon Plus Vehicle. Accelerate the R&D of autonomous vehicles to seize the commanding height of developing the automobile industry, and support electric vehicles to lead the development of Low-Carbon Plus Transportation in cities. (3) Low-Carbon Plus Logistics. The Low-Carbonization of logistics industry, which is to realize low energy consumption, low pollution and low emissions, requires to build a system composed of functional modules such as low-carbon transportation, low-carbon storage and low-carbon packaging. With the deepening of industrial linkage, the scope of cooperation between logistics and other industries has been expanding from transportation, storage and distribution to high value-added businesses such as centralized procurement, order management, circulation, processing, logistics finance, after-sales maintenance, warehouse-distribution integration, and personalized innovative services, which requires the development of a refined logistics management system.

1.5 Key areas and paths of implementing the Low-Carbon Plus Strategy in China

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1.5.5 Low-Carbon Plus Energy Owing to the robust development of clean energy around the world, the traditional energy landscape has been going through a transformation, and the “Internet plus energy” is expected to bring about great changes. China ranks first in the world for its rapid development of solar and wind energy, but its absorptive capacity remains weak. Against the backdrop of low global fossil energy prices and under the new normal of domestic economic development, and considering various restrictive indicators and increasing policies for abandoning wind and photovoltaic power, there exist some uncertainties for the renewable energy target (RET) to be met. Energy transformation is not only about increasing the proportion of renewable or non-fossil energy in the existing energy mix, but more importantly, it requires to restructure the energy mix. Low-Carbon Plus Energy is not merely an energy transformation, but a recreation of the whole process of energy exploitation, conversion, transportation and consumption with the Low-Carbon Plus concept; it includes not only technological transformation and product upgrading, but also revolution of production and consumption management mode and consciousness, in an aim to form a new industry landscape, a new lifestyle and even a new form of society which are all based on Low-Carbon Plus Energy. The basic approach to the development of Low-Carbon Plus Energy is first and foremost the development of low-carbon energy, including the development of renewable energy, as well as the clean, low-carbon and efficient use of traditional fossil energy. But the more important is to realize the Low-Carbon Plus transformation of the traditional energy chain, including the Internet-based industry transformation, and the institutional innovation for breaking the boundaries between energy, environment, economy and social sectors, between producers and consumers, and between technology and management, in a bid to ultimately achieve Low-Carbonization of energy, environment, economy and society, and enable Low-Carbon Plus Energy to produce a multiplier effect on socio-economic development. To implement the Low-Carbon Plus Energy strategy, efforts must be made in the following aspects: (1) Reinforce our energy self-owned support capacity, promote clean and efficient development and utilization of coal, steadily increase domestic oil production, vigorously develop natural gas, and strengthen capacity building for energy reserve and emergency response. (2) Promote a revolution in energy consumption, strictly control excessive growth in energy consumption, implement plans to improve energy efficiency, reform the energy use mode in urban and rural areas, and take actions to develop new towns, new energy, and a new lifestyle.

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(3) Continuously optimize the energy structure by reducing coal consumption, increasing natural gas consumption, encouraging the safe development of nuclear power, and vigorously developing hydropower, wind power, solar power, renewable energy, geothermal energy, biomass energy and ocean energy.

1.5.6 Low-Carbon Plus Finance Low-Carbon Plus Finance refers to the financial institution arrangement and financial transaction activities that serve the development of low-carbon economy. It includes direct investment and financing for technologies and projects related to the reduction of GHG emissions, trading of carbon emission rights and derivatives, and other relevant financial intermediation activities. The essence of Low-Carbon Plus Finance is to reduce carbon emissions with financial instruments, including the financial innovation based on carbon emission trading, and the investment and financing innovation in credit system. Currently, there are two primary tasks for China to develop low-carbon finance, that is, the cultivation of carbon trading market and the development of green credit. The implementation of the Low-Carbon Plus Finance strategy is to give full play to the financial market in fund allocation and liquidity adjustment, which is of great significance for promoting China’s economic growth and transformation and for safeguarding its sustainable development. (1) In order to develop a carbon finance market, we need to strengthen the cooperation between the government and financial institutions, define the role of the government in the carbon trading market, determine the allocation criteria for carbon credits, integrate domestic carbon trading platforms, enhance international negotiation capacity, predict the cost of carbon emission reduction in China, and avoid selling off China’s carbon assets for short-term benefits. (2) In order to develop low-carbon credit, we need to encourage commercial banks to follow the EPs and fulfill their social responsibilities, adopt incentive measures to motivate banks to implement green credit, strengthen communication and cooperation between relevant departments, create a good external environment for the development of low-carbon finance, and incorporate environmental data into the loan approval process to make sure of green credit and do good to low-carbon development.

1.5.7 Low-Carbon Plus Consumption As an economical consumption pattern that benefits people’s sustainable development, Low-Carbon Plus Consumption requires that, in our daily life, we’d better reduce energy consumption and practice a low-energy, low-consumption and low-cost lifestyle,

1.6 Major policy suggestions for implementing the Low-Carbon Plus Strategy in China

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purchase and consume low-carbon products and services, in order to minimize energy consumption, reduce pollution and waste, thereby reducing CO2 emissions and protecting the environment. Low-Carbon Plus Consumption can be regarded an economic activity characterized by low energy consumption, low pollution, low emissions and low waste, and takes the means of emission reduction and green consumption. Consumption plays a connecting role in economic development, since it is not only the ultimate goal of production, but also the starting point of the new demand for reproduction. Low-Carbon Plus Consumption guides the direction of low-carbon production through real consumer demand, and in turn sustains low-carbon production through effective realization of consumer demand. The vigorous development of low-carbon consumption is of great significance, for it not only meets people’s demand for a better ecological environment and a high-quality life, but also coordinates the relationship between socio-economic development and environmental protection. To implement the Low-Carbon Plus Consumption strategy in China, we should stick to the theory that man is an integral part of nature, the sustainable development concept of coordinated economic, social and ecological relations, as well as the ecological civilization outlook that highlights coexistence, interdependence and mutual promotion between man and nature. The following principles must be strictly followed: take the construction of ecological culture as the basis, set green and lowcarbon consumption as the objective, make breakthroughs in transforming our lifestyle, uphold the leadership of government, innovate institutions and mechanisms, promote low-carbon products and services, help the public develop a consumption habit that meets the requirements of ecological civilization, and make civilized, economical, green and low-carbon consumption a social trend and a voluntary act of the public. The primary tasks for implementing the Low-Carbon Plus Consumption strategy are as follows: foster a low-carbon ecological culture and develop a green lifestyle and consumption pattern; build a comprehensive governance system and encourage the active participation of the whole society; improve consumer markets to enrich the supply of low-carbon products and services; optimize the traffic system to facilitate people’s green and low-carbon travelling; and promote waste product recycling to achieve green, circular and low-carbon development.

1.6 Major policy suggestions for implementing the Low-Carbon Plus Strategy in China As a responsible great power, China takes the Low-Carbon Plus strategy as an inevitable choice for its peaceful rise and sustainable development, which requires us to systematically innovate the existing policies based on policy chain paradigm. The policies to be innovated are respectively for energy security, economy (e.g., industrial, financial, and fiscal), society (e.g., public participation), science and technology, talents, consumption,

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and culture. Besides, Low-Carbon Plus, which is a sustainable development model, also presents new requirements for government management, implying that the Chinese government must make innovation in management philosophy, management capacity, management mode, performance management, formulation of public policies and policy tools, in a bid to promote the Low-Carbon Plus development. However, China’s low-carbon development on the whole is still in its infancy during which a systematic Low-Carbon Plus policy framework remains absent, that is, most relevant policies are essentially command-and-control administrative means, fiscal and tax policies are not flexible enough, and there are no optional policy tools dedicated to low-carbon development. Such a reality is detrimental to China’s lowcarbon development. Given this, the establishment of a Low-Carbon Plus policy framework must keep up with the process of market-oriented reform, and the design of policy tools should be no longer driven by administrative means but by market mechanism. There should be policies favorable for energy restructuring through development of new energy and renewable energy; for transforming the economic growth pattern through industrial restructuring and vigorous development of the tertiary industry such as high-tech and service businesses; and for guiding the change of consumption pattern by reducing energy consumption and working for low-carbon development. Specific suggestions are as follows:

1.6.1 Agriculture The following measures can be taken to promote the moderate development of LowCarbon Plus Agriculture: (1) Set up a Low-Carbon Plus Agriculture fund and form a stable policy-based investment mechanism. (2) Formulate special policies to boost the development of Low-Carbon Plus Agriculture, such as subsidy policies, tax policies, and low-carbon technological innovation policies. (3) Provide assistance to farmers in scientific agricultural operation, precise formulated fertilization, improvement of nitrogen use efficiency, reduction of fertilizer and pesticide inputs, scientific selection of fertilization time, promotion of crop rotation for carbon sequestration, and enhancement of soil carbon sequestration capacity. (4) Strengthen the construction of Low-Carbon Plus Agriculture infrastructure and demonstration projects; establish a number of national research centers for lowcarbon agriculture to undertake technology R&D, innovation, technology transfer, or industry incubation; and build service centers for monitoring and certification low-carbon agricultural products, and supporting network platforms. (5) Build national-level databases respectively for low-carbon agriculture, low-carbon agricultural technologies, and organic agriculture.

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(6) Expand the construction scale of national-level organic agriculture bases, ecological agriculture bases and Low-Carbon Plus Agriculture bases. (7) Establish a unified regulation and certification system for agricultural carbon emissions, and ensure steady progress in the development of Low-Carbon Plus Agriculture. (8) Strengthen the innovation and integrated promotion of low-carbon agricultural technologies, so as to improve the comprehensive effect of Low-Carbon Plus Agriculture. (9) Promote the development of Low-Carbon Plus Agriculture in combination with the issues related to agriculture, rural areas and farmers and the construction of beautiful countryside. To be specific, while reducing carbon emissions, we need to lower the agricultural input costs, increase farmers’ income, transform and beautify the rural environment, expand social and ecological benefits, and narrow the gap between urban and rural areas by promoting their integrated development.

1.6.2 Industry The following measures can be taken to boost the development of Low-Carbon Plus Industry: (1) Do a good job in the top-level design of low-carbon industrial development, unveil mid – and long-term plans for this purpose, and improve laws and regulations in this regard. (2) Improve the policies for low-carbon industrial development, tighten the market access for high-emission industries, optimize the system of standards for lowcarbon industries, and set up a special fund for supporting these industries. (3) Improve the governance model for low-carbon industrial development and the corresponding operation and management mechanisms, implement low-carbon performance assessment, and insist on strict law enforcement and supervision. (4) Coordinate the relationship between international trade and low-carbon industrial development. (5) Let the Internet Plus initiative play a driving role in the development of LowCarbon Plus Industry. (6) Accelerate the progress of low-carbon technologies, create a network that facilitates low-carbon innovation subjects to complement each other’s advantages, improve the policy framework for global low-carbon technology transfer, trade market share for low-carbon technology capability, and strengthen independent innovation, application and intellectual property protection of low-carbon technologies.

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1.6.3 Construction The following measures can be taken to boost the development of Low-Carbon Plus Construction: (1) Constantly improve the existing policy framework for building energy efficiency and green buildings, motivate all the subjects in the construction sector to pursue low-carbon development, and cultivate a low-carbon building market. (2) Strengthen the guidance by standards and further improve the energy-saving standards of new buildings. (3) Strengthen supervision and inspection to ensure that mandatory standards are strictly implemented. (4) Establish the national standards for energy-saving building materials and technologies. (5) Provide more policy incentives, make use of the special funds for building energy conservation, and grant tax preference to the real estate developers that develop non-high-end buildings above the energy-saving standards (the preferential taxes include urban maintenance and construction tax, education surcharges, land value increment tax, tax on using urban land, and corporate income tax). Tax incentives are also given to the buyers of this type of buildings, including reduction of or exemption from deed tax and future real estate tax. (6) Continue to implement preferential policies (e.g., discount interest on loans) to the developers of low-carbon buildings, agencies that provide energy-saving services, and consumers that pay for such services. (7) Enhance the capacity and intensity of supervision, improve the coordination and cooperation between government departments, and build up the capacity of the low-carbon development team in the construction sector. (8) Clarify ownership of property rights, introduce the third-party contract energy management system, start the trading of building carbon emission permits and build a trading platform that covers major areas of China, set quotas for building energy consumption, and effectively promote the low-carbon development of buildings.

1.6.4 Transportation The following measures can be taken to boost the development of Low-Carbon Plus Transportation: (1) Save energy consumption, raise energy use efficiency and adjust the energy mix based on the whole industrial chain and life cycle, and no longer look at the sources of carbon emissions in the transportation sector in an isolated and one-sided vision, so as to reduce carbon emissions from transport fully and completely.

1.6 Major policy suggestions for implementing the Low-Carbon Plus Strategy in China

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(2) Ensure that the means of transportation are propelled by low-carbon power sources, promote the construction of smart power grids based on advanced distributed power generation, and provide a dynamic free-access platform for all sorts of distributed energy sources. (3) Both the national overall planning and public policies should provide institutional guarantee for the development of Low-Carbon Plus Transportation, and the “Internet plus” initiative may be taken as a supplementary means for this purpose. (4) Attach importance to the innovation of low-carbon technologies and also to the cultivation of professionals in this field. (5) Accelerate the reform and innovation in logistics, build an integrated transport system with multi-modal transport as the core, avoid unnecessary traffic, and improve transport efficiency, in order to promote the development of lean logistics and a modernized low-carbon logistics industry.

1.6.5 Energy In order to promote the development of Low-Carbon Plus Energy, we need to keep a close eye on the global low-carbon governance, take the initiative in low-carbon transformation, not only obey the rules but also try to lay down the rules, realize economic revitalization, safeguard social stability and security of energy supply, and remain flexible and invincible in the tide of Low-Carbonization across the world. Each subject in this low-carbon undertaking should perform its own functions: (1) Government: The Central Government should make scientific plans, give scientific guidance, and avoid introducing temporary policies or stopgap measures which may confuse market participants. Local governments need to control the investments into both traditional fossil energy projects and the low-carbon energy projects that cannot be absorbed; they are advised to incorporate low-carbon energy into their performance appraisal indicators (e.g., growth of low-carbon electricity consumption and of low-carbon power generation), and strictly have them satisfied. (2) Market: Quicken the market-oriented reform of the electric power system, build electricity and carbon trading platforms, allocate green power quotas, conduct carbon emissions trading, and let market mechanism play its part. (3) Traditional energy enterprises: Steadily phase out outdated production capacity, carry out flexibility transformation of generator sets, participate in electric peak shaving, and lead the transition to low-carbon energy consumption. (4) Newly-rising electric power companies: They should, by employing the energy Internet technology, establish balance groups and stabilize power supply and demand. (5) Renewable energy companies: They should, by making use of the Internet and big data, make scientific prediction and optimization, improve scientific scheduling, and apply blockchain technology in the energy sector.

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(6) Energy consuming enterprises: Carry out carbon audit, and launch low-carbon transformation by beginning with what is easy to accomplish (e.g., eliminating scattered coal burning). (7) Financial institutions: Regulate the issuance of low-carbon loans, guard against the capital flow into the areas contrary to low-carbon development in non-market ways, and provide risk warning and window guidance in a timely manner.

1.6.6 Finance The following measures can be taken to boost the development of Low-Carbon Plus Finance: (1) In the development of a Low-Carbon oriented financial system, the government should properly define its role (e.g., whether to intervene or not) and cooperate with financial institutions to develop new financial products. (2) Since financial institutions have more say than governments in developing financial markets, it is necessary to foster an intermediary service system for carbon finance. Therefore, more work should be done to establish and improve the intermediaries that take part in the businesses of financial institutions such as consultation, appraisal, accounting and legal assistance. (3) Pay attention to regional differences while developing a unified market. Build a number of regional markets in the early stages after scientific analysis, and have them unified when the conditions are getting ripe. (4) Enterprises should live up to their social responsibilities, create conditions for the development of low-carbon finance, enhance their capacity for international negotiation and risk control to keep away from selling off China’s carbon assets. (5) Motivate banks to implement green credit with incentives. For enterprises that seriously abide by environmental laws and regulations and strictly carry out pollution control, they should enjoy preferential treatment in approval of new projects and funds appropriation for pollution reduction. But for enterprises that discharge pollutants illegally, they should be denied the qualification of environmental protection verification, appraisal and allowance, which are imperatively required by listed financing. (6) Improve the operability of green credit, and introduce the requirements of environmental protection and energy conservation into the credit approval criteria of banks, that is, strictly evaluate the credit customers in terms of environmental protection and energy conservation. (7) Improve the information communication mechanism, obtain credit approval through intelligent use of environmental protection information, and make sure that the loans are poured into green industries.

1.6 Major policy suggestions for implementing the Low-Carbon Plus Strategy in China

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1.6.7 Consumption The experiences and practices in low-carbon consumption at home and abroad show that, despite of varied national conditions, all countries and regions agree on the significance of low-carbon consumption. In case of China, it should refer to the following suggestions during the development and implementation of a low-carbon consumption strategy: (1) Introduce sound incentive policies for low-carbon consumption, motivate and supervise the main bodies of low-carbon consumption and their consumption behaviors, and give preferential treatment to enterprises that manufacture energysaving products or develop low-carbon energy technologies. (2) Create a cultural atmosphere for low-carbon consumption, resolutely resist the culture of consumerism, and guide the public to establish a correct concept of consumption, especially that of low-carbon consumption. (3) Improve infrastructure construction for low-carbon consumption, and build lowcarbon communities across the country according to local conditions by drawing experiences from the existing demonstration projects of low-carbon communities. (4) Strengthen the promotion and application of low-carbon technologies and products, and gradually establish a diversified low-carbon technology system that covers energy conservation and efficiency, clean coal and energy, new and renewable energy, and natural carbon sinks; (5) Accelerate the technology R&D for high-efficiency coal-fired power generation, CCS, high-performance power storage, ultra-efficient thermal pump, and hydrogen production, transport and storage; and form a technological reserve to support low-carbon transition and transformation of economic growth pattern. (6) Give full play to the advantages of the government in consolidating sci-tech resources, vigorously develop the low-carbon technologies that are suitable for mass consumption, further promote the development of low-carbon consumption, and apply low-carbon technologies to all realms of consumption. In short, the study of the Low-Carbon Plus Strategy is both exploratory and pioneering. The research group has respectively conducted an aggregation study in several key fields, but lots of fields and problems call for further discussion and systematic research, in a bid to promote the construction of ecological civilization in China, thereby contributing to the sustainable development of Chinese economy and society, as well as the early realization of the Chinese Dream.

2 Basic connotation and theoretical basis of Low-Carbon Plus 2.1 Origin and development predicament of the “low-carbon” concept 2.1.1 Origin and development Among the environmental problems caused by human activities, global warming is a prominent one for it can lead to the greenhouse effect and El Niño Phenomenon, disrupting the global ecosystem and threatening human life. Although the inducement and rationale of global warming are not yet unambiguously explained, it is certain that the accumulation of GHGs such as CO2 in the atmosphere is the prime precipitating factor. As an oxide accounting for more than 2/3 of GHG emissions, CO2 can be produced in large quantities in both life and production. Moreover, with a long cycle of decomposition and consumption, CO2 may be stored in the atmosphere for about 50~200 years, thereby producing a lasting impact on the environment. According to statistics, CO2 emissions have been increasing by 0.5% year by year since 1959, and the emissions attributed to human activities total about 7.5×109t. CO2 emissions mainly come from the consumption of carbonaceous energy by enterprises and residents, for example, the fossil fuel combustion releases about 6×109t of CO2 every year. As the process of industrialization keeps pacing up across the world, energy consumption has been on the rise year by year. Figure 2.1 shows the trend of world energy consumption according to the statistics and projections provided by the Organization for Economic Cooperation and Development (OECD).

Figure 2.1: OECD projection of world energy consumption over 1980–2030.

https://doi.org/10.1515/9783111040066-002

2.1 Origin and development predicament of the “low-carbon” concept

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It can be seen that energy consumption will keep increasing in a foreseeable period. The year 2015 saw the world energy consumption increase by 88.89% from the 1980 level, and such growth rate is expected to fall to 23.53% by 2030. However, a slowdown in growth rate will not change the general growth trend. So far, industrial sector remains the top energy consumer with an energy mix still dominated by fossil fuels. Consequently, industrial energy consumption has been and keeps emitting a large amount of CO2. Against this backdrop, “energy saving” and “emission reduction” have become worldwide concerns. In order to reduce energy consumption and CO2 emissions, countries and international organizations have made various attempts: enact laws or regulations for renewable energy sources and energy efficiency management; set strict goals for improving energy efficiency and developing renewable energy; control the carbon quotas allocated to energy companies, power plants and other enterprises by presenting mandatory requirements for them to reuse energy. In short, all parties expect to tackle the challenges of global warming and energy crisis in every possible way. The 15th Conference of the Parties (COP 15) to the United Nations Framework Convention on Climate Change (UNFCCC) was convened in Copenhagen on December 7, 2009, which was a day to remember for the cause of sustainable development. Environment ministers and other government officials from 192 countries got together to negotiate over a successor to the Kyoto Protocol which would expire in 2012. Their negotiations went on for 12 days, one day late than the schedule, but only ended up adopting the non-binding Copenhagen Accord. At the conference, China pledged to reduce its CO2 emissions per unit of GDP by 40%~45% by 2020 as compared with 2005, showing its determination to assume its responsibilities as a great power and setting an example for other developing countries. Green and low-carbon development is an important path to transit from industrial civilization to ecological civilization, while preventing climate risks, saving resources, protecting the environment and enhancing low-carbon competitiveness are the main driving force of green and low-carbon development. Since the Industrial Revolution, the excessive use of fossil energy by human beings has brought about global climate change. As the IPCC Fifth Assessment Report states, if global GHG concentrations are to be kept below 450ppm of carbon dioxide equivalents (CO2e), then total anthropogenic GHG emissions by 2050 should be 40%~70% lower than in 2010, and there should be zero emission of GHGs by 2100. The 2015 Paris Agreement releases a signal for carrying on global low-carbon transition, in a bid to keep a global temperature rise this century well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 °C. The international community should reach the peak of GHG emissions as soon as possible and achieve net zero emissions in the second half of this century. In short, low-carbon development, which has become a globally recognized concept since then, points out the direction of human joint efforts in the future.

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2.1.2 Difficulties and problems Although the concept of low-carbon development has won worldwide acceptance, problems keep popping up while this concept is being practiced. These problems mainly display in the following aspects: First, due to the decoupling of low-carbon concept from industrial development, some areas may try to divert pollutant discharge in the disguise of industrial transfer. But the fact is that even if the energy intensive or highly polluting enterprises are relocated from developed areas to backward areas or from developed countries to developing countries, and then some areas may realize industrial upgrading and phase out outdated production capacity in the short run, high carbon emissions are still there, it is as meaningless as moving something from your left hand to your right hand. Second, low-carbon development and elimination of backward production capacity may affect the economic growth of developing countries, and the closure, suspension, merger or transfer of production of certain enterprises may increase the pressure on employment, thereby causing economic instability to some extent. With continuous economic growth, developing countries may find an increase in their total energy consumption (such increase is relative and reasonable), and there will be more CO2 emissions accordingly. As an economic development model characterized by low energy consumption, low pollution and low emissions, low-carbon economy is highly dependent on technological innovation. Therefore, enterprises should do better in technological innovation and independent R&D, and manufacture more products in line with the requirements of a low-carbon era. Third, traditional low-carbon development has been subject to the so-called “green trade barrier”, which indicates that strict and mandatory technical norms are set to limit the import of products that do not meet the standards for energy consumption and environmental protection, thus forming a veritable technical barrier to international trade and making Low-Carbon an obstacle to international trade cooperation. In spite of this, the strict green trade barrier imposed by developed countries is indisputable, because “. . . no country should be prevented from taking measures necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the environment . . .”, as the World Trade Organization (WTO) has stated in the preamble to the Agreement on Technical Barriers to Trade (TBT). As the low-carbon concept becomes more and more popular around the world, products that are not green or low-carbon are bound to be eliminated. The green trade barrier imposed by developed countries, which takes place when developing countries still lag far behind in economy and in science and technology, is covert and discriminatory and may affect the enterprises in developing countries that deal with processing and manufacturing. However, such situation may somewhat motivate enterprises to promote industrial upgrading and transformation and increase R&D investment, which is an inevitable trend for them to take part in international competition.

2.2 Basic connotation of Low-Carbon Plus

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In a word, it is an urgent task to apply low-carbon concept to industrial restructuring, integrate upstream and downstream enterprises in energy-intensive industries, and promote coordinated low-carbon development on a global scale. Thanks to this opportunity, the concept of Low-Carbon Plus has gradually taken shape to have Low-Carbonization, economic growth, industrial transformation and environmental protection linked together.

2.2 Basic connotation of Low-Carbon Plus Through more than ten years of practice, the low-carbon concept has been widely accepted; however, the effect of low-carbon development is not prominent enough due to the co-existence of other similar concepts like green development, energy saving, environmental protection, and ecological civilization. The upgraded Low-Carbon Plus concept is proposed to explore the new connotations of low-carbon development, broaden its scope of content, and infuse it with new vitality. Besides, this Low-Carbon Plus concept is deeply inspired by the popular Internet Plus initiative: the combination of information technology and traditional industries can create new growth points, and certain public policy goals may be achieved through co-implementation of low-carbon and other policies and through employment of Low-Carbon as an instrument. The Low-Carbon Plus concept stems from the Internet Plus initiative. By 2015, the Internet business in China had gone through 20 years of development ever since January 1995 when the Ministry of Posts and Telecommunications started to provide Internet services to the public, and the “Internet plus” had risen to be a national strategy. Also in the same year, China became the largest online retail market in the world with an ecommerce transaction volume reaching 18 trillion yuan ($2.86 trillion). At the 12th National People’s Congress held on March 5, 2015, Premier Li Keqiang unveiled the “Internet Plus Action Plan” when he delivered the government work report. The essence of the “Internet plus” initiative is to, by making use of the Internet platform and information and communication technology (ICT), integrate the Internet with all industries (including the traditional ones) and create a new business ecosystem in new realms. In his 2015 government work report, Premier Li clearly stated that “we will develop the ‘Internet plus’ action plan to integrate the mobile Internet, cloud computing, big data, and the Internet of Things with modern manufacturing, to encourage the healthy development of e-commerce, industrial networks, and Internet banking, and to guide Internet-based companies to increase their presence in the international market”. From the perspective of industrial development, the “Internet plus” is to upgrade traditional industries instead of subverting them. For example: In the field of communications, “Internet plus communication” has brought along instant messaging, enabling almost everyone to chat by voice, text or video with instant messaging apps. In the initial stages, however, traditional operators took these

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apps as a formidable enemy which seriously hit their revenues from voice and SMS services. But as of today, with the robust development of the Internet, all communications operators have seen their revenues from data traffic services multiplied several times, proving that the rise of the Internet does not subvert the communications industry, but stimulates the operators to pursue business reform and upgrading. In the field of transportation, there was no mobile Internet in the past and the market for vehicle transportation and operation could not be completely opened. The birth of the mobile Internet posed a great challenge to the conventional mode of traffic supervision, since it gave rise to a number of taxi-booking and car-pooling apps, such as Uber and Lyft in foreign countries and Didi and Kuaidi in China. These apps, although controversial in different parts of the world, have transformed the traditional ways of travelling with the mobile Internet, not only making people’s travel more convenient and raising the utilization rate of vehicles, but also advancing the development of Internet-based sharing economy and contributing to the environmental protection by cutting GHG emissions. In the financial field, when Yu’e Bao (an online fund launched by Alipay, China’s largest third-party payment platform) was just unveiled, it was thought to be out of control by conventional banks, and lots of people were worried about the safety of QR code payment. After the Chinese government organized several fruitful studies on the Internet finance and China UnionPay introduced norms for QR code payment, the Internet finance has finally embarked on an orderly development path in China and received strong support from national policies. In terms of other fields, such as retail and e-commerce, they have also started integration with the Internet in recent years. According to Pony Ma, founder of Tencent Holdings, “it (Internet plus) is an upgrade of traditional industries, instead of any subversion.” It can be seen that “the mobile Internet, in particular, plays a great role in upgrading the existing traditional industries”. In fact, “Internet plus” is not only being fully applied to the tertiary industry, thereby forming a new business ecosystem involving Internet finance, Internet transportation, Internet medical and Internet education, but also penetrating into the primary and secondary industries. Tencent’s founder Pony Ma said that the Industrial Internet has been extending from consumer goods to other industrial sectors including equipment manufacturing, energy and new materials, in an aim to comprehensively transform the traditional mode of industrial production; while the Agricultural Internet has been extending from online sales to the sphere of production, in an aim to create new opportunities and broaden the space for agricultural development. The popular Internet Plus initiative has inspired people’s thinking and bred the concept of Low-Carbon Plus. This chapter is to expound the basic connotation of this new concept.

