Development of a Low Carbon Economy in Wuxi City

The development of a Low Carbon Economy is a vital instrument to encounter climate change and take into account the growing challenges of an increasing urbanization in China. Wuxi City in East China’s Jiangsu Province is starting to implement a Low Carbon City Plan for safeguarding a sustainable development of the city until 2020 and beyond. This paper aims at estimating the impact of the Low Carbon City plan for Wuxi’s energy demand and CO2-emissions until 2050. Using an econometric energy supply and demand model to estimate and forecast the Wuxi energy and CO2-balance aggregates until 2050, it compares a scenario without specific Low Carbon City measures to reduce sectoral CO2-intensities to a Low Carbon scenario implementing these measures according to the Low Carbon City Plan until 2020 and beyond. The decomposition of the Kaya-identity reveals that the increase of per capita income has the largest impact on the growth of CO2-emissions and the decrease of energy intensity of Gross Value Added the largest impact on the reduction of CO2-emissions in Wuxi. A decrease of population and CO2-intensity of Primary energy supply only have average contributions. The decrease of energy intensity of Gross Value Added is due to energy efficiency gains in the single economic sectors, but to a large extent due to structural changes of the economy away from energy intensive sectors such as iron and steel, chemical industry or cement industry towards the energy extensive service sectors. A growing residential sector also reduces the industrial share of energy demand. Only following the assumed national trend with a shift from CO2-intensive industries to a CO2-extensive service economy, the Low Carbon goal of a 50% reduction of CO2-intensity of Gross Value Added compared to 2005 cannot be reached in Wuxi. Specific sectoral CO2 -intensity goals have to be successfully observed by the economic sectors in Wuxi, especially by the industry. The promotion of combined heat and power generation also has to contribute to the specific activities in Wuxi.

Some Remarks on the Individual Contribution to Climate Change

Climate change is one of the most important challenges of the 21st Century. As greenhouse gas concentration of the atmosphere has reached the 400ppm threshold of a 2°C global warming on 9 May 2013 and irreversible tipping points of the climatic system at some point of time have got even more likely, the question of the individual contribution to climate change becomes more and more virulent. For a long time, the absorption capacity of the environment has been regarded as limitless, and based on this perception, the economic entities used the environment for hundreds of years without constraints. Today, with progress of scientific knowledge, we are now aware of the possible negative impacts of climate change to environmental, economic and social systems on Earth. This awareness, however, did not lead to a significant change of individual behavior, because the perceived individual contribution to both the anthropogenic cause of climate change and its mitigation is still regarded as marginal. To encounter this misperception or “diffusion of environmental responsibility”, this article presents an alternative calculation of the individual contribution to climate change taking the incremental approach to a tipping point or a 2°C global warming threshold into account.

Economic Growth and CO₂-Emissions: What If Vietnam Followed China’s Development Path?

Vietnam and China both are quickly emerging market economies in Asia. China has had an unprecedented economic growth in Asia for the past 30 years. Also, Vietnam’s GDP is increasing, but more slowly. However, Vietnam is starting to catch up. Against this background, this article assesses the question what the economic and environmental impacts in Vietnam would be, if the country followed China’s development path. Based on econometric analysis, it is shown that currently, Vietnam is lagging behind China in terms of economic growth for 11 years. Although Vietnam and China have a similar primary energy mix in the early 1980s, China is still massively relying on coal, whereas Vietnam starts to develop hydro power in the late 1980s on large scale. Due to a quick growth of per-capita income, per capita emissions in China are already catching up with those of North-European economies such as Denmark, Finland and Germany. The question arises, what if Vietnam followed China’s development path. Using econometric models of GDP and CO2-emissions, two scenarios for Vietnam are analyzed, a scenario following China’s development path and one alternative scenario pursuing the current development patterns until 2050. The results show that the additional impact of following China’s economic development path is minor. Vietnam would only have a 0.5% percentage point per annum higher GDP growth. In other words, Vietnam would grow relatively quickly anyway. However, following China’s development path also in terms of high CO2-emissions per capita, would increase the growth of CO2-emissions in Vietnam by 2.3 percentage points per annum and would lead to an increase of CO2-emissions in 2050 by 2.6 bn. tons compared with the scenario in which Vietnam sticks to its own development patterns. However, in that case, Vietnam also had a 25% lower per capita income compared with the scenario following China’s development path. Here, the people and government in Vietnam have to make a strategic choice.