(Source: Boao Forum for Asia Annual Conference 2022 Official)
From April 20 to 22, the Boao Forum for Asia 2022 Annual Meeting released a strong signal: China is committed to the development goals of "carbon neutrality" and "green transformation", from the government to corporate organizations, from the public sector to all sectors of society, from domestic to international discussion and action, to seek layout.
It is reported that in order to cope with the challenges brought by global climate change, more than 130 countries and regions around the world have proposed "carbon neutrality" or "zero carbon" goals, and "green and low carbon" and "sustainable development" have become an international consensus.
Before that, let's go back in history: in 2016, China signed the Paris Agreement, a climate change agreement. The goal of the Paris Agreement is to limit the increase in global average temperature to less than 2°C compared to pre-industrial times within this century, and to strive to limit the increase to less than 1.5°C. Reducing and offsetting remaining carbon emissions in the mid-21st century can be said to be the basis for achieving the goals of the Paris Agreement. Many countries and multinational corporations have committed to net zero emissions by 2050 or earlier. As the world's largest carbon emitter, China has pledged to achieve net zero emissions by 2060.
According to the Boao Forum for Asia's report Sustainable Asia and the World – Green Transition Asia in Action, the three drivers of green transition are mainly green financing, green technology, and the actions of Asian companies to address climate issues. The report also mentions that the achievement of carbon neutrality relies heavily on technological breakthroughs in energy efficiency and clean energy utilization. Looking to the future, green technology innovation in the fields of solar photovoltaics, wind energy, green hydrogen, biofuels, energy-saving building technologies and electric vehicles will effectively promote energy transformation.
The report shows that net zero emissions has become a widely accepted goal worldwide. According to NetZero Tracker, the net-zero emissions target now covers 88% of the world's greenhouse gas emissions, 90% of the economy and 85% of the population. By the end of 2021, 25 out of 47 Asian countries had made carbon neutrality commitments. Among Asia's seven largest economies, Japan and South Korea have set time targets for achieving carbon neutrality in 2050, Turkey in 2053, China, Indonesia and Saudi Arabia in 2060, and India in 2070.
The recurrence of the global COVID-19 pandemic since 2020, the pressures of economic recovery in various countries, and the impact of the recent Russo-Ukrainian war have all added uncertainty to the challenges posed by climate change.
In this situation, how to take more valuable actions is quite important. The Titanium Media App brings together topics and recommendations from the Boao Forum for Asia such as "Carbon Pricing", "Carbon Quantification", "Carbon Finance", "Carbon Border Regulation Tax Controversy", "Energy Security", "Green Hydrogen Energy" and other issues and suggestions, which may become a bellwether for judging the results of carbon reduction targets in the next few decades.
How can governments act to achieve carbon neutrality?
Ma Jun: Do a good job of carbon accounting and plan a carbon neutral path
Ma Jun, director of the Green Finance Professional Committee of the China Society of Finance and Finance and president of the Beijing Institute of Green Finance and Sustainable Development, said in response to a question from the media that green finance and green investment can be comparable to real estate in terms of volume, and the upstream and downstream of real estate have strong correlations, which can affect 20%-30% of GDP. If the green economy is estimated according to the industrial catalog, it has directly accounted for 20%-30% of GDP, and the upstream and downstream correlation is also very strong.
Only by doing a good job of carbon accounting can we plan a path towards carbon neutrality in the future.
Zhou Xiaochuan: Decompose the double carbon target and optimize the carbon market incentive mechanism
Zhou Xiaochuan, vice chairman of the Boao Forum for Asia, chief representative of the Chinese side, and president of the China Society of Finance and Finance, said on how to decompose the double carbon target that for achieving the double carbon target, it cannot be too fast, too slow, too fierce and overheating, which is a medium- and long-term goal. The realization of this goal is not to make each place and each industry set up its own set, but to make the efforts at all levels consistent with the overall goal of the country.
Zhou Xiaochuan believes that the decomposition of the double carbon target can seek the rationality of the target according to the department, according to the locality, and according to the industry. There will also be some new problems in the process of goal dismantling, such as the sum of "small goals" can not reach the overall goal, and whether the decomposition is exactly in line with the roadmap and timetable, this error needs to be controlled within a reasonable range, and the whole must have an optimal model, that is, to establish an optimal incentive mechanism.
Next, China also needs to optimize the carbon market incentive mechanism, the direction of the optimization mechanism should be from the spot to the forward market, including futures, options, etc., the incentive mechanism in the medium and long term the goal is mainly to guide investment.
Zhou Xiaochuan also pointed out that due to the development and start-up sequence, the cost of marginal carbon reduction between countries is not the same, and this difference has led to inconsistent carbon prices in different markets. To achieve the goal of carbon neutrality, the most important thing is to find an optimal path, and there is an optimal incentive mechanism at each point in time, and positive expectations should be given when enterprises invest and lend to reduce carbon, so as to promote the market to move forward as soon as possible and optimize functions.
Yasmin: Developing countries need financial, technical and capacity assistance
More than 100 countries have made near-zero emissions commitments, but some are still unable to meet their commitments. Egypt's Environment Minister Yasmine Fouad believes that the international community should take responsibility to help developing countries and large emitters reduce emissions, while also paying more technical, financial and capacity assistance, such as developing policies at the national level, creating new jobs and more beneficial skills training, as well as technology transfer, climate finance and so on, to accelerate climate action.
Li Bo: Set a lower limit on carbon pricing, and the global average carbon price will reach $75/ton in 2030
Li Bo, vice president of the International Monetary Fund (IMF), said that IMF research shows that in order to achieve the goal of controlling temperature rise by 1.5 to 2 degrees Celsius by the middle of this century, the world should achieve a 25% to 50% carbon reduction task by 2030. The best way to achieve this task is to put a price on carbon.
He pointed out that there are different ways to price carbon, one is carbon trading, the other is carbon taxation, which is selected according to the circumstances of each country. In order to meet the carbon reduction target by 2030, the global average carbon