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2.2.1 Deepening: Transformation of traditional industries Regarding the Low-Carbon Plus concept, “Low-Carbon” is the main trunk, while “plus” represents branches which involve thhe key areas of development, that is, industry, agriculture, construction, transportation, energy, and consumption. 2.2.1.1 Low-Carbon Plus industry At present, industry remains the top energy consumer in China, with an energy structure still dominated by fossil fuels. In terms of energy consumption and emissions, industry is one of the sectors with the greatest potential for Low-Carbonization. Industrial Low-Carbonization, which is the principal direction of Low-Carbon Plus development, heavily relies on technological innovation, green transition, resource recycling and intelligent production. (1) Results from low-carbon industrial production During the 12th Five-Year Plan period (2011–2015), China’s industrial sector had made positive progress in energy conservation and emission reduction. From 2011 to 2014, China eliminated huge backward production capacity, including 155 million tons of iron and steel, 600 million tons of cement and 32.66 million tons of paper, which were respectively 1.6 times, 1.6 times and 2.2 times above the goals set in the 12th Five-Year Plan. During these four years, the chemical oxygen demand (COD) and ammonianitrogen emissions per unit of industrial added value respectively dropped by 36% and 40%, the energy consumption per unit of GDP declined by 13.4%, the CO2 emissions per unit of GDP decreased by about 16%, and the water consumption per unit of industrial added value fell by 24%. In terms of policy support, climate change and energy shortage provide a valuable opportunity for China to seek economic transition. China will find the best balance point between development and Low-Carbon by altering the growth pattern, adjusting industrial structure, saving energy and reducing emissions. According to the Work Plan for Controlling Greenhouse Gas Emissions During the 12th Five-Year Plan Period issued by the State Council at the end of 2013, by 2015 China should cut its CO2 emissions per unit of GDP by 17% from 2013 and initially build a carbon emission trading market. From 2013 to 2050, China is expected to find a low-carbon development path with Chinese characteristics, and achieve a ten-fold growth in per capita GNP with per capita CO2 emissions only increasing by 50%. (2) Challenges in low-carbon industrial production A. Resource shortage and serious environmental pollution China is now in the stage of high-speed economic growth where there is large energy consumption and rapidly increasingly resource demand, and its demand for iron and steel exceeds the combined demand of the US and Japan. According to predictions,

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among the 45 types of mineral resources indispensable for China’s economic development by 2020, only 24 types can be guaranteed, two types are possibly accessible, ten types may be in short supply and nine types may be in critical shortage; and the key mineral resources such as oil, iron, copper, lead and zinc will be largely imported. With a large population base, China sees its per capital hold of resources far below the world per capita level. In the coming ten years or more, China will remain in the stage of rapid industrialization, with the shortage of resources becoming a major obstacle to its economic development. As the process of urbanization and modernization keeps accelerating, China sees its environmental pollution become more and more serious, which not only increases the costs of pollution control, but also makes low-carbon development a top priority. So far, the ongoing heavy industrialization has brought about structural pollution mainly from coal, steel, chemical and other industries, which is blamed for 70% of air pollution. The pollution induced by SO2 and smoke emissions is getting worse, 1/3 of the land across the country is destroyed by acid rain, and urban air and groundwater pollution is deteriorating. Moreover, environmental governance always lags behind environmental destruction, and pollution has spread from land to surrounding waters, together with the complicated intersection between domestic and industrial pollution and between new and existing pollution, hence posing a threat to the sustainable development of Chinese economy. B. Coal-based energy structure is hard to change Most of the pillar industries in China are energy intensive, but they can provide powerful support to the national economic growth. As matters stand, China’s energy demand will continue to increase in the future. According to the data released by the National Bureau of Statistics (NBS), China’s total energy consumption in 2008 amounted to 2.85 billion tons of standard coal, almost three times more than the 990 million tons in 1990. Over the period 2000–2008, China saw its energy consumption grow by an average of 183 million tons of standard coal per year. In 2010, China became the world’s largest energy consumer with primary energy consumption reaching 3.25 billion tons of standard coal, up by 6% year on year. Coal is the most important energy source in China, and its reliance on coal remains firm despite of a light decrease in coal consumption in recent years. In 2007, coal accounted for 69.5% of China’s primary energy consumption, much higher than the world average level at 27.8%. Such proportion in developed countries is less than 20%, showing that China’s reliance on coal is far greater than that of other countries. Compared with other fossil fuels, per unit of coal combustion emits much higher CO2, that is, about 36% and 61% higher than the emissions from oil and natural gas consumption, respectively, which explains the reason why China has huge carbon emissions. In 2010, the value added of the secondary industry, which dominates China’s industrial structure, accounted for 48.6% of the GDP; and such proportion of light and heavy industrial sectors was 28.9% and 71.1%, respectively. In contrast, the tertiary industry, which features low energy consumption, only accounted for 40.1%. This

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kind of industrial structure, in which heavy and chemical industries play a major role, is not conducive to increasing energy use efficiency. C. Development of low-carbon technologies is no easy matter Low-carbon technologies refer to the technologies that facilitate low-carbon economic development and effectively control GHG emissions. They are mainly made up of energy-saving technology, renewable energy technology, new-type power generation technology, and CCS technology. These technologies are the internal impetus of lowcarbon development and the key to continuously promote the progress of low-carbon economy. As far as China is concerned, it is caught in difficulties in innovation, transfer and application of low-carbon technologies: Firstly, China still lags behind in the development level and innovation ability of low-carbon technologies, such as combined heat and power (CHP) technology, costeffective solar photovoltaic cell technology, biomass energy technology and hydrogen energy technology, nor has it offered enough incentives and financial support in this regard like its developed counterparts. According to the United Nations’ Human Development Report 2010, China cannot access to the core content of 42 low-carbon technologies, although it is in need of these technologies as many as 60. Secondly, the “lock-in effect” brings great obstacles to the R&D of low-carbon technologies. To be specific, the existing infrastructure, machinery and equipment take root in traditional technologies, and they cannot be abandoned in the near future. It seems that both the technologies and investments will be “locked” for a long time, making it difficult to invest in new technologies. Lastly, the Kyoto Protocol supports technology transfer to developing countries, which is endorsed by developed countries. But in practice, developed countries like to make excuses to block technology transfer for fear of weakening their own competitiveness, which makes it more difficult for China to carry on independent R&D. D. Institutional barriers are still there In the face of increasingly severe climate change, China set up a coordination group on global climate change as early as 1990, and then established the Department of Climate Change to take on strategic planning and policy formulation in 2008. But these regulatory bodies responding to climate change are understaffed and not competent enough to deal with the far-ranging and complicated climate change issues or for China to perform the responsibilities as a great power. Moreover, China does not have a perfect policy or legal framework for mitigating climate change, and lots of areas need to start from scratch, which are obstacles to China’s development of a lowcarbon economy. Besides, China also lags far behind developed countries in terms of mandatory energy efficiency standards, specification and labeling of energy-saving products, benchmarking management of energy efficiency by industry, government procurement of energy-saving and emission-reduction products, market access and exit mechanisms, thus seriously affecting the follow-up work on energy conservation and emission reduction, as well as the low-carbon transformation of enterprises.

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E. International pressure keeps mounting On the one hand, with carbon emissions increasing constantly, China has surpassed the US to become the world’s largest carbon emitter. Upon the expiration of the Kyoto Protocol, China has been under intense pressure from developed countries, especially the US which always asks China to bear more responsibilities in reducing emissions. However, unlike developed countries that have gone through the stage of rapid economic growth and no longer consume energy as much as before, China has to maintain economic growth and cut emissions at the same time. On the other hand, China is at the low end of the global industrial division of labor, among its exports—driving force of national economic growth, a great portion of commodities are energy intensive and highly dependent on raw material processing, implying that China has been directly or indirectly exporting vast energy resources. According to the Tyndall Center for Climate Change Research, the year 2004 saw the net exports of China emit 1.1 billion tons of CO2, accounting for almost a quarter of the world’s total emissions that year, making the international community keep pressing China to reduce emissions. In order to deal with the international pressure and pursue sustainable development, China has to accelerate its low-carbon economic development to break the dilemma. 2.2.1.2 Low-Carbon Plus agriculture Agriculture is an important source of carbon emissions and a sector most vulnerable to climate change, despite of having a powerful carbon sink function. The agricultural carbon emissions of China—a major agricultural country—are worthy of great attention, since studies have shown that about 17% of the country’s carbon emissions come from agricultural production. Amid the increasingly severe global problems such as climate change, sustainable agricultural development and food security have become great challenges to China. (1) Status quo of low-carbon agricultural development As of December 31, 2008, China’s arable land area was 1,825.74 million mu, registering a decrease of 290,000 mu over the previous year. On the one hand, agriculture has a huge potential for low-carbon development from a global point of view. As the Food and Agriculture Organization of the United Nations (FAO) has estimated, if biomass and coal could be replaced by biogas, the annual emissions of CO2 and SO2 would respectively drop by 3,077,700 tons and 131,100 tons until 2010, and continue to drop by 45,928,000 tons and 88,700 tons until 2050.1 On the other hand, returning farmland to forest, returning crop stalks to the field, and other protective agricultural practices can greatly increase China’s carbon reserves,

 Lixia Zhang & Liming Cao. Development status and countermeasures of low–carbon agriculture in China. Inquiry into Economic Issues. 2011 (11), 103–06.

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improve the ecological environment, and mitigate the impact of climate change. Now that eco-agricultural system can offset 80% of global GHG emissions caused by agriculture, development of low-carbon agriculture is veritably a top priority. Given this, China has made a big decision to develop low-carbon economy in order to realize sustainable development, although there are a large number of challenges. (2) Problems existing in low-carbon agriculture A. Development of low-carbon agriculture lacks mid-and-long-term planning and institutional guarantee Construction of low-carbon countryside requires legal support. China is a latecomer in rural environmental protection, lots of the existing environmental protection laws are stipulated for industrial sectors and urban areas, giving little consideration to rural environmental management and pollution control. In addition, since the property rights of land and other resources in rural areas are not clear, the rural environmental resources are somewhat like “public assets”. Unlike industrial pollution, rural environmental pollution does not have a definite subject of liability, which has greatly increased the difficulties in environmental pollution control in rural areas.2 Although China had successively promulgated the Law on the Promotion of Clean Production and the Circular Economy Promotion Law in January 2003 and August 2008, it still has more work to do in the future. Furthermore, China should no longer focus on the short-term agricultural planning and benefits, but turn to developing mid-and-longterm plans for low-carbon agriculture. In short, China should keep far-sighted to align low-carbon agriculture with sustainable development. B. Evaluation index system and supervisory system for low-carbon agriculture remain absent or defective On January 19, 2011, the “Evaluation System of China’s Low-carbon Cities” was officially made public, laying down a number of norms and standards for urban lowcarbon evaluation, but not paying equal attention to low-carbon agriculture. And China has a long way to go to establish a perfect supervisory system for low-carbon agriculture, since it has a vast area of cultivated land, and farmers are not fully aware of low-carbon supervision and management. In addition, China’s rural areas neither have enough regulatory bodies nor perfect systems for environmental monitoring and inspection, which has further worsened the rural environment and impeded the development of low-carbon agriculture. C. Peasant economy is a stumbling block At present, the production units of ecological agriculture in China are basically farmers. However, the farmers engaged in ecological agricultural production are relatively scattered

 Zhao Jing & Liu Jianya. Thinking on the practical and theoretical problems concerning the development of low-carbon agriculture [C]. Seminar on Low-carbon Agriculture. 2010.

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and isolated, showing that China’s agricultural production still lacks unified organization and support. This kind of agricultural production, which features wide distribution of small farmers, directly affects the organization of large-scale, intensive and standardized production activities, and raises the cost of low-carbon agricultural development. Finally, low income restricts farmers from transforming their consumption concept. A survey shows that people with a family monthly income of less than 1,000 yuan generally do not accept a 5% premium for low-carbon and green products, while 100% of people with a family earning of above 8,000 yuan per month have bought green products. The deep-rooted and extensive means of production and management are extremely unfavorable to China’s development of low-carbon agriculture. D. Infrastructure for low-carbon agriculture is underfunded Development of low-carbon agriculture relies on mass capital input, yet the government financial investment into low-carbon agriculture is far from enough to vigorously improve low-carbon technologies. On the one hand, the government support for developing low-carbon agriculture is not sufficient enough. In developed countries, the funds for spreading agricultural technology usually account for 0.6%~1.0% of the gross output value of agriculture, such percentage is as low as 0.5% in developing countries, and even lower at 0.2% in China. On the other hand, an effective coordination mechanism for the use of fiscal funds for agriculture remains absent, which has resulted in decentralized use of funds, crossed or repeated investment. And beyond that, although the agricultural project funding is jointly borne by upper-level fiscal appropriation, local finance and farmers themselves, the paid-in investment cannot be guaranteed all the time. E. R&D input into low-carbon agriculture should be further increased Sci-tech innovation is the cornerstone for the development of low-carbon agriculture, and continuous innovation is the only way for China’s low-carbon agriculture to join the front ranks of the world. To this end, Chinese government needs to maintain its investment in low-carbon agriculture, and at the same time actively learn from and import foreign advanced technologies by taking the essence and discarding the dregs. Presently in China, the capital input into agricultural R&D remains insufficient, the advanced agricultural technologies are not widely applied, and the sci-tech extension system remains defective, which directly restricts the promotion and application of low-carbon technologies for agriculture. And on top of that, the eco-agriculture model that is currently being promoted and implemented still have technical limitations. Therefore, China should face up to these weaknesses and make constant improvement, doing its utmost to build up its R&D capability. 2.2.1.3 Low-Carbon Plus construction In a narrow sense, building energy consumption refers to the energy consumption during the operation of buildings. In China, building energy consumption accounts

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for about 27% of total social energy consumption. Reasonable construction planning and application of low-carbon and energy-saving technologies are of great significance to reduce the carbon emissions in construction sector. In addition, efforts must be made to put an end to mass-demolishing mass-construction. (1) Status quo The government, real estate developers and the public have taken actions to promote the development of low-carbon construction: The government has extended the chain of energy efficiency supervision, i.e., from the phase of engineering construction to the phase of land acquisition and planning and to the phase of building scrapping. The Ministry of Housing and Urban-Rural Development has been making efforts in reducing carbon emissions of buildings, and the work is unfolded in five aspects: energy-saving supervision of new buildings, energy efficiency renovations on existing residential heating systems in North China, renovation of government buildings and medium-and-large buildings, utilization of renewable energy, and promotion of new materials. Lots of real estate companies and entrepreneurs have made remarkable achievements in promotion of green buildings, energy conservation and environmental protection, thereby solidifying their market standing and winning a good reputation. By developing corporate-level climate change strategies and reducing their carbon footprints in production and business activities, these companies and entrepreneurs have been doing their best to support and participate in climate change mitigation activities, so as to fulfill their corporate social responsibility (CSR). The public, under the guidance of the government and social media, has become increasingly aware of Low-Carbon and environmental protection. So far, Low-Carbon has become a hot topic, and low-carbon and eco-friendly construction products are favored by more and more people. (2) Existing problems Compared with developed countries, China lags far behind in the development of lowcarbon buildings. The problems mainly exist in the following three aspects: Firstly, absent policies and supporting mechanisms have, to a certain extent, hindered the development of low-carbon buildings. Presently in China, the development of low-carbon buildings remains in its infancy, with policies and supporting mechanisms in this regard either under incubation or pilot operation. And beyond that, there are not mandatory measures and unified standards for the carbon emissions of energy-intensive real estate developers. As for the developers with low-carbon emissions, their efforts in energy saving and emission reduction are out of their consciousness, instead of being rewarded with any incentives. Secondly, lots of real estate developers, though having learned about Low-Carbon, have not put it into practice or only used it as a marketing hype for selling houses. In other words, there are not many low-carbon buildings worthy of the name. This is

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somewhat attributed to the difficulties in low-carbon construction sector, e.g., lowcarbon building materials are sometimes unavailable, advanced technologies are not easy to come by (traditional construction techniques are not enough to create lowcarbon buildings), and a higher development cost than traditional buildings. Finally, the concept of low-carbon buildings is yet fully popularized. Not everyone has an in-depth and comprehensive knowledge and understanding of low-carbon buildings. Quite a number of them, while appealing for Low-Carbon, still persist their old ways: high energy consumption, and a high-emission production mode, lifestyle and ideology, which are unfavorable for the development of low-carbon buildings. In short, China still has a long way to go before achieving the overall popularization of low-carbon buildings. 2.2.1.4 Low-Carbon Plus transportation Low-carbon transportation is characterized by high energy efficiency, low energy consumption, low pollution and low emission, with an aim to improve the energy-use efficiency and structure of transportation, optimize the development mode of transportation, and upgrade the transport infrastructure and public transport system for eventually reducing the intensive consumption of high-carbon energy (mostly traditional fossil fuels). In short, Low-Carbon Plus Transportation is a combination of “low-carbon transportation” and “green commuting”. (1) Status quo Firstly, China attaches great importance to the development of public transport. The process of motorization is successively dominated by buses, taxis and private cars (see Table 2.1). And these changes have kept increasing the carbon emissions from transportation. Although the transportation in the non-motorized period is lowcarbon, it is an epitome of backwardness and the least desirable either for socioeconomic development or for improvement of people’s life quality. As the urbanization and motor vehicles have entered a period of rapid development, the government has intensified efforts in developing public transport. The period from 2007 from 2010, in particular, is a golden age for the public transport marked by rail transit.3 In terms of supporting policies, the Guiding Opinions of the State Council on Giving Priority to the Development of Public Transport in Cities (Guofa [2012] No. 64) were released on December 29, 2012, stating that “giving priority to the development of public transport is an inevitable requirement to ease traffic congestion, reform the transport development pattern in cities, raise people’s living standards, and improve the basic public services provided by the government, as well as a strategic choice to build a resource-saving and eco-friendly society”.

 Zhang Taoxin, Zhou Yueyun & Zhao Xianchao, Current situation and approaches of development of low–carbon transportation in Chinese cities [J]. Urban Development Studies, 2011: 68–73.

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Table 2.1: Number of buses per 10,000 people in China. Year

Value of the year

YoY (%)

   

. . . .

. . . .

Secondly, China has been vigorously developing new energy vehicles. In 2015, China manufactured 379,000 new energy vehicles, registering an explosive growth of 3.5 times more than the year before, and making China the world’s largest incremental market of new energy vehicles. Such a high growth momentum is likely to remain in the next five years. To be specific, by 2020, the number of new energy vehicles may hit the preset target of five million by maintaining a compound annual growth rate (CAGR) of about 40%. (2) Existing problems A. While the urban built-up area expands rapidly, the density of city bus lines decreases as a whole From 2000 to 2008, the urban built-up area in China increased from 224,39km2 to 362,95km2, registering a total growth rate of 61.75% and an average annual growth rate (AAGR) of 6.2%, while the density of city bus lines decreased by 0.66% annually. The continuous increase in urban spatial distance has extended the commuting distance and time, making people more and more reliant on motorized traffic. At the same time, the imperfect urban bus network has aggravated traffic congestion, hence increasing carbon emissions from transportation. B. Serious underinvestment in urban public transport By consulting with the China Urban Construction Statistical Yearbook (2008), the year 2000 saw the national urban transportation investment account for 47.25% of the urban fixed-asset investment, such proportion rose to 62.72% in 2008, up 15.5 percentage points. A great portion of the urban transportation investment flowed into roads and bridges, while the capital input into public transport was no more than 22%. Mass rapid transit started late and developed slowly. Among 120 cities with a population of more than one million, only ten of them had rail transit as of 2008, and their bus rapid transit (BRT) had just started. The slowly developing public transport is a constraint on the improvement of public transit facilities and services, making it hard to increase the sharing rate of public transport—a low-carbon way of travel. C. Urban traffic structure has become increasingly motorized From 2000 to 2008, the AAGR of urban civilian vehicles and private cars was respectively 15.51% and 24.03%, while the consumption of alternative fuels for vehicles

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remained low. In 2008, gas-fueled and electric vehicles accounted for only 1‰ in Chinese total civilian vehicles. Such composition of motor vehicles has greatly transformed people’s travel modes, and made the energy consumption of cars account for about 86% of the total energy consumption of urban traffic. A survey of the typical travel modes of urban residents shows a rapid trend of motorization of urban traffic, i.e., travel by car is increasingly common, while travel by public transport has been on the decline, and low-carbon or zero-carbon travel (e.g., by bicycle) no longer plays a dominant role. If this trend continues, urban transport may be locked into a highcarbon development path. How to make people’s travel modes more reasonable? It is a problem demanding prompt solution. D. Urban traffic management is incompatible with the development of low-carbon transportation China does not have a unified coordinating body, which should be composed of multiple departments (e.g., urban planning, construction, traffic management, public utilities and environmental protection), for urban road traffic management, which has resulted in overlap of government policies and poor coordination between departments. In Chinese urban transport sector, the management of energy conservation and emission reduction is not perfect enough, and the monitoring and statistics making of carbon emissions remain weak. As a special planning, urban traffic planning is not closely related to urban planning and urban land use planning. With the continuous expansion of city size and the rapid development of motorization, urban traffic planning fails to be updated in time. Although there are different means of transport, intermodal-transfer is not convenient enough, which not only offsets the overall benefit of urban traffic system, but results in unnecessary energy consumption and increase of carbon emissions. Traffic demand is not under effective regulation. Chinese municipal governments have all along been highlighting the expansion of traffic supply capacity, instead of improving the management of urban transport system. As time passes, static traffic is able to interfere with dynamic traffic, and chronic traffic congestion has increased unnecessary driving distance of motor vehicles, which wastes energy and increases carbon emissions. 2.2.1.5 Low-Carbon Plus energy An important way to develop low-carbon economy is to transform the existing highcarbon energy structure into a low-carbon one, and build a modern energy system which is safe, stable, clean and economical. As required by the law of energy development from high carbon to Low-Carbon and finally to zero carbon, the trend of energy development in the future should be low-carbon, efficient, diversified and sustainable.

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(1) Status quo As an economic model based on low energy consumption, low pollution and low emission, low-carbon economy has an essential requirement for efficient energy use and clean energy development. Traditional energy sources have made great contributions to the progress of mankind, but they are on the verge of depletion after more than a century of exploitation. In this context, it has become an inevitable choice for human beings to look for and develop substitutes for traditional energy to realize sustainable development. Beyond that, due to the inaccessibility of certain traditional energy sources, new energy sources (e.g., solar, wind and nuclear energy) have become increasingly important for the development of global economy. As far as China is concerned, the signing of the Kyoto Protocol and the introduction of the Renewable Energy Law in 2005 have provided source power for the country to expedite the development of clean energy. According to its Medium- and Long-term Program for Renewable Energy Development, China would have the annual output of new and renewable energy reach 43 million tons of standard coal by 2015, accounting for 2% of the national total energy consumption. This implies that solar, wind and nuclear sectors will have a broad space for development over the next decade. (2) Existing problems Although China has achieved remarkable progress in energy development, some deep-seated problems should not be neglected: (1) Unreasonable energy structure. An excessively high proportion of coal is directly used for final consumption, while clean energy such as natural gas, wind and solar occupies a small share. (2) Technical strength is not strong enough. The R&D and application of clean coal technology (CCT) remain backward. (3) Energy use efficiency and environmental protection measures lag far behind the world’s advanced level, and cannot fully meet the requirements of sustainable development. 2.2.1.6 Low-Carbon Plus Consumption Decarbonization of consumption is an important link in the development of lowcarbon economy. Low-Carbon Plus Consumption calls for people to transform their deep-rooted consumption habits and concepts, which is an extremely urgent task but hard to accomplish. The impact of household consumption on carbon emissions is mainly reflected in energy consumption and waste discharge. In China, urban area is a powerhouse for the national socio-economic development, and the average energy consumption of urban residents is about three times that of rural people. So, urban area should bear more responsibilities in advancing the Low-Carbon Plus Consumption undertaking. (1) Status quo As an important part of the solution to climate change, low-carbon consumption plays an indispensable role in developing a low-carbon economy.

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As far as China is concerned, developing a low-carbon economy, transforming the economic growth pattern and practicing a low-carbon lifestyle can guarantee its sustainable development. In the wake of the Copenhagen Climate Conference held in 2009, major countries around the world pledged to control and reduce GHGs by 2020. Among them, China has promulgated a number of laws and policies and taken supporting measures to pursue low-carbon development. Vigorously developing low-carbon cities has been made the focus of current urban construction project. In 2014, some Chinese researchers conducted a comprehensive evaluation of the low-carbon development level of 100 Chinese cities, and compared them with their foreign counterparts. They found that although Shenzhen is well ahead of other Chinese cities in low-carbon consumption, it lags far behind the international advanced level, showing that Chinese cities on the whole have a long way to go to achieve low-carbon development. Studies show that about 30% of China’s annual CO2 emissions are caused by people’s daily needs and the economic activities to meet these needs. Therefore, in order to achieve low-carbon development and fulfill emission reduction targets, China should encourage greater participation of citizens, instead of relying on the government alone. Practicing low-carbon consumption is an effective way to reduce emissions. With the continuous promotion of low-carbon technology, low-carbon concept, low-carbon products and green commuting—which have somewhat decarbonized the life of urban residents, Low-Carbon has been accepted by a growing number of people. Studies show that most Chinese urban residents have started paying attention to lowcarbon consumption and daily life behaviors. However, advanced low-carbon technologies and concepts are not given a full play and it is hard for residents to have their life further decarbonized. (2) Existing problems A. Proportion of green travel remains low in urban area In China, transportation is a major contributor of energy demand and carbon emissions, i.e., urban traffic occupies a great share in China’s total energy consumption every year. So, decarbonization of urban traffic is a top priority for China to build a low-carbon society. Green travel, which advocates the ways of travel that have minimal impact on the environment, is a key to achieving low-carbon transportation. Now China still has a low proportion of green travel, since more and more citizens prefer to travel by their own cars as their living quality gets improved constantly, even though green travel has been propagated extensively and public transport is given priority in many cities. Private cars are no doubt more convenient and more comfortable, but their low carrying capacity and high solo driving rate run counter to low-carbon transportation. In the future, green travel must be vigorously promoted to motivate people to live a low-carbon life.

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B. The concept of low-carbon consumption is yet ingrained Low-carbon consumption is a “Low-Carbon” oriented consumption pattern which is scientific, civilized, healthy and eco-friendly. It is an inevitable trend of the development of low-carbon economy, and also an important link in promoting a low-carbon lifestyle and building a low-carbon society. However, Chinese urban residents are yet fully aware of the connotation and significance of low-carbon consumption, environmental protection and social responsibility, that’s why most consumers are not accustomed to buying low-carbon products with good environmental benefits. In addition, the income level also has a great impact on the demand for low-carbon products. High-income earners are likely to pay for costly low-carbon products, while those living from hand to mouth cannot afford them. Therefore, in order to popularize low-carbon consumption among Chinese residents, efforts must be made to strengthen the propaganda and education of low-carbon consumption and lower the prices of low-carbon products.

2.2.2 Convergence: Policy convergence Low-Carbon Plus is to integrate low-carbon policies with the market system and the current “new normal” policies for stabilizing growth, adjusting economic structure, improving people’s livelihoods and preventing risks. For example, Low-Carbon Plus Poverty Alleviation is to achieve targeted poverty reduction by implementing lowcarbon projects, while Low-Carbon Plus Innovation takes decarbonization as the basis for mass entrepreneurship and innovation, and sets low-carbon innovation or technology as the objective. Furthermore, low-carbon policies can also be integrated with green and ecological policies. 2.2.2.1 Low-Carbon Plus mass entrepreneurship and innovation (1) Background The 18th National Congress of the CPC held in 2012 put forward the strategy of innovation-driven development, and made it an urgent and important strategic task concerning the overall situation of the national economy. In his 2015 Government Work Report, Premier Li Keqiang called for promoting mass entrepreneurship and innovation and fostering new driving forces for socio-economic development. In June 2015, the State Council issued the Opinions on Policy Measures to Promote Mass Entrepreneurship and Innovation, which defines mass entrepreneurship and innovation as an inevitable choice for fostering new driving forces for socio-economic development, a basis for expanding employment and enriching the people, and a path for activating the innovation potential and entrepreneurial vitality of the whole society. In October of the same year, the Fifth Plenary Session of the 18th CPC Central Committee placed innovation at the top of five major development concepts, pointing out to pursue innovation-driven development by placing innovation at the core of the national overall

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development, supporting innovation in theory, system, science and technology, and culture, making innovation run through all the work of the Party and the State and become a common practice for the whole society. (2) How to combine Low-Carbon with mass entrepreneurship and innovation? With the work of mass entrepreneurship and innovation in full swing across the country, Low-Carbon Plus Innovation, which is a concrete embodiment of combination of Low-Carbon and other policies, is defined as one of the priorities for low-carbon development. In this context, while we are implementing low-carbon pilot projects and other related work, we need to combine Low-Carbon and innovation, i.e., innovate lowcarbon technology, low-carbon trading and low-carbon management, and carry out other work in a low-carbon way. In the implementation of mass entrepreneurship and innovation and low-carbon pilot projects, we should vigorously innovate low-carbon technologies by taking advantage of favorable policies. Low-carbon technologies, including CCS, energy saving and emission reduction, renewable energy, and some technologies that are yet to know, can help mitigate the impact of economic development on the carbon cycle of ecosystem and achieve carbon-neutral development. The success of low-carbon technological innovation is determined by its development path, yet low-carbon technology is caught in path dependence and lock-in effect. Since modern technology system is deeply embedded in the institutional structure, technological lock-in has been intensified by its interaction with institutional lock-in. In the case of China where there are rich coal resources, the national industrial economy is in the state of carbon lockin, especially locked in carbon-intensive fossil fuels, which is caused by the path dependence during the co-evolution of technologies and institutions. This lock-in effect must be broken for fear of obstructing the innovation in low-carbon technologies. To this end, we should vigorously popularize innovative thinking, implement innovation pilot programs, and make technological breakthroughs. (3) How to make the best of Low-Carbon Plus Mass Entrepreneurship and Innovation? A. Formulate policies to support low-carbon plus mass entrepreneurship and innovation, and build a low-carbon innovation system with the government serving as the leader, enterprises as the main body, and research institutions as the think tank. Upon positioning low-carbon innovation as the engine, we should seek breakthroughs in low-carbon technological innovation and institutional innovation, let the government preside over the combination of Low-Carbon with entrepreneurship and innovation and set up a special fund for this endeavor. Since enterprises act as the main body in technological innovation and market resource allocation, we need to incubate green industries and innovative enterprises which have great potential for lowcarbon development. B. Strengthen low-carbon technological innovation and build a low-carbon industrial value chain. The government should increase input into the R&D of low-carbon

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technologies, introduce incentive policies to motivate enterprises to fund low-carbon technological innovation, establish a government-industry-university-institute collaborative system and network platform that are dedicated to low-carbon innovation, and seize the high ground in development of low-carbon technologies. We should actively bring in advanced low-carbon technologies and facilities across China and from other countries, support enterprises to absorb imported technologies and carry out re-innovation based on integrated innovation and original innovation. As propelled by low-carbon technological innovation, we should try to occupy the high end of the industrial value chain, foster a new economic growth point, and promote green recovery and low-carbon transformation. C. Establish a public service platform dedicated to low-carbon technologies, so as to provide better services and institutional guarantee to Low-Carbon Plus Innovation. Mass entrepreneurship and innovation is a society-wide undertaking that involves the government, enterprises, NGOs, research institutes, intermediary agencies, and the general public. To combine Low-Carbon with mass entrepreneurship and innovation, we need to build a service platform to deal with the low-carbon affairs such as entry of enterprises, technological innovation, investment and financing, production, marketing, consumption, talent introduction, and technology promotion, and to provide information, technology and knowledge services, thereby promoting the development of urban low-carbon industries and economic growth and the construction of a low-carbon innovation system, and pressing ahead with urban green transformation. D. Mobilize NGOs and the general public to take part in low-carbon innovation. Like mass entrepreneurship and innovation, low-carbon development also relies on broad masses, therefore, the concepts and values of Low-Carbon and innovation should be popularized across the society, so as to create a solid mass base and a socio-cultural atmosphere for establishing a low-carbon innovation system, and combine the power of low-carbon innovation and green development. We should implement an innovative low-carbon lifestyle and consumption pattern, give play to the synergistic effect of Low-Carbon Plus Innovation, and promote urban green transformation and ecocivilization construction.4 2.2.2.2 Low-Carbon Plus poverty alleviation In November 2015, the Central Conference on Poverty Alleviation and Development was held in Beijing. Speaking to the conference, General Secretary of the CPC Central Committee Xi Jinping pointed out that eliminating poverty, improving living standards, and achieving common prosperity is a fundamental task for socialism and an important mission of the CPC. To fully carry out the targeted poverty alleviation strategy—a major

 Lu Xiaocheng, Research on the low–carbon innovation system of urban green transformation in China [J]. Journal of Guangdong Institute of Public Administration, 2013(2): 97–100.

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strategic task during the 13th Five-Year Plan period (2016–2020), China would do its utmost to lift the 70 million impoverished population out of poverty by 2020. Poverty alleviation is inseparable from development, even though past experiences have shown that development causes higher energy consumption and higher carbon emissions. Is it true that poverty alleviation contradicts with development? How to protect the right to development of poverty-stricken areas and how to help them achieve low-carbon development? Low-Carbon Plus Poverty Alleviation, which employs lowcarbon concepts and approaches to develop backward areas, increase people’s income and social wealth and create a sound ecological environment, seems to be the optimal solution in the current context. The backward areas in China usually refer to the contiguous poor areas with traffic inconvenience but sound environment, such as border areas, mountainous areas and old revolutionary base areas. Although these contiguous poverty-stricken areas are lagging behind in economic and social development, they are connected geographically and in similar natural conditions, and most of them are the national key ecological function zones. To define these areas as the main battleground for a new round of poverty alleviation is to open up a broader space for carbon financing and realizing the value of ecosystem services. The available policy instruments for LowCarbon Plus Poverty Alleviation are introduced as follows: (1) Policy instruments based on market mechanism Most of the forest resources and alpine grassland in China are concentrated in contiguous poor areas, which are remote and hard to get to, but their air, water and soil are less polluted, which makes it possible for these areas to convert ecosystem services into economic value by employing the market mechanism. Their work should be carried out from the following respects: – Development of carbon sink industry. More trees and grass should be planted to form forest carbon sink and grassland carbon sink, which can be traded in carbon market to convert into economic benefits. – Development of green and organic agriculture. The production of green and organic food should be intensified to meet the demand of high-end market. The added value of agricultural products should be increased to add a premium to the ecological service value. – Development of eco-tourism. Provide tourists with clean air and ecological landscape to meet their ecological consumption demand, which can generate economic benefits directly. (2) Policy instruments based on government transfer payment Ecosystem services are essentially public goods with their supply fundamentally guaranteed by the government. In addition to guiding the establishment of a market mechanism for realizing the ecological service value, the government also has some direct spendings:

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Subsidy for the returning of farmland to forest/returning of grazing land to grassland. Farmers will be directly subsidized based on the returned area from farmland/grazing land. Compensation for non-commercial forests. The government shall compensate the organizations, operators or owners of non-commercial forests (e.g., shelterbelts or forests for special purpose) for forest ecological benefits, in an aim to plant trees, as well as nurture, protect and manage forest resources. Subsidy for protective farming. The government shall subsidize the farmers who adopt the protective farming techniques such as stubble (straw) mulching, so as to encourage them to protect farmland, control dust, resist drought, save water, remediate soil acidity and increase soil fertility, increase per unit area yield, and reduce farming costs. Subsidy for agricultural water-saving. Farmers are subsidized for using watersaving irrigation equipment and techniques in the process of farming. Subsidy for soil testing and formulated fertilization. The government should pay for soil testing and necessary trainings, and provide free fertilization formula to farmers for decreasing fertilizer consumption. Subsidy for use of clean energy. Farmers are subsidized for consuming biogas and other clean energy. Compensation for watershed ecology. Under the leadership of the Central Government or the local governments at the upstream or downstream of watershed, a charge mechanism should be established for the downstream users enjoying ecosystem services, while upstream farmers and villages will receive ecological compensation in the form of inter-governmental transfers.

