Going Clean: New Research Shows how China can Adopt low-Carbon Growth

BEIJING, December 8 - Results released today from a detailed economic study show that China may
cut carbon emissions deeply and minimise the adverse effects on its economy
over the next 40 years. The report, Going Clean: the economics of China's
low-carbon development, by the Chinese Economists 50 Forum and Stockholm
Environment Institute, says that emission reductions up to 2050 can be made
for example through:

    - Energy efficiency gains through improved building design, standards for
      electrical appliances and the use of less energy-intensive materials

    - A massive shift towards the use of renewable energy such as wind and
      solar energy, municipal solid waste and biomass, and small hydropower

    - Electric vehicles for road transport

    - Using Carbon Capture and Storage technology in new coal-fired power
      plants

    - A better international cooperation mechanism that can channel more
      finance and technologies from developed countries

The report by Chinese, Swedish, German, British and American experts says
that these changes would also present opportunities for China to improve its
energy security and move its economy higher up the international value chain.

"A low-carbon China is a country with a larger service sector, more
advanced labour skills and less environmental degradation," said Dr FAN Gang,
Director of the National Economic Research Institute in China, who led the
research in China. "Such a transition would also be an essential part of
China's development."

China is currently one of the 10 most carbon-intensive economies in the
world, meaning that it has a high carbon footprint in relation to the level
of economic activity. "Avoiding dangerous climate change requires the world
to act together to cut global emissions. Developed countries are largely
responsible for the past build up in global green house gas emissions but
future responsibility is shared by developed and developing countries alike,"
said Lord Nicholas Stern, report author and Professor at the London School of
Economics. "This important report demonstrates that China can take strong and
decisive action to reduce its carbon emissions, whilst continuing its
economic growth and delivering a prosperous and a harmonious society for its
people."

"China will be one of the countries most adversely affected by dangerous
climate change. Avoiding dangerous climate change is in the best interest of
China," said Professor Ottmar Edenhofer, report author, deputy director and
chief economist of the Potsdam Institute of Climate Impact Research. "The
study demonstrates that China can combine a high economic growth path with
ambitious emission reductions. This is the reason why China has the potential
to become a role model for other economies in transition."

Going Clean recommends a phase-out of fossil fuel subsidies and for
carbon to be priced more highly, either through a carbon tax or a global
cap-and-trade system. "With today's low prices, the incentives for a
low-carbon transition are not strong enough. But this can change," said Dr
Fan Gang. The report shows that it is technologically feasible for China to
reach a 2 degrees pathway and estimates that the savings from lower energy
use and other efficiencies will partly offset the costs of transformation.
"High-income countries account for a vast majority of global emissions to
date and need to shoulder this responsibility through financial support to
developing countries," said Professor Johan Rockstrom, Executive Director of
the Stockholm Environment Institute. "To make this a reality, Going Clean
proposes a new international finance mechanism - the Inter-country Joint
Mitigation Plan - as a broader and more efficient way of financing technology
transfers."

"Consumption and production patterns also need to be steered in a more
resource- sustainable direction," said Klas Eklund, report author and Senior
Economist at the Nordic bank SEB. "As the world's most populous country and
the largest emitter of greenhouse gases, China's role is critical in
combating global climate change. Thus, effective economic tools to curb
emissions are necessary."

The shift to a low-carbon economy will hit coal-fired power and some
heavy industries, but will also create new 'green jobs'. In the first half of
2009, China built more wind turbines than the US. Low-carbon transport is
growing - there are currently over 50 million electric bikes and motorcycles
in the country, and China is now leading the mass production of electric
hybrid cars.

"Even in these difficult economic times, climate change action may
present more opportunities than costs," said Professor Johan Rockstrom. "Such
a transformation, for China and the rest of the world, will not be easy. But
it is possible, necessary and worthwhile to pursue."

The Chinese 50 Economists Forum is a Beijing-based grouping of Chinese
economists for collaborative research and public discussion of China's
economy. The Stockholm Environment Institute is an independent, non-profit
research organization bridging science and policy for sustainable
development.

    - Going Clean - The Economics of China's Low-Carbon Development will be
      launched in Beijing on 8 December 2009, 12:00 at the Raffles Beijing
      Hotel.

    - The report can be downloaded from www.sei-international.org

Media contact: Dr Fan Gang, Director, National Economic Research Institute, fangang at neri.org.cn, Mobile: +86-10-63906533; Robert Watt, Head of Communications, Stockholm Environment Institute, Email: robert.watt at sei.se, Mobile: +46-73-707-8589