Introduction
POINT1
China’s carbon dioxide emissions fell by a record 8% in the second quarter of 2022. On the just ended 2022 China International Fair For Trade IN Services (CIFTIS), Xie Zhenhua, China’s Special Envoy for Climate Change Affairs, said that the investment scale in the process of achieving China’s carbon neutrality target will reach over 130 trillion RMB, and that carbon neutrality actions will bring new investment opportunities and a broad market for China.
POINT2
Private carbon inclusive accounts have grown rapidly recently in many countries. The Japanese Ministry of the Environment has launched the “Green Life Point-Promotion Program”, in which companies and local authorities issue points to consumers who purchase environmental-friendly products and services, and the accumulated points can be used to purchase products, etc. On August 10, Beijing’s first green living record platform, Green Living Season, was released as a mini app. It creates a personal “carbon ledger” for citizens and rewards them for their green and low-carbon behavior, such as riding bicycles, driving new energy cars, using less disposable tableware or buying green appliances.
News
Energy & Society
China’s carbon dioxide emissions fell by a record 8% in the second quarter of 2022, a 230 million tons reduction that is the largest in at least a decade. China’s carbon dioxide emissions have been falling year-on-year for four consecutive quarters, extending what was already the longest sustained decline in recent history. The Chinese government is now responding to the ongoing real-estate slump with a new stimulus package that also aims to speed up infrastructure projects. The package will also benefit clean-energy investment. Recent adjustments will determine whether China’s carbon emissions have peaked, or rather, it will still rebound before peaking later this decade.
Climate & Energy
Two-thirds of Europe is under some sort of drought warning. The latest report from the Global Drought Observatory says that 47% of the continent is in “warning” conditions and 17% is on alert. Nearly all of Europe’s rivers have dried up to some extent. The dry spell will hit crop yields and spark wildfires. According to the report, Hydroelectric power has also been highly influenced by the drought, dropping by a significant 20%.
Carbon Neutrality
On 4th September, the 2022 China International Fair For Trade IN Services (CIFTIS)-Global Green Development and Carbon Neutrality Series Conferences opened at the China National Convention Center in Beijing, the theme is “Green Development and ‘carbon peaking and carbon neutrality’ – Reshaping the New Economic Landscape”. Xie Zhenhua, China’s Special Envoy for Climate Change Affairs, said in a video that the investment scale in the process of achieving China’s carbon neutrality target will reach over 130 trillion RMB, and that carbon neutrality actions will bring new investment opportunities and a broad market for China. China will cooperate with developing countries in relevant areas and expand investment and financing to support the transition from fossil energy to green, low-carbon, clean and efficient and renewable energy in developing countries, and build the green “Belt and Road” together.
【VIEW】
https://mp.weixin.qq.com/s/r1reEUqAH6YiNMcNOcgZ_Q
Green Economy
The Japanese Ministry of the Environment has launched the “Green Life Point-Promotion Program”, in which companies and local authorities issue points to consumers who purchase environmental-friendly products and services, and the accumulated points can be used to purchase products, etc. Currently, greenhouse gas emissions from households account for about 60% of total emissions. On top of that, the amount of food waste and the amount of plastic used one way remains huge. By encouraging people to live a green life with point promotion, it is expected to reduce CO2 emissions from households, thus accelerating the population’s shift to a decarbonized and recyclable lifestyle.
【VIEW】
https://www.jimin.jp/news/information/203920.html
Green Economy
On August 10, Beijing’s first green living record platform, Green Living Season, was released as a mini app. It creates a personal “carbon ledger” for citizens and rewards them for their green and low-carbon behavior. When citizens ride bicycles, drive new energy cars, use less disposable tableware or buy green appliances, they will be recorded in their personal carbon ledgers. In the future, the Personal Carbon Ledger will enable people to access public and commercial benefits, policy incentives, and will be the basis for personal green credits. The Green Living Season engages individuals in achieving the carbon neutrality goal, making everyone a participant, contributor and monitor of carbon neutrality.
【VIEW】
https://news.yahoo.co.jp/articles/c81955f4d99ca62d28d2bccb4d13e150dbe55dff
Carbon Neutrality
Alibaba Group’s Environmental, Social and Governance report shows that the Group achieved its carbon neutrality goal by using cleaner energy sources, reducing emissions by 619,944 tons of carbon dioxide equivalent over a 12-month period. In addition to increasing its use of renewable energy, Alibaba Group is using energy-efficient technologies, deploying environmentally friendly logistics, and encouraging consumers to purchase environmentally friendly products. Alibaba Group and China Merchants are working together to build a new green and sustainable business ecosystem with a view to creating value beyond business outcomes, which is a new exploration for all businesses.
