Introduction
POINT
Climate change continues to affect the global economy, and according to the African Development Bank (AfDB), Africa stands to lose 5-15% of its economic growth per capita for climate change. Therefore, it is significant to combine emission reduction methods with economic growth under the wave of global carbon neutrality. The Japanese government is promoting a new indicator that combines greenhouse gas reduction progress with GDP, which called the “Green GDP”. According to the OECD, the average growth rate of Japan’s GDP from 1991 to 2012 was 0.93%, while green GDP grew by 1.34%. The Japanese Cabinet Office will commission the private sector to conduct the survey and start the system design.
News
Carbon Peaking
Shanghai, as the national carbon market trading center and the most important green financial center in China, has gone further than ten years ago in achieving the “carbon peaking, carbon neutrality” goals. At present, Shanghai’s carbon emission intensity continues to decline, and the proportion of fossil energy is significantly reduced. The average amount of carbon dioxide emitted when 10,000 yuan of GDP is generated is about 0.5 tons, and the proportion of carbon emissions from coal consumption in the city’s total carbon emissions has dropped from 59% in 2010 to 43%. Dong Yunhu, chairman of the Chinese People’s Political Consultative Conference (CPPCC）in Shanghai, pointed out that the work of “carbon peaking, carbon neutrality” goals should be placed in a more prominent position in the overall situation, and efforts should be made to take the lead in the undertaking of green and low-carbon road of high-quality development.
【VIEW】
https://mp.weixin.qq.com/s/A-Xqw1G_vWqOLhED_rVa6A
Carbon Neutrality
As the Japanese government aims to achieve zero greenhouse gas emissions by 2050, the Ministry of Environment will enhance its support for small and medium-sized enterprises and consolidate its policy of promoting zero carbon management in the supply chain, from the deployment of raw materials to the disposal of products. For this purpose, the budget for next year will be adjusted as follows: the investment in equipment to reduce CO2 emissions will be increased by more than twice the amount of the current year, approximately 10 billion yen, and the budget to support the “Measurement and Reduction of Greenhouse Gas Emissions” program will be increased by 1.5 billion yen.
【VIEW】
https://www3.nhk.or.jp/news/html/20220826/k10013788121000.html
Green Finance
Since the beginning of 2022, 10 companies have publicly announced the issuance of transition bonds, and the total bond issuance volume of these companies reached about 320 billion yen in August. Even with the impact of rising interest rates, the issuance of 5-year bonds reached 1.5 to 2 times the expected volume. Mitsubishi Heavy Industries and other companies have stated that they will also continue to pay attention in the future and actively apply environmental preferential conditions and transition bonds. In addition, as the overseas market for transition bonds is not yet mature, it is not yet clear whether overseas investment can be obtained. However, the transition bond policy has shown its positive contribution to investment in energy conservation and emission reduction and its prospect is highly anticipated.
【VIEW】
https://business.nikkei.com/atcl/gen/19/00159/090800053/
International Cooperation
In a report released by the International Energy Agency on Sep. 20th, it was pointed out that the lack of cooperation and assistance among countries in the development and sharing of new and emerging technologies has seriously affected the achievement of the global goal of reducing greenhouse gas emissions and curbing temperature rise. IEA Administrator Birol also stressed the importance of international collaboration in the statement. In addition, a report jointly released by the International Renewable Energy Agency (IRENA) and the United Nations also proposed constructive guidelines for strengthening international cooperation, such as the establishment of cross-border supergrids for wind and solar power generation.
【VIEW】
https://jp.reuters.com/article/climate-change-iea-idJPKBN2QL053
Perspectives
Green Economy 【Seika Nagashima】
According to the actual survey results, about 70% of enterprises have applied electronic technology, which has played a positive role in improving the efficiency and quality of production and operation. However, at the same time, companies are facing a shortage of human resources for e-technology. The government should support companies in vocational education for the purpose of training human resources in electronics, DX and other fields. The main measures taken by Japan to achieve carbon neutrality include the Green Revolution Fund, innovation in basic raw material industries, and reduction of greenhouse gas emissions. The pace of carbon neutrality is gradually accelerating around the world. For the manufacturing industry, especially small and medium-sized enterprises, increasing understanding of environmental changes and responding positively to carbon neutrality targets is the only route to maintain and improve competitiveness.