(3) Policy instruments based on civil society and international cooperation Ecosystem services are a kind of public welfare undertaking. Activities such as emission reduction and carbon sink can provide public goods that transcend national boundaries. Civil society and international community are prominent supporters of ecosystem services. – Private low-carbon development fund. Being financed by charitable funds, NGOs or enterprises may set up a compensation fund for the ecological environment in contiguous poverty-stricken areas, so as to subsidize specific projects. – REDD is short for Reducing Emissions from Deforestation and Forest Degradation, while “REDD Plus” is an endeavor that combines REDD with “forest carbon sinks” and “sustainable forest management”. The connotation of REDD Plus is that the international community will, by means of providing compensation funds and strengthening capacity building, support developing countries (including China) in the prevention of deforestation and degradation, forest carbon sinks and sustainable forest management.

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In conclusion, in order to effectively implement the Low-Carbon Plus Poverty Alleviation strategy, the focus should be placed on the areas rich in ecosystem services and the ecological fragile areas: For the areas rich in ecosystem services, it is important for them to build a benign interactive mechanism between ecology and economy. (1) Further improve the ecocompensation mechanisms. The Chinese government has developed policies on the establishment of eco-compensation mechanisms and gives priority of compensation to poor areas. In this context, in order to implement the Low-Carbon Plus Poverty Alleviation strategy, efforts should be made in establishing relevant eco-compensation mechanisms for contiguous poor areas, in addition to developing carbon trading schemes. (2) Develop eco-friendly industries, especially those that stress the ecological service value. The effect of eco-compensation mechanisms, which are essentially a secondary distribution of wealth, is subject to government finance and corporate profitability. But eco-compensation only plays a supporting role in poverty relief, meaning that the areas rich in ecosystem services should create wealth on their own to eliminate poverty, i.e., they should increase the income from primary distribution by developing eco-friendly industries, especially those that care about the ecological service value. These industries include but are not limited to tourism, eco-agriculture, and cash crops. For example, in Wuling mountainous area, the planting of economic forests (e.g., camellia and citrus) should be combined with afforestation and returning of farmland to forest; Qin-Ba mountainous area is available for developing tourism, elderly care, shipping and distinctive agricultural products, which are favorable for improving local environment and casting off poverty to get rich. For the ecological fragile areas, the key to poverty relief and development is to open up sustainable livelihood channels that can ease environmental pressure, alleviate or even eliminate the tension between human activities and ecological environment. The transformation of the means of livelihood is to replace the one relies on intensive use and depletion of environment and resources by the one that makes little or no use of environment and resources. There are mainly three directions for transforming the means of livelihood: (1) Eco-migration. (2) Development of low-carbon industries. Ecological fragile areas are available for developing ecological agriculture and animal husbandry, traditional handicraft, characteristic low-carbon processing, culture, and eco-tourism. The development of these industries can be placed at the height of environmental protection and emission reduction, and supported by the eco-compensatory policy instruments such as returning grazing land to grassland, returning farmland to forest, soil and water conservation, natural forest protection, shelterbelt construction, desertification control and other ecological rehabilitation projects. (3) Create eco-friendly and non-commercial jobs. In some important ecological preservation areas, a certain proportion of jobs should be reserved for local residents, who are more willing to protect their dwelling environment. The conditions for making carbon trading as an option for poverty relief and development have gradually matured. In the areas rich in ecosystem services, when and

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only when the potential of ecosystem services is associated with the predictable economic gains, local residents will be motivated to maintain and even expand this potential, and the most direct way to do so is payment for ecosystem services (PES). (4) “Trinity” of special poverty alleviation, industry-based poverty alleviation, and social poverty alleviation – Special poverty alleviation. It includes poverty alleviation relocation, entirevillage advancement, providing employment as a form of relief, poverty alleviation through industrialization, employment promotion, pilot poverty alleviation, and construction of old revolutionary base areas. – Industry-based poverty alleviation. It includes clarifying departmental responsibilities, developing characteristic industries, alleviating poverty through science and technology, improving infrastructure, developing education and cultural undertakings, optimizing the management of public health and population services, strengthening the social security system, and intensifying efforts in energy development and eco-environment construction. – Social poverty alleviation. It includes strengthening targeted poverty alleviation, promoting the anti-poverty coordination between the eastern and western regions, giving play to the role of the armed forces and the armed police, and mobilizing enterprises and all sectors of society to participate in poverty alleviation. The information registration of natural resource assets should go through nine procedures, e.g., definition of natural resource assets, database construction, preparation of detailed ledger, confirmation of rights to resource assets, and determination of accounting factors, for the purpose of implementing the rights to use and manage natural resource assets. In the context of global climate change, as well as resource and environmental constraints, it is necessary to transform the development pattern and marketize resource and environmental prices or environmental rents, e.g., to collect royalties for high-quality resources and environmental rents for projects developed in different places, in an aim to make low-carbon development an important path for underdeveloped areas to shake off poverty and become prosperous. A government-guided and market-led eco-compensation mechanism should be established to play the regulatory role of the market, and facilitate the rational flow of ecological resources. The government has issued policies and regulations on centralized auction of high-quality ecological resources in backward and impoverished areas through the environmental trading mechanism, companies in developed regions can submit a bid to use these ecological resources. The auction proceeds, which are owned

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by the government that has jurisdiction over these ecological resources, are to be spent on the development of local ecological economy.5

2.2.3 Expansion: Scope expansion Since the concept of Low-Carbon is closely associated with low-carbon economy, the feasibility and necessity of carbon emission reduction are usually discussed from the perspectives of economic sphere, industrial structure and energy mix. Low-Carbon Plus goes further to expand the coverage of Low-Carbon from economy to social, cultural, political and diplomatic spheres, so as to form low-carbon society, low-carbon culture, low-carbon politics and low-carbon diplomacy. As for their significance to low-carbon development path, low-carbon economy is the core, low-carbon society is the social foundation, low-carbon culture is the endogenous driving force, and lowcarbon politics is the institutional guarantee. Low-carbon society and low-carbon culture are ideological aspects of low-carbon development, aiming to implant the low-carbon concept into every aspect of social life. Low-carbon politics is to add Low-Carbon or green indicators into the evaluation indicator system for government performance assessment, and appropriately increase the weight of these indicators, so as to urge government managers and officials to pay greater attention to low-carbon development. Low-carbon diplomacy is to promote China’s international status by building the image of a responsible low-carbon country. 2.2.3.1 Low-carbon society Society is an abstract concept with its scope of coverage not uniformly defined. Similarly, the definition of “low-carbon society” in the strictest sense is yet universally accepted. According to the findings in the Japan-UK Joint Research Project “Developing Visions for a Low-Carbon Society (LCS) Through Sustainable Development”, a lowcarbon society should be the one that takes actions to meet the development needs of all groups in society by following the sustainable development principle; and the one that has made a due contribution to reducing global GHG emissions by raising energy use efficiency, consuming low-carbon energy, and adopting low-emission consumption patterns and behaviors. It can be said that low-carbon society is characterized by Low-Carbon emissions, with low-carbon economy as the development pattern and direction, and low-carbon life of citizens as the ideology and code of conduct. According to the Chinese Professor Hong Dayong, low-carbon society can be broadly defined as a brand new and integral

 Zhou Qiang, Strengthening areas of weakness in building a moderately prosperous society in all respects [J]. China Economic & Trade Herald, 2016(3): 21–22.

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social form that adapts to global climate change and reduces carbon emissions; based on a comprehensive reflection of the technical pattern, organizational system, social structure and cultural values of the traditional industrial society, low-carbon society puts sustainability at the first place, and insists on a systematic low-carbon reform of economy, politics, culture and lifestyle.6 As a common goal of the whole world, lowcarbon society seeks for a minimal cost for economic development, a harmonious relationship between man and nature, as well as humanity and tolerance. If low-carbon economy is an economic system that reduces emissions by means of technology and efficiency, then low-carbon society is an important prerequisite for the development of low-carbon economy, and the only way to cope with global climate change. Low-carbon society, which is a revolutionized social development model in succession to agricultural society, industrial society and information society, requires to minimize energy and resource consumption and CO2 emissions for the purpose of sustaining the socio-economic development. In contrast, the traditional economic growth theory holds that economic development should depend on the input of natural resources and productive factors, and gives no consideration of the constraint of CO2 emissions. In the future, the carbon emission space is likely to be taken as a limited natural resource, the scarcest productive factor, and the constraint of economic development. Furthermore, low-carbon society is also a revolution of lifestyle and consumption concept, that is, in both work and life, people should pay attention to reducing energy consumption and carbon emissions, preferring simplicity and frugality to extravagance and waste, and opposing over-processing and over-packaging. And people should take Low-Carbon and environmental protection as the aesthetical standard, catch up with the new trend of green and low-carbon development, and practice a low-carbon lifestyle which saves electricity, water, oil and natural gas. As the rational thinking of human beings who inhabit in a deteriorating environment, low-carbon society reflects the concept of sustainable development and expresses the appeal for harmonious coexistence between man and nature. 2.2.3.2 Low-carbon politics Since economy is closely related to politics, the development of low-carbon economy is sure to affect the political system of a country and gradually form the polity under low-carbon economy, namely low-carbon politics, which is manifested as a layered structure with low-carbon democracy at the top, low-carbon governance at the middle, and low-carbon government at the bottom. The top-level low-carbon democracy means that politicians and voters usually play a game in deciding climate change issues when climate becomes one of the world’s public goods, and their selfishness is likely to obstruct the global climate cooperation.

 Hong Dayong. A preliminary study on the construction of a low–carbon society in China [J]. Journal of Renmin University of China, 2010(2): 19–26.

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Low-carbon governance—a kind of governance with Low-Carbon as a shared vision—requires the government to position itself as an “elder among peers”, implement transformational leadership, and provide a platform for negotiation and dialogue, as well as favorable institutional arrangements and policy design, to motivate enterprises and the public to make concerted efforts in realizing low-carbon targets. In the scenario of low-carbon governance, political leaders and officials should firstly acknowledge that low-carbon economy is a yardstick for the international community to measure a country’s sense of responsibility, and a determinant of its core competitiveness in the future. Low-carbon government means that the government has fully accepted the lowcarbon concept, takes the lead in low-carbon practices, and pays attention to reducing energy consumption and carbon emissions in all aspects of work. Governments of higher levels will assess the low-carbon performance of their inferiors from the following aspects: the government should have a lean and cost-efficient organizational structure; the office building should go through low-carbon renovation, all civil servants should save vehicle energy consumption, use less office paper and electricity, and avoid social gatherings and other unnecessary high-carbon behaviors; the workflow should be decarbonized, bureaucracy should be replaced by flat management, and paperwork and meetings should be reduced by means of information technology. As far as China is concerned, low-carbon politics should start from the building of a low-carbon government, which can lead the low-carbon trend of the whole society, and introduce scientific and forward-looking policies to encourage low-carbon production by enterprises and low-carbon consumption by residents. After low-carbon governance takes shape on this basis and then converges with the top-level lowcarbon democracy, the whole picture of low-carbon politics will be unfolded. Amid the green industrial revolution in the new century, China should take the chance to become the initiator, leader and innovator of this revolution, in an aim to resolve the enormous pressure from the international community to reduce emissions, and make contributions to global sustainable development.7 2.2.3.3 Low-carbon culture The development of a low-carbon economy and a low-carbon society requires technological innovation, capital input, establishment and perfection of supporting systems, and particularly the cultivation of a low-carbon culture. Technological innovation, capital input or system improvement are part of human behaviors which are determined by people’s values, thoughts, customs, attitudes, norms and other spiritual factors, that is, cultural factors. In this sense, what people are doing is determined by what they are thinking, or by their cultural “instruction”. Therefore, efforts must be  Yin Yanhong & Wang Yong, Low–carbon politics from a hierarchical perspective [J]. Journal of Guangdong Institute of Public Administration, 2012,24(4): 17–21.

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intensified to foster a low-carbon culture in the whole society, which is particularly important for the development of a low-carbon economy and a low-carbon society. In a narrow sense, low-carbon culture is defined as the sum of values, ideas, knowledge, customs, beliefs, attitudes, norms and other spiritual factors about low CO2 emissions,8 while low-carbon culture in a broad sense also includes tangible objects and technologies, as well as intangible systems, rituals and other social forms. In a narrow sense, low-carbon culture is defined as the sum of values, thoughts, knowledge, customs, beliefs, attitudes, norms and other spiritual factors about low CO2 emissions,9 while low-carbon culture in a broad sense also includes tangible objects and technologies, as well as intangible systems, rituals and other social forms. Low-carbon culture can be examined from four dimensions: instrument, system, behavior norms and ideology. (1) Low-carbon instrument, which indicates the technology and machinery equipment with low CO2 emissions, exists in physical form and serves as the material and technological basis for the low-carbon development of economy and society. (2) Low-carbon system, which is made up of the institutions, regimes and mechanisms in economic, social, scientific and technological, educational and corporate spheres that are dedicated to CO2 emission reduction, is a form of social organization that guarantees the formulation and compliance of low-carbon behavior norms. (3) Low-carbon behavior norms, which are made up of mandatory and nonmandatory rules (e.g., laws, regulations, policies, and moral codes), regulate the CO2 emission behaviors of enterprises, public institutions and citizens to satisfy the requirements of low-carbon development. (4) Low-carbon ideology refers to the values, thoughts, knowledge, customs, beliefs, attitudes and other ideological factors related to low CO2 emissions. Within low-carbon ideology, which is the core of low-carbon culture, values, thoughts and attitudes play a fundamental role in deciding and guiding the formulation of low-carbon behavior norms for people to abide by, hence pointing out the ideological direction and providing the spiritual support to low-carbon development. Low-carbon culture has the following characteristics: Firstly, it is a culture that takes ecological value as its core value. Such value orientation requires to replace Protagoras’ principle that “man is the measure of all things” by “ecology is the measure of all things”, deviates from the values that place one-sided emphasis on materials, economy and mankind while ignoring the benefits of nature, environment and ecology, and seeks after ecological progress. In this sense, the so-called low-carbon development, which takes ecology as the measure of value, causes minimal damage to ecology and such damage can be compensated, restored and reconstructed.  Tan Xinmin. Low-carbon culture and its fundamental role in low–carbon development [J]. Studies in Dialectics of Nature, 2011 (4): 122–126.  Tan Xinmin. Low-carbon culture and its fundamental role in low–carbon development [J]. Studies in Dialectics of Nature, 2011 (4): 122–126.

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Secondly, it is a culture that endorses a green and eco-friendly attitude of living. Low-Carbon, which means low emissions and low pollution, advocates a natural, healthy, safe, green and eco-friendly living attitude and philosophy, and represents a cultural perspective that does not satisfy human desires, economic growth and social development at the cost of damaging health and the environment. In short, lowcarbon culture is a new attitude of living established on the basis of profound reflections on the economic and social development paradigm during the industrialization since the mid-18th century. Thirdly, it is a culture that prefers thrift and frugality. Low-carbon culture appreciates a thrifty and simple lifestyle, as well as moderate production and consumption. It requires the transformation from the high-consumption lifestyle into the low- consumption one, advocates a simple, moderate and sustainable consumption concept but opposes consumerism and hedonism, prefers a programmatic consumer psychology to conformity, comparison and flaunt, favors scientific and rational consumption behaviors instead of blindness, impulsiveness and personal loyalty, and endorses a rational and civilized consumption pattern rather than the irrational and uncivilized one. Finally, it is a culture that echoes with sustainable development. Low-carbon development, which pursues the sustainability of socio-economic development, is essentially a basic way of sustainable development. It requires a shift from the unsustainable development—abnormal development based on “things” but ignores the overall progress of mankind and society, and one-sided development that centers on “man” but neglects the balance between man and nature, resource cost, environmental carrying capacity, and the development rights and interests of future generations—to the comprehensive, coordinated and sustainable development of people, society, and the environment. The Low-Carbon Plus Strategy extends Low-Carbon from the economic sphere to the cultural sphere, in an aim to cultivate a low-carbon culture in the whole society, and inculcate the public with low-carbon values and thoughts and guide them to cut CO2 emissions in both production and everyday life, which will pave the way for lowcarbon development. China has pledged to reduce CO2 emissions per unit of GDP by 40%~45% from the 2005 levels by 2020. In order to fulfil such commitment, it is far from enough to simply employ economic, technological and institutional instruments, what is more important is to vigorously implement the Low-Carbon Plus Strategy and form a strong low-carbon cultural atmosphere. The general public need to establish low-carbon values, develop low-carbon attitudes and habits, learn relevant knowledge and skills, abide by the laws, policies and moral codes on emission reduction, and perform due responsibilities in lowering CO2 emissions in production and daily life. Only when people voluntarily behave in a low-carbon manner that low-carbon development will become an act of following the natural course.

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2.3 Theoretical basis of the Low-Carbon Plus Strategy Low-Carbon Plus is not only the extension of the low-carbon connotation, but also the development and innovation of low-carbon theories. The proposition of theories is usually driven by practical demand, and after getting matured, theories will guide the further development of practices from a higher level. Firstly, Low-Carbon remains the core content and foundation of the Low-Carbon Plus Strategy. Low-Carbon is a new realm and a new thing derived from people’s realistic need for controlling GHG emissions caused by climate change. The purpose of low-carbon development is to achieve sustainable development of human beings, mitigate the impact of human activities on the natural environment, and harmonize the relationship between man and nature. Therefore, the theory of sustainable development is bound to be the most solid theoretical basis and theoretical source of the Low-Carbon Plus Strategy. Secondly, the Low-Carbon Plus Strategy, which extends the low-carbon strategy from economic sphere to social and cultural spheres, reflects the relationship between carbon emissions and human development, and the relationship between human development and the environment. Therefore, Ecological Footprint Theory, Decoupling Development Theory and Environmental Kuznets Theory have become additional theoretical supports for the Low-Carbon Plus Strategy. Finally, the Low-Carbon Plus Strategy requires the coordination and cooperation between low-carbon policies and other policies for green development, innovation and poverty relief. Therefore, Synergistic Theory and policy coordination mechanism also serve as the theoretical basis for interpreting the Low-Carbon Plus Strategy.

2.3.1 Sustainable development theory The Sustainable Development Theory originated in the 1950s and 1960s when people were faced with the environmental pressure caused by economic growth, urbanization, population expansion and resource consumption. This situation raised questions about the “growth is development” model. In 1962, the American biologist Rachel Carson published Silent Spring which depicted a horrifying picture caused by pesticide pollution, and warned that the pleasant spring might become a thing of the past. This book triggered a worldwide debate on the approaches to development. A decade later, The Limits to Growth: A Report to the Club of Rome came out, presenting the notions of “sustained growth” and “reasonable, sustainable and balanced development”. In 1987, at the World Commission on Environment and Development (WCED), the then Norwegian Prime Minister Brundtland delivered the report Our Common Future in which he formally put forward the concept of sustainable development, and with this concept as the theme, he expounded the environment and development issues of common concern to mankind, which drew great attention of governments,

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organizations and news media around the world. At the 1992 United Nations Conference on Environment and Development (UNCED), the sustainable development concept was widely accepted by the representatives of participating countries. 2.3.1.1 Content of sustainable development In terms of specific content, sustainable development is a unity of sustainable economy, sustainable ecology and sustainable society. It requires individuals to pay attention to efficiency, ecological harmony and social equity during development, so as to get prepared for all-round development of human beings. This shows that sustainable development, despite of originating from environmental protection, has sublimed to a development theory leading mankind towards the 21st century, instead of being limited to environmental protection. By combining environmental and development issues in an organic manner, sustainable development has been accepted as a comprehensive strategy for socioeconomic development. The research of sustainable development, which is an all-embracing and crosscutting research subject, can be done from a multi-disciplinary angle. For example, ecologists look at sustainable development as a natural issue and take it as the development of human society which cannot exceed the renewability of environmental system. Economists treat sustainable development as an economic issue, believing that sustainable development is to maximize the net benefits of economic growth on the premise of maintaining the quality and supply capacity of natural resources. According to sociologists, sustainable development is to improve the quality of human life as much as possible without exceeding the carrying capacity of ecosystem. In the view of scientists and technologists, sustainable development is to build a green process or technical system that generates few wastes and pollutants. 2.3.1.2 Basic ideas of sustainable development (1) Sustainable development does not deny economic growth. Economic development is the material basis for human survival and progress, and for social development and environmental protection and restoration. Development is especially important for underdeveloped areas, since poverty is the root cause of environmental degradation which in turn exacerbates poverty. Regarding underdeveloped countries and regions, they must adopt appropriate approaches to consume energy and raw materials, so as to reduce losses, eliminate waste, relieve the environmental pressure caused by economic activities, and seek for sustainable economic growth. (2) Sustainable development, which is dependent on natural resources, is coherent with environmental carrying capacity. Sustainability is to be achieved through appropriate economic instruments, technical measures and government intervention, for the purpose of harmonizing the relationship between man and nature, and reducing the consumption of natural resources to make it slower than resource regeneration. There

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should be a set of valid policy mechanisms, so as to guide companies to adopt clean process and low-emission production and motivate consumers to transit to sustainable consumption. The proposition that “first-class environmental policy must be first-class economic policy” is a symbol of sustainable development, making it distinctive from traditional development. By the way, in case of environmental degradation, the huge costs are about to offset the fruits of economic growth. (3) Sustainable development pursues the goal of improving people’s living quality and catching up with social progress. The growth of output value cannot reflect the connotation of development, because the veritable development is to transform the socioeconomic structure and fulfill a range of social development goals, otherwise, it will be no better than a kind of growth. (4) Sustainable development recognizes the value of natural environment. This value is not only reflected in the environmental support and service to economy, but also in the environmental support to the life support system. The input of environmental resources in production should be counted in production costs and product price, and the system of national accounts (i.e., “green GDP”) should be gradually improved. In order to fully reflect the value of natural resources, product price should be made up of three costs: resource exploitation or acquisition costs; environmental costs related to resource exploitation, acquisition and utilization, e.g., environmental purification cost and environmental damage cost; and user costs (certain resources consumed by contemporary people will be unavailable to future generations, hence causing loss of benefit). The selling price of products—the sum of these costs plus taxes and distribution charges—is borne by manufacturers and consumers, and ultimately by consumers. (5) Sustainable development is an opportunity for fostering new economic growth points. It is generally believed that sustainable development may slow down economic growth since it is strict with pollution control and environmental protection, and opposed to excessive mining, deforestation and resource waste. But the fact is that sustainable development is to restrict the industries with poor quality and low efficiency, which will broaden the development space for green industries, ecofriendly industries, health care industries and energy-saving industries; all of them contain a large number of new economic growth points. 2.3.1.3 Sustainable development supports low-carbon development Sustainable development is inherently linked with Low-Carbon in terms of connotation and denotation. Sustainable development, which emphasizes a harmonious relationship among economy, society, resource and environment, is to meet the needs of contemporary people without compromising the benefits of future generations. The only way to accomplish the goals of sustainable development is low-carbon development, which involves green economy, eco-friendly industries, energy-saving production and lifestyle. In short, harmonious coexistence of man and nature is a guarantee

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for the long-term stability of human society, healthy development of ecological environment, and sustainable development of mankind.

2.3.2 Man-land relationship theories Human development is sure to affect the environment, but at the same time restricted by environmental carrying capacity. The theories of relationship between human development and environment, or man-land relationship theories, also serve as the theoretical basis of the Low-Carbon Plus Strategy. The typical man-land relationship theories are introduced as follows: 2.3.2.1 Environment kuznets curve Kuznets Curve was proposed by the Nobel laureate economist S. Kuznets in the 1950s to depict the relationship between the level of per capita income and the degree of distribution fairness. Since income inequality first rises then descends along with economic growth, Kuznets Curve is represented as an inverted U curve. During the North American Free Trade Agreement (NAFTA) negotiations in 1991, Americans were worried that the free trade with Mexico may ruin the environment of their homeland. In this context, American economists G. Grossman and A. Krueger carried out an empirical study on the relationship between environmental quality and per capita income, and found that pollution increases with rising per capita GDP in low-income scenario, but decreases with rising per capita GDP in high-income scenario. By consulting with the Kuznets Curve, Panayotou came up with the Environmental Kuznets Curve (EKC) to depict the relationship between environmental quality and per capita income in 1965. EKC shows that economic development has a powerful impact on the degree of environmental pollution: ecological environment continues to deteriorate with economic growth and increasing per capita income, and environmental pollution will not decrease with rising per capita GDP until economic development reaches a certain level. Since China is in a critical stage of accelerated industrialization and urbanization, rapid economic growth and continuously increasing population have exacerbated the shortage of resources. If the current growth and consumption patterns remain unchanged, resource and environmental constraints will become increasingly acute. In this context, the implementation of the Low-Carbon Plus Strategy will help transform the economic growth pattern, adjust consumption structure and industrial structure, and ultimately promote sustainable development. 2.3.2.2 Decoupling theory “Decoupling” was originally a term of physics, which means to break the response relationship between two or more physical quantities. As early as 1966, foreign scholars

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presented “decoupling” of economic development from environmental pressure, bringing this notion into the socio-economic sphere for the first time.10 Later, the Organization for Economic Cooperation and Development (OECD) proposed the Decoupling Theory to analyze the relationship between economic growth and resource consumption or environmental pollution. To be specific, economic growth and resource consumption or environmental pollution should be decoupled.11 According to the EKC hypothesis, continuous economic growth will lead to mounting environmental pressure and resource consumption, however, the employment of appropriate policies and new technologies may achieve the same or even faster economic growth with lower environmental stress and resource consumption, and this process is known as decoupling and represented by an inverted U curve. According to the OECD, there are absolute decoupling and relative decoupling. Absolute decoupling, which is also known as strong decoupling, describes the situation where environmental variables remain stable or decline along with economic development; while relative decoupling or weak decoupling describes the situation where economic growth rate and change rate of environmental variables are both positive values, but the latter is lower than the former.12 By applying the notion of decoupling to economic and environmental spheres— the decoupling thinking is similar to the laws of economic development and carbon emission, the Low-Carbon research is guided by the Decoupling Theory from the outset, hence laying the basis for forming the Carbon Emission Decoupling Theory. This theory analyzes the state and degree of decoupling with three indicators, i.e., change of aggregate economic growth, change of total carbon emissions, and GDP elasticity of energy carbon emissions, and defines scenarios of decoupling based on different combinations of the three indicators (see Table 2.2). In various scenarios of decoupling, strong decoupling the most ideal to achieve low-carbon development, while the goal of low-carbon development is to facilitate the strong decoupling of socio-economic development from carbon emissions. According to the available studies on carbon emissions both at home and abroad, in either developed or developing countries (regions), the evolution of the relationship between economic development and carbon emissions is represented by three inverted U curves (i.e., the inverted U curves respectively for carbon intensity, per capita carbon emissions and total carbon emissions), or in this evolution process, the peaks of the three inverted U curves are crossed one after another. In the latter case, the evolution will go through three major directional shifts, i.e., the ascending trend

 Li Xiaoshun, Qu Futian, Guo Zhongxing, et al. Study on the decoupling of urban and rural construction land [J]. China Population, Resources and Environment. 2008, 18(5): 179–184.  Peng Jiawen, Huang Xianjin, Zhong Taiyang, et al., Decoupling of economic growth and carbon emissions in China [J]. Resources Science, 2011, 33(4): 626–633.  OECD. Indicators to Measure Decoupling of Environmental Pressures from Economic Growth [R]. Paris: OECD, 2002.

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Table 2.2: States of decoupling between economic growth and carbon emissions.13 Decoupling

Negative decoupling

Strong decoupling

ΔGDP > 0 ΔC ≤ 0 %ΔC=%ΔGDP ≤ 0

Expansive negative decoupling

ΔGDP > 0 ΔGDP > 0 %ΔC=%ΔGDP ≥ 1

Weak decoupling

ΔGDP > 0 ΔC > 0 0 < %ΔC=%ΔGDP < 1

Weak negative decoupling

ΔGDP < 0 ΔC ≥ 0 %ΔC=ΔGDP ≤ 0

Recessive decoupling

ΔGDP < 0 ΔC < 0 %ΔC=%ΔGDP ≥ 1

Strong negative decoupling

ΔGDP < 0 ΔC < 0 0 < %ΔC=%ΔGDP < 1

of carbon intensity, per capita carbon emissions and total carbon emissions is to be replaced by the descending trend.14 After studying the carbon emission EKC, Prof. Wang Tongsan put forward the following laws of changes and developments (see Figure 2.2): Stage I is the period of CO2 emission accumulation, which is not only the primary development stage of economy, but also the stage before the peak of carbon intensity (Point A). In this stage where per capita income remains low, both carbon intensity and total CO2 emissions maintain a steady growth momentum. Stage II is the period of declining carbon intensity, i.e., carbon intensity will start decreasing after CO2 emissions reach the peak. In short, as the per capita income increases significantly, the carbon intensity will gradually fall back, but the total CO2 emissions will keep increasing. Stage III is the period of absolute CO2 emission reduction, i.e., the period after the peak of total CO2 emissions (Point B). As per capita income reaches a high level, both carbon intensity and total CO2 emissions will be on the downward track, which is a sign that CO2 emissions are decoupled from economic growth.15

 Lu Fengxian, Wang Xi, Qin Yaochen, et al., Theoretical basis of low–carbon development research [J]. China Population, Resources and Environment. 2012(9): 8–14.  CAS Sustainable Development Research Group. China’s Sustainable Development Strategy Report 2009 [M]. Beijing: Science Press, 2009: 52–53.  Zhou Jieqi, Wang Tongsan. Convergence of regional economic growth and carbon intensity differences and its rationale: an empirical analysis based on China’s provincial panel data [J]. Social Science Research, 2014(5): 66–73.

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Figure 2.2: Three stages of carbon intensity and total carbon emissions.

2.3.2.3 Ecological footprint theory Ecological Footprint Theory is a measure of human utilization of natural resources and the life support services provided by nature for human beings. It was proposed by Canadian ecological economist W. Rees in 1992 and perfected by his student M. Wackenagel in 1996. Ecological footprint converts the resources consumed by each individual into a productive area which is globally uniform. It is vividly described as “the footprint left on the earth by a giant foot which carries man and the cities and factories created by them”. This description shows the human impact on the earthly environment: when there is no enough land for this giant foot, the cities and factories built on the land will lose their support, and if the giant foot can never get a foothold, then the civilization it carries will eventually fall and collapse. The calculation of ecological footprint is based on the conceptual indicators such as ecological carrying capacity and ecological deficit/ surplus. When ecological footprint exceeds ecological carrying capacity, there will be ecological deficit, which indicates that human utilization of natural resources has exceeded their regenerative capacity. Carbon footprint has become an important carbon emission management tool that indicates human impact on the environment, especially climate change. Carbon footprint at first refers to the CO2 equivalent emissions from a product or service throughout its life cycle, and later extends to the GHGs generated by individuals or a region. In the United Nation’s Human Development Report 2007/2008, carbon footprint is used to expound the GHG emissions and emission reduction scenarios of all countries. The calculation of carbon footprint should count in two parts: one is the carbon emissions from the direct consumption of energy, and the other is the carbon emissions from the indirect use of products and services. Carbon footprint grows faster than any other footprint. According to the Human Development Report 2007/2008, if citizens of a developing country had the same carbon footprint as the average people in Germany or the UK, global emissions would

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now be six times higher than what we’ve identified as sustainable emission pathways; if the per capita carbon footprint of developing countries climbed to the level of the US or Canada, current global emissions would increase ninefold.