【VIEW】
https://cafe-dc.com/sustainable/alibaba-cuts-carbon-footprint-by-620000t-using-renewable-energy/
Perspectives
Carbon Offset 【Adrian Horton】
The benefits of carbon offset can be wildly overstated because the whole offset system places profits over science. Carbon offsets are a popular route for reaching “net zero” inside many corporations and social organizations. Recent research has found that two-thirds of companies in heavily polluting industries relied on offsets instead of emissions reductions to reach carbon neutrality. In other words, many organizations make their carbon footprints disappear by investing money. Carbon offset registries, as a neutral third party, have remarkably low thresholds. In reality, they don’t have to be accountable to any party, and companies can get a sign-off without a hitch.
Green Economy
The “Green Life Point-Promotion program” initiated by the Japanese Ministry of the Environment which is mentioned above is a major incentive plan for the Japanese government to achieve the goal of carbon neutrality. It is very difficult to achieve carbon neutrality by the government, local authorities, and large corporations alone. Carbon neutrality depends on the active participation of all citizens. Given that carbon emissions from everyday life are the bulk of carbon emissions, the program focuses on five areas that are relevant to citizens’ daily lives – clothing, food, housing, transportation, and recycling (which means encouraging the use of recycled products). Consumers will be given points for environmentally friendly behavior in these areas.
【VIEW】
https://mirasus.jp/sdgs/climate-change/8028
Green Economy 【Ito Taisuke】
Kao, a Japanese leading company in the daily necessities industry, has invented a reusable folding container instead of the traditional cardboard used in most stores as a way to reduce CO2 emissions. As a manufacturer of everyday products, Kao uses and discards a large number of products every day. Therefore, the company’s decarbonized products will have a significant impact on society. In addition to making changes on the consumer side, Kao is also actively encouraging its suppliers to adopt more low-carbon business practices to contribute to energy conservation and emissions reduction.
【VIEW】
https://article.auone.jp/detail/1/3/6/7_6_r_20220904_1662237125816271
Policy & Energy Saving 【Jakob Petutschnig】
According to UNFCCC and European Environment Agency data, decarbonising Europe’s industry is essential to achieving net emission in greenhouse gas, considering industry is responsible for about 22% of the bloc’s emissions. In this process, a sound policy framework for low-carbon technology innovation and deployment is a guiding component for a climate-neutral strategy to be successfully implemented. One potential policy tool is “carbon contracts for difference” (CCfDs), the idea behind which is for national governments to offer long-term contracts to cover the difference between the current price of carbon and the actual cost of CO2 reductions.CCfDs are an emerging concept, but they are currently seen as one of the most promising options for decarbonizing European industry.
Energy Policy 【WangYuelun】
Zeng Yuqun, chairman of Contemporary Amperex Technology（CATL) said at the World New Energy Vehicle Congress that the regulation of battery carbon footprint should form a globally unified and internationally mutually recognized standard. China, as a leader in the battery industry chain, should be more proactive in the development of global carbon footprint standards and regulations. Europe and the United States have taken the lead in conducting research on the standards, policies and regulations of carbon footprint of power batteries. In contrast, China’s research on battery carbon footprint is obviously lagging behind.
【VIEW】
https://mp.weixin.qq.com/s/Ffr2oHvNbCpBY4pQyKLgSA
Interpretations
【Carbon Tariff】As CBAM comes into sight: Direct impact on China’s trade limited, yet a push for renewable power consumption
The European Parliament (EP) and the Council of the European Union (Council) have approved the basic model of the Carbon Border Adjustment Mechanism (CBAM) proposed by the European Commission (EC). Given that China’s domestic cost of carbon will be lower than that of the EU, China’s exports covered by CBAM will generate a net positive cost adjustment once CBAM comes into effect. Still, if the EU decides to include indirect emissions from electricity consumption in the CBAM, the implementation of it could have a profound impact on export-oriented manufacturers in many ways. But it would also provide an incentive for more energy-intensive industries to be included in the carbon market, with a steadily increasing carbon price in China.