【VIEW】
https://monoist.itmedia.co.jp/mn/articles/2209/20/news002.html
Carbon Market 【Alistair Ritchie, Chen Yi】
Within one year of the launch of the Chinese emissions trading system(ETS), the cumulative volume of carbon emissions allowances traded reached 194 million tons, with a turnover of over US$1 billion. Despite the fact that the figure is remarkable, the problems of the data quality and authenticity have yet been the biggest challenge facing the national ETS. In July 2021, a power station in Inner Mongolia was found to have falsified its data, and there were far more than one company that committed forgery. For the ETS to play an actual role, a sound monitoring, reporting and verification system is an indispensable foundation, and this needs to be supported by an efficient IT system, strong security measures, and effective disciplinary actions for non-compliance. China should learn from the successful experience and practices of the EU carbon market in this regard, and transfer them organically to the Chinese carbon market.
【VIEW】
https://chinadialogue.net/zh/1/88008/
Tech & Energy 【Liu Ke】
Currently in the application of wind and solar energy, although inexpensive, but subject to its instability and technical limitations, can not be expected to dominate in the short term. Take solar energy as an example, many areas in China only have enough sunlight for one sixth of the year, and obviously, it can not replace fossil energy if the storage technology can only last a few hours. Overall, there is enough solar and wind energy produced, but in order to make full use of it, it is important to combine short-term energy storage technology with large-scale, long-term energy storage technology. Finding solutions of long-term energy storage technology is currently the biggest challenge, but at the same time, it will also bring a large number of new technological innovation opportunities and new industries.
【VIEW】
https://mp.weixin.qq.com/s/1D0pFQU1iGbF1NsAndhy7w
Interpretations
【Climate Finance】Africa losing up to 15% of GDP growth to climate change, African Development Bank says
According to the African Development Bank (AfDB), Africa is losing 5-15% of its economic growth per capita due to the effects of climate change. On top of this, Africa is simultaneously facing a huge shortage of climate finance. African countries received about $18.3 billion in climate finance between 2016 and 2019, however, African countries have a financing gap of almost $1.3 trillion between 2020-2030. Developed countries pledged $100 billion in climate finance to developing countries in 2009, but that pledge has only been partially met, and to make matters worse, the pledge is due to expire in 2025.
【VIEW】
https://www.reuters.com/world/africa/africa-losing-up-15-gdp-growth-climate-change-afdb-2022-09-13/
【Green Economy】About Green Growth Strategy
The Green Growth Strategy, known as the “2050 Carbon Neutral Synergistic Green Growth Strategy”, includes the creation of a Green Revolution Fund, an investment promotion tax system for carbon neutrality, financial market restructuring for the purpose of financial capital utilization, and regulatory reform and standardization. Based on this, we can expect future growth in four energy-related industries, seven transportation and manufacturing-related industries, and three home-office industries. In the future, the government will continue to support the development of technologies related to carbon neutrality by small and medium-sized enterprises through policies such as budgeting, taxation, system reform, and private capital inducement.
【VIEW】
https://mirasapo-plus.go.jp/infomation/17587/
【Green Policy】Government Launches New Carbon Neutral Target, and What is Green GDP?
In October 2020, the Japanese government announced its goal of achieving carbon neutrality by achieving zero greenhouse gas emissions by 2050. To achieve this goal, the Kishida government plans to promote structural economic changes which are centered on clean energy. One of these changes is the study and improvement of the “Green GDP”. The “Green GDP” uses a new indicator for carbon neutrality in addition to the original concept of “environmentally adjusted domestic production” to derive a quantitative relationship between the environment and the economy, and emphasizes the importance of both economic growth and environmental protection.
【VIEW】
https://jbpress.ismedia.jp/articles/-/71551
【Personal Carbon Emission Reduction】From the “Ant Forest Model” to the co-construction of group standards: the Internet “personal carbon emission reduction incentive” will come out of the management norms
As of August 2022, Ant Forest has accessed more than 50 low-carbon scenarios, including green travel, paper and plastic reduction, online business, recycling, energy saving and consumption reduction, and has witnessed the low-carbon actions of 650 million people, generating more than 26 million tons of “green energy”. However, most of the “personal carbon emission reduction incentive” programs like Ant Forest lack standards in terms of framework design, quantification of personal carbon emission reduction and incentive mechanism. In order to provide support for the participation of “personal green low-carbon behavior” in the carbon emission reduction system, in June this year, the China Energy Conservation Association (CECA) formulated a group standard related to the “management standard of personal carbon emission reduction incentive based on the Internet platform” according to the “Management Measures of Group Standards of CECA”, and the group standard has now entered the discussion and preparation stage.
【VIEW】
https://mp.weixin.qq.com/s/d77okR21ael3eDgbdE_FHA
Academics
Challenges and opportunities for carbon neutrality in China
80% of China’s carbon emissions are from electric power generation and industrial sources, since its rapid industrialization, urbanization and globalization are powered by a coal-dominated energy system.Indeed, with large-scale deployment of renewable power generation, particularly hydro, wind, and solar, the share of fossil fuel has reached an all-time low and coal consumption has plateaued.