2.3.3 Synergistic theory Synergistic Theory, or Synergetics, was first proposed by German physicist H. Haken in the 1970s.16 According to Haken, under certain conditions, all sub-systems with relative independence, autonomy and self-interest can cooperate with each other to achieve the common ultimate goal, thereby ushering the disordered development of the entire system into an ordered state.17 Synergy effect, to put it simply, is a “1+1>2” effect. It is directly determined by synergy degree—a quantity that measures the closeness and interaction between the elements within the system and between the system and the environment. Higher synergy degree indicates that there are more connections, higher degree of integration and stronger interaction between elements and between the system and the environment; lower synergy degree indicates that there are less connections, lower degree of integration and weaker interaction between the elements and between the system and the environment. In a word, higher synergy degree is a sign that the system has stronger overall functions, while lower synergy degree stands for weaker overall function of the system.18 Although many scholars recognize the importance of policy synergy, there is yet a unanimous definition of what it is. It is generally believed that policy synergy refers to the case where policy makers and executors fulfill policy goals by taking advantage of coordination between policy measures. Policy synergy requires cross-border cooperation between multiple policies regardless of their subtle differences in contents and objectives, so as to magnify the common value of different policies. Policy synergy, which includes inter-organizational and intra-organizational synergy, can be achieved through “horizontal synergy”, “vertical synergy” and “time dimension synergy”. In China and elsewhere there have been rich theoretical studies and practices on the synergy effect of the policies and measures to address climate change. For example, the Policy Research Center for Environment and Economy, Ministry of Ecology and Environment of the PRC, once undertaken a study on the environmental synergy effect of the West-to-East Gas Transmission Pipeline Project, and found that this project—a strategic project for optimizing the current energy structure—will produce a significant environmental synergy effect, and such effect will magnify with the expansion of gas

 Peng Jisheng. Synergetics of Technological Innovation in China [M]. China Economy Press, 2000.  H. Haken. Advanced Synergetics [M]. Berlin: Springer-Verlag, 1983.  Zhang Guoxing, Gao Xiulin, Wang Yingluo, Liu Mingxing. Policy synergy: research on energy conservation and emission reduction policies from a new perspective [J]. Systems Engineering–Theory & Practice, 2014(3): 545–559.

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supply scale. To be specific, this project is expected to vigorously cut the emissions of SO2 and other air pollutants, as well as CO2 and other GHGs. From 2003 to 2020, in addition to reducing SO2 emissions by 3.12 million tons, CO2 emissions would be cut by 34.75 million tons, which would be 40.15% higher than the conventional scenario.19 Chen Changhong et al. (2003), by employing the MARKAL model, predicted the energy consumption and air pollutant emissions by 2020 under baseline scenario and energy policy-based scenario, and interpreted the additive effect of relevant policies in control over CO2 emission growth. They’ve found that, through the implementation of energy and environmental policies, the emissions of SO2, PM10 and other air pollutants would be much lower than the baseline scenario during the corresponding period, and the CO2 emission growth would be significantly slowed down. Under the energy policy-based scenario, the emissions of SO2, PM10 and CO2 would fall by 450,000 tons, 16 tons and 170 million tons, respectively, by 2020. Low-Carbon Plus is to combine low-carbon policy with other policies, technologies and projects, in an aim to have a two-way positive effect on GHG control, environmental protection, clean air quality and economic restructuring. In the future, there will be Low-Carbon Plus poverty alleviation, Low-Carbon Plus mass entrepreneurship and innovation, Low-Carbon Plus green development, and Low-Carbon Plus supplyside structural reform, and all of these endeavors will enjoy stronger policy support and a broader market space.

2.4 Realization path of the Low-Carbon Plus Strategy Low-Carbon Plus is the extension and enrichment of Low-Carbon, but remains centering on Low-Carbon. To effectively implement the Low-Carbon Plus Strategy, we must follow the path of low emissions, low pollution and low energy consumption, continue to transform traditional industries with low-carbon technologies, upgrade our consumption behavior with low-carbon philosophy, and create a low-carbon cultural atmosphere. We need to keep in mind the concept of “innovative, coordinated, green, open and shared development”, which was proposed at the Fifth Plenary Session of the 18th CPC Central Committee, and make the leap from Low-Carbon to Low-Carbon Plus in the following five aspects.

 Zhang Guoxing, Gao Xiulin, Wang Yingluo, Liu Mingxing. Policy synergy: research on energy conservation and emission reduction policies from a new perspective [J]. Systems Engineering–Theory & Practice, 2014(3): 545–559.

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2.4.1 Innovative In the face of mounting resource and environmental pressure and under the new normal situation, in order to build an ecological civilization and pursue green and lowcarbon development, we must give priority to innovation, establish such a belief that science and technology constitute a primary productive force and innovation is the primary driving force, and rapidly form a Low-Carbon Plus development model which is powered by technological and institutional innovation. The Low-Carbon Plus model mainly has two requirements: one is to reduce carbon emissions through lowcarbon technology innovation, and the other is to develop and innovate low-carbon technologies with the support of institutional innovation. 2.4.1.1 Vigorously carry out low-carbon technology innovation In order to have a voice and a leading position in the international arena on climate change, it is ultimately up to the efforts and effects of emission reduction, while lowcarbon technologies are no doubt the most powerful support. Low-carbon technologies refer to all kinds of carbon-reduction, carbon-free or de-carbon technological means for reducing GHG emissions and preventing climate warming, so as to promote low-carbon socio-economic development. Low-carbon technologies are likely to become a symbol of national core competitiveness, which implies that the one who owns advanced low-carbon technologies are sure to be the most competitive one. Generally speaking, low-carbon technologies involve energy-saving technology, carbon-free or low-carbon energy technology, and CCS which captures the CO2 generated by coal-based power generation and stores it underground. To be specific, American scholar Stephen W. Pacala et al. classifies the available carbon reduction technologies into five categories: energy efficiency improvement, fuel replacement and carbon storage, renewable energy, nuclear power, and carbon sequestration by forest land. The International Energy Agency (IEA) divides low-carbon technologies into nine categories: solar power, advanced transport means, energy conservation in buildings and industries, bioenergy, wind power, efficient and low-emission coal technology, smart power grid, CCS, and other energy sources. At present, there exists two prominent bottlenecks in low-carbon technology innovation: carbon lock-in of traditional energy and weak innovation ability. The situation of carbon lock-in—traditional carbon-based technologies rely on high energy consumption and high pollution—is a major stumbling block to the innovation, promotion and application of new energy technologies. In recent years, lots of Chinese companies have intensified efforts in the R&D of energy conservation and emission reduction technologies, and yielded some remarkable results. However, domestic research on clean energy technologies is neither mature nor comprehensive, the R&D of new energy is moneyconsuming, and companies themselves are inexperienced in low-carbon technology innovation. Worse still, developed countries impose technology blockade or even monopoly

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on the transfer of core technologies to developing countries. In view of this, low-carbon technology innovation is imperative for implementing the Low-Carbon Plus Strategy. Where is the direction of low-carbon technology innovation? In the short term, China should place the focus of low-carbon policies on promoting technology innovation in saving energy consumption and raising energy efficiency in industrial, construction and transportation sectors, and promoting the R&D and application of CCS in high-emission industries such as electricity, steel and cement. In the long term, China may shift the focus to the R&D and commercial promotion of renewable energy, new energy and nuclear energy, and to biological carbon sequestration and carbon utilization in forest land development.20 It makes no sense to designate any trendsetting technology at present, what is important is bold and persistent innovative practices. In the future, it is the technology that first makes breakthroughs and becomes popularized will lead the trend. 2.4.1.2 Institutional innovation is essential for low-carbon technology innovation Low-carbon technology innovation requires the vigorous support from the national innovation system. In this system, the government plays an essential role in introducing public policies and making institutional arrangements, in order to create a favorable institutional environment for all innovation entities to innovate, import, spread and apply low-carbon technologies. Institutional innovation should be carried out from the following five aspects: Firstly, promulgate fiscal input policies to support the R&D of low-carbon technologies. In order to encourage enterprises to continue the R&D and application of innovative low-carbon technologies, the government should provide them with necessary financial support by utilizing the regulatory fiscal and financial instruments and introducing preferential policies. Secondly, formulate or improve tax policies to motivate enterprises to develop low-carbon technologies. The policies of this kind mainly include preferential tax policies and restrictive tax policies for low-carbon technologies, energy conservation and emission reduction.21 Thirdly, improve the awarding policies oriented to low-carbon enterprises such as tax relief, preferential loans, low-carbon bonds and accelerated depreciation; and let government procurement drive the demand for low-carbon technology innovation. Fourthly, build public platforms dedicated to low-carbon technological service. We need to improve the national technological innovation system and enhance technological innovation capacity, which are essential for the sustainable development of low-

 Zhou Wuqi, Nie Ming. Public policy practice and enlightenment on promoting low–carbon technology innovation [J]. Forum on Science and Technology in China, 2011(7): 18–23.  Zhou Yanxia, Qin Shusheng, Ma Na. China’s policy support for developing low–carbon technologies [J]. Science and Technology Management Research, 2013(5): 41–44.

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carbon industries. The content of capacity building includes technological standards, data query, equipment and instruments, computing software, product certification, and professional training. Capacity building requires enterprises, research institutes, colleges, national key laboratories or engineering research centers to work together in consolidating and sharing resources. On the basis of an established sharing mechanism and management procedures for effective resource usage, we should build public platforms for providing low-carbon technological service, establish a number of venture capital institutions to fund the R&D of low-carbon technologies, and a national lowcarbon industrial R&D center. Fifthly, innovate the patent service system. The intellectual property administrative department should adjust the patent policies from the national strategic height, so as to create a favorable institutional environment for enterprises to enjoy convenient lowcarbon patent information service. (1) Establish a patent information tracking system and a risk warning mechanism dedicated to low-carbon technology innovation. (2) Improve the patent funding system for small and medium enterprises (SMEs) to apply, transfer or use low-carbon technology patents at a lower cost. (3) Expedite the substantive review and priority review of low-carbon technology patent applications where Chinese enterprises has a comparative advantage (e.g., solar heat utilization, hybrid electric vehicles, and wind power generation), and improve the efficiency of patent review and authorization. (4) Explore the feasibility of compulsory licensing for certain low-carbon technologies in consideration of public interest and urgency of low-carbon development.

2.4.2 Coordinated Coordinated Low-Carbon Plus development emphasizes the balance between rural and urban areas, between different regions, and between different sectors. 2.4.2.1 Urban-rural coordination To balance the low-carbon development of urban and rural areas means to break the urban-rural segmentation and dual contradiction which are attributed to the traditional development model that prioritizes urban areas and industrial development, optimize industrial structure, increase regional economic benefits, raise resource use efficiency and environmental ecological benefits by respecting the laws of nature and ecology, and attach equal important to the interests of urban and rural areas to guarantee their efficient, coordinated and sustainable development. Firstly, coordinate the low-carbon use of urban and rural land resources. Proper utilization of land resources is the basis for the overall planning of low-carbon urban and rural construction, industry centralization, and large-scale land management. In this way, the land resources of urban and rural areas will complement

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each other to broaden the development space for urban areas, and divert more development funds to rural areas and improve their infrastructure construction. As a result, both urban and rural land resources will be subject to intensive utilization and efficient allocation, which is beneficial to urban development and protection of rural farmland. Secondly, innovate new mechanisms for urban-rural interaction. We should develop low-carbon agriculture and promote organic farming to help farmers get higher returns than conventional agriculture. We should advocate civilized consumption, form a benign interactive mechanism between local production and consumption in a given area, and shorten the processing and transportation cycles. There should be a mutual assistance mechanism for urban and rural areas to jointly develop an ecological economy, and ensure food safety at the source of production and mutual benefits for urban and rural residents. Thirdly, coordinate the construction of a low-carbon eco-environment in urban and rural areas, and integrate their eco-environmental protection. Instead of only paying attention to urban areas, urban and rural environments should be taken as an inseparable organic whole, that is, their low-carbon eco-environmental protection should be integrated. 2.4.2.2 Regional coordination Owing to unbalanced regional economic development, China’s low-carbon economic transformation ultimately depends on the conscious actions of all regions. What are the difficulties in coordinating regional low-carbon development? According to Huang Shikun, the unbalanced regional development has led to three contradictions in low-carbon development: the contradiction between low-carbon economy and localized interest of a region; the contradiction between low-carbon economy and balanced development between regions; and the contradiction between low-carbon economy and optimized regional development. Given this, China mainly has three difficulties in promoting lowcarbon development at the regional level: no region has intrinsic motivation to take unilateral actions for reducing carbon emissions; there is a paradox of low-carbon economy, i.e., faster development of backward regions is more detrimental for the achievement of emission reduction targets; and low-carbon development may conflict with exploiting regional comparative advantages. To coordinate the Low-Carbon Plus development of all regions, the efforts should be made from five aspects: (1) Construct a regional responsibility mechanism for carbon emission reduction, which involves regional decomposition of energy conservation and emission reduction and regional target responsibility assessment. (2) Establish or improve the mechanisms for developing regional low-carbon economy (e.g., improve the carbon tax mechanism, reform the energy and resource pricing mechanism, and improve the incentive binding mechanism), strengthen the regulation of local governments, and improve the regional identification of policies. (3) Establish a market

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mechanism at the regional level, which includes reasonable layout of carbon trading markets, development of third-party institutions, standardized operation, improvement of government management efficiency and legal protection, and construction of a carbon trading insurance system. (4) Establish a regional mutual assistance and cooperation mechanism, including inter-temporal exchange mechanism and benefit sharing mechanism. Specifically, there may be “pair-wise province-to-county aid”, “paying more taxes and transfer payment”, and “technical assistance” in different regions; carbon emission reduction may be incorporated into “pairing assistance” to aid more qualified areas, and a technology improvement fund may be set under the central transfer payment. (5) Improve the inter-regional industrial transfer mechanism, including the setting of barriers to prevent transfer of unqualified industries, establishment of an interregional compensation mechanism for carbon transfer, and enhancement of low-carbon construction and energy-saving management of industrial parks.

2.4.3 Green Under the direction of the 18th National Congress of the CPC convened in 2012, we should adhere to the principles of prioritizing resource conservation and environmental protection and letting nature restore itself, and give priority to green, circular and low-carbon development. And the entire process of Low-Carbon Plus development should be guided by the “green philosophy”, meaning that we should pursue green economic development, green environmental development and green social development. 2.4.3.1 Green economy As a new philosophy of economic development, green economy is based on the idea of sustainable development and committed to improving human welfare and social equity. Green economy, which serves as the material basis of green development, has two implications: One is that economy should be eco-friendly, that is, all economic activities must be premised on environmental protection and conducive to ecological benefits instead of doing harm to the environment. The other is that environmental protection should be economical, that is, environmental protection activities may yield some economic benefits and even serve as a new economic growth point, and the belief that “clear waters and green mountains are as good as mountains of gold and silver” should be embedded in people’s brains. 2.4.3.2 Green environment Green environment means that people should properly utilize natural resources, prevent natural and humanistic environment from being polluted and destroyed, protect a variety of creatures, maintain ecological balance, improve people’s living environment,

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harmonize the relationship between man and the natural environment and do good to their common development. In order to resolve the contradiction between economic development and environmental protection, the inevitable choice is to build an ecological civilization and develop a low-carbon economy. To this end, we need to make efforts in reforming economic structure, increasing capital input, making technological breakthroughs, introducing favorable policies and laws, creating a green and low-carbon cultural atmosphere, taking part in international cooperation, and implementing demonstration projects. 2.4.3.3 Green society Green society means that green production mode, green lifestyle and green consumption should be popularized across society, both economy and ecology are sent into a virtuous cycle, and people live in harmony with each other and with the natural environment. To develop a green society, we must prioritize resource conservation and environmental protection and let nature restore itself, take green, circular and lowcarbon development as the basic approach, stick to thrift and intensive utilization of land, water, energy and other resources, strengthen environmental protection and ecological restoration, reduce the disturbance and damage to the natural environment, and promote green and low-carbon production mode and lifestyle.

2.4.4 Open Climate change is a common challenge facing mankind and bears on the fundamental and long-term interests of all countries. In order to effectively address the issue of climate change, countries around the world have entered into several rounds of negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) and agreed on GHG emission reduction targets, approaches, capital input and technologies. The effectual Paris Agreement (2015), which is a landmark achievement after the Kyoto Protocol (1997), has ushered global multilateral governance of climate change into a new era. 2.4.4.1 Low-Carbon Plus requires extensive global climate cooperation Low-carbon development requires inter-governmental policy coordination and exploration of diversified paths of cooperation. For this reason, the international community needs to establish an institutional framework for transnational cooperation, which is the key for countries across the world to get out of the Prisoner’s Dilemma. Under the constraints of the international institutional framework, all countries should actively cooperate with each other by means of reaching transnational technological agreements, carrying out low-carbon projects, and promoting low-carbon commercial activities.

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Climate warming is by far the biggest crisis and the biggest public problem in the history of mankind. To mitigate the effects of climate change, the international community had established three market-based emission reduction mechanisms while the Kyoto Protocol (1997~2012) was still valid: International Emission Trade (IET), Joint Implementation Mechanism (JI), and Clean Development Mechanism (CDM). Among them, it is the CDM that has brought financial and technological benefits to developing countries. The Paris Agreement provides detailed and workable provisions on Nationally Determined Contributions (NDCs), adaptation mechanism, loss and damage, financial mechanism, capacity building, transparency, global inventory and market mechanism, and lays out systematic arrangements for post-2020 global low-carbon development. By summing up the 20 years’ experiences and lessons from implementing the UNFCCC and the Kyoto Protocol and pooling the collective wisdom of politicians, negotiators and experts, the Paris Agreement was finally reached to form a flexible but irreversible international framework on climate change. As a new starting point of human beings to march towards the goal of sustainable development, the Paris Agreement has pushed the international cooperation on climate change to a new stage, pointed out the direction for energy transition and development of a green and lowcarbon economy, and has exerted a far-reaching impact on domestic policy making. 2.4.4.2 Learning and sharing experiences is essential for openness and cooperation In order to embark on the path of low-carbon development as soon as possible, China needs to learn from the relevant experiences and lessons from other pioneering countries. Although quite a number of countries implement low-carbon development strategies, they are in different development stages, varying from each other in development philosophies, growth patterns and resource endowments, which decide their different positions in the international arena. For this reason, different countries have different gains and lessons in low-carbon development. The EU was the first region to tackle climate change, and the UK is the first country that proposed “low-carbon economy”. Both of them have set examples for other regions and countries that are exploring lowcarbon development. For example, the EU implements strict climate policies and a sound emissions trading system (EU ETS). The development of renewable energy and the improvement of energy efficiency have all along been the primary targets of the EU climate policies. Under the strict policy framework, the EU has been motivating its member states to pursue low-carbon economic development through institutional and technological innovations, and achieved good results, hence becoming a global leader in combating climate change for a time. By drawing heavily on the EU’s climate policies and combining its own practices, China has formulated its own low-carbon plans and policies, launched carbon trading

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pilot programs, and achieved fruitful results in the control of GHG emissions. According to the report on China’s Policies and Actions for Addressing Climate Change (2015), China has been actively implementing the national strategies to address climate change, accelerating industrial restructuring and energy structure transformation, launching energysaving and emission-reduction projects, carrying out carbon trading and low-carbon pilot programs in provinces (municipalities), and made remarkable achievements. From 2005 to 2014, China saw CO2 emissions per unit of GDP drop by 33.8%, non-fossil energy account for 11.2% of primary energy consumption, forest area enlarge by 21.6 million hectares (ha), and forest stock volume increase by 2.188 billion cubic meters (m3). As a responsible developing country, China has been sharing its low-carbon experiences with underdeveloped countries, in an aim to help them complete low-carbon transition. For example, China attaches great importance to South-South cooperation on climate change and has scored positive results. According to the NDRC statistics, by the end of 2015, the commission itself had signed 22 MOUs with 20 developing countries on material donation to address climate change, and it had donated more than 1.2 million LED lights, 9,000 LED street lamps, 20,000 energy-efficient air conditioners, and 8,000 solar photovoltaic power generation systems. Besides, the NDRC had held a total of 11 training sessions on climate change, green and low-carbon development, helping other developing countries train more than 500 officials and technicians in charge of climate change affairs. Through international cooperation and experience sharing, China has made its own contributions to global low-carbon development, and established an image as an active and responsible major power.

2.4.5 Shared According to the Communiqué of the Fifth Plenary Session of the 18th CPC Central Committee (2015), we should “uphold the principle of development for the people, development by the people and development achievements shared by the people; achieve governance systems that can more effectively give the entire population an increased sense of shared gain; increase developmental momentum; and unite the people further toward a shared goal of common prosperity”. The shared path of Low-Carbon Plus development means that the green development fruits should be shared by the people, and the low-carbon strategy can only be realized by the people. This lowcarbon value orientation is the right choice for green development and the only way to build a moderately prosperous society in all aspects. To bring the fruits of green and low-carbon development to all the people, we need to narrow the development gap and eliminate poverty. The Low-Carbon Plus Strategy can be taken as a means of poverty alleviation, that is, we can transfer resources to poverty-stricken areas and implement low-carbon projects in these areas, so as to convert local resources into economic benefits.

3 The situation of Low-Carbon development in China and other Countries Climate change has become a common challenge facing mankind. Since the Industrial Revolution, the labor productivity of human society has been greatly improved, which has fuled the rapid development of economic society. During the same period, human activities have caused a non-negligible impact on energy, resources and the environment. Global warming, which is caused by excessive consumption of carbonbased fuels, is often blamed for the frequent extreme weather in recent years, such as violent typhoons, sandstorms, high temperature, drought, extreme precipitation and coldness. Extreme weather releases a signal that some serious issues, such as global energy consumption, pollution and emissions, need to be promptly sovled. In order to achieve the goals of net zero emissions of GHGs by the end of the 21st century—the goals set at the Paris Conference, known as the 21st United Nations climate change conference (COP21), all countries and regions must recognize the seriousness of energy pressure, GHG emissions and environmental pollution, follow the green and lowcarbon development trend, establish and implement the Low-Carbon Plus Strategy, and pursue sustainable development.

3.1 Global carbon emissions and responses 3.1.1 Overall situation and trends of global carbon emissions 3.1.1.1 Carbon dioxide emissions With the development of global economy and society, the demand for energy has maintained a rapid growth momentum. In 2015, the global Total Primary Energy Supply (TPES) was about 1.6 times higher than in 1971, which was mainly attributed to fossil fuel growth. As result of increasing energy consumption, the global CO2 emissions present an obvious upward trend. In 2015, the global CO2 emissions reached 33,508Mt, an increase of 0.11% compared with 2012; countries in the Organization for Economic Cooperation and Development (OECD) had seen declining CO2 emissions since 2008, but such emissions of non-OECD countries had kept increasing rapidly since 2000, registering an average annual growth rate (AAGR) of 5.07%, or 694.77Mt (see Figure 3.1). The CO2 emissions in OECD countries became stabilized in 2013, but still increased in non-OECD countries because of excessive coal consumption (see Figure 3.2). The statistics show that the CO2 emissions from coal consumption in non-OECD countries

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Figure 3.1: Trends in CO2 emissions from fuels (1971–2015). Source: British Petroleum (BP)

Figure 3.2: CO2 emissions by source in OECD and non-OECD countries in 2013.

increased by 451Mt from a year ago, which was about 12.21 times more than those of OECD countries.1 Regarding the CO2 emissions from primary energy consumption, coal burning is the largest source of CO2 emissions. In 2013, the coal-based CO2 emissions accounted for about 46% of the total emissions from all primary energy (see Figure 3.3). From the 1980s to 2000, the global CO2 emissions from coal and oil consumption were roughly the same, both accounting for about 40%. In OECD countries, most of the CO2 emissions came from oil, but in non-OECD countries where coal is the dominant energy, CO2 emissions had maintained a significant increase. Since 2002, the sources of CO2 emissions have changed dramatically: the CO2 emissions from coal surpassed those from oil, and the oil-based emissions have kept falling. In 2013, the global CO2 emissions from coal increased by 3.14% from a year ago, amounting to 14,809Mt (see Figure 3.4).

 The figures herein are the latest CO2 emissions data from fuel combustion, because the International Energy Agency (IEA) lags behind in releasing CO2 emissions data.

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Figure 3.3: Energy use and CO2 emissions in 2013. Note: “Other energy” includes nuclear, hydro, geothermal, solar, tidal and wind energy, biofuel, and energy from waste recovery. Source: IEA

Figure 3.4: Change in sources of CO2 emissions.

3.1.1.2 Regional differences in CO2 emissions In 2013, non-OECD countries saw their CO2 emissions increase by about 57% from the previous year, the emissions of China, other Asian countries and Latin America grew by 5.4%, 3.5% and 3%, respectively, while the emissions of some European countries showed a downward trend (see Figure 3.5). There are also significant differences in the amount of CO2 emitted in different countries. In 2013, the combined CO2 emissions of ten countries accounted for twothirds of the global total emissions, with China and the US emitting far more CO2 than any other country. Among the top ten emitters, half were OECD countries and the other half were non-OECD countries (see Figure 3.6). 3.1.1.3 Inter-industry differences in CO2 emissions In 2013, two-thirds of the global CO2 emissions were from electricity, heating and transportation sectors, among which the emissions from electricity and heating sectors accounted for about 42%, while those from transportation sector accounted for about 23% (see Figure 3.7).

3.1 Global carbon emissions and responses

Figure 3.5: Growth rates of CO2 emissions in different countries and regions in 2013.

Figure 3.6: CO2 emissions in different countries in 2013.

Figure 3.7: Comparison of CO2 emissions by industry sector. Note: The industrial classification is subject to the IEA standard.

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Electricity and heating sectors rely heavily on coal—a carbon-intensive fuel. In Australia, China, India, Portugal and South Africa, more than two-thirds of electricity and heating generation is based on coal burning. Over 2012–2013, the CO2 emissions from electricity and heating sectors grew by about 2.1%, which was roughly equal to the increase in global total emissions. As a result of rising oil prices and other factors, electricity and heating sectors have kept reducing oil consumption since 1990, but gradually increased the use of natural gas. To sum up, due to the rapid development of global economy and society, the increasing demand for energy has led to a sharp rise in CO2 emissions, which in turn has aggravated global warming. The rise in CO2 emissions is primarily attributed to excessive use of carbon-intensive coal resources. As the low-carbon development strategy has become widely accepted, all countries across the world have taken appropriate measures to accelerate low-carbon transition, so as to lay a basis for sustainable development. 3.1.1.4 Future trends in CO2 emissions After the 2008 financial crisis, global CO2 emissions maintained an upward trend on the whole, but the year-on-year (YoY) growth rate tended to slow down (see Figure 3.8). Since 2012, global CO2 emissions is still on the rise with a YoY growth rate remaining low at about 1%, which is due to the worldwide economic downturn and the energy-saving and emission reduction efforts made by all countries.

Figure 3.8: Global CO2 emissions and YoY growth rate in 1990–2014. Source: BP dataset

According to BP’s Energy Outlook 2006, fossil fuels will continue to be the dominant sources of energy for the world economy, accounting for about 60% of the projected energy increase and nearly 80% of global TPES by 2035. Among all fossil fuels, natural gas supply is expected to grow at the fastest pace (1.8% YoY), with its share in TPES gradually increasing. Oil supply is to grow steadily (0.9% YoY), with its share in TPES continue to decrease. In contrast, coal supply is to undergo a sharp slowdown (0.5% YoY) despite of a growth momentum since 2000, with its share in TPES to hit an all-

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time low by 2035, and with its second place seized by natural gas by that time. Among non-fossil sources of energy, renewables (including biofuels) will increase rapidly (6.6% YoY), with their share in TPES increasing from the current 3% to 9% in 2035 (see the energy supply trend in Figure 3.9).

Figure 3.9: Forecast of shares of primary energy by 2035. Source: BP dataset

Transformation of energy mix is bound to change CO2 emissions. The development of a low-carbon energy system relies on policy support, and different emissions are based on different policy incentives. Under the IEA New Policy Scenario, CO2 emissions will show an upward trend on the whole, but maintain a slow growth rate. Under the BP Accelerated Scenario, carbon trading prices will rise to US$100/t in OECD countries and other leading economies by 2035, and at least US$$50 elsewhere; and transportation sector should implement stricter CO2 emission standards for vehicles. The IEA 450 Scenario, which emphasizes intensified emission reduction, is premised on the significant changes in global energy intensity and carbon intensity, and apparently higher than the Paris Commitments which are similar to the IEA New Policy Scenario (see Figure 3.10).

Figure 3.10: Forecast of CO2 emission trend under different scenarios. Note: The IEA New Policy Scenario is similar to the Paris Commitments. The IEA 450 Scenario is that CO2 emissions are controlled to be no more than 450ppm and the increase in global average temperature is to be kept below 2 °C compared with pre-industrial levels. Source: BP dataset

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3.1.2 China’s carbon emissions 3.1.2.1 Overall characteristics China’s GHG emissions, which mainly come from energy production and consumption, have four characteristics: (1) A huge amount of total energy consumption. In 2015, China’s energy consumption amounted to 3.014 billion tons of standard oil, while that of the US—the world’s largest economy2—was lower at 2.393 billion tons of standard oil.3 (2) Rapidly increasing energy consumption. From 1994 to 2015, China’s total energy consumption rose from 1.227 billion tons of standard coal to 4.326 billion tons, registering an AAGR of 6.2%, which was about three times more than the world average. Such rapid growth trend will remain so in the future. (3) Low energy efficiency. In 2007, China’s GDP accounted for about 6.6% of the world total, and its TPES/ GDP was 0.75, which was 2.5 times more than the world average, and 7.5 times, 3.75 times and 5.4 times more than that of Japan, the US and Germany. This situation got improved in 2015 when China’s TPES/GDP was 1.59 times that of the world average, 2.14 times, 6.35 times and 3.46 times more than that of the US, the UK and Japan. (4) High GHG emission intensity. In 2015, China’s CO2 emissions per unit of GDP were 1.84 times more than the world average, and 2.86 times, 2.76 times and 3.18 times that of Japan, the US and Germany. According to the IEA data, the global total carbon emissions in 2015 was 33,508Mt, up 0.11% from 2014, hitting a record high; and China—the world’s largest CO2 emitter —contributed 300 Mt to the growth of global carbon emissions, or about 27% of the global total. But the BP data show China’s CO2 emissions in 2015 reached 9,153.90 Mt, which was 11.63 Mt lower than that in 2014, showing negative growth for the first time in years (see Figure 3.11).

Figure 3.11: China’s GDP growth and CO2 emissions.

 Due to different estimation methods, the forecast in IEA’s World Energy Outlook 2010 says that China would overtake the US as the world’s largest energy consumer in 2009.  Source: Statistical Review of World Energy 2015

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On the other hand, China’s energy intensity has been declining year by year, indicating that the country’s energy efficiency has gradually improved. As shown in Figure 3.12, from 1970 to 2005, China’s carbon intensity per unit of GDP fell by more than 40%. The research findings prove that China’s carbon intensity declined sharply from 1993 to 2000 because of its extensive growth pattern. After that, with the continuous growth of energy consumption, mounting CO2 emissions and economic slowdown, China saw its carbon intensity by 2015 drop to only one-tenth of that in 1970.

Figure 3.12: Changes in China’s carbon intensity in 1970–2015.

3.1.2.2 Regional differences China’s carbon emissions by region have been on the rise year by year, with emissions in the eastern part much higher than those in the central and western parts. But the carbon emissions in central and western China increase at a faster pace, while those in the east have become leveled off (see Figure 3.13). The AAGR of eastern China’s carbon emissions used to be 4.41% before 2002, and then went up to 9.32% after that. The carbon emissions in central and western China demonstrate a similar trend, that is, increasing slowly before 2002 but speeding up after that. This is because China’s heavy chemical industry entered into another fast growth period after 2002, and this period is characterized by “high carbon” due to the constraints of development stage, technical level, system and mechanism, and international division of labor, as well as the traditional development pattern relying on “high input, high consumption, and high emission”. Some Chinese scholars have done valuable research on the regional differences of China’s carbon emissions. Wang Zheng and Zhu Yongbin4 (2008) compared the variation of carbon emissions in different provinces and regions upon calculating China’s carbon emissions caused by energy consumption. Wang Qianqian et al. (2009) analyzed

 Wang Zheng, Zhu Yongbin. Research on China’s carbon emissions in all provinces (autonomous regions and municipalities) and emission-reduction strategies [J]. Bulletin of Chinese Academy of Sciences, 2008(2): 109–115.