【Green Economy】What is Green GDP? A new carbon-neutral indicator that the government has struck out?
In order to achieve carbon neutrality by 2050, the Kishida government intends to promote GX (Green Transformation), which refers to the transformation of the fossil fuel-oriented economic structure since the industrial revolution into a clean-energy-oriented one. The Japanese government is introducing a new indicator to visualize the relationship between the environment and the economy. On August 5, the Economic and Social Research Institute of the Cabinet Office released a report entitled “Economic Statistics and Indicators that Take into Account Environmental Factors”, which proposes a “pollution-adjusted economic growth rate”. This indicator is a provisional estimate based on the Organization for Economic Cooperation and Development (OECD) estimation methodology and can be considered a springboard for being positioned as “green GDP”.
【VIEW】
https://jbpress.ismedia.jp/arti/cles/-/71551
【Carbon Recycling】The Key to Carbon Neutrality: Why Carbon Recycling is attracting attention
To achieve carbon neutrality, we need to reduce carbon dioxide emissions from industry at some kind of cost, while creating new industries with the technologies and services needed to reduce emissions, thereby reducing the burden on industry as a whole. Carbon recycling is the process of recovering carbon dioxide as a carbon resource and reusing it as carbon compounds in chemicals, fuels, minerals, etc. The development of carbon recycling not only emits no carbon dioxide into the atmosphere, but also enables the recycling of carbon dioxide. Currently, research and specific applications related to carbon recycling are being understood and recognized.
【VIEW】
https://www.pref.hiroshima.lg.jp/lab/topics/20220902/01/
【Energy-saving Technology】Carbon neutrality technologies alongside us
This article introduces three promising frontiers of research – solar panels that can generate electricity at night, artificial photosynthesis and air capture technology. 1. Researchers have used the principle of “radiative cooling” to design solar panels that can generate electricity at night. Although the efficiency of this new technology has yet to be examined, it may solve the weakness of current solar power generation equipment. 2. Researchers have applied artificial photosynthesis to buildings by mimicking the process of plant photosynthesis. 3. A technology called “direct air capture”, which captures carbon dioxide directly from the atmosphere by using special filters and alkaline absorbing liquids.
【VIEW】
https://www.asahi.com/edua/article/14706677
【Green Economy】India plans to become hydrogen giant to cut energy imports
India is planning a massive expansion of green hydrogen production to curb its dependence on energy imports and move the economy away from fossil fuels to achieve carbon neutrality. New Delhi aims to reach an annual production capacity of 25 million tons by 2047, according to people familiar with the matter. India is the world’s third-largest emitter of greenhouse gases, and its potential to generate low-cost renewable energy has been a driving force behind the government’s goal of becoming carbon-free of hydrogen. On top of attracting funds from big companies, the government is considering more ways to stimulate the industry, including offering production-linked incentives for manufacturing electrolyzers.
Academics
【Green Technology Innovation】Impact and mechanism of carbon trading market on firms’ innovation strategies
Driven by the goals of carbon peaking and carbon neutrality, companies’ breakthrough innovation activities have been significantly boosted. According to the matching data on green patents from pilot firms in the carbon trading market, researchers from the Institute of Economics, School of Social Sciences, Tsinghua University found that firms were more willing to invest in highly skilled human capital to seek technological advances that could lead to energy savings and emissions reductions. At the same time, the carbon innovation activities of firms in polluting sectors were more significant. When firms are in an innovation ecosystem where innovation factors are abundant, they are more likely to generate breakthrough innovations.
【Carbon Allocation】The economic impacts of introducing auction into carbon allowance allocation mechanism in the national carbon market:Simulation based on CGE model
A team from the School of Environment of Renmin University of China and the Research Centre for Environmental and Economic of the Ministry of Ecology and Environment, China analyzed the impact of different mechanism designs on the carbon market and macroeconomy, slovinging key issues such as the introduction of paid auctions in carbon quota allocation, the implementation of carbon tax policies and the setting of carbon reduction targets.
The study concludes that a paid auction mechanism for allocating carbon allowances can reduce the negative impact of mandatory emissions reduction on economic growth. The introduction of an auction mechanism would lead to a lower price for carbon trading, which would help expand the size of the carbon market, but would have a differential impact on the different sectors. Higher carbon reduction targets will lead to higher auction and trading prices, resulting in lower initial and trading volumes in the national carbon market and a greater negative impact on economic development, but higher carbon prices will also lead to a greater increase in total national carbon market transactions and government revenues.
