Chinese and Foreign Economists Gather to Discuss China’s Turn to Green Growth
On June 14, 2014, Energy Foundation China and Resources for the Future co-hosted the “China Green Growth Forum” at the 2014 annual conference of the Chinese Economists Society in Guangzhou. Attendees included Sir James Mirrlees, 1996 Nobel Laureate in Economics and professor of Economics in Cambridge University, Professor Justin Yifu Lin, economist and honorary dean of the National School of Development at Peking University, and Marianne Fay, chief economist for the Sustainable Development Network of the World Bank. Participants shared their insights on green growth policies in China and abroad.
China’s rapid economic growth over the past three decades has pushed the environment to the edge. China is now the world’s number one emitter of greenhouse gases. Smog, water contamination, and soil pollution have become issues of national concern. Experts agree that China can develop in a more sustainable fashion, but this will require transforming its mode of growth.
With the theme of “Green Economic Growth,” the forum took a close look at China’s economy. Participants discussed different approaches to green growth as well as related opportunities and challenges.
In a keynote speech entitled “Opportunities and Challenges of China’s Green Growth and Structural Transformation” Professor Lin suggested that China should regard green growth as an achievement for itself as well as for the world at large. He pointed out that restructuring is one of the preconditions of green growth. China needs to make some quick yet necessary choices, such as significantly increasing energy efficiency. He also argued that by pursuing green growth, China could become a leader in R&D, investment, and popularization of green technologies. As a member of the World Trade Organization (WTO), China should also increase subsidies to green technologies, particularly those that can meet the unique requirements of the domestic market. In the future, green innovations should be the source of China’s competitiveness, he argued. To successfully shift towards green growth, China should regulate its economy with a “carrot and stick” approach, supporting the green sector in its urbanization and industrial infrastructure upgrading processes.
Nobel Laureate Sir James Mirrlees also delivered a keynote speech. Awarded the Nobel Prize for Economics in 1996 for his achievements in economic growth and development, he is currently conducting research on economic issues in China. Sir Mirrlees shared his insights on promoting green growth through tax policies while questioning the efficacy of negotiations in the international community. He said that China should have a comprehensive carbon tax system to encourage R&D of green technologies.
Marianne Fay, chief economist at the Sustainable Development Network of the World Bank, delivered a speech entitled “Inclusive Green Growth” in which she showed that green growth aligns with China’s overall goal of sustainable growth. Improved efficiency together with more economical services could serve China’s environmental sustainability and social equity goals. China should see natural capital as a major factor of development, making environmental policies function as an important driver of economic growth. Policymakers need to increase energy efficiency in the short term, expand the applications of green technologies in the medium term, and restore economic balance in the long term.
In response to a proposal made by Prof. Lin that all countries should expand their investment in infrastructure to solve the economic crisis, Jiang Lin, senior vice president of the Energy Foundation, said that all countries should expand their investment in green, low-carbon infrastructure to solve the economic crisis. Lin listed many existing technological and capital conditions that prepare China to transition to a low-carbon economy, pointing out how to improve them to achieve the transition to green growth.
Energy Foundation China’s Low-Carbon Development Program began to focus on green growth in 2013. Since then, the foundation has supported a range of green-growth related projects. Going forward, the foundation will work on a “Green Economics Forum”— an interdisciplinary communication platform that integrates economic research and policy advice.