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Figure 3.13: Variation trend of China’s CO2 emissions by region. Note: Based on the IPCC’s CO2 emission calculation Source: China Energy Statistical Yearbook

the regional differences in China’s per capita carbon emissions and, through decomposition analysis, calculated the contribution rate of varied influencing factors to China’s per capita carbon emissions by region. Some scholars have applied the econometric analysis of panel data to study the causes of national and regional differences in carbon emissions. Zhang Lei5 (2006) analyzed the variation trend of China’s carbon emissions in three major regions and 29 provinces (autonomous regions and municipalities), and found that the evolution of industrial structure directly affects the regional energy consumption and the basic pattern of carbon emissions. Zou Xiuping et al.6 (2009) analyzed the panel data of 30 provinces (autonomous regions and municipalities) from 1995 to 2005, and summed up the characteristic spatial distribution of China’s carbon emissions, that is, low emissions in the southeast and the northwest, but high emissions in the central and northern parts. Wang Enxu and Wu Chunyou7 (2011), by employing the Super-Efficiency DEA Model, measured the eco-efficiency of China’s 30 provinces (autonomous regions and municipalities) from 1995 to 2007, analyzed the spatio-temporal differences of the measurement results of four regions (east, central, west and northeast), and ran a convergence test on the variation trend of eco-efficiency. The test result shows that, from 1995 to 2007, China’s eco-efficiency presented a divergent trend with the gap gradually widening, which was mainly affected by the changing eco-efficiency in the eastern part. By taking carbon intensity and carbon emissions per capita as

 Zhang Lei, Cai Guotian. Analysis on the growth trend of China’s energy consumption [J]. China Soft Science, 2006(11): 1–6.  Zou Xiuping, Chen Shaofeng, Ning Miao, Liu Yang. An empirical study on the influencing factors of China’s carbon emissions [J]. Ecological Economy, 2009(3): 34–37.  Wang Enxu, Wu Chunyou. Study on the spatial-temporal differences of provincial eco-efficiency in China based on Super-Efficiency DEA Model [J]. Journal of Management Science, 2011(3): 443–450.

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carbon emission indicators, Yang Qian and Liu Huajun8 (2011) conducted a structural decomposition of the regional differences in China’s carbon emissions from 1995 to 2009, and confirmed that the country’s carbon emissions vary greatly by region, and the regional differences in carbon intensity are more significant than those in carbon emissions per capita. Wang Di et al.9 (2012), by applying Theil entropy and Kaya factorization, measured and decomposed the regional inequality of per capita carbon emissions in China from 1990 to 2009. The intra-regional gap in per capita carbon emissions is growing faster than the gap between regions. The decomposition of carbon emission reduction targets should be based on a full consideration of the future development needs of each region and their current emission reduction capacity. 3.1.2.3 Sectoral differences China’s CO2 emissions have been on the rise, with significant differences between regions and between industries. As shown in Figure 3.14, a great portion of China’s energy is consumed for production and supply of electricity and heat, extraction of oil and natural gas, and manufacture of non-metallic mineral products. And the CO2 emissions from these high-carbon industries have maintained an upward trend in recent years, though registering a slow growth rate.

3.1.3 GHG emission reduction: World in action 3.1.3.1 International organizations have been pushing for GHG emission reduction With the continuous development of the world economy, the contradictions between economy and resources, economy and environment, as well as resources and environment have become increasingly prominent, hence bringing great challenges to human survival and development. Among them, the problems caused by global warming— which is mainly caused by GHGs emitted from human production activities—are especially serious. In this context, low-carbon development, which is a kind of sustainable development model, was proposed to cope with climate change. Climate and environment are the basis of human survival and development. Since climate warming and environmental deterioration have kept escalating over the past century, the Intergovernmental Panel on Climate Change (IPCC) started to track and assess global climate change since the 1990s. The four IPCC assessment reports released in 1990, 1995, 2001 and 2007 have confirmed that the increasing GHGs emissions from human activities are the chief culprit of global warming, and CO2 is

 Yang Qian, Liu Huajun. Research on the safety regulation of nuclear power in China: theoretical motivation, experience reference and reform suggestions [J]. Pacific Journal, 2011(12): 76–86.  Wang Di, Nie Rui. Evolution characteristics and influencing factors of carbon emissions from China’s manufacturing industry [J]. Journal of Arid Land Resources and Environment, 2012(9): 132–136.

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Figure 3.14: Trend of China’s CO2 emissions by industry. Note: Based on the IPCC’s CO2 emission calculation Source: China Energy Statistical Yearbook

the dominant GHG. Since the Industrial Revolution, the global CO2 concentration in the atmosphere had risen from 280 ppm to 370 ppm by the beginning of the 21st century due to the massive use of fossil fuels. According to the data detected by the Global Greenhouse Gas Reference Network, which is affiliated to the National Oceanic and Atmospheric Administration (NOAA), the global CO2 concentration in the atmosphere had rose above 400ppm by March 2016. If the emissions of CO2 and other GHGs are not controlled, the rise in global temperature over the next 20 years is expected to reach 0.2 ℃ per decade, then the resulting global climate change will lead to shrinking glaciers and permafrost, changes of oceanic and terrestrial ecosystems, rise of water temperature in lakes and rivers, and acidification of seawater, which will do harm to human health and production, as well as their living environment. In order to further confirm the causal relationship between carbon emissions and climate warming, the first United Nations Climate Change Conference was held in Geneva

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in 1979, and since then the United Nations has made this conference a regular event to find ways for reducing global carbon emissions (see Table 3.1). In June 1992, more than 150 countries signed the United Nations Framework Convention on Climate Change (UNFCCC), which set a goal of reducing global GHG emissions by 50% by 2050. In December 1997, the Third Conference of the Parties (COP3) to the UNFCCC adopted the Kyoto Protocol, which aims to limit the GHG emissions from developed countries for curbing global warming. As of February 16, 2005, the Kyoto Protocol entered into force to become the first legally binding protocol in human history to limit GHG emissions. On December 15, 2007, the United Nations Climate Change Conference held in Bali, Indonesia adopted the “Bali Roadmap”, which points out the direction for future carbon emissions: all parties agree to vigorously reduce global GHG emissions, and set specific reduction targets for developed countries (including the US) in future negotiations; developing countries should try to weigh down the growth of GHG emissions without being imposed any specific targets; developed countries should provide assistance to their developing counterparts in emission reduction through capital input and technological development or transfer; and all parties must reach a new agreement on combating global warming to succeed the Kyoto Protocol by the end of 2009. The Copenhagen Climate Change Conference held in December 2009, though only produced the Copenhagen Accord which is not legally binding, reached a political consensus on controlling GHG emissions, defined the low-carbon development direction of the world at large, and confirmed the principle and system of international cooperation to address climate change. On 29 November 2010, the Climate Change Conference in Cancun, Mexico decided to provide financial support and technical assistance to developing countries on climate change, and negotiate Table 3.1: World climate conferences and conclusions. Year

Conferences and agreements



First World Climate Conference held in Geneva (Switzerland).



Governments met in Rio de Janeiro and forged the UNFCCC.



The Kyoto Protocol required worldwide cuts in emissions of about %, compared with  levels, by , and  countries (excluding the US) agreed on this emission reduction target.



The Copenhagen Climate Conference ended without an agreement on a global emission reduction target beyond .



At the Cancun Climate Conference in Cancun, a system was established for countries to set their own GHG reduction targets by  on a voluntary basis.



At the Doha Climate Conference, the Doha Amendment to the Kyoto Protocol was adopted for a second commitment period (–).



The Lima Climate Conference clarified the post- emission reduction targets.



The Paris Climate Conference produced a globally binding agreement on climate change.

Source: Outcomes of the UN Climate Change Conference over the years.

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a second commitment period of the Kyoto Protocol. And the KP second commitment period (2013–2020) was approved on the Climate Change Conference in Doha, Qatar in December 2012. The Lima Climate Change Conference held in December 2014 decided to implement the post-2020 climate goals. On September 25, 2015, at the United Nations Sustainable Development Summit, 193 member states adopted the document “Transforming Our World: The 2030 Agenda for Sustainable Development”, which covers 17 sustainable development goals10 and aims to address the social, economic and environmental problems in an integrated manner and shift to a sustainable development path from 2015 to 2030. The sustainable development goals are mainly for eradicating poverty and hunger, addressing inequality and empowering women, promoting sustainable economic growth and transformation, establishing new global partnerships, and coping with climate change. Besides, this document makes it clear to take urgent actions for addressing climate change and its impacts. At the Paris Climate Change Conference held in December 2015, nearly 200 parties adopted the Paris Agreement—a globally binding agreement on climate change. At the G20 Hangzhou Summit held in September 2016, China and the US took the lead to ratify the Paris Agreement, giving a significant boost to its entry into force in 2016. The United Nations highly appreciated China and the US for playing an exemplary role in tackling climate change. By creating a new and stable framework for sustainable development, the ambitious Paris Agreement is expected to safeguard for our planet. 3.1.3.2 China’s role in reducing GHG emissions China’s rapid energy consumption has resulted in serious environmental pollution. In 2013, the central and eastern regions suffered from a wide range fog and haze, affecting 30 provinces (autonomous regions and municipalities). In February 2014, one seventh of the national land was shrouded in haze. Take Beijing for example, on January 20, 2015, among 35 environmental monitoring sites spread over the city, 33 reported level-6 severe pollution; in the past three years by 2015, the air quality of Beijing had kept deteriorating, the days with standard air quality only accounted for 50% of the year, and the haze was especially serious in certain months regardless of climate factors (see Figure 3.15). In China, the occurrence of haze is closely related to the current economic growth pattern, industrial structure and energy mix. For a long time, China has been implementing an extensive growth model, which is characterized by fast growth, excessive consumption of raw materials and energy (esp. high-carbon energy), and low energy use efficiency. With the rapid progress of industrialization and urbanization, and as result of high energy consumption, China has become the world’s largest emitter of CO2, facing the dual pressure from economic development and environmental protection.

 The United Nations 2030 Agenda for Sustainable Development. https://sustainabledevelopment.un. org/content/documents/21252030%20Agenda%20for%20Sustainable%20Development%20web.pdf

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Figure 3.15: Number of days with standard air quality in Beijing. Note: standard air quality includes moderate and good quality. Source: Beijing Environmental Protection Bureau

As a responsible power, China is fully aware of the necessity and urgency of low-carbon development, as well as the opportunities brought by the low-carbon development strategy. At the 15th Informal Meeting of APEC Leaders held in 2007, the then Chinese President Hu Jintao noted that addressing climate change is the premise of sustainable development, and articulated that China would pursue low-carbon development. On November 26, 2009, China pledged to reduce CO2 emissions per unit of GDP by 40%~50% by 2020 from the 2005 level. On May 24, 2013, Chinese President Xi Jinping delivered a speech at the sixth group study session of the Political Bureau of the 19th CPC Central Committee, pointing out that eco-environmental protection is a great cause that benefits the present and future generations, and it is urgent to control environmental pollution; the Chinese people should fully implement the guiding principles of the 18th National Congress of the CPC, and strengthen the construction of a socialist ecological civilization to create a good working and living environment. Xi’s speech was so far regarded as the most powerful statement by the Chinese leadership on ecological and environmental issues. On November 30, 2015, at the Paris Climate Change Conference, President Xi announced further commitments for 2030: peak its CO2 emissions, lower the emissions per unit of GDP by 60%~65% from the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 20%, and increase the forest stock volume by 4.5 billion m3 from the 2005 level. The convening of international conferences and the making of international conventions reflect that carbon emission reduction has become a reality. In this context, countries around the world have started drawing up low-carbon economic plans, in order to seize the initiative in low-carbon development while the global race for oil continues.

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3.2 Decoupling of China’s development from carbon emissions China’s energy industry has made great progress since the reform and opening up in 1978. At present, China has become the world’s top energy producer, and formed a comprehensive energy supply system including coal, oil, natural gas, electricity, new and renewable energy. Sufficient energy supply is a powerful guarantee for improving the living standards of Chinese people and maintaining fast economic growth. However, the rapidly increasing energy consumption and low energy efficiency have become a threat to China’s energy supply, and emitted a large amount of CO2, SO2 and other harmful gases, causing serious environmental pollution and ecological damage. And the rapidly proceeding industrialization and urbanization will continue to prop up China’s energy consumption. In short, to increase energy supply, ensure energy security, protect the ecological environment and sustain socio-economic development has become a crucial and long-term strategic task for China.

3.2.1 Energy conservation and emission reduction is an arduous task 3.2.1.1 Large energy consumption and rapidly growing carbon emissions (1) Large energy consumption Since the reform and opening up, China has made remarkable economic achievements and maintained a strong growth momentum. With an economic aggregate successively surpassing that of Russia, Canada, Italy, France, the UK, Germany and Japan, China has become the world’s second largest economy next to the US. But China’s rapid economic growth is accompanied by huge energy consumption. In order to improve its energy supply capacity and maintain fast growth, Chinese government has kept deepening the reform of domestic energy industry. From 2005 to 2015, China’s energy consumption surged with an AAGR of 5.33%, and such growth rate even hit 9.72% in some years. According to the BP Annual Report, China’s primary energy consumption in 2009 paralleled that of the US, but soon surpassed the latter to be the world’s largest energy consumer in 2010, accounting for 21% of the global total primary energy consumption. China’s population is four times that of the US, with per capita economic output only half that of the latter, yet its energy consumption is much higher. With the continuous progress of urbanization, China’s total energy consumption is about to maintain a rapid growth momentum. So, its position as the world’s largest energy consumer is hardly replaceable in the near future. The world’s major energy consuming countries include China, the US, India and Russia. These countries account for more than half of the global total energy consumption (see Figure 3.16). A large population size, rapidly advancing industrialization and urbanization, and increasing car buying have contributed to China’s surging energy consumption. From 1978 to 2015, China’s primary energy consumption rose from 570 million tons of

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Figure 3.16: Primary energy consumption structure of the world in 2013.

standard coal to 3.013 billion tons, increasing by 5.34 times and registering an AAGR of 10.57% in 37 years. However, due to an unreasonable energy consumption structure, China relies heavily on high-carbon coal resources, with the development of renewable energy lagging far behind that of other developing countries, hence resulting in a sharp increase in CO2 emissions. As shown in Figure 3.17, China’s coal consumption accounts for over 60% of the total primary energy consumption, with other energy sources, especially renewables, occupying a small share.

Figure 3.17: Variation trend of China’s energy consumption structure.

On the whole, China’s economic growth and energy consumption have been changing in the same direction, that is, when there is rapid economic development, there will be large energy consumption. While looking at the world, the energy consumption of the EU has maintained an AAGR of 1%~2%, and that of the US has entered a stage of

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slight growth, but such growth rate in China has been much higher at 5%~6%. If this trend remains so in the future, China’s primary energy consumption would reach 4.8 billion tons of standard coal by 2020. Such huge energy consumption is sure to put pressure on China’s energy supply. The variation trend of China’s economy and energy consumption is shown in Figure 3.18.

Figure 3.18: Changes of China’s GDP growth and total energy consumption. Source: BP dataset

(2) Carbon emissions increasing in tandem with energy consumption There is a clear correlation between energy consumption and CO2 emissions in China, that is, energy consumption and CO2 emissions increase in tandem with economic growth. From 1978 to 2015, the changes of energy consumption and CO2 emissions in China can be roughly divided into four stages: (1) 1978~1997: As result of the deepening of reform and opening up and the expansion of production scale, China’s energy consumption increased rapidly, which led to a sharp increase in CO2 emissions. (2) 1998~2002: The growth of both energy consumption and CO2 emissions tended to be stable. (3) 2003~2011: Because of rapidly progressing industrialization and urbanization and a new round of economic expansion, China’s energy consumption increased dramatically, so did CO2 emissions. (4) 2012 to date: As China entered a new normal in economic development, the growth of CO2 emissions began to slow down. In 2015, China’s CO2 emissions dropped by 0.13% from a year ago, registering the first negative growth in years (see Figure 3.19). 3.2.1.2 Striking contradiction between energy supply and demand (1) Increasing energy imports due to a widening supply-demand gap The total population of China was as large as 960 million by the end of 1978, yet the energy reserves were still sufficient due to the low per capita energy consumption at that time. However, as driven by economic expansion, China’s energy consumption began to increase exponentially and outpaced energy production, hence resulting in an energy supply-demand gap, and the continuously widening gap can only be filled by energy imports. China’s total energy consumption exceeded total production for the first time in 1992, and the availability of petroleum became a bottleneck restricting its

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Figure 3.19: China’s carbon emissions and year-on-year growth. Source: BP dataset

sustainable economic growth. China became a net importer of petroleum and crude oil successively in 1993 and 1996. Along with the industrial restructuring and accelerating fixed-asset investment since 2002, China found its economic growth become more dependent on energy, and had to increase energy imports year by year. As shown in Figure 3.20, China’s net energy imports exceeded 200 Mt of standard coal in 2006, with imported petroleum accounting for a large proportion. In 2008, China imported 220Mt of petroleum, which was 51.3% of domestic petroleum consumption that year. In 2012, China imported 290 Mt of coal, up by 29.8% year on year, and 270 Mt of crude oil, up by 6.8%. China found its petroleum gap reach 350 Mt of standard oil in 2015; and natural gas gap gradually covered since 2009.

Figure 3.20: Variation trend of China’s energy demand gap. Note: All converted to million tons of oil equivalent (Mtoe) Source: BP Statistical Review of World Energy

(2) Energy security is being threatened The development course of reform and opening up demonstrates that energy is the driving force and support for China’s economic take-off. However, due to a huge energy demand, Chinese economic growth has become constrained by insufficient domestic energy supply, and begun to rely on energy imports. As the world’s second largest oil consumer after the US, China has become excessively dependent on petroleum imports. Although energy imports can somewhat alleviate the tight energy supply within China,

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the heavy dependence on overseas energy (esp. crude oil) is likely to threat China’s energy security. Unlike the natural gas gap which has been narrowed since 1993, the petroleum gap tends to widen year by year. So, the petroleum external dependence of China climbed from 6% in 1993 to over 50% in 2012. Owing to the rising energy prices stimulated by recovering global economy and energy demand from major powers, the undersupply of energy within China has been aggravated, hence driving up domestic energy prices. In short, the fluctuation of international energy prices can increase the fragility and instability of Chinese economic performance. (3) High energy consumption, high emissions and excessive mining have a serious impact on the environment As a major energy consumer and CO2 emitter, China mainly relies on the epitaxial growth model, which features “high input but low output; high cost but low quality; and high consumption but low benefit”, to achieve economic development. This model is sure to cause ecological deterioration and environmental pollution. In order to reduce the dependence on energy-intensive industries and alleviate the contradiction between economic development and environmental protection, China must take the path of low-carbon development.

3.2.2 An empirical analysis of the decoupling between China’s development and carbon emissions 3.2.2.1 Selection of decoupling index There are mainly two types of decoupling indexes: OECD decoupling index and Tapio decoupling index. The mathematical expression of OECD decoupling index is shown as follows: DI =

ðEPt =DFt Þ ðEP0 =DF0 Þ

(2:1)

In Equation (2.1), DI, EP and DF represent decoupling index, environmental pressure and driving force, respectively, while and the subscripts 0 and t denote base period and report period, respectively. OECD decoupling index mainly describes the relationship between environmental pressure and changes in driving force. Taking the decoupling relationship between CO2 emissions and economic growth as an example: CO2 emissions represent environmental pressure (EP) and economic growth represents driving force (DF), when the increase in CO2 emissions is slower than economic growth, it means that CO2 emissions are decoupled from economic growth. This decoupling relationship can be further divided into two types: (1) Relative decoupling, that is, both CO2 emissions and economy maintain positive growth, but the growth of CO2 emissions is slower than

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that of economy. (2) Absolute decoupling, that is, the situation of negative growth of CO2 emissions but positive growth of economy. Tapio decoupling index was proposed by Tapio (2005) when he was studying the relationship between the European CO2 emissions and economic development over 1970–2001. Tapio decoupling index describes the decoupling of CO2 emissions from economic growth as the elasticity between the two, that is, the relative change rate of CO2 is divided by that of economic growth. The mathematical expression is as follows: tðCO2 ,GDPÞ =

ðΔCO2 =CO2 Þ ðΔGDP=GDPÞ

(2:2)

In Equation (2.2), tðCO ,GDPÞ represents the decoupling elasticity between CO2 emissions 2 and economic growth. Tapio decoupling elasticity can be subdivided into eight decoupling states, among which strong negative decoupling is the least desirable state, that is, negative economic growth with positive CO2 emissions. Strong decoupling, which means positive economic growth with negative CO2 emissions, is the ideal state for achieving low-carbon development. Equation (2.2) shows that when economic aggregate continues to grow (ΔGDP > 0), the value of decoupling elasticity t tends to be smaller, which indicates a higher degree of decoupling, that is, CO2 emissions is significantly decoupled from economic growth. According to Equation (2.1), OECD decoupling index is based on the comparison of base period value and report period value. This index is prone to be affected by the selection of base period value and report period value, which may result in a notable deviation of calculation results, and then compromise the accuracy and objectivity of decoupling measurement. Equation (2.2) shows that Tapio decoupling index synthesizes two indexes (total change and relative change) and analyzes the elastic decoupling relationship between variables by taking period as the time scale. Tapio decoupling index is not affected by the changes in statistical dimensions since it is essentially a kind of elasticity index analysis. Because of this, Tapio decoupling index can avoid the influence of the selection of initial and final values, which is a shortcoming of OECD decoupling index. Besides, in addition to a more refined division of decoupling states than OECD decoupling index, Tapio decoupling index is also available for causal chain decomposition. Therefore, Tapio decoupling index is more accurate for reflecting the subtle changes of the decoupling states between CO2 emissions and economic growth in the same region of different periods, and for showing the influence of the changes of different factors on the decoupling index. In summary, we use Tapio decoupling index to analyze the decoupling relationship between China’s CO2 emissions and economic growth. To fully learn about the impact of energy consumption on the decoupling of CO2 emissions from economic growth, we’ve run a causal chain decomposition of Tapio decoupling index with the Kaya Equation, and counted in energy consumption. This process can be expressed in the following mathematical formula:

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tðCO2 ,GDPÞ =

ðΔCO2 =CO2 Þ ðΔE=EÞ ðΔCO2 =CO2 Þ = × = tðE,CDPÞ × tðCO2 ,EÞ ðΔGDP=GDPÞ ðΔGDP=GDPÞ ðΔE=EÞ

(2:3)

In Equation (2.3), E represents primary energy consumption, and tðCO ,GDPÞ is the de2 ðΔ CO2 =CO2 Þ coupling elasticity of CO2 emissions from GDP ; tðE,GDPÞ is the decoupling ðΔ GDP=GDPÞ ðΔ E=EÞ elasticity of energy consumption from GDP , which is related to energy ðΔ GDP=GDPÞ efficiency, economic structure and economic development model; tðE,GDPÞ is the deðΔ CO2 =CO2 Þ coupling elasticity of CO2 emissions from energy consumption , which is reðΔ E=EÞ lated to energy consumption structure, clean energy and carbon capture technologies. In brief, the decoupling elasticity of CO2 emissions from economic growth can be expressed as the product of the decoupling elasticity between energy consumption and GDP and the decoupling elasticity between CO2 emissions and energy consumption. 3.2.2.2 Stages of the decoupling states between CO2 emissions and economic growth We’ve divided the decoupling states between China’s CO2 emissions and economic growth into seven stages. Table 3.2 lists the data about China’s GDP, energy consumption, CO2 emissions, decoupling elasticity, and decoupling states in seven five-year stages from 1980 to 2015. Table 3.2: Decoupling states between China’s CO2 emissions and GDP in seven stages over 1980–2015. Decoupling index

– – – – – – –

ΔGDP=GDP

.%

.%

.%

.%

.%

.%

.%

ΔE=E

.%

.%

.%

.%

.%

.%

.%

ΔCO2 =CO2

.%

.%

.%

.%

.%

.%

.%

tðE,GDPÞ

.

.

.

.

.

.

.

Decoupling state

WD

WD

WD

WD

END

WD

WD

tðE,CO Þ 2

.

.

.

.

.

.

.

Decoupling state

EC

END

EC

EC

EC

END

END

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3.2 Decoupling of China’s development from carbon emissions

Table 3.2 (continued) Decoupling index

– – – – – – –

tðCO

.

.

.

.

.

.

.

Decoupling state

WD

WD

WD

WD

END

WD

WD

2 ,GDPÞ

Note: WD=weak decoupling; END=expansion negative decoupling; EC=expansive coupling.

(1) Decoupling between China’s energy consumption and GDP in 1980–2015 In 1980–2015, the energy consumption and GDP in China were all weakly decoupled except for 2000–2005, that is, developing economy was accompanied by increasing energy consumption, yet the growth of energy consumption was slower than that of GDP. In 2000–2005, there was expansion negative decoupling between energy consumption and GDP, that is, developing economy was accompanied by increasing energy consumption, yet the accumulated growth rate of energy consumption reached 77.85%, much faster than that of GDP at 59.32%. The reason for this expansion negative decoupling is that the 2000–2005 stage overlaps with China’s Tenth Five-Year Plan period (2001–2005). It was a period where world economic began to recover, China acceded to the WTO, implemented macro-economic policies for expanding domestic demand and increasing investment, and approved a large number of infrastructural and heavy chemical projects characterized by “high energy consumption, high emission and high pollution”. As a result, a huge amount of energy was consumed for fueling an economic boom, making the energy consumption elasticity of GDP as high as 1.21 in this period. It was the 1995–2000 stage that had a minimum energy consumption elasticity of GDP at 0.18, and the highest degree of decoupling between energy consumption and GDP, this is because China began to eliminate some of the small enterprises with serious pollution, low efficiency and backward technology since 1996, hence weighing down the growth of energy consumption; besides, the Asian financial crisis in 1997 and the catastrophic floods in 1998 slowed down the growth of Chinese economy. In short, in the case of positive economic growth, the smaller the value of decoupling elasticity is, the more significant the decoupling state is. (2) Decoupling between China’s CO2 emissions and energy consumption in 1980–2015 In 1980–1985, 1990–1995, 1995–2000 and 2000–2005, the CO2 emissions and energy consumption in China were in a state of expansive coupling, while in 1985–1990, 2005–2010 and 2010–2015, the CO2 emissions and energy consumption were in a state of expansion negative decoupling. But in all of these stages, the energy consumption elasticity of CO2

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emissions was greater than 1, indicating that the growth of CO2 emissions was higher than that of energy consumption. Since the value of energy consumption elasticity of CO2 emissions is related to the changes of energy consumption structure, clean energy and carbon capture technologies, it implies that China had not made enough efforts in optimizing its energy consumption structure, developing and promoting clean energy and carbon capture technologies in 1980–2010. In the future, China must work harder in these aspects to achieve the weak decoupling and even decoupling of CO2 emissions from energy consumption, that is, CO2 emissions will have a smaller growth rate than energy consumption and eventually a negative growth rate. (3) Decoupling between China’s CO2 emissions and GDP in 1980–2015 Table 3.2 shows that there was expansion negative decoupling between China’s CO2 emissions and GDP in 2000–2005, that is, growth of GDP was accompanied by growth of CO2 emissions, yet the latter was much faster. Except for 2000–2005, China’s CO2 emissions and GDP were weakly decoupled in other stages, that is, growth of GDP was accompanied by growth of CO2 emissions, yet the latter was slower than the former. The GDP elasticity of CO2 emissions was at the lowest point of 0.18 in 1995–2000, but at the highest point of 1.34 in 2000–2005. The domestic and international economic environments in these two stages will not be reiterated here since they are already described in preceding paragraphs. Looking at the GDP elasticity values and decoupling states of each stage in Table 3.2, it is found that China’s CO2 emissions and energy consumption have similar GDP elasticity values, and the same decoupling states in every stage, which is intuitively depicted in Figure 3.21. Each stage corresponds to a five-year plan period in this figure.

Figure 3.21: Trend of GDP elasticity values of energy consumption and CO2 emissions in China over 1980–2015.

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In 1980–2010, the GDP elasticity of CO2 emissions in China was highly approximate to that of energy consumption, and their trend curves are almost overlapping as shown in Figure 3.21. This indicates that the decoupling states between CO2 emissions and GDP in those years were mainly affected by the decoupling of GDP from energy consumption, and only slightly affected by the decoupling of CO2 emissions from energy consumption. The decoupling elasticity of GDP from energy consumption is closely related to energy-saving technology, industrial structure and economic growth model, while the decoupling elasticity of CO2 emissions from energy consumption is influenced by energy consumption structure, clean energy and carbon capture technologies. In short, the changes of the decoupling states between CO2 emissions and GDP in those years were mainly driven by progress of energy-saving technology, optimization of industrial structure and economic transition, with energy structure, clean energy and carbon capture technologies playing a little role. This also shows that because of the resource endowment (rich coal reserves but less oil and scarce natural gas reserves) and long-term industrial strategy (with focus placed on secondary industry, esp. heavy industry), China’s energy consumption structure is seriously unbalanced and excessively relying on the consumption of coal, which is the foremost carbon-based fossil fuel. As a result, China has seen its CO2 emissions increase continuously and surpass the US to be the world’s largest carbon emitter in 2007.

3.2.3 Feasibility analysis of decoupling between China’s GDP and carbon emissions In preceding paragraphs, Tapio decoupling index is used to analyze the decoupling relationship between China’s CO2 emissions and economic growth in 1980–2015. During most of the time in this period, China’s CO2 emissions were weakly decoupled from economic growth, that is, CO2 emissions kept increasing at the same time as economic growth, yet at a slower growth rate. The expansion negative decoupling was only seen in 2000–2005, that is, CO2 emissions kept increasing at the same time as economic growth, yet at a faster growth rate. As shown in Figure 3.21, the changes in the decoupling of energy consumption from GDP synchronized with the changes in CO2 emissions in 1980–2015 except for the years from 2010 to 2005. The elasticity of CO2 emissions was significantly smaller than that of energy consumption in 2010–2015, indicating that the CO2 emissions per unit of energy consumption had been decreasing, because the progressing energy-saving technology and upgrading industrial structure have promoted the reform of energy consumption structure and the improvement of energy efficiency, thus making great contributions to China’s CO2 emission reduction. According to the BP Statistical Review of World Energy, China’s CO2 emissions in 2015 fell by 0.12% year on year, showing a downward trend for the first time since the beginning of the 21st century. The research shows that China has partially achieved weak decoupling between economic growth and CO2 emissions, and a decoupling trend is already seen in some

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cities along the eastern coast. However, because of an extensive development model, unreasonable industrial structure, and low-level energy conservation and emission reduction technology, the decoupling between economic growth and CO2 emissions remains limited. According to international experiences and China’s own practices, by improving energy conservation and emission reduction technology, upgrading industrial structure, and optimizing energy consumption structure, economic growth is sure to be increasingly decoupled from CO2 emissions. We are confident that, by following a new development philosophy and implementing the Low-Carbon Plus development strategy, China will embrace notable progress in socio-economic development, revolutionary technological breakthroughs, strong decoupling of GDP from CO2 emissions, and accelerated construction of an ecological civilization and a beautiful country.

3.3 Low-Carbon development practices and experiences in major countries In the context of global warming, more and more countries have started implementing the low-carbon development model—characterized by low energy consumption, low pollution and high energy efficiency—which is now recognized as the best choice to solve the increasingly serious environmental and energy problems and achieve sustainable development. China should learn the valuable low-carbon experiences from other countries, and try to establish a low-carbon development system suited to its national conditions. This section introduces the low-carbon development strategies of the UK, US, Germany and Japan and their implementation status, aiming to inspire China to cope with climate change and pursue sustainable development by implementing the Low-Carbon Plus development strategy.

3.3.1 UK: Implementing proactive Low-Carbon development policies 3.3.1.1 Energy endowment and development stages The UK government has all along serious about low-carbon development and dedicated to reducing GHG emissions since 1990. Upon the introduction of the energy tax, the UK has seen its CO2 emissions going downhill while maintaining economic growth. Since 1990, the UK has introduced a number of policies and measures in this regard, which have not only cut GHG emissions by 15%, but also realized real economic growth by 35%. As shown in Figure 3.22, the GDP of the UK had maintained an upward trend since 1971, with CO2 emissions keep declining and falling to about 437 Mt in 2014. Since the Industrial Revolution, the energy landscape in the UK has gone through the era of coal, the era of petroleum and natural gas, and now continues to move towards the era of low-carbon energy. As shown in Figure 3.23, the UK has been

3.3 Low-Carbon development practices and experiences in major countries

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Figure 3.22: Variation trend of UK’s GDP and CO2 emissions in 1970–2014.

increasing the consumption of low-carbon energy since 2000. Consequently, from 2005 to 2015, the share of renewables in the UK’s primary energy consumption had risen from 1.18% to 9.11%. In 2015, although fossil energy still accounted for a great proportion of 81.84%, which was take up by petroleum (37.47%), natural gas (32.13%) and coal (12.24%), the share of clean energy slightly went up to reach 18.16%.11 Overall, the energy consumption pattern in the UK is dominated by petroleum, natural gas and other energy sources (i.e., coal, nuclear energy and renewables); the proportion of industrial energy consumption continued to decline, while transportation and residential life have become the main force of energy consumption.

Figure 3.23: Changes of UK’s energy consumption structure in 2005–2015.

In the UK, electricity supply is still based on fossil fuels, with natural gas and coal serving as supplements. Nuclear power generation has been waning in recent years due to safety concerns, while renewable power generation has been on the rise. In the UK’s total electricity supply in 2015, a great proportion of 58.2% was based on fossil fuels, which was followed by renewables (18.4%) and nuclear energy (17.3%). In the UK’s total electricity consumption, the electricity consumed by household, service and agriculture,

 BP Statistical Review of World Energy 2016. http://oilproduction.net/files/especial-BP/bp-statisticalreview-of-world-energy-2016-full-report.pdf

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and industry respectively accounted for 36%, 33% and 31%. The UK has been optimizing its electricity consumption structure by decreasing the electricity consumed by industrial sector but increasing the electricity consumed by service sector. 3.3.1.2 Strategic orientation As early as before 1980, the UK had made the decision to vigorously develop lowcarbon technologies and take low-carbon development as a national strategy. In 2008, the UK government introduced the UK Climate Change Strategic Framework, which set out its vision for a global low-carbon economy. In July 2009, the LowCarbon Transition Plan and the Renewable Energy Strategy were promulgated, together with a number of supporting programs related to energy, business and transportation, for the purpose of completing the national low-carbon economic transition by 2020. The UK government unveiled the National Adaptation Plan (NAP) in 2013 to plan for the long-term CO2 emissions. Generally speaking, the UK firstly set the midlong term and binding emission reduction targets, and then enacted laws, formulated policies and adopted economic means (e.g., taxation and carbon emissions trading) to ensure the realization of emission reduction targets. At the same time, the UK has kept raising the proportion of clean energy, which reached 32.13% in 2015 to rank among the top in the world. According to the Energy Efficiency Action Planning (2nd Edition) released in 2011, the UK should, by the end of 2016, reduce energy consumption by 9% or save energy by 136.5TWh, improve the standards for energy-saving products, implement the industrial emission standards of cutting CO2 emissions by 10%, raise the energy efficiency in transportation sector, and promote the use of renewable energy. In 2014, all parts of the UK drew up their own plans to tackle climate change, in an aim to reduce CO2 emissions. See more details in Table 3.3. Table 3.3: Low-carbon strategic plans in the UK. Year Policy

Target

 New Energy Strategy

By , reduce CO emissions by %.

 National Renewable Energy Action Plan (NREAP)

By , increase the share of renewable energy to %; increase the share of new energy-based heat and electricity to % and %, respectively; increase the share of new energy demand to %.

 Energy Efficiency Action Planning (nd Edition)

By the end of , reduce energy consumption by % or save energy by .TWh; improve the standards for energy-saving products; implement industrial emission standards of cutting CO emissions by %; raise energy efficiency in transportation sector; promote the use of renewable energy.

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Table 3.3 (continued) Year Policy

Target

 Carbon Plan

CO emissions reduction by % in ; % in ; % in ; % in ; % in .

 National Infrastructure Plan

Upgrade the infrastructure in energy, transportation and water conservancy sectors to cope with extreme climate change.

 National Adaptation Plan (NAP)

Enhance environmental awareness; build up the ability to cope with extreme environments; adopt timely actions and measures according to the long-term planning.

 Northern Ireland’s Climate Change Adaptation Programme (NICCAP)

A five-year plan for strengthening the capacity to address climate change risks.

 Scottish Climate Change Adaptation Programme (SCCAP)

A five-year plan for strengthening the capacity to address climate change risks.

Source: UK Department of Energy and Climate Change (DECC)

3.3.1.3 Policies and systems The UK government attaches great importance to the development of low-carbon industries and the establishment of a low-carbon energy system. In addition to a perfect legal framework, the UK government has been employing three economic means to tackle climate change: tax and subsidy policies related to global warming countermeasures, a carbon emissions trading system, and a carbon fund support program. In order to achieve the targets of energy conservation and emission reduction and boost the development of new energy industry, the UK government introduced three economic stimulus programs in 2011, that is, the Plug-in Car Grant (to grant a subsidy of 25% of the price for fuel-efficient cars), the Government Buying Standards, and the Feed-in-Tariffs for Renewable Electricity for PV and Non-PV Technologies (see Table 3.4).

3.3.2 Technologies Since technological progress is an important guarantee for developing a low-carbon economy, the UK has laid down a series of targeted policies to innovate the costeffective low-carbon technologies, which explains why the relevant industries and key sectors in the UK are technologically competitive. In addition to vigorously promoting the energy-saving and emission reduction technologies, the UK government also pays great attention to technological R&D (see Table 3.5). With respect to new energy, the UK, on the one hand, encourages the development of industrial energy-saving technologies, especially the transformation of

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3 The situation of Low-Carbon development in China and other Countries

Table 3.4: Economic means for promoting the UK’s low-carbon development. Year Policy  Plug-in Car Grant

Target 

A subsidy of % of the price for fuel-efficient cars, up to £,.

 Government Buying Standards

Government can only purchase the products of low energy consumption according to the procurement list.

 Feed-in-Tariffs for Renewable Electricity for PV and Non-PV Technologies

Different subsidy standards for feed-in tariffs.

Source: DECC Table 3.5: Conventional approaches to support the UK’s low-carbon development. Year Policy

Target 

 Central Government Estate Targets

Reduce GHG emissions by % by .

 Smart Metering Implementation Programme

Use smart meters to strengthen the monitoring of energy consumption.

 Carbon Reduction Commitment Energy Efficiency Scheme (CRC)

%。 Reduce GHG emissions by % annually.

Source: DECC

traditional sectors (e.g., industrial heating and air conditioning, industrial circulating water system, waste heat power generation, and power supply), and the development of high-efficiency and energy-saving products for household use (e.g., heating and refrigerating equipment, home appliances, and energy-saving bulbs). These efforts have gradually improved the country’s energy efficiency. On the other hand, the UK gives

 Plug-In Car Grant. https://www.gov.uk/government/publications/plug-in-car-grant.  Government Buying Standards. https://www.gov.uk/government/collections/sustainable-procure ment-the-government-buying-standards-gbs.  Feed-in-Tariffs for Renewable Electricity for PV and Non-PV Technologies. https://www.ofgem.gov. uk/environmental-and-social-schemes/feed-tariffs-fit.  Central Government Estate Targets. https://www.gov.uk/government/policies-energy-demand-re duction-in-industry-business-and-the-public-sector.  Smart Metering Implementation Programme. https://gov.uk/government/publications/2010-to-2015government-policy-household-energy/2010-to-2015-government-policy-household-energy#appendix-7smart-meters.  Carbon Reduction Commitment Energy Efficiency Scheme (CRC). https://www.gov.uk/government/ policies/reducing-demand-for-energy-from-industry-business-and-the-public-sector-2/supportingpages/crc-energy-efficiency-schem.

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priority to the development and application of new energy and renewable energy technologies. The advanced solar, wind, and combined heat and power (CHP) technologies have been widely applied, the research on wave and tidal energy has been underway, and the R&D of carbon capture technology has made notable breakthroughs. With respect to capital input, the UK government set up an “Environmental Reform Fund” with a total budget of £1.2 billion in 2008. This organization donated £48 million to the Carbon Trust (a government body that guides companies to reduce CO2 emissions) for its 2008–2009 technology development programme, and sponsored the “Biomass Capital Grant” and the “Biomass Energy Infrastructure and Development Plan”.

3.3.3 US: Bellwether of Low-Carbon technologies 3.3.3.1 Energy endowment and development stages With the explosive growth of the Internet economy since 2000, the US began to see its GDP go upwards, yet its CO2 emissions still remained high. It was under the impact of the financial crisis since 2007 that the US CO2 emissions started falling slightly. In 2013, the US CO2 emissions from fuels ranked first in the world, reaching 5,119.70 Mt (255.7 Mt more than those of Chinese mainland) with an AAGR of 1.75%. However, because of the government transition in 2008 and the economic downturn since then, the US CO2 emissions began to go downhill although the total amount of emissions remained high (see Figure 3.24).

Figure 3.24: Variation trend of US GDP and CO2 emissions in 1970–2014.

The energy consumption structure of the US has gone through significant changes. The consumption coal and petroleum began to decline since 2007, yet petroleum remains the dominant energy of the US, accounting for about 38% of the country’s total energy consumption. In contrast, the consumption of natural gas been on the rise, increasing from 24.17% in 2007 to 31.29% in 2015, registering a growth rate of 7% (see Figure 3.25). Data show that the US is one of the largest CO2 emitters in the world, with its CO2 emissions in 2015 accounting for 16.37% of the global total, and per capita emissions

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3 The situation of Low-Carbon development in China and other Countries

Figure 3.25: Changes of US energy consumption structure in 2005–2015. Source: BP and EIA

reaching 17.1 tons. In recent years, the US has intensified the support for renewable energy industry in terms of R&D investment, preferential tax and subsidy. Besides, it has been vigorously developing renewable energy sources such as wind, solar, biomass and geothermal energy, and increased the consumption of renewables. In 2015, renewable energy accounted for 13.99% of the US total energy consumption, and nuclear energy accounted for 8% (such proportion had remained so for years). The robust development of renewable energy industry is mainly attributed to the correct policy guidance, as the US government expects to guarantee the national energy security and economic development through the development of renewables. To combat climate change, the US government adopted the US Climate Action Plan in 2013. According to this plan, the US should, on the one hand, vigorously develop clean energy and consolidate its leading position in the field of new energy. It should double the current new energy generation by 2020, and reduce CO2 emissions by three billion tonnes (Bt) by 2030. On the other hand, the US should pay greater attention the prevention of bad weather. In conjunction with the US Climate Action Plan, the National Infrastructure Protection Plan (NIPP) was introduced in 2013 to strengthen the construction of key public infrastructure across the country, for the purpose of withstanding extreme weather (see Table 3.6). 3.3.3.2 Policies and systems As early as the 1970s, the US government began to explore the feasibility of a pollution rights trading system. In 1970, the White House promulgated the Clean Air Act, which specified the air quality standards and laid down four carbon emissions trading policies, namely Offset, Bubble, Banking and Netting, based on the system of Emission Reduction Credits (ERCs), thereby establishing a cap-and-trade model for implementing the future Acid Rain Program. During that period, the SO2 emissions of the US decreased significantly. The Clean Air Act is so far the most successful attempt in pollution rights trading in American history. In order to slash the emissions of nitrogen oxides, SO2 and other atmospheric pollutants, the White House set down the Clean Air Interstate Rule (CAIR) in 2005, and put into force the Regional Greenhouse Gas Initiative (RGGI) in 2008. A US$500 million fund was set up in 2009 to promote the consumption of

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Table 3.6: Low-carbon strategic plans in the US. Year Policy

Target

 Copenhagen Accord Pledge of United States

Reduce CO emissions by %, % and % as of ,  and , respectively.

 US Climate Action Plan

Set CO emission standards for US power stations; invest US$ million in clean energy; improve energy efficiency by % as of ; reduce CO emissions by Bt as of .

 National Infrastructure Protection Plan (NIPP)

Strengthen infrastructure construction to combat extreme climate; protect national key infrastructure.

Source: The White House

biomass energy, and an additional US$100 million fund was to be spent on energysaving and emission-reduction technologies. In 2013, the Climate Action Plan was released to increase the fiscal appropriation for clean energy by 30%, for a grand total of about US$7.9 billion a year, in an aim to consolidate the leading position of the US in clean energy development (see Table 3.7). Table 3.7: Economic means for stimulating the US low-carbon development. Year Policy  Wood-to-Energy Grants

Target 

Set up a US$ million fund to promote the use of biomass energy.

Spend US$ million on the improvement of emission-reduction  Climate Showcase Communities Grant Program technologies to reduce carbon emissions by , tons annually by . Source: The White House

 Copenhagen Accord Pledge of United States. http://unfccc.int/files/meetings/cop_15/copenhagen_ac cord/application/pdf/unitedstatescphaccord_app.1.pdf.  US Climate Action Plan. https://www.whitehouse.gov/sites/default/files/image/president27sclima teactionplan.pdf.  National Infrastructure Protection Plan (NIPP). https://www.dhs.gov/sites/default/files/publications/NIPP %202013_Partnering%20for%20Critical%20Infrastructure%20Security%20and%20Resilience_508_0.pdf.  Wood-to-Energy Grants. http://www.fs.fed.us/news/2012/releases/07/renewablewoods.shtml.  Climate Showcase Communities Grant Program. http://www.epa.gov/state-localclimate/local/show case/index.html.

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3.3.3.3 Technologies In order to promote the development of energy sector, the US has strengthened technological innovation in this regard, mainly including hydropower, solar, wind, biomass and geothermal energy, and vigorously developed smart grids, energy-saving buildings and vehicles, and carbon treatment technologies. On the basis of the Clean Air Act and the Energy Policy Act, the US government introduced the Clean Coal Power Initiative (CCPI), with the aim of making full use of lowcarbon technologies to improve energy efficiency, save production costs and reduce carbon emissions. According to the data released by the Energy Information Administration (EIA), half of the US electricity supply is based on coal burning, and such proportion is likely to rise to 57% by 2030. Besides, the US has spent years in developing new and renewable energy technologies through conventional means (see Table 3.8), and has achieved remarkable results. For example, the US is the birthplace of photovoltaic technology and industry. Table 3.8: Conventional approaches to support the US low-carbon development. Year Policy

Target

 State-Level Renewable Portfolio Standards (RPS)

Encourage energy suppliers to use renewable energy.

 Marine and Hydrokinetic Technology Database

Develop an ocean tide database to fully exploit tidal energy.

 Hydrodynamic Testing Facilities Database

Develop a hydrodynamic database to fully exploit hydraulic energy.

 Energy and Climate Partnership of Strengthen regional cooperation; take appropriate measures to reduce the use of fossil fuels and carbon emissions. the Americas (ECPA)

 State-Level Renewable Portfolio Standards (RPS). http://www.dsireusa.org/incentives/index/cfm? EE=1&SPV=0&ST=0&searchtype=RPS&sh=1.  Marine and Hydrokinetic Technology Database. http://www.eere.energy.gov/windandhydro/hydro kinetic/default.aspx.  Hydrodynamic Testing Facilities Database. http://www.eere.energy/gov/windandhydro/ hydrodynamic/  Energy and Climate Partnership of the Americas. http://www.state.gov/p/wha/rls/fs/2009/124330.htm.

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Table 3.8 (continued) Year Policy

Target

 Mandatory Reporting of Greenhouse Gases Rule

Strengthen the reporting system for GHG emitters.

 FEMA Federal Flood Risk Management Standard

Form a federal working group on extreme climate to mitigate the probability of flooding by reducing GHG emissions

Source: The White House

3.3.4 Germany: A sound legal system for Low-Carbon development 3.3.4.1 Energy endowment and development stages The CO2 emissions of Germany have maintained a downward trend since 1979. The emissions in 2015 totaled 753.63 Mt, only 2.24% of the world’s total. At the same time, the GDP growth of Germany has been constantly on the rise, with a growth rate significantly higher than that of CO2 emissions, indicating that Germany has basically realized decoupling of economic growth from carbon emissions (see Figure 3.26).

Figure 3.26: Variation trend of Germany’s GDP and CO2 emissions in 1970–2014.

The reason why Germany could significantly reduce CO2 emissions is due to the use of renewable energy. In Germany, the CO2 emissions from coal burning have kept decreasing, while those from clean energy (natural gas) have been on the rise (see Figure 3.27). By 2013, the share of natural gas-based CO2 emissions in Germany’s primary energy consumption had risen to 22%, and that of renewable energy had maintained an upward trend, hence the share of overall clean energy consumption could rank high in the  Mandatory Reporting of Greenhouse Gases Rule. http://www.epa.gov/climatechange/emissions/ ghgrulemaking. Html.  FEMA Federal Flood Risk Management Standard. https://www.whitehouse.gov/the-press-office/ 2015/01/30/executive-order-establishing-federal-flood-risk-management-standard-and-.

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world. In 2015, the proportion of renewable energy consumption was about 18%, reaching the world advanced level.

Figure 3.27: Changes of Germany’s energy consumption structure in 2005–2015.

According to the vision proposed by the German government, one-third of the domestic net electricity consumption should be based on renewable energy generation by 2020, including wind, hydraulic, solar, geothermal and biomass energy; and such proportion should reach at least 50% by 2030 and 80% by 2050. The share of renewable energy in net energy consumption by 2020, 2030, 2040 and 2050 is expected to reach 18%, 30%, 45% and 60%, respectively. Such ambition shows that the German government is serious about renewable energy, and takes it as the driving force of the national economic development. In 2016, Germany saw the solar and wind power generation reach the peak, with renewables satisfying 87.6% of domestic energy demand, chalking up a record. Regarding the energy transition of Germany, the primary purpose is to downscale the installed capacity of coal power and nuclear power, increase the supply of renewables, and reduce energy consumption through the participation by all people and reasonable supervision and evaluation mechanisms. As the scale of wind and photovoltaic power generation continues to expand, Germany has been trying to alleviate its dependence on fossil and nuclear energy, and support renewable energy to play a leading role. 3.3.4.2 Strategic orientation In order to achieve the targets for addressing climate change, the German federal government has been following the principles of vigorously developing renewable energy and raising energy efficiency. In addition to kicking off a number of energy projects since 1977, the government released the National Energy Efficiency Action Plan (NEEAP) in 2007 to set targets for energy conservation and emission reduction. In 2011, the second NEEAP was issued, planning to save energy consumption by 9% by 2016. In Germany’s climate protection strategy, energy conservation is defined as one of the primary goals. In fact, the German industrial sectors on the whole, such as power stations and lighting systems, still have great potential to raise their energy efficiency. Germany has been playing to the strengths of its industrial system by

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motivating companies to combine tax preference with modern energy management. And SMEs can access to the financial assistance by a special government fund (see Tables 3.9 and 3.10). Table 3.9: Low-carbon strategic plans in Germany. Year Policy

Target

 National Energy Efficiency Action Plan (NEEAP)

Set the targets of CO emissions, energy conservation and emission reduction.

 National Renewable Energy Action Plan (NREAP)

In the total energy consumption by , the share of renewable energy is to reach %. In the consumption of renewable energy, .% is for heating, % for power generation, and % for transportation.

 nd National Energy Efficiency Action Plan (NEEAP)

Reduce energy consumption by % by .

3.3.4.3 Laws and regulations Table 3.10: Main environmental and climate acts in Germany. Main act

Interpretation

Environmental Liability Act

Special legislation on compensation for environmental pollution and damage.

Basic Law for the Federal Republic of Germany

The revised Basic Law provides a constitutional foundation for sustainable development.

Closed Substance Cycle and Waste Management Act

The first environmental protection act or waste management act on waste sorting and landfilling.

Green Gas Emission Trading Act

All energy sectors, energy-intensive industrial sectors and airlines should submit CO emission permits. Most of the permits are auctioned off to companies, and the taxes from the auction gains will become the source of climate fund.

Einkommensteuergesetz (EstG)

Tax credits for workers who upgrade energy sources.

 National Energy Efficiency Action Plan  National Renewable Energy Action Plan (NREAP). http://ec.europa.eu/energy/renewables/action_ plan_en.htm.  2nd National Energy Efficiency Action Plan. http://www.bfee-online.de/bfee/energieeffizienz_in_ deutschland/energieeffizienzaktionsplan/.

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Table 3.10 (continued) Main act

Interpretation

German Renewable Energy Act

Give renewables priority over other resources and guarantee a fixed pay for power generation from renewable resources.

Renewable Energies Heat Act

Ensure that a certain percentage of energy in new buildings comes from renewable resources.

Biofuel Quota Act

Define a minimum proportion of biofuels in petrol and diesel and a mandatory labelling of biomass production.

KWKG

Give cogeneration technology priority over non-renewable energy generation, and manage financial incentives.

German Energy-Savings Directive (EnEV)

Energy labelling of new buildings and comprehensive modernization of existing buildings.

Carbon Dioxide Standards for New Cars and Vans (EU)

Set emission limits for small cars and light vehicles: the maximum emission value for new vehicles is g CO/km.

Motor Vehicle Tax

Levy tax upon motor vehicles based on their CO emissions.

Federal Highway Toll Act

Vehicles carrying goods weighing up to  tonnes on motorways and four-lane federal highways will be charged according to their CO emissions.

CCS Regulatory Framework

Establish a regulatory framework for capturing, transporting and storing carbon atoms.

Waste Disposal Act

Landfill of untreated waste has been banned since  to reduce methane leakage.

F-Gas Regulation

Aimed at reducing the use and leakage of climate-damaging fluorinated GHGs widely used in air conditioners.

EU Eco-Design Directive

Minimum efficiency standards for new household appliances, lighting and engines.

Energy Labelling

Energy-efficiency labelling of all household appliances, lighting facilities, vehicles and buildings within the EU.

Source: Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

The Federal Republic of Germany introduced a series of environmental protection policies and acts as early as the 1970s, such as a comprehensive environmental protection program launched in 1971. In addition, by drawing lessons from the oil crisis, the German government tried to alleviate its dependence on traditional energy and replace it with renewable energy. To this end, the Renewable Energy Act and the Energy-Savings Directive came out. And the government also introduced the National Energy Efficiency Action Plan and the Buildings Energy Act (GEG) to improve energy efficiency. Other economic stimulus programs, such as the Biofuels Quota Act and the

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Table 3.11: Policies for stimulating Germany’s low-carbon development. Year  

Policy Biofuels Quota Act

Target 

Energy and Climate Fund (EKF)

Biofuels used in transportation sector to increase % by . 

Set up a fund to develop energy efficient industries.

Energy and Climate Fund (EKF), have been implemented to subsidize the development of new energy industry (see Table 3.11). 3.3.4.4 Technologies By giving full play to its advantages in manufacturing, Germany has been vigorously developing low-carbon new energy industry, and invented the technology of Combined Heat and Power Generation (CHP). In simple terms, CHP is a technology that captures the heat generated during power generation and concentrates it for heating. It is able to reduce the loss of energy while creating additional profits to the enterprise. In order to promote the development of this technology, the German government has introduced an act to specify the eligibility for subsidies and the concrete subsidy standards for the application of CHP. Besides, the German government planned to double the share of CHP-based power supply by 2020. Every year, the German government will appropriate a certain amount of funds for energy-saving renovation and construction, including the optimization of energysaving equipment in buildings, utilization of renewables in communities, and energy storage. It also invests the research and development of new energy technologies every year. In 2011, such investment reached US$3.4 billion, increasing 75% from that in 2006–2009. Besides, the government also encourages citizens to use energy-efficient household appliances. According to the relevant EU directives, all household appliances sold in Germany must be labeled with an energy grade so that consumers can choose appliances with low energy consumption. In short, since the improvement of energy efficiency is crucial to the success of Germany’s energy transition, all sectors have set targets for improving their energy efficiency.

 Biofuels Quota Act.  Energy and Climate Fund (EKF). http://www.erneuerbare-energien.de/unser-service/presse/detai lansicht/artikel/bundesumweltministerium-klimaschutz-und-energiewendeprogramme-werdenweiter-gefoe.

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3.3.5 Japan: An innovative system for Low-Carbon development 3.3.5.1 Characteristics of energy consumption Japan’s economic growth began to pick up speed since 1970 (see Figure 3.28), but it is not exempt from the dual pressure of environmental pollution and energy shortage. For example, the CO2 emissions of Japan increased by 49.01% from 1970 to 2015. As environmental protection, energy conservation and emission reduction have caused widespread public concern, the Japanese government has stepped efforts in the development of low-carbon economy and the construction of low-carbon society. By introducing strategic policies in this regard, taking the lead in proposing the construction of low-carbon society, and defining the development of low-carbon economy as a growth point, Japan tries to fulfill its economic transition and lead the world lowcarbon economic revolution, so as to occupy the commanding heights of future economic development. Guided by the low-carbon development strategy, the Japanese government has established a sound low-carbon economic system, and defined the construction of lowcarbon society as the ultimate goal. And it persists in innovating policies and lowcarbon technologies. Thanks to these efforts, Japan has seen its CO2 emissions remain at about 1,000 Mt since 1971. The emissions in 2015 reached 1,207.79 Mt, down 0.33% from 2014, which were merely one ninth of China’s emissions.

Figure 3.28: Variation trend of Japan’s GDP and CO2 emissions in 1970–2014.

In Japan’s total energy consumption, petroleum holds a dominant position, accounting for more than 40% for years; and the combined consumption of coal and natural gas account for about 20%. After the Fukushima Daiichi Nuclear Disaster in 2011, the nuclear energy consumption in Japan dropped sharply, occupying a tiny share of 0.22% in 2015. The consumption of hydro and renewable energy in Japan has been kept at a very low level (see Figure 3.29).

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Figure 3.29: Changes of Japan’s energy consumption structure in 2005–2015.

3.3.5.2 Strategic orientation Japan is in extreme lack of energy, with 95% of its energy demand satisfied by imports, so the Japanese government has always attached great importance to saving energy. In 2006, the government unveiled its first national energy strategy, that is, the New National Strategy for Energy of Japan, which set ambitious targets for the 2030 national energy scenario. This strategy, for the first time, elevated the energy issue to the height of national strategy and provided a guarantee for Japan to develop lowcarbon economy. Besides, the global financial crisis and escalating climate warming have made it an inevitable choice to pursue low-carbon development. It is in this context that Japan began to introduce guidelines or strategies that are dedicated to lowcarbon economic development. In 2008, then Japanese Prime Minister Yasuo Fukuda gave a speech entitled “In pursuit of Japan as a Low-Carbon Society”, also known as “Fukuda Vision”, which marks a manifesto for a low-carbon revolution in Japan. In his speech, PM Fukuda revealed the long-term target for Japan’s energy conservation and emissions reduction: by 2050, Japan will cut its CO2 emissions by 60%~80% from the current level and become the world’s first low-carbon society. As for the medium-term target by 2020, PM Fukuda believed that Japan could reduce CO2 emissions by 20% from the 1990 level, which would be on a par with the EU’s emission reduction target, since Japan is a leader in energy conservation with energy efficiency much higher than that of EU members. He went further to recommend some emission reduction policies and measures to lay a solid foundation for further improving the low-carbon economic system. On this basis, the Japanese government formulated detailed low-carbon strategies for different industrial sectors, showing its determination to accomplish and lead the low-carbon socio-economic development. In 2015, Japan refined the CO2 emission reduction targets, requiring that by 2030, the proportion of renewable energy power generation should reach 22%~24%, including 1.7% of wind energy, 3.7%~4.6% of biomass energy, 1% of geothermal energy, and 9% of hydro energy (see Table 3.12).

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Table 3.12: Low-carbon strategic plans in Japan. Year Policy

Target 

 Strategic Energy Plan ()

Reform the energy supply and demand structure; conduct a longterm tracking of energy supply and demand; and promote the development of strategic technologies.

 Basic Energy Plan ()

Improve energy efficiency in business, household and transportation sectors, and so on.

 Long-Term Energy Supply and Demand Outlook

Continue to implement energy policies and seek balance among energy security, economic efficiency and environmental protection. In total power generation by , renewable energy power generation is to reach ~TWh, accounting for %~%; and the proportions of solar, wind, biomass geothermal and hydro energy will be %, .%, .%~.%, % and %, respectively.

3.3.5.3 Policy innovation Japan’s climatic countermeasures had been heavily weighted in technological innovation before 2008, with all corresponding policies and systems dedicated to strengthening the public environmental consciousness, such as motivating enterprises to actively reduce carbon emissions. In recent years, the Japanese government has shifted focus to the innovation in the strategic plans for developing a low-carbon economy. For example, after laying down the Action Plan for Achieving a Low-Carbon Society, the Japanese government has started to design relevant policies and innovated systems such as the carbon footprint system, the pacemaker system, and the enterprise classification management system. (1) Improve relevant laws and regulations The Japanese government has been giving full play to the role of laws in promoting low-carbon development. The Energy Conservation Act (1979), which entered into force when the second oil crisis broke out, was the cornerstone for Japan to proceed with energy conservation, carbon emission reduction, and development of a lowcarbon economy. Afterwards, the Act for the Promotion of Use of Renewable Resources, the Act on the Rational Use of Energy, the Waste Disposal Act, the Act for PRTR and Promotion of Chemical Management, and the Long-Term Energy Supply and Demand Outlook (2010) were introduced in succession. These acts set constraints on energy conservation and efficient use in different sectors, thereby consolidating the  Strategic Energy Plan (2014). http://www.meti.go.jp/english/press/2014/0411_02.html.  Basic Energy Plan (2014). http://www.meti.go.jp/english/press/2014/0411_02.html.  Long-Term Energy Supply and Demand Outlook. http://www.meti.go.jp/english/press/2015/pdf/0706_ 01a.pdf.

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solid legal foundation for further development of a low-carbon economy. In addition to the general laws such as the Basic Act on the Environment (1993) and the Basic Act on Establishing a Sound Material-Cycle Society (2000), the Japanese government also enacted some specialized laws such as the Act on Promoting Green Procurement and the Home Appliance Recycling Act. While making efforts to seize the commanding heights of low-carbon technologies, Japan pays attention to adjusting its industrial, energy and sci-tech policies, implementing all sorts of energy-saving measures, and placing the growth of social energy demand under strict control of the government. (2) Strengthen economic means In order to motivate enterprises and individuals to save energy and develop a lowcarbon economy, Japan implements a series of economic incentive systems and means, including tax reform, grant system, special accounting system and carbon emissions trading system, as shown in Table 3.13. Table 3.13: Economic means for stimulating Japan’s low-carbon development. Year Policy

Target

 Eco-Car Tax Break and Subsidies for Vehicles

Levy an additional tax by % on fuel-efficient cars, and grant a subsidy to eco-friendly cars.

 Carbon Tax

Carbon tax is to be lifted from US$./t in  to US$./t.

 Low-Carbon City Act (Eco-City Act)

Reduce carbon emissions by .% by ; fulfill long-term emission reduction targets step by step.

3.3.5.4 Technology innovation Japan attaches great importance to the development and application of low-carbon and new energy technologies, and encourages enterprises to continue technological innovation and upgrading. By leading the development direction of low-carbon technologies, Japan has no parallel in the fields of new energy and environmental protection. Its achievements in solar power generation and bioethanol manufacturing are so far unsurpassable, and its economic benefit per unit of energy consumption goes beyond that of other developed countries. The Japanese government has established a competitive research funding distribution system to motivate industrial and academic communities to take part in the research, development and innovation of low-carbon technologies. In May 2009, the  Eco-Car Tax Break and Subsidies for Vehicles. http://www.wri.org/sites/default/files/wri_workingpa per_japan_final_ck_6_11_14.pdf.  Carbon Tax. https://www.env.go.jp/en/policy/tax/env-tax/20121001a_dct.pdf.  Low-Carbon City Act (Eco-City Act). http://www.env.go.jp/en/focus/docs/files/20140318-83.pdf.

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Ministry of Economy, Trade and Industry (METI) launched an open recruitment campaign oriented to colleges, enterprises and local governments, with an aim to have them united as a three-in-one research and development system dedicated to building a low-carbon society and accessible to financial assistance. Moreover, in order to smoothly transform the research and development achievements into productive forces, the Japanese government also sponsors the technology projects that have gone through the phases of basic research and applied technology development. Thanks to these incentives, the Japanese industrial and academic communities have been devoted themselves into the research, development and innovation of low-carbon technologies and made constant breakthroughs, which will make Japan get prepared for developing itself into low-carbon society, and gain competitive advantages in the international arena (see Table 3.14). Table 3.14: Other policies for low-carbon development in Japan. Year Policy

Target

 Product Carbon Footprint Labeling

Track and monitor the carbon emissions of enterprises in all sectors.