【Carbon Footprint】Do carbon footprint labels promote climatarian diets? Evidence from a large-scale field experiment
Consumers are becoming increasingly aware of the environmental impact of their food consumption.According to recent consumer research by the Carbon Trust, almost two-thirds of consumers say they would feel more positive towards companies that have reduced the carbon impact of their products.Carbon footprint labels address the market failure of information asymmetry and aim to bring about sustainable behaviour change in many consumer domains, given sufficient demand for low-carbon alternatives.
The research team from University of Cambridge found that carbon footprint labels have statistically significant impacts on meal choices. Specifically, we show that labels shifted consumer choices from high-carbon impact meals to mid-carbon impact meals by 2.7 percentage points and decreased sales of meat and fish dishes by 1.7 percentage points (with an equivalent increase in vegan/vegetarian dishes). Effects are most pronounced for individuals who followed a high-carbon footprint diet prior to the intervention.
【VIEW】
https://www.sciencedirect.com/science/article/pii/S0095069622000596#!
【Carbon Footprint】The evolution of carbon footprint in the yangtze river delta city cluster during economic transition 2012-2015
China has been undergoing an industrial transformation, shifting from an energy-intensive growth model. As the most developed region in China, the Yangtze River Delta city cluster is leading the industrial transition. However, the impact of the industrial transformation on the carbon footprint of the Yangtze River Delta cities is unclear.
The results of a study by Tsinghua University show that the carbon footprint of the Yangtze River Delta city cluster has increased more than the Chinese average, and the top 10 cities in terms of carbon footprint (including all mega-cities in the Yangtze River Delta city cluster) account for 61.2% of the Yangtze River Delta city cluster, indicating a high concentration of carbon footprints in the Yangtze River Delta city cluster. This highlights the greater responsibility of mega-cities in developed regions.
The construction, service and high-tech manufacturing sectors are the largest contributors, and this share is increasing from 2012 to 2015. The mega-cities are pioneers in the industrial transformation of the Yangtze River Delta urban agglomeration, and they tend to move more high-carbon industries to other regions and buy carbon from other regions in order to take the lead in meeting their emissions reduction targets. As a result, smaller cities have become the successors to take over from the mega-cities in terms of lagging capacity and increasing carbon emissions.
【VIEW】
https://www.sciencedirect.com/science/article/abs/pii/S0921344922001148#!
【Carbon Trading】A theory of carbon currency
In order to tackle two pressing externalities in today’s global economic and political context: the dangerous and irreversible effects caused by unconstrained green-house gas emissions and the cost to the rest of the world as a result of the U.S. dollar being the dominant global currency and the U.S. Federal Reserve increasingly implementing monetary policies not aligned with the global common interest, the researchers at Peking University Guanghua School of Management propose a new international monetary system based on carbon currency (the carbon standard). They define carbon currency as standardized carbon-related securities backed up by the right of one unit of carbon emissions. By incorporating the cost of carbon emissions into decision making, carbon pricing provides incentives for countries to pursue low-carbon growth, which helps achieve the net zero emissions global goal set under the 2015 Paris Agreement.
【VIEW】
https://www.sciencedirect.com/science/article/pii/S2667325822001182#!
Other resources
Greening Aid for Trade:Pathways for a just transition to sustainable trade
【VIEW】
https://www.iisd.org/system/files/2022-07/greening-aid-trade-brief.pdf
State and Trends of Carbon Pricing
Events
Upcoming Events
2022.10.3 Seminar “The Ideal and Reality of Regional Decarbonization” by Mr. Takashi Muratani, President of AnPrenergy Inc.
【DETAIL】
https://prtimes.jp/main/html/rd/p/000002138.000032407.html
2022.9.27 Talk Roadmap to Net Zero for Financial Institutions
Recordings
2022.8.27 Podcast Why Private Markets Need More Transparent ESG Data
2022.8.18 Seminar Creating Carbon Offset Projects for Nature-based Climate Solutions
2022.7.19 Seminar How the Ethanol Industry is Accelerating Toward Net Zero Carbon
2022.9.8 Seminar GX as a growth strategy – the creation of markets and new industries, and the formation of rules starting with GX
【DETAIL】
https://prtimes.jp/main/html/rd/p/000000066.000042181.html