In pursuit of a clean bill of health

In the past 40 years, China has made great strides in its development. China's economy has become the second-largest in the world, and people's living standards have been greatly improved. However, these achievements have been made at the cost of a large amount of energy input and serious pollution.

Of course, these negative effects are closely related to China's past development stage, and they have also happened in the history of major developed countries. But today, people's need for a better life is no longer material growth only, and the environment has become a major indicator of life quality. People want a blue sky and cleaner water in addition to continued productivity improvement. Therefore it is necessary to explore a clean, efficient and green development model that balances economic development with environmental protection.

China is already the world's largest energy consumer, yet its energy consumption per unit of GDP still lags far behind that of developed countries. China is also the world's largest emitter of carbon dioxide and will face pressure to meet its international carbon reduction commitments in the future. China needs to make a profound change to its energy input that has been dominated by coal in the past decades. The higher pollutant emissions coefficient of coal compared with other energy sources and the relatively low level of utilization of cleaner energy sources have brought great pressure to the environment.

Energy is a key point of China's economic transformation, that is, the way energy is produced and used is the next stage of China's transformation.

The cost of non-fossil energy such as solar power and wind power has been greatly reduced, and has begun to compete economically with traditional energy. Meanwhile, the continuous development of energy storage technology will make large-scale clean energy feasible. As the costs of photovoltaic, wind power and energy storage fall further in the future, the energy supply structure will undergo profound changes. The share of clean energy in the primary energy mix will increase dramatically and may even become the dominant energy source in the future. Also, the use of natural gas will become more common in the future with advances in shale gas technology and breakthroughs in the extraction of combustible ice.

With the change of economic development mode, the proportion of electric energy will also be increased, resulting in more convenient and efficient production and living activities. The maturity and wide application of electric vehicles and battery technology, will benefit the urban environment, which will become cleaner, and the level of energy security will be improved. Moreover, even in the fields where fossil fuels are still needed, the overall energy system will be cleaner as natural gas and other clean-energy sources are introduced and applied.

China will unswervingly develop clean energy. The development of clean energy is the basic guarantee for the sustainable development of humankind, and is of great significance to China's energy independence and energy security. In recent years, with the rise of conservative forces, some Western countries have changed their attitudes toward clean-energy fueled development, which has also brought worries about the future development of global clean energy. In this context, China's institutional advantages are being amplified, China can continue to promote the development of domestic clean energy. Based on the domestic market, it can cultivate a number of new energy enterprises with global competitiveness and strengthen the influence of Chinese energy enterprises in the global energy industry.

For a long time, China was a follower of developed Western countries in energy technology. New energy technologies have generally been introduced to China after being matured in developed countries. However, this situation has changed. By introducing advanced technologies to achieve leapfrog development and taking advantage of its late-mover advantage, China is now leading the world in many aspects. China is already the country with the largest installed wind power and photovoltaic power capacity, as well as the world's largest market for new energy vehicles. In the future, China must remain confident in its own energy development path, take innovation as the driving force, and constantly explore and break through the frontier of energy technology development.

It should concentrate on three things.

First, it should accelerate the pace of market-oriented reform and establish a sound modern energy market. Due to the particularity of energy commodities and the role of energy in the national economy, the liberalization of the energy market is far from enough. Difficulties such as making energy prices reflect its true cost have resulted in resource misallocation. Through the liberalization of the electricity market, the separation of oil and gas pipelines, and the adjustment of the energy pricing mechanism, China can accelerate the reforms of the electricity, oil and gas subsectors, so that the market can play a decisive role in the allocation of energy resources.

Second, it should break down the barriers of vested interests and stimulate the vitality of innovation. The energy market is highly concentrated, and China's comprehensively deepening reform will change the existing allocation of interests. On the supply side, market access restrictions need to be eased, to fairly treat market players. Clean energy should be integrated into the overall energy supply system with better institutional arrangements. In the energy distribution links, such as transmission and distribution networks and pipelines, the supervision of monopoly enterprises needs to be strengthened to benefit the development of new energy.

Third, China should develop its carbon market. Greenhouse gas emissions from the use of fossil fuels are one of the main causes of climate change. Controlling carbon emissions is of great significance to fulfilling China's commitment to the international community and realizing its goal of building a harmonious and beautiful modern socialist country. Through accelerating the establishment of a unified national carbon market, we can make fossil energy prices reflect environmental costs and enhance the competitiveness of clean energy. This is also an important reflection of self confidence in the energy development.

The author is dean of the China Institute for Studies in Energy Policy at Xiamen University.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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