Key steps towards China’s carbon neutrality include increasing its non-fossil energy share, deploying negative-emission technologies at large scale, promoting regional low-carbon development and establishing a nationwide ‘green market’.
【VIEW】
https://www.nature.com/articles/s43017-021-00244-x
Impacts of poverty alleviation on national and global carbon emissions
Wealth and income are disproportionately distributed among the global population. This has direct consequences on consumption patterns and consumption-based carbon footprints, resulting in carbon inequality. Due to persistent inequality, millions of people still live in poverty today.
A team from the University of Groningen in the Netherlands calculated that the average national carbon footprint increases with the increase of expenditure, and the majority of people living below poverty lines have yearly carbon footprints of less than 1 tCO2. The total emissions of the top 1% were in fact bigger than those of the bottom 50%, or those of people living in poverty.
【VIEW】
https://www.nature.com/articles/s41893-021-00842-z
Analysis of emission reduction effects of carbon trading: Market mechanism or government intervention?
Low carbon prices and poor liquidity characterize China’s carbon market. Researchers from the School of Management at Xiamen University and China Institute for Studies in Energy Policy wanted to find out how China’s carbon trading mechanism could achieve the expected emissions reductions, when the market mechanism is not yet fully established.
The authors explore the relationship between the implementation of carbon trading policies and carbon emission reduction. The results show that carbon trading does effectively curb carbon emissions, but the effect cannot be significantly achieved by market mechanisms alone, which are imperfect and have limited industry coverage. Government intervention significantly enhances the role of carbon trading in promoting carbon emissions reduction. The more government intervention there is, the more carbon trading will curb emissions. Finally carbon trading reduces carbon emissions by adjusting energy consumption rather than by changing industrial structure.
Potential impacts and challenges of border carbon adjustments
Harmonized carbon pricing across borders is hard to achieve in the real world as carbon leakage can reduce the cost-effectiveness of unilateral approaches to reduce global emissions. If the emissions policy of a country raises local costs, then another country with a more relaxed policy may have a trading advantage. If demand for these goods remains the same, production may move offshore to the cheaper country with lower standards, and global emissions will not be reduced.
Border carbon adjustments (BCAs) would apply the domestic carbon price to emissions embodied in traded goods, which levels the playing field for emissions-intensive and trade-exposed industries. By reviewing the potential environmental and economic impacts of border carbon adjustment on reducing leakage, restoring competitiveness, and cost-effectiveness, scholars from Oldenburg University and the University of Ottawa think that the feasibility of the border carbon adjustment is greatly reduced under current legal and practical enforcement restrictions.
【VIEW】
https://www.nature.com/articles/s41558-021-01250-z
Impact of high-speed rail on road traffic and greenhouse gas emissions
Carbon emission reduction in the transportation sector is essential in the global mitigation effort, and a large-scale public transport system has the potential to be an effective instrument.
The team from the Hong Kong University of Science and Technology (HKUST) found that the construction of high speed railways would reduce carbon emissions by reducing traffic on highways, but would have little effect on traffic on ordinary national roads. This mitigation effect is mainly due to the fact that the HSR can relieve the pressure on passenger traffic carried by conventional railways, thus releasing the freight capacity of conventional railways and thus reducing the traffic flow on highways.
【VIEW】
https://www.nature.com/articles/s41558-021-01190-8
Other resources
Industrial Decarbonization Roadmap – Department of Energy
Siemens CN – White Paper of Zero-carbon Smart Industrial Campus
Deloitte and SAP – White Paper of Building Low-carbon Industries with the Lead of Sustainable Development
Events
Upcoming Events
September 20th, 2022 Webinar Seminar on carbon footprint calculation, validation, etc. ：to achieve carbon neutrality throughout the supply chain
【DETAIL】
https://www.meti.go.jp/press/2022/09/20220920003/20220920003.html
September 21st, 2022 Webinar ESG management and decarbonization, the need for carbon neutrality, and the importance of certification
【DETAIL】
https://prtimes.jp/main/html/rd/p/000000071.000041191.html
September 29th, 2022 Webinar All 3 sessions | ESG Management is achieved through decarbonization, circular economy, business transformation! Part I: Decarbonization
【DETAIL】
https://www.amita-oshiete.jp/seminar/entry/016049.php
September 29th, 2022 Webinar Case study of zero carbon package to support decarbonization from planning to implementation of concrete measures
【DETAIL】
https://go.kepco.jp/case_webinar_20220929_request.html