 Global Methane Initiative

Unite with other partner countries to control carbon emissions.

3.3.6 Summary of Low-Carbon development experiences in major countries Through a review of the low-carbon development course of the UK, the US, Germany and Japan, we can sum up the experiences that are worth learning for China. In brief, the UK mainly relies on policies to promote energy conservation and low-carbon development. The US is the most technologically adept, since it highlights the R&D and application of low-carbon technologies, and through which it has increased energy efficiency and reduced carbon emissions. In Germany, detailed and specialized laws serve as a reliable guarantee for carbon emission reduction and industrial restructuring. Japan has an established a low-carbon innovation system, and made full-scale efforts in developing low-carbon industrial, energy, transportation and construction sectors, with an aim to build itself into a low-carbon society. The low-carbon development experiences in major countries can be summarized as follows:

 Product Carbon Footprint Labeling. http://www.meti.go.jp/english/press/data/20091013_01.html.  Global Methane Initiative. https://www.globalmethane.org/.

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Firstly, implement long-term supporting polices and laws. Governments of these countries have promulgated favorable policies and laws to promote low-carbon actions across society, in order to develop a low-carbon economy and ultimately build a lowcarbon society. Secondly, vigorously develop new and renewable energy sources. These countries have been conscientiously developing new and renewable energy sources adept to their natinoal conditions, reducing the use of fossil fuels and reforming the energy consumption structure, and their efforts are proved to be worthwhile. Thirdly, guide the public to join in the development of a low-carbon economy. Ordinary people need to be fully aware of the significance of low-carbon economy and willing to save resources and reduce carbon emissions. Only in this way can lowcarbon economy become a daily routine of individuals and can them be accumstomed to a civilized, healthy, green and low-carbon lifestyle. Fourthly, continue the research and development of low-carbon technologies. The development of low-carbon economy is inseparable from technological progress. In recent years, developed countries have kept making breakthroughs in the research, development and application of energy-saving, renewable energy and CCS technologies. Fifthly, increase economic incentives and financial support. Economic incentives, which involve the means of tax, subsidy, price, loan and special fund, are widely adopted in different countries. For example, some EU member states have set vehicle tax standards based on fuel efficiency and environmental performance of vechicles, with an aim to drive the development of domestic new energy industry.

3.4 Enlightenments from foreign Low-Carbon development practices to China’s Low-Carbon Plus development In the context of global climate change, low-carbon development, which features low energy consumption, low emissions and low pollution, has gradually become a global concensus and even an inevitable choice to address the increasingly serious environmental and energy problems and to sustain the development of human society. Since the reform and opening up, China has maintained rapid economic growth and made remarkable achievements, becoming the world’s second largest economy. However, an extensive economic growth pattern, which relies on scale expansion and growth speed but ignores social and environmental benefits, has resulted in high energy consumption, resource depletion and pollutant discharge, as well as serious damage to the ecological environment, hence posing a threat to China’s sustainable development. In order to build an ecological civilization and a beautiful China, we

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need to implement the Five-sphere Integrated Plan42 and the Four-pronged Comprehensive Strategy,43 believe in the concept of “innovative, coordinated, green, open and shared development”, and establish a Low-Carbon Plus development system (which combines Low-Carbon with education, finance, energy, industry and consumption) by proceeding from national conditions and learning from foreign experiences. We should implant low-carbon concept into economic and social spheres, endow development with a low-carbon core, low-carbon attributes, low-carbon cultural content and low-carbon values, decarbonize every aspect and every link of socio-economic development, improve resource productivity and total factor productivity, reduce resource consumption and discharge of major pollutants, cut down GHG emissions, and decouple socio-economic development from carbon emissions.

3.4.1 Low-Carbon Plus Finance: Building a green finance system Finance plays an essential role in raising capital, allocating resources, managing risks, providing information and incentives. A sound finance system can improve the efficiency of resource allocation and return on investment, thus promoting economic growth. As GHG emission reduction has become an international concern, environmental protection is now in growing need of financial support. Insufficient capital input has weakened the overall strength and market competitiveness of China’s low-carbon industries, even though they have a broad development prospect. According to estimates, during the 13th Five-Year Plan period (2016–2020), China’s green financing demand would increase at least two trillion yuan every year, yet the annual fiscal allotment on environmental protection, energy conservation, new energy and other green industries would be slighlty over 200 billion yuan. According to the forecast of the Ministry of Environmental Protection,44 the air pollution control in five years would cost 1.7 trillion yuan, yet the government budget for three years would amount to only 50 billion yuan. Low-carbon industries are characterized by great uncertainties and risks, both fading traditional industries and financial enterprises in China show little interest in lowcarbon investment. So, it is usually difficult for new energy enterprises to obtain loans

 The Five-sphere Integrated Plan refers to China’s overall plan for building socialism with Chinese characteristics, that is, to promote coordinated progress in the economic, political, cultural, social and eco-environmental fields.  The Four-pronged Comprehensive Strategy refers to China’s strategic plan for building socialism with Chinese characteristics, that is, to make comprehensive moves to complete a moderately prosperous society in all respects, to further reform, to advance the rule of law, and to strengthen Party selfgovernance.  In 2018, the Ministry of Environmental Protection (MEP) was renamed the Ministry of Ecology and Environment (MEE).

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from commercial banks. Although these enterprises can pool social funds by issuing stocks and securities, they have to bear a high cost of doing so and their securities hardly have enough liquidity. An immature securities market, opaque transactions, and non-standard transaction registries all make it difficult for enterprises to raise funds in time, which not only dampens the diversified financing needs of low-carbon industries, but also keeps financial institutions from increasing profit margins. The main function of the Low-Carbon Plus Finance is to direct capital flow to the industries that develop resource-saving technologies and protect ecological environment, and motivate enterprises to place focus on green production. According to international experiences and national conditions, the Low-Carbon Plus Finance to be implemented in China includes the following contents: (1) Establish a green banking system. (2) Build a discount mechanism for green credit. (3) Build a guarantee mechanism for green projects. (4) Set up a green industrial fund with government participation. (5) Issue green bonds to finance medium – and long-term local projects with stable cash flow. The Low-Carbon Plus Finance facilitates the green transformation of investment structure, thus transforming the polluting economic structure. It is also conducive to the implementation of financial derivatives aimed at reducing GHG emissions, and to the design of green financial products suitable for national conditions.

3.4.2 Low-Carbon Plus Energy: Building a modern energy system To achieve the goal of carbon emission reduction, China must deepen the revolution in energy technology, transform the way of energy production and utilization, optimize the energy supply structure, improve energy efficiency, build a clean, safe and efficient modern energy system, and safeguard national energy security. The modern energy system is ought to accomplish the follow tasks: (1) Promote the clean utilization of traditional fossil fuels, especially by employing clean coal and CCS technologies. (2) Replace high-carbon energy with low-carbon and carbon-free energy such as natural gas, wind, nuclear, solar and geothermal energy. (3) Vigorously develop distributed energy resources and tap the potential of Internet energy. In order to establish a modern energy system that suits China’s national conditions, the efforts should be made in the following aspects: (1) Increase the proportion of non-fossil energy, and promote the clean and efficient use of coal and other fossil fuels. (2) Speed up the development of wind, solar, biomass, hydro and geothermal energy, and develop nuclear energy in a safe and efficient manner. (3) Vigorously develop energy storage technology and construct smart grids, develop distributed energy resources, and promote energy-saving and low-carbon power dispatching. (4) Open mining rights in an orderly manner and actively develop natural gas, coalbed methane and shale gas. (5) Reform the energy system and cultivate a market-based competitive mechanism; and it is especially important to get the whole society involved in energy transition by formulating and improving policies and laws.

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3.4.3 Low-Carbon Plus Industries: Building a green supply system In terms of Low-Carbon Plus Industry, we need to promote clean production, make the best use of resources, minimize the generation of industrial wastes and have them recycled or subject to harmless treatment. The main tasks are as follows: (1) Break the boundaries of administrative divisions, and build a cross-regional industrial system with a balanced industrial layout according to resource endowment. (2) Maintain ecological equilibrium, and build a circular industrial system with optimized industrial structure, complete industrial chain, and reduced energy and resource consumption. (3) Give full play to the advantages of technologies, improve the ability of independent innovation, and build a modern industrial system that industrializes sci-tech achievements and facilitates high-end, low-carbon and eco-friendly development of industries. In terms of Low-Carbon Plus Agriculture, we need to follow the guidance of lowcarbon development concept, and actively develop green agriculture, white agriculture, blue agriculture, black agriculture, fungus agriculture, protected agriculture, horticultural agriculture, sightseeing agriculture, environmental safety agriculture, and information agriculture. In a word, we should develop new-type agriculture which is organic, eco-friendly, efficient and modernized. In terms of Low-Carbon Plus Transportation, the principles of accessibility, orderliness, safety and comfort, low energy consumption and low pollution should be followed, in an aim to alleviate traffic congestion and environmental pollution, promote social equity and rational use of resources, reduce social costs, improve traffic efficiency, and ultimately establish a sustainable transportation system that satisfies people’s travel demand. In terms of Low-Carbon Plus Construction, our target is to realize the coordinated development of people, buildings and the natural environment. To this end, we should, while taking advantage of natural conditions and employing artificial means to create a good living environment, minimize the damage to the natural environment, achieve the balance between taking from nature and giving back, and construct eco-friendly and energy-saving buildings. In terms of Low-Carbon Plus Commerce, we should establish the following green marketing concepts: (1) Inspire the green consciousness of distributors and establish proper interest relations with them, look for enthusiastic marketing partners, and build a stable marketing network. (2) Do a good job in all aspects of distribution. Green distribution is that the entire process—from selection of transport means and warehouses, loading and unloading, shipment and storage to formulation and implementation of management measures—must be green. (3) Shorten or widen distribution channels as far as possible, and reduce resource consumption and expenses on channels.

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3.4.4 Low-Carbon Plus Consumption: Recommending a low-carbon lifestyle Low-Carbon Plus Consumption is a pattern of consumption that is part of ecological civilization and the fundamental requirement for sustainable development. It appeals to people to choose green products, properly treat wastes, reduce pollution, coordinate the relationship between man and nature, and protect the environment, which is a concrete expression of ecological culture, ethics and values. Consumers and producers need to make concerted efforts to achieve the eco-friendly Low-Carbon Plus Consumption. Firstly, consumers should establish the Low-Carbon Plus concept and assume the social responsibility of Low-Carbon Plus Consumption. Bearing in mind the green development philosophy, consumers should accept a new value of moderate consumption, do their part to pursue sustainable development and harmonize the relationship between man and nature, and abandon the conspicuous consumption of luxuries and unbridled material comforts. Secondly, consumers should adopt low-carbon consumption. They should cut out the high-carbon one-off consumption and fast consumption, choose green and ecofriendly products and ways of travel, develop good living habits, and make lowcarbon consumption, which is healthy, eco-friendly and energy-saving, the value orientation of their modern life. Thirdly, enterprises should produce low-carbon products. Production determines consumption, and the mode of consumption is constrained by the mode of production. There needs to be plenty of commodities in the market, which is the prerequisite for consumers to pick out the low-carbon ones among them. So, it is enterprises that take control of Low-Carbon Plus Consumption. In view of this, enterprises should strengthen technology innovation, reduce energy consumption, improve energy efficiency, adopt eco-friendly ways of emission, produce and develop low-carbon and energy-saving products and services, and set reasonable prices for low-carbon products to make sure they are affordable. Besides, enterprises have to reduce the carbon emissions per unit of energy consumption through input of human and financial resources and sci-tech innovation, which is part of their social responsibilities, and finally diversify their energy consumption structure and upgrade their industrial structure. The Low-Carbon Plus development strategy proposed by China is bound to balance the landscape of international economic competition. On the one hand, it will build up the national strength of China as a developing country, enable it to keep pace with the developed countries in low-carbon development, take part in the negotiations over new international rules of the game, and win a place in the climate game led by developed countries. On the other hand, it is a chance to smash the scheme of developed countries to break up the camp of developing countries.

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To sum up, the Low-Carbon Plus development strategy is an inherent requirement for China to address climate change and pursue sustainable development, and a typical manifestation of the plans, actions and wisdom with Chinese characteristics. It will help advance the construction of ecological civilization and a beautiful China, as well as the sustainable development of the Chinese nation, and at the same time help usher the world into the era of sustainable development.

4 Overall thinking, targets and main tasks of China’s Low-Carbon Plus Strategy The CPC Central Committee and the State Council attach great importance to tackling climate change and have achieved positive results in studying and implementing the low-carbon development model. But on the whole, the low-carbon endeavor of China still lags behind its economic and social development. This situation is caused by objective factors such as the stage of development, basic national conditions of population, resources and environment, and technological strength, as well as by the immature toplevel design, imperfect system and improper management. To solve these problems, the Chinese government has, by sticking to problem orientation and goal orientation, put forward the overall thinking and targets of the Low-Carbon Plus Strategy.

4.1 Overall thinking and goals 4.1.1 Guiding ideology We should conscientiously implement the decisions of the 18th CPC National Congress and the Third, Fourth, and Fifth Plenary Sessions of the 18th CPC Central Committee, as well as the instructions given by President Xi Jinping in his speeches. By taking account of China’s commitments made at the Paris Climate Conference, and the major decisions and plans of the Central Government on green development, we should acclimatize ourselves to the new normal in economic and social development, and endeavor to satisfy the overall and long-term requirements of low-carbon development. We’d better give priority to transforming the growth model, and take Low-Carbon Plus Innovation as the means to develop green, safe, efficient and modernized agriculture, manufacturing, construction, transportation, energy and financial sectors. A low-carbon lifestyle is highly recommended, low-carbon technologies, new growth models and new business formats should be promoted, and the supply-side structural reform in low-carbon industries must be continued, with an aim to adapt to and mitigate climate change, and lay a solid foundation for transforming China from a traditional power to a modern power driven by low-carbon development.

4.1.2 Basic principles China’s low-carbon development is under the guidance of the following principles: – Take into account both domestic and international situations. On the one hand, we should vigorously promote green and low-carbon development by starting from China’s national conditions and needs. On the other hand, it is important to https://doi.org/10.1515/9783111040066-004

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participate in international cooperation on climate change, and learn from advanced foreign experiences to tackle global climate change. Work in tandem to address climate change and develop a low-carbon economy. The ideas for tackling global climate change are available for promoting lowcarbon development, while low-carbon development can help implement the measures to adapt to and mitigate climate change. The response to global climate change and low-carbon development will help China complete economic transition and upgrading and comprehensively deepen the reform. Exploration, innovation and demonstration go hand in hand. We should follow the law of Low-Carbon Plus development, support the innovation of diversified technologies, mechanisms and models, implement the low-carbon projects that apply new technologies or new models based on local conditions, and create an open and inclusive atmosphere for mass innovation. Combine government guidance with public participation. We should give play to the guiding role of the government in carrying out the low-carbon development work, and form an incentive mechanism and a good public opinion atmosphere. Enterprises, social organizations and the public should be mobilized to accelerate the formation of a low-carbon development landscape featuring openness and sharing.

4.1.3 Targets The overall target of China’s Low-Carbon Plus development is to preliminarily build a low-carbon industrial system by 2020 and let it serve as a powerful driving force of economic growth. At that time, there will be a perfect market mechanism for lowcarbon development, complete technology and standard systems geared to international conventions, an open and shared environment for low-carbon development, effective control over GHG emissions, notable increase in consumption of low-carbon energy, all-round international cooperation, significantly improved development capacity, and active public participation. These favorable conditions are no doubt a strong support for China to deepen the overall reform, transform and upgrade the national economy.

4.2 Main tasks The Low-Carbon Plus development strategy is an inherent requirement for China to actively respond to climate change and achieve sustainable development. As a typical manifestation of China’s plans, actions and wisdom, this strategy is to promote the construction of an ecological civilization and a beautiful China, sustain the development of

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the Chinese nation, and help usher the world into the era of sustainable development. The main tasks of China’s Low-Carbon Plus development strategy are as follows:

4.2.1 Implement the Low-Carbon Plus Agriculture strategy in an all-round manner The implementation of the Low-Carbon Plus Agriculture strategy is an inevitable requirement for alleviating and even curbing the trend of global climate change, one of the options for reducing GHG gas emissions, and the solution for China to transform agricultural development model, perform multiple functions of agriculture and modernize agricultural production. To develop Low-Carbon Plus Agriculture, we should adhere to the principles of moderate Low-Carbon, collective action, coordination, and maximization of comprehensive benefits, pay attention to solving the issues relating to agriculture, rural areas and farmers, and promote the construction of beautiful countryside. In terms of the priorities defined by the Low-Carbon Plus Agriculture strategy, low-carbon technology innovation is put in the first place. Secondly, the construction of low-carbon agricultural infrastructure and a corresponding policy framework should be strengthened. Lastly, it is necessary to form incentive mechanisms, adopt diversified and flexible development models in line with season, local conditions and individuality, and endeavor to realize the goals of Low-Carbon, agricultural yield, value and quality. The participants in developing Low-Carbon Plus Agriculture be diversified to include the government, enterprises, NGOs, farmers/households, low-carbon agricultural technology research institutes, and ecological bodies. In order to reduce agricultural carbon emissions, clean energy projects (e.g., power generation based on wind, solar and photovoltaic energy) should be carried out to replace thermal power generation. Organic fertilizer production, straw utilization, biogas engineering, ecological parks and noncommercial forests should be promoted to reduce or delay carbon emissions, and realize carbon sequestration in agricultural soils and forests. In addition, energy exchanges should be upgraded to facilitate carbon trading for emission reduction, while enterprises should actively develop carbon sequestration in agricultural soils and forests to achieve carbon neutrality, thus driving the development of Low-Carbon Plus Agriculture.

4.2.2 Implement the Low-Carbon Plus Industry strategy in an all-round manner The key tasks defined by China’s Low-Carbon Plus Industry strategy are as follows: Accelerate the restructuring and upgrading of traditional industry through lowcarbon transformation, provide a strong impetus to emerging industry, integrate manufacturing with IoT, enhance the visibility of Chinese brands in the international

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market, and implement the initiative of “Made in China 2025”—the Chinese version of “Industry 4.0”. Build an integrated low-carbon technology system, which consists of an industry technical innovation system, intermediary service system, capital guarantee system, and human resource system; build an low-carbon energy system for industry to improve the energy efficiency of existing equipment and strengthen the energy cascade use; build a long-term regulatory mechanism to standardize the low-carbon development of industry; and build a long-term guarantee mechanism to implement the LowCarbon Plus Industry strategy in virtue of the price mechanism, market access mechanism, carbon trading market, and low-carbon legal system. Cancel or rectify the preferential treatment for the industries with high energy consumption and high emissions, and adjust foreign trade policies to strictly control the export of products with high pollution, high energy and resource consumption. Slow down or curb the growth of carbon emissions, optimize the structure of commodities, and develop low-carbon trading business through the balanced development of trade, industries and urbanization.

4.2.3 Implement the Low-Carbon Plus Construction strategy in an all-round manner The key tasks defined by China’s Low-Carbon Plus Construction strategy are as follows: Form an architect-led operational model, adopt low-carbon construction techniques and materials from the beginning to minimize energy consumption and carbon emissions of buildings, and guide people to transform their high-carbon lifestyle or consumption pattern after buildings are put to use, for the purpose of ensuring the lowcarbon development of buildings throughout their life cycle. But this puts forward higher requirements for architectural design. So, we need to industrialize the lowcarbon construction sector through prefabricated components, fabricated construction, standardized architectural design and mechanized operations, integrate architectural design with construction operations, develop energy-saving and eco-friendly buildings and maximize their life time value. Cultivate a market for Low-Carbon Plus Construction, and continue to improve the market circumstances by establishing the systems for keeping energy consumption statistics, assessing and labeling energy efficiency, and developing a third-party evaluation mechanism. Support the development of passive and ultra-low-energy buildings, make full use of the market to adjust supply and demand, employ the administrative means of the government, improve relevant laws and regulations, and finally create a healthy development pattern led by the government, based on the market, and joined by the public.

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4.2.4 Implement the Low-Carbon Plus Transportation strategy in an all-round manner Low-Carbon Plus Transportation, which is to achieve low-carbon development of transportation in an innovative and all-round way, will drive the low-carbon development of all industries, boost China’s economic transition and upgrading, and create new growth points. Low-Carbon Plus Transportation can be broken down into LowCarbon Plus High-Speed Rail (HSR), Low-Carbon Plus Vehicles, and Low-Carbon Plus Logistics. The HSR of China, which is characterized by fast speed, small space occupation and low emissions, is spoken highly by lots of countries. With low energy consumption and carbon emissions, HSR marks a new opportunity for China to pursue lowcarbon development of transportation. In addition, as the electrification rate keeps going up, the railways of China have been increasingly powered by electricity instead of petroleum, thus weighing down the petroleum consumption in railway sector. In short, HSR plays a crucial role in driving the low-carbon development of transportation, thus transforming people’s travel patterns and the basic industries of China. In terms of Low-Carbon Plus Vehicles, it aims to stimulate the development of self-driving cars and lead the development of all industries. Electric vehicles represent the future development trend of Low-Carbon Plus Transportation in urban areas. In terms of Low-Carbon Plus Logistics, the low-carbonization of the functional modules of logistics is to reduce energy consumption, pollution and carbon emissions, and build a system composed of low-carbon functional modules such as shipment, storage and packaging. With the development of refined logistics management and industrial linkage, the scope of cooperation in logistics has extended from shipment, warehousing and distribution to high value-added businesses (e.g., centralized procurement, order management, circulation, processing, logistics finance, after-sales repair, and warehousing-distribution integration) and personalized innovative services.

4.2.5 Implement the Low-Carbon Plus Energy strategy in an all-round manner On top of energy transition, Low-Carbon Plus Energy also requires low-carbon reconstruction of energy exploitation, processing, shipment and consumption. It includes not only technological transformation and product upgrading, but also the revolution of production, consumption, management and consciousness, so as to form new industries, new lifestyles and even a new social form driven by low-carbon energy. The basic approach to implement the Low-Carbon Plus Energy strategy is to vigorously develop low-carbon energy, including both renewable energy and traditional fossil energy subject to clean, low-carbon and efficient utilization. More importantly, this strategy requires low-carbon reconstruction of the traditional energy chain through internet-based reconstruction and institutional innovation, so as to break the boundary

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between energy, environment, economy and society, between producers and consumers, and between technological application and management, thus realizing Low-Carbonization of the whole chain of energy—environment—economy—society, and giving play to the multiplicative effect of low-carbon energy on socio-economic development. We need to safeguard our energy supply, promote the clean and efficient development and utilization of coal, increase domestic oil production, vigorously develop natural gas, improve the energy reserve system, and build up the emergency response capacity. It is necessary to revolutionize energy consumption by weighing down excessive growth in energy consumption and improving energy efficiency, change the energy consumption pattern in both urban and rural areas, and implement the action plans for new towns, new energy, and new lives. The existing energy consumption structure must be optimized by reducing coal burning, increasing the use of natural gas, and vigorously developing wind, solar, nuclear, geothermal, biomass and ocean energy.

4.2.6 Implement the Low-Carbon Plus Finance strategy in an all-round manner To implement the Low-Carbon Plus Finance strategy, which aims to reduce carbon emissions by employing financial instruments, the work should be done from two aspects: financial innovation based on carbon emissions trading, and investment and financing innovation in credit system. At present, the developments of low-carbon finance in China mainly manifest in carbon trading market and green credit. To vigorously develop Low-Carbon Plus Finance is to bring into full play the leverage effect of financing, which has vital significance to promoting China’s economic transition and sustainable development. In order to develop a carbon finance market, we should deepen the cooperation between the government and financial institutions, define the role of the government in carbon trading, set up the allocation criteria of carbon credits, integrate domestic carbon trading platforms, perform better in international negotiations, improve predictions of emission reduction costs in China, and avoid selling off the national carbon assets for short-term gains. In order to develop low-carbon credit, we should encourage commercial banks to adopt the Equator Principles (EPs) to fulfill their social responsibilities, give impetus to these banks to start green credit business, and strengthen communication and collaboration among competent departments to create a favorable external environment. For enterprises that intend to apply for green loans, they are recommended to attach their environmental protection data to the application materials to be approved by banks, which will help standardize the development of green credit.

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4.2.7 Implement the Low-Carbon Plus Consumption strategy in an all-round manner To implement the Low-Carbon Plus Consumption strategy, we must adhere to the theory that man is an integral part of nature, the sustainable development view that economy, society and ecology coordinate with each other, and the concept of ecological civilization in which man and nature are interdependent and mutually reinforcing. We should develop an ecological culture, adopt a green and low-carbon lifestyle, stick to the guidance of the government, and continue innovation in systems and mechanisms. We should motivate the public to adopt a consumption pattern compatible with ecological civilization, and make civilized, economical, green and low-carbon consumption a social trend and voluntary behavior of ordinary people. In addition, there should be a comprehensive environmental governance system with broad mass participation, and a sound consumer market for providing a wealth of low-carbon products and services. The transportation sector should be optimized to make green and low-carbon travel modes more accessible. Product recycling and harmless treatment must be promoted to facilitate the green, circular and low-carbon development.

5 Research on the Low-Carbon Plus Agriculture strategy In terms of GHG emissions, a significant difference between agriculture and other industries is that the former has the dual attributes of carbon source and carbon sink, that is, agriculture is not only the main source of GHG emissions, but also a sink of GHGs. Whether it acts as “source” or “sink” of GHGs depends on the impact of human activities on the natural environment. Unreasonable agricultural activities (e.g., deforestation, excessive fertilization, and straw burning) have emitted a large amount of GHGs, while reasonable adjustment, transformation or substitution of agricultural production by human beings can increase the carbon sinks of the ecosystem. Therefore, to implement the Low-Carbon Plus Agriculture is to reduce China’s GHG emissions, perform the diverse functions of agriculture, modernize agricultural production, and help curb and mitigate the trend of global climate change.

5.1 Basic connotation and significance of Low-Carbon Plus Agriculture 5.1.1 Basic connotation Low-Carbon Plus Agriculture is the sum of low-carbon concept, low-carbon technology innovation, low-carbon practice, and powerful policy support to conventional agriculture. To be specific, Low-Carbon Plus Agriculture is to guide agricultural development with low-carbon concept, equip agricultural production with low-carbon technology, stimulate the enthusiasm of stakeholders with policy incentives, and transform the traditional agriculture with high GHG emissions into the modern one with low emissions. This is a new mode of agricultural input, production, management and supply, with focus placed on the yield, quality and revenue of agricultural products, and on the instillment of low-carbon and scientific knowledge into farmers, with an aim to build a low-carbon agricultural complex, promote the construction of beautiful countryside, sustain the development of rural areas, and obtain the combined and amplified effects. The core of Low-Carbon Plus Agriculture refers to the positive effect of low-carbon technology on agriculture production and equipment. So far, agriculture has gone through the stages of primitive agriculture, traditional agriculture, petroleum agriculture, and chemical agriculture. In this process, the traditional agricultural mode has been gradually modernized, evolving into lowcarbon agriculture and Low-Carbon Plus agriculture. For traditional agriculture, the growth of yield and value is more important than the huge indirect benefits. Consequently, while agricultural output is on the rise, soil pollution, food safety, consumer health risks and GHG emissions have become increasingly https://doi.org/10.1515/9783111040066-005

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prominent, and accelerated global warming. Regarding low-carbon agriculture, though its focus is shifted to reducing GHG emissions and increasing agricultural yield and value, it neither pays enough attention to the huge indirect benefits. Like traditional agriculture, low-carbon agriculture also relies on farmers and the government. In short, neither traditional nor low-carbon agriculture can bear the historical mission of agricultural development in the new era. Low-Carbon Plus Agriculture, which is based on the huge externalities of lowcarbon agriculture and technology and the wide range of stakeholders involved, and supported by policy incentives, is to transform agriculture with low-carbon concept and technology, inculcate low-carbon knowledge and skills in farmers and increase their income, construct beautiful countryside, sustain the development of rural areas, and strive for multiple direct and indirect benefits and positive effects. As a “corrected version” of the development goals of traditional agriculture and a sustainable model of agricultural development, Low-Carbon Plus Agriculture is of great significance for the agricultural development in China and the world at large, which explains why it has been pushed to the forefront of the development of the times in recent years.

5.1.2 Significance of Low-Carbon Plus Agriculture: Necessity, potential and feasibility Firstly, Low-Carbon Plus Agriculture is of great necessity. Since the beginning of the 20th century, the problem of global warming has become increasingly serious. According to statistics, in the past 100 years, the annual mean ground surface temperature has increased by 0.85 ℃; there have been 14 overheated years since 1880, and 13 of them are concentrated in the 21st century, with 2015 setting a record as the hottest year. The chief culprit of climate warming is the increasing emission of GHGs. For this reason, the international community has reached consensus on reducing GHG emissions and controlling the rise of ground surface temperature, yet slow progress has been made. The Paris Agreement envisages to keep a global temperature rise this century well below 2 °C above pre-industrial levels, but the reality is that even if the carbon reduction commitments of all contracting parties were added up, the temperature rise would be hardly lower than 2.7 ℃, which is the most optimistic scenario. In short, the aforesaid target of the Paris Agreement is virtually impossible. Such situation is so grim that all countries need to redouble their efforts to reduce GHG emissions in all industrial economic activities. “Agriculture is the second largest source of GHG emissions, accounting for about 13.5% of global anthropogenic emissions” (IPCC, 2007). New FAO estimates of GHG data show that emissions from agriculture, forestry and fisheries have nearly doubled over the past fifty years and could increase an additional 30 percent by 2050, without greater efforts to reduce them. (FAO, 2014). In view of this, the world agriculture

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should undergo a low-carbon transformation to become modernized, efficient, ecofriendly and able to reduce GHG emissions. Secondly, Low-Carbon Plus Agriculture has great potential to reduce GHG emissions. For example, the study of Dinesh K. Benbi (2013) demonstrates that, through improvement of nitrogen fertilizer efficiency, water and fertilizer management, cultivation techniques and crop structure, the agricultural GHG emissions may drop by 5.1~6.1 billion tons CO2e/a by 2030. The estimates made by Falloon (2004) are slightly different at 5.5~6 billion tons CO2e/a. According to a study conducted by David and Christopher (2006) in California, as result of biomass carbonization and conversion to fields, the crop yield increased by 20% annually from 1980 to 2000. If local orchards and vineyards were expanded from 700,000 hectares (ha) to 1 million ha to replace field crops, there would be more woody carbon sinks, then the estimated agricultural carbon sinks would reach 0.19 tons per hectare annually (t/ha•a). Since the soil carbon sinks in one-year non-paddy fields were 0.09 t/ha•a and perennial fields have more soil carbon sinks than one-year fields, the one-year crops at vineyards and orchards would have carbon sinks of 0.68 t/ha•a and 0.85 t/ha•a, respectively. In the 1990s, paddy fields had additional carbon sinks of 0.55 t/ha due to zero straw burning. Here, a plot of farmland of 3.6 million ha would have 11 Mt of soil carbon sinks and 3.5 Mt of woody biomass carbon sinks over 21 years, adding up to a total of 14.5 Mt, which was 0.7% of California’s carbon emissions from fossil fuels over the same period. So, Californian agriculture could offset 1.6% of local carbon emissions from fossil fuels if it adopted conservation tillage, changed pruning style of apricots and walnuts, and recycled all the wastes from orchards and vineyards for generating electricity. According to the findings of Yan et al. (2007), if applying 50% no-tillage and 50% straw returning, China would increase agricultural carbon sinks by 32.5 Mt/a, equivalent to 4% of annual agricultural CO2 emissions. At present, the N2O emissions from nitrogen fertilizer (N-fertilizer) in China account for 30% of the world’s total N2O emissions, the energy consumed for N-fertilizer production and application accounts for 10% of the total fossil energy consumption in industrial sectors, and the GHG emissions from N-fertilizer production and application account for 8% of China’s total GHG emissions. So, through the development of bio-carbon technology for straw incineration, China could have a promising prospect for reducing the use of N-fertilizer in agricultural production. Theoretically speaking, by giving full play to the roles of policies and technologies, agriculture can achieve 20% of China’s emissions reduction target. Lastly, Low-Carbon Plus Agriculture has strong feasibility. The economic benefits of traditional agriculture should firstly guarantee food security—the basic function of agriculture, and the maintenance of agricultural sustainability depends on low-carbon and ecological development. This is to say, if we transform traditional agriculture into moderate Low-Carbon Plus agriculture, we can not only safeguard food security (Fan & Ramirez, 2012), but also reap additional benefits (Konyar, 2001).

