Seeking carbon neutrality through green transformation
Policymakers of urban development should eradicate concepts and behaviors which obstruct sustainable development such as excessive consumption or modes that prioritize GDP over sustainability. Photo:Lin Lin/PROVIDED TO CSST
All cities seek development solutions to the green growth of their local economies. Pressured by infrastructure renewal as well as sector and energy structural adjustments, areas move forward to green transformation at an inconsistent pace due to their various development stages. Therefore, their paths to reaching a carbon emission peak, and eventually carbon neutrality, diverge. Cities emit different levels of carbon. Municipalities need to formulate green development measures based on local resource endowments and development features, thus proposing carbon-friendly blueprints in line with respective conditions.
Pressing needs
The current social and economic development mode, driven largely by resource industries, has pushed resource-based urbanization. However, excessive dependence on resource-reliant industries has brought a unitary industrial structure. If the situation persists, demands for innovation will be inadequate, and innovation’s weak supply side will drain development momentum after resources have become depleted. The environmental “debt” made from the intensive development pattern requires resource-driven cities to pursue sustainable development in the following two ways.
The first approach is to establish long-term mechanisms for resource-based cities’ transformation. This type of transformation is time consuming, so mechanisms focused on a long-range process are essential, as are terms which address issues such as compensation for regions regarding resource transition and follow-up support for alternative industries. Special funds backed by state and local finance can drive alternative industries. Cities need to better their investment environments, form a sound economic order, and tailor preferential policies covering land, financing, and taxation. Their goals also include fortifying infrastructure construction and turning themselves into magnets for foreign investment and companies from other industries. Developing small and medium-sized enterprises will generate supporting services for large enterprises and form industrial clusters to lift regional competitiveness.
Secondly, green investment and financing policies will invite the transformation and upgrade of traditional industrial chains. Cities should prescribe investment and financing policies to transform resource-based cities’ development patterns. Increased efforts are needed to attract investment in green innovation so that resource-based cities can finance green enterprises, in terms of equipment and operation. The focal point also rests upon green finance and industrial optimization, in which project standards and evaluation measures deserve attention. Production, institutes, and research need to expand their collective strength. Governments, financial sectors, and public domains all can become funders to raise input in sci-tech innovation, pushing industrial chains to feature low-carbon production and high added value. Thus, the previously advantageous industries will command a higher value. Meanwhile, extended industrial chains can lead cities to embark on the road to a circular economy.
Green innovation
A big consumer of energy resources, the manufacturing sector confronts harsh restrictions on carbon emission cuts. Most manufacturing-based cities heavily rely on traditional industries, facing shortfalls such as an immoderate number of homogeneous enterprises, excessive supply of low-end products, insufficient input in green innovation, and weak attractiveness for innovation elements. Meanwhile, policies on green development fail to keep pace with the times, as a one-size-fits-all environmental standard undermines urban development. In this context, two aspects are important.
The first aspect refers to breakthroughs in transformations and upgrades such as ecological green parks. During the 14th Five-Year Plan period, guided by urban industrial layouts, cities have begun to integrate traditional industries with strategic industries. Enterprises’ technological transformations and upgrades will steer industrial structures to become more technology- and knowledge-intensive, therefore, high added-value products will grow in proportion. Industrial cluster construction also matters. The effects of agglomerative economies will generally speed up growth, while boosting the green economy, building ecological and green parks, and choosing a few representative companies. In a circular economy, cities will save energy and cut emissions through ecology-friendly product design, recycled product use, and clean production. As a result, industrial symbiosis and metabolic ecology will take form, leading the way to a circular industrial system.
The second aspect requires cities to enact better green policies and collect innovation factors. While tightening ecological protection, cities should enact explicit measures to avoid one-size-fits-all policies, making implementation more feasible. More support will be added to strategic emerging industries, modern service industries, and green growth-oriented enterprises. Service improvement and rigid supervision are just as critical, as are inspirational encouragement and punitive restriction. A favorable external environment will serve enterprises devoted to green innovation. Targets also range from the establishment of public sci-tech service platforms, to tech and information support for enterprises, and enterprises’ closer cooperation with research institutes and universities. The transfer and application of research outputs are expected to become more convenient, forming seamless connections between technology and the economy, innovation and products, as well as projects and markets. With green development goals as a reference, cities should ready themselves for industrial restructures by designing a strategic format that prioritizes talent.
Value realization
Ecological resources are irreplaceable in mitigating and adapting to climate change. However, their mobility and cross-regional features make it difficult to clearly define property rights, responsibilities, and beneficiaries, reducing the endogenous motivation for constructing ecological product markets. There are few ecological products and services eligible for trade due to the high threshold for resource flow, insufficient capital and talent, incomplete trading systems, unfair initial distribution of property rights, and low levels of marketization. This situation impedes cities’ realization of the values of ecological resources. In this context, two suggestions are recommended.
Cities should strive to improve property rights systems and realize ecological products’ value. Ecological products are typically public goods, and government-led approaches should ensure the realization of the product value. The value realization of ecological products such as material products, cultural services, and the right to use ecological resources relies on market mechanism regulations. Governments should expand state-owned capital while introducing more social capital to bolster the marketization of ecological products. Production and service enterprises should receive more aid. Also, cities should balance supply and demand to maximize the economic value of ecological resources when ecological functions are secured.
Greater innovation and higher ecological value are on the agenda. Ecological innovation comes from the fused strength of technological progress, market forces, and environmental governance. Different industries should increase uptake of innovation, such as information and communication technology, industrial biotechnology, and ecological design, removing blockades for technological advancement across industries. Decision-making regarding ecological innovation assures a country’s strategic position in the world. All countries should strengthen domestic research and map out mechanisms for ecological innovation in terms of economic policies and social governance, to carry out environmental technology action plans and innovation framework projects. They also need to explore the value realization of ecological products through digital technology.
Sustainable cities
Regarding mechanism optimization, the following steps can help adjust domestic cities’ economic development patterns when the development is unbalanced, uncoordinated, and unsustainable. These steps will empower cities to embrace greenness, competitiveness, and inclusiveness.
Cities should promote innovative mechanisms for green development. Policymakers should eradicate concepts and behaviors which obstruct sustainable development such as excessive consumption, modes that prioritize GDP over sustainability, or sacrifice the environment and social harmony. They are tasked with clarifying government functions and establishing public supervision and accountability systems for government behaviors. Acts of green production, green investment, and green consumption are advantageous. A compensation mechanism for resource property rights will come to fruition through the reform of property rights and pricing methods.
Technological innovation devoted to the urban green economy calls for more efforts. Cities are encouraged to implement green development strategies based on their respective potential. Resource-based cities should give their best to seek an industrial upgrade, innovation in R&D, and ecological restoration. A compensation mechanism can apply to resource-exhausted cities so that resource-consuming regions can pay a reasonable sum of money to resource-supply regions. Meanwhile, national revenue and expenditure can play a supplementary role.
Setting up a market service system will fuel green development. Yet, the trading market for carbon emission rights still requires refinement. Regarding pollution emission rights, more regions with suitable conditions should join the trading system that promotes paid use. Cities should build comprehensive service platforms for urban green finance, appreciating the positive role of financial instruments such as venture capital, equity investment, risk insurance, and financial leasing.
Jiang Jinhe is a research fellow from the Institute of Quantitative & Technical Economics at the Chinese Academy of Social Sciences.
Edited by MA YUHONG