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According to Lal (2004), changes in land types (e.g., deforestation, biomass burning, and wetlands drained for cultivation) will turn natural systems into farmlands, thus releasing 78.12 Pg of soil organic carbon into the atmosphere. Where land and soil are under unscientific utilization and management, 1/2~2/3 (30~40 t/ha•a) of soil organic carbon will get lost. But proper land management will restore soil carbon sinks by 0.05~1 t/ha•a. Lal (2011) pointed out that the loss of soil organic carbon will weigh down crop yield and land use efficiency, yet proper land management can restore soil carbon sinks, improve land quality, and increase agricultural production, thus offsetting CO2 emissions from burning fossil fuels and mitigating climate change. Now that the global potential for soil carbon sinks amounts to 1.2~1.3 Bt/a, whenever there is 1 t/ha•a of soil carbon sink, there will be additional 2,432 tons of grain and 610 tons of root-tuber crops. The nine-year experiment of Liu Haitao (2015) and other researchers also proved that Low-Carbon Agriculture can turn agricultural activity into a net carbon sink and increase crop yield at the same time. Low-Carbon Plus Agriculture also has huge externalities, that is, it can save production costs and guarantee food security while reducing carbon emissions. To develop Low-Carbon Plus Agriculture, it is necessary to implement scientific and low-carbon management of agricultural production, strengthen farmers’ environmental awareness, increase their income and help them get rid of poverty, press ahead with agricultural modernization and construction of beautiful countryside. In short, Low-Carbon Plus Agriculture can alleviate the pressure of global warming, protect the ecological environment, increase agricultural output, and benefit the sustainable development of agriculture, farmers, rural areas and even the overall socio-economy. It is a grand blueprint and a new development model for modern agriculture worthy of in-depth study and vigorous promotion.

5.2 Restricting factors of Low-Carbon Plus Agriculture 5.2.1 Difficulties in manifesting and realizing the value of GHG emission reduction Firstly, due to the restriction of income level and traditional consumption concept, most Chinese consumers care more about the quantity and low price of agricultural products, and take little interest in the costly low-carbon products. Moreover, the government fails to effectively manage the consumer market, with inferior and counterfeit products emerging endlessly but lightly punished, thus giving rise to “the Market for Lemons”, which goes against the development of low-carbon products. Considering the immature consumer psychology and improper market management, lowcarbon produce is hard to be monetized for the time being, even though they are costeffective and affordable to most consumers. Secondly, the environmental value of CO2 emission reduction can be reflected in the demand curve. However, the aggregate demand curve is a vertical summation of

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individual demand curves, and the value of CO2 emission reduction is determined by the summation of individuals’ environmental demands within the spheres under its impact. The correct pricing based on these demands should be supported by a sound global carbon trading market, however, the global market has not fully taken shape, a unified national market remains in embryo, and official local markets are either absent or under slow construction. In some trial-run local markets, the value of CO2 emission reduction is often underestimated owing to scarce carbon trading businesses and serious carbon leakage. In particular, the current carbon trading fails to reflect the positive effect of national and global environmental demands on the value of CO2 abatement, and the fiscal subsidies to farmers can only realize a small portion of their income. So, it is very difficult to fully manifest the environmental value of farmers’ self-imposed emission reduction. Currently, the CO2 trading price remains low and keeps going downhill. For example, from December 20, 2013 to December 16, 2014, the average CO2 trading price across China was only 38.38 yuan/t, and such price in Shanghai was lower at 30.45 yuan/t (see Figure 5.1), which was not enough to make up for the loss of external effects. In general, the price had kept falling and even hit a record low at 9 yuan/t, making it hardly possible to manifest and realize the value of Low-Carbon Plus Agriculture, seriously distorting its real value, and threatening its implementation in the long run.

Figure 5.1: China’s carbon trading price in 2013–2014.

5.2.2 Consumption supporting mechanism has yet to take shape As people’s income continues to rise, there should be a rapidly increasing demand for low-carbon agricultural products. But the fact is that they still prefer cheap and lowquality commodities, and remain indifferent to the low-carbon substitutes. Such consumption inertia is unable to drive up the consumption of low-carbon produce, but

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stands in the way amplifying of the effects of Low-Carbon Plus Agriculture and seriously restricts its development. At present, it is urgent to form a consumption supporting mechanism for LowCarbon Plus Agriculture. To this end, we need to do a good job of publicity to draw the interest of consumers in low-carbon agricultural products, guide them to understand and appreciate these products, spend more on brand building and maintenance for these products, and perform strict product quality certification.

5.2.3 Inertial restriction of traditional production and consumption patterns Due to the low-price elasticity of agricultural products and an undeveloped national unified market, the behavioral patterns of agricultural producers and consumers have become deep-rooted over the years. From the aspect of production, in the face of the consumer demand for a large quantity of produce at a low price, farmers have been relying on traditional ways of tillage, that is, straw burning and application of large amounts of fertilizers and pesticides, with an aim to save costs and increase yields. From the aspect of consumption, most consumers care more about the price and quantity of agricultural products instead of their quality. Take low-carbon organic vegetables for example, they are welcomed by consumers abroad since they are healthy, nutritious, rich in fiber content, and good for and environmental protection and ecological balance. A survey shows that 56% of Americans are accustomed to buying organic vegetables, 73% of French and 60% of Danes buy organic vegetables from time to time, but in China, the buyers of organic vegetables are less than 1% of the total population. Therefore, to implement the Low-Carbon Plus Agriculture strategy, farmers need to replace the traditional production pattern with a low-carbon way of farming, while consumers need to have a thorough knowledge of low-carbon produce and develop a low-carbon consumption habit.

5.2.4 Scarce Low-Carbon facilities Conventional agriculture relies heavily on infrastructure, including the facilities for water conservancy, power supply and scientific research. The construction of these facilities is largely funded by the government for their great externalities. But the facilities suitable for implementing the Low-Carbon Plus Agriculture strategy are far from enough. Such facilities mainly include straw biogas generators, research institutes dedicated to integrated low-carbon agricultural technologies, low-carbon technology sharing platforms, distributed power grids, energy storage devices, biological control and insect-trapping and killing apparatuses, low-carbon irrigation facilities,

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low-carbon cultural establishments, and carbon sink exchanges. Moreover, the existing ecological infrastructure plans seem to be irrelevant to the functions of lowcarbon agriculture, such as regulating climate, activating ecological tourism, absorbing human and animal excreta and wastes.

5.2.5 Lagging development of a Low-Carbon culture Culture is an aggregation of the philosophical thoughts, beliefs, values, concepts and ideas shared by social members. Being ingrained in the minds of social members, culture acts as an invisible binding force on their behaviors. It is also an important hallmark that distinguishes one social group from others and shapes the outside world’s perception of this social group. By employing social pressure and social cognition as the means to expand its influence, culture is capable of motivating individuals or organizations to assume social responsibilities and play a leading and exemplary role (Fu Liyou, 2010). The root cause of the global atmospheric problem is that the prevalent highcarbon culture is a shackle on the development of low-carbon culture; moreover, the uncertain view of nature hidden deep in human thought or philosophy and the manland relationship remain in effect up to this day. Currently, one of the keys to address global air pollution is to actively develop low-carbon culture and use it in place of high-carbon culture. This is because low-carbon culture, first and foremost, provides a natural mechanism for people to comprehend and accept low-carbon production pattern and lifestyle, which is the cornerstone for low-carbon development. Once the low-carbon cultural values are accepted by most people, it is equivalent to building a society which upholds a common low-carbon concept, low-carbon values and lowcarbon consumption preference. In this society, people are fairly conscious, focusing and cohesive, and these abilities will become an internal driving force for low-carbon development. Since Low-Carbon Plus Agriculture is beneficial to the sustainable development of human society, it is better to be sublimed to the height of culture, that is, a lowcarbon agricultural culture should be formed, which is of great significance for maintaining circular and balanced agricultural development, and reducing carbon emissions in agriculture. It is certain that a low-carbon agricultural culture will link the low-carbon agricultural concept to people’s views of the world, science and technology, and education, and become an eternal endogenous driving force for the development of Low-Carbon Plus Agriculture (Luo Shunyuan, 2010).

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5.2.6 Insufficient financial support Low-carbon technologies, with a high cost unaffordable to most farmers and agricultural firms, are not yet widely applied to agricultural production which is characterized by the weakness of meager profit. For this reason, the in-depth development of Low-Carbon Plus Agriculture requires a high input, including plenty of infrastructural facilities and a variety of financial support such as fiscal grants, carbon emission reduction funds, and compensation. Otherwise, it will be impossible for individual investors to implement or continue implementing the Low-Carbon Plus Agriculture strategy.

5.2.7 Underdeveloped organic agricultural market A developed market for organic agricultural products is one of the breakthroughs for developing organic agriculture and Low-Carbon Plus Agriculture. China has a large and rapidly growing market capacity of organic food. However, in terms of the average annual food consumption per person, the organic food sales in China account for merely 0.1% of regular food sales, registering a 20-fold difference from such proportion of 2% in developed countries. An underdeveloped organic food market can neither boost the growth of agricultural production nor satisfy the increasing consumer demand, which is a true picture of China’s agricultural development at present. Price is the key factor restricting organic food consumption. Compared with conventional food, organic food features high production costs, high prices but low yields. The price of organic food in foreign markets is generally 30% higher than that of conventional food. And in China’s domestic market, the price of organic food is 3~5 times or even ten times more than that of conventional food, which is hardly accepted by ordinary consumers. The reason for this phenomenon is that the labor cost of organic food remains high, and China has an immature organic food market where illegal business operators, by grasping the consumer psychology for appreciating organic food, often take advantage of the loopholes of market management to earn high profits. Organic agriculture, with a yield 8%~25% lower than that of conventional agriculture, may sometimes threaten food security and is therefore not widely recognized by the government. This situation goes against the expansion of organic food market and the development of organic agriculture. In short, the immature organic food market of China, which is not greatly approved for its huge input, high costs and low yields, is a major obstacle to the development of Low-Carbon Plus Agriculture.

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5.2.8 Lack of supporting policies and weak risk aversion Although China has introduced a series of policies for energy conservation and emission reduction, most of them are designed for industrial sectors, with the specialized policies and systems for low-carbon agriculture and Low-Carbon Plus Agriculture remaining absent. It is certain that favorable policies can motivate farmers to discipline themselves and protect the environment while promoting the development of LowCarbon Plus Agriculture, and the self-discipline of farmers is precisely the most valuable for developing low-carbon agriculture (Wen Tiejun, 2010). At present, the foremost adverse factor in the development of Low-Carbon Plus Agriculture in China is that farming is no longer the only way of survival for farmers, so they prefer a large amount of chemical fertilizer input to save labor and time instead of devoting themselves to simplified agricultural production. In addition to this, China does not have perfect or reasonable policies for improving the agricultural environment, and the policies for certain fields are almost in blank, which does no good to increase the income and welfare of farmers, or guide them to avoid the risks in adopting low-carbon technologies (Xiang Dongmei, Zhou Hongwen, 2007). In this case, there are no incentives for farmers to discipline themselves, protect the environment or avoid risks in the development of Low-Carbon Plus Agriculture. Although some parts of China grant a variety of subsidies to farmers, they are unable to vigorously and sustainably stimulate the development of Low-Carbon Plus Agriculture, because the gross subsidies are not enough to help farmers shun from the risks associated with Low-Carbon Plus Agriculture, or give them faith and confidence in this undertaking.

5.2.9 Complexity and high risk Low-Carbon Plus involves the research, development and application of low-carbon technologies, low-carbon facilities and talents, and other factors that influence agriculture, while agriculture is made up of crop farming, animal husbandry, forestry and fishing. The control over agricultural carbon emissions at the source is a complicated and systematic project, since it not only controls the emissions from crop farming and animal husbandry—main sources of carbon emissions, but also the emissions from farmers, rural areas and all aspects of agricultural production, including the ongoing construction of a new and beautiful countryside. Therefore, Low-Carbon Plus Agriculture is to integrate Low-Carbon with agriculture, farmers and rural areas, thereby producing an obvious spillover effect that “the whole is greater than the sum of its parts”. This complex project is fraught with risks.

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5.3 Strategic conception of Low-Carbon Plus Agriculture 5.3.1 Strategic principles of Low-Carbon Plus Agriculture 5.3.1.1 Principle of moderate Low-Carbonization Generally speaking, the foremost purpose of agricultural development is to safeguard food supply. Low-Carbon Plus Agriculture is not only a crucial means to correct the negative effect caused by agricultural production on the environment, but also the general direction for the long-term and sustainable development of agriculture and rural areas. But the development of Low-Carbon Plus Agriculture must be moderately pushed forward. Moderate Low-Carbonization can produce notable spillover effects and increase the overall welfare level without endangering food security. In contrast, excessive low-carbon agricultural development is prone to shake the foundation of food security, weaken its positive external spillover effects, and even bring down the overall welfare level. The results of some empirical studies show that moderate Low-Carbonization of modern agriculture can achieve “Low-Carbon-based high growth”. For example, Mi Songhua (2013) once paid a field trip to Hedian Village, Zhejiang Province, to investigate how the incentive-based low-carbon agriculture was progressing. He found that, by employing the emission reduction technologies and management approach, farmers could save production costs, agricultural firms could guarantee produce supply with stable quantity and quality, and the entire society had seen mitigated climate change and other positive external effects. In a nutshell, all the suburban rural areas of major cities, peripheral rural areas of small-medium cities, developed and backward rural areas should choose and implement an appropriate Low-Carbon Plus Agriculture development model according to local conditions. 5.3.1.2 Principle of collective action In terms of cost and benefit, one of the major obstacles to the development of LowCarbon Plus Agriculture lies in its great externality, which is often manifested as private cost is higher than social cost, yet private benefit is much lower than social benefit, hence discouraging farmers or agricultural firms from developing low-carbon agriculture. Therefore, addressing negative externalities is a necessary step to develop Low-Carbon Plus Agriculture. According to the principle of environmental economics, Pigouvian Tax can be levied on negative externalities where private cost is lower than social cost, but for positive externalities where private cost is higher than social cost, which are usually manifested as insufficient production, subsidies can be granted to producers to mobilize

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their production enthusiasm. But the amount of subsidy and beneficiaries must be determined by following the principle of fair and just compensation. The welfare spillover of Low-Carbon Plus Agriculture can be divided into four levels: rural—municipal—national—global. For rural villages and higher-level towns where the spillover effects of Low-Carbon Plus Agriculture are prominent, they can be subsidized in partial or full amount by the county/municipal/provincial government. However, if the spillover effects are at the national or global level, the subsidy is likely to fall through since the corresponding beneficiaries and amount of subsidy are hard to be determined. So, Low-Carbon Plus Agriculture can be only implemented under the condition that private cost is greater than social cost, which can hardly stimulate its rapid development. Another approach of environmental economics is to build an agricultural carbon trading market: the reduced carbon emissions in Low-Carbon Plus Agriculture are measured and certified, and then subject to market exchange; the market-set prices are going to offset the emission reduction costs, and stimulate the low-cost main bodies or projects implementing Low-Carbon Plus Agriculture to foster growth advantages, thereby advancing the development of Low-Carbon Plus Agriculture. The similar practices in the US and Denmark have proved the feasibility of this approach (Mi Songhua, 2013). But in case of China, it neither has enough strength nor mature facilities and transaction main bodies to carry on agricultural carbon trading, let alone the trading mechanism cannot appeal to national and international beneficiaries to enter the market voluntarily to complete transactions and compensation. In general, low-carbon agriculture is characterized by scattered emission reduction points, small quantities of reduced emissions and unidentified beneficiaries of spillover effects, which is sure to push up the carbon trading costs and hinders the progress of Low-Carbon Plus Agriculture. Regarding the settlement mechanism through private negotiation, the Coase Theorem tells that as long as the property right is clear enough, no matter who owns the property right, a solution can be reached through the negotiation between the buyer and the seller to remove the negative effects of externalities. But the premise is that there are not many transaction main bodies and transaction costs are small or even zero. However, the positive externalities of Low-Carbon Plus Agriculture involve a large group of vaguely defined spillover beneficiaries, which makes it difficult for the private settlement mechanism to take effect. If an administrative is adopted, there will be a high executive cost and insufficient economic incentives to farmers and agricultural firms that are engaged in LowCarbon Plus Agriculture, making a valid promotion mechanism unlikely to be formed. One of the core contents of Low-Carbon Plus Agriculture is to reduce GHG emissions and provide common public goods for the world. The GHG emission reduction at the global scale requires international agreements and treaties, low-carbon taxes, lowcarbon industries and lifestyle, carbon trading, and collective actions of all stakeholders (Scotton, 2006). In the opinion of Ricardo Abramovay (2010), in addition to saving energy consumption, carbon emission reduction also requires people to change their

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behavioral habits and develop a global network for personal carbon trading (Matt, 2008). Tina Fawcett (2010) holds the same view by saying that personal carbon trading is a promising policy conception. D. McEvoy et al. (2001) have found that the cooperation within and among local authorities and the cooperation between all types of enterprises and communities are essential for reducing household carbon emission density; the emission reduction through transformation of energy supply facilities will be a long-term endeavor, but households boast great potential to raise energy efficiency and reduce carbon emissions in the mid-short term. The studies of Gill Seyfang (2010), Yacob Mulugetta (2010), Lucie Middlemiss (2010), Eva Heiskanen (2010), Susie Moloney (2010) and Snigdha (2009) have proved that the community-level action is a main pathway to reduce carbon emissions. It can be seen that the development of Low-Carbon Plus Agriculture and reduction of GHG emissions are inseparable from the multi-level cooperation among different main bodies, including the government, private sectors, NGOs and residents (Liu Z et al., 2009). In order to develop Low-Carbon Plus Agriculture, the low-carbon ideas should be widely accepted, and a long-term strategic vision and comprehensive plan should be implemented (Liu Jiyuan, Deng Xiangzheng, 2011). No technological breakthrough can reach the predetermined low-carbon target until people’s behavioral patterns are significantly transformed (Abigail L., 2008). Deborah Salon (2010) proposed to construct climate-friendly communities through the incentives of carbon budget. According to Timoth et al. (2007), GHG emission reduction requires an integration of multiple measures such as afforestation, domestic use of biomass energy, use of energy-saving appliances for personal travel, CHP, and wind power generation. In short, the development of Low-Carbon Plus Agriculture requires changes in ideology, behavioral patterns, production mode and lifestyle, mobilization of all sorts of organizations and forces, collective action of all stakeholders, as well as improvement of relevant laws, regulations and systems (Xie Q., 2009). According to Ostrom (2010), the ultimate solution to climate warming lies in the polycentric collective action at the community level, involving individuals, families and other actors and relating to how their means of livelihood are produced and consumed. Traditional theory holds that carbon emissions cannot be controlled without external authority, coordinator action or effective sanction, but polycentric governance is still practicable when there is no treaty in force. This theory also stresses that we should follow a polycentric path, that is, the parties from a number of formally independent decision-making centers should respect each other, despite of a competitive relationship, engage in cooperative activities under a contractual framework, or employ new mechanisms to resolve conflicts. In this case, local public economy can achieve a well-ordered performance, since large, medium and small-sized governmental and non-governmental enterprises can maintain cooperation amid competition (Ostrom, 2010). Tackling carbon emissions through joint action depends on direct resource costs and organizational costs. The larger the group, smaller the share of total revenue, the

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less reward for collective actions, and the smaller income of sub-groups; the greater the number of group members, the higher the organizational costs. Large groups generally do not provide themselves with a minimum amount of collective goods without coercion or independent external incentives (Gao Chunya, 2009). Selective incentives, mainly in the form of public or private goods, are given to individuals to induce them to participate in collective actions (Pamela E. Oliver, 1990). As the means by which organizations allocate resources, selective incentives—private benefits that are distinct from collective benefits—are a kind of additional incentives for group members to engage in collective actions. In the view of Olson, the invisible hand not only realizes the compatibility between individual interests and public interests in the market, but also plays a role in small groups to facilitate the provision of resources for collective goods. The purpose of selective incentives is to make individual interests a guardian of collective interests, and transform non-cooperative behaviors into cooperative behaviors through institutional changes. In short, collective actions are of innovative significance to promote the development of Low-Carbon Plus Agriculture. 5.3.1.3 Principle of synergy The so-called “synergy”, which refers to the coordinated, cooperative, or synchronized joint action and collective behavior of subsystems in a system, is the internal manifestation of system integrity and correlation. As an important part of synergy theory in the realm of system science, “synergy effect” refers to the overall or collective effect produced by the interaction of a large number of subsystems in a complex and open system. The internal mechanism of low-carbon agricultural development lies in the synergetic development of agroecosystem, economic system and social system under the constraint of resources. According to the synergy theory, the development of the agroecosystem, economic system and social system is a dynamic and synergistic process, meaning that the performance of their overall function is to get better and better. At present, Chinese agriculture is still in the primary stage of synergetic development when the overall function of the three systems cannot be fully performed. Petroleum agriculture is a mark that agricultural development is going to be costly, but more than that, the inefficient utilization of chemical inputs and agricultural machinery has resulted in serious negative externalities such as food insecurity and crosscontamination of soil, water and air, which has deepened the contradiction among agroecosystem, economic system and social system. With the adoption of the ecofriendly agricultural development models such as Low-Carbon Plus Agriculture, the overall function of agroecosystem, economic system and social system will be basically performed, and the three of them will enter the intermediate stage of synergetic development. After Low-Carbon Plus Agriculture is in full swing, the overall function of the three systems will be fully performed, marking that they are about to enter the advanced stage of synergetic development.

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Synergy theory can serve as the basic theory for guiding the synchronous development of agroecosystem, economic system and social system. And Low-Carbon Plus Agriculture is a synergy effect which, based on the synergetic development of the three systems, uplifts the sustainable development of agriculture to a higher level. To be specific, the development of Low-Carbon Plus Agriculture should be synergistic in at least three aspects: (1) Coordinated promotion by co-stakeholders, including the government (policy support), farmers (technology adoption), and organizations (organizational carrier). (2) Co-control through cropping systems, emission reduction technologies, and management measures. Low-Carbon Plus Agriculture itself is not a single technical issue, because it is the synergy of emission reduction technologies, management measures and policies (incentives for carbon sinks and inhibitions for carbon sources) that can reduce the constraints on the implementation of Low-Carbon Plus Agriculture. (3) Co-benefits of multiple targets and multiple interests, including the cobenefits of emission reduction and adaptation, emission reduction and food security, emission reduction and positive externalities (Mi Songhua, 2013). The thought of synergistic innovation should be upheld throughout the entire development of Low-Carbon Plus Agriculture. In particular, efforts must be made to select and promote the emission reduction technologies and management measures with strong certainty, feasibility and applicability, and great potential for cutting emissions and increasing or stabilizing the yield, so as to drive the transformation of agricultural inputs, reduce emissions and raise efficiency across the agricultural industry chain, and build an agricultural development model featuring low consumption, low emission, high yield and high efficiency. 5.3.1.4 Principle of maximum comprehensive benefits With respect to agricultural production, how to improve its comprehensive benefits is a worldwide concern. For example, the Food and Agriculture Organization of the United Nations (FAO) pays special attention to the effects of food safety, environmental externality, economic function, and social function. The EU is more interested in rural landscape and environmental protection. In the World Development Report 2008: Agriculture for Development, the World Bank commented that agriculture has both positive and negative impacts on our environment. As stated in the No. 1 Document1 jointly released by the CPC Central Committee and the State Council in 2007, agriculture not only concerns food security, but also bears on raw material supply, ecological protection, employment, income increase, tourism and leisure, and cultural inheritance. Based on the above analysis, we’d better select a development model of

 This document is titled “Opinions of the CPC Central Committee and the State Council on Actively Developing Modern Agriculture and Making Solid Progress in the Construction of a New Socialist Countryside”.

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Low-Carbon Plus Agriculture which is adapted to local conditions, and conducive to fostering and giving full play to the multi-functional effects of agriculture. In addition, all sorts of agricultural wastes are the principal raw materials for the development of renewable energy. The development and utilization of renewable energy can optimize the energy structure in rural production and household, which directly embodies the core connotation of low-carbon agricultural economy. In a nutshell, Low-Carbon Plus Agriculture can achieve the basic goal of agriculture—increasing food production and safeguarding food supply, and give full play to the ecological and social effects of low-carbon technologies, ideas and practices, as well as the multiple beneficial functions of agriculture, thereby fulfilling the final objective of agricultural development to maximize the comprehensive effects. 5.3.1.5 Principle of helping solve the “three rural” issues and construct beautiful countryside Low-Carbon Plus Agriculture should, first of all, directly promote the development of agricultural production, and then exert a profound impact on rural construction. To be specific, the primary goal of Low-Carbon Plus Agriculture is to strengthen the driving force of rural development, transform the backward land use pattern in rural areas, restore the damaged or polluted local environment, narrow the gap between urban and rural areas, and sustain rural development. So, the development of LowCarbon Plus Agriculture must follow the principle of helping solve the issues relating to agriculture, rural areas and farmers and construct beautiful countryside.

5.3.2 Strategic goals and priorities of Low-Carbon Plus Agriculture As a complex project, Low-Carbon Plus Agriculture should be implemented step by step according to local conditions and by employing low-carbon technology and equipment, cultivating people’s low-carbon awareness, and giving full play to its direct effects and extensive spillover effects, in a bid to develop Chinese agriculture into modern agriculture characterized by Low-Carbon, high quality and high efficiency, and capable of securing food supply and safety, thus bringing greater social and environmental effects into play. By taking account of the characteristics, development constraints and feasibility of Low-Carbon Plus Agriculture, the development goals of this project are defined by three stages and introduced as follows: (1) From 2017 to 2022, the Low-Carbon Plus Agriculture strategy is to be implemented in the developed agricultural areas in eastern China, and in the urban agricultural areas and demonstration areas in the central and western regions, with an aim to primarily integrate Low-Carbon with agriculture, and reduce the total agricultural carbon emissions by more than 40% compared with 2005.

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(2) From 2023 to 2028, the Low-Carbon Plus Agriculture strategy is to be further promoted, with an aim to build the eastern developed agricultural areas and part of the central and western urban agricultural areas into medium-level low-carbon agricultural areas, develop the rest of the central and western agricultural areas into low-level low-carbon agricultural areas, and reduce the total agricultural carbon emissions by 60%~70% compared with 2005. (3) From 2029 to 2033, the Low-Carbon Plus Agriculture strategy is to be vigorously promoted according to local conditions, with an aim to build part of the developed agricultural areas in the eastern, and central and western regions into highlevel low-carbon agricultural areas, greatly improve the low-carbon development level of the remaining agricultural areas in the central and western regions, and transform the agriculture in these regions into an industrial sector providing net carbon sinks. There are three priorities to implement the Low-Carbon Plus Agriculture strategy: lowcarbon technology innovation is put at the first place; the institutional construction for low-carbon agricultural infrastructure and policy making should be strengthened; an incentive mechanism should be established, and diversified and flexible development models should be adopted according to local conditions, so as to realize the multiple goals of low-carbon agriculture for increasing yield and improving quality.

5.3.3 Strategic thinking and development mechanism of Low-Carbon Plus Agriculture 5.3.3.1 Strategic thinking (1) Diversified support entities involved in Low-Carbon Plus Agriculture The support entities that are involved in Low-Carbon Plus Agriculture mainly include the government, NGOs, peasant households or farmers, agricultural firms, low-carbon agricultural research centers, and ecological bodies. These support entities should be a complex with the government serving as the lead, peasant households or farmers as the carrier and cornerstone, research centers as the driving engine and creative source, agricultural firms as the main force, ecological bodies as the important supplement, and NGOs as the overseer and propellent (see Figure 5.2). The government, which is a highly systematic organization, is a critical part in Low-Carbon Plus Agriculture. On the one hand, it makes institutionalized and policyoriented arrangements to establish a positive or negative motivational framework and a political culture, so as to adjust the development process of low-carbon agriculture. On the other hand, it directly undertakes part of the socio-economic low-carbon activities of Low-Carbon Plus Agriculture, and acts as the foremost capital source to subsidize low-carbon agriculture.

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Figure 5.2: Schematic diagram of the Low-Carbon Plus Agriculture strategy.

Agricultural firms include those either engaged in production, wholesale and retail or processing of agricultural products, and those dedicated to the research and development of agricultural technologies. Agricultural firms are the main force in the development of Low-Carbon Plus Agriculture, serving as the manager and the managed at the same time. These firms should, by relying on their own development strategy and ecological ethics, form an internally consistent and stable low-carbon governance structure, which is the key to the development of Low-Carbon Plus Agriculture. This lowcarbon governance structure involves the research, development and trading of low-carbon and energy-saving technologies, the low-carbon production, sales and delivery of agricultural products, and the low-carbon activities for charity or public welfare carried out by the agricultural firms to perform their social responsibilities as qualified corporate citizens. As a helpful supplement, NGOs have become an indispensable part in the development of Low-Carbon Plus Agriculture in recent years. The civil organizations such as China Association of Low-Carbon, China Association of Environmental Protection Industry, China Low-Carbon Forum, China Energy Conservation Association, the lowcarbon agriculture website and the energy conservation website (CES.CN) have been doing a good job in low-carbon publicity and education, appealing people to reduce carbon emissions in their everyday life and production activities. Peasant households/farmers, which mainly produce carbon emissions in production, food, clothing, housing and travel, are the cornerstone that affect the development process of Low-Carbon Plus Agriculture. The low-carbon publicity and education at the

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community level can effectively teach individual farmers to reduce the input into agricultural production, and develop a low-carbon behavioral habit and consumption pattern. In the future, peasant households/farmers are expected to play the part of a lowcarbon governance center in the field of agriculture. Low-carbon research centers, which undertake the development and supply of low-carbon technologies, are an important propellent of low-carbon technologies and a creative driving force for developing Low-Carbon Plus Agriculture. Low-carbon ecological bodies mainly refer to the public resources or public goods such as nature reserves, ecological gardens, eco-agricultural parks, and organic green food bases. These ecological bodies are usually governed as private goods or club goods under the metropolitan system. Being able to absorb CO2 and lots of pollutants, ecological bodies have become a force to be reckoned with in the development of Low-Carbon Plus Agriculture. (2) A variety of pathways to develop Low-Carbon Plus Agriculture The practice of low-carbon development shows that there are multiple pathways to develop Low-Carbon Plus Agriculture. To be specific, the power generation based on wind, photovoltaic and solar energy can promote the use of clean energy, which helps reduce the carbon emissions in agriculture; organic fertilizer production, straw utilization, biogas projects, ecological gardens and non-commercial forests can substitute carbon sources, reduce or delay carbon emissions, and increase carbon sinks. In addition, the environment and energy exchange should be improved to facilitate carbon trading, and motivate enterprises to actively develop forest or agricultural carbon sink, and reduce carbon emissions by means of carbon neutrality and carbon trading, thereby promoting the development of Low-Carbon Plus Agriculture. 5.3.3.2 Development mechanism (1) Incentive and pressure mechanism The development of Low-Carbon Plus Agriculture is mainly driven by the combined effect of incentives and pressure. In terms of incentives, if an entity pursues Low-Carbon-development is given subsidies or tax breaks, it can avoid the high costs imposed by government regulation while winning a good reputation. There are economic and social incentives, and psychological incentives such as encouragement and praise. Regarding the multiple types of modernization of traditional agriculture, such as the construction of low-carbon agricultural parks, eco-agricultural bases and organic food bases, the incentive is given in the form of diversified subsidies. For example, Chongming County2 granted different subsidies to local farmers and agricultural organizations, with an aim to implement the international ecological island planning and eco-agricultural planning:

 Chongming County under the jurisdiction of Shanghai was turned into Chongming District in 2016.

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subsidize organic fertilizer production; subsidize green manure production and seeds by 380 yuan/mu (150 at city level + 180 at county level + 50 at township level); subsidize green products by 60%~80% of urban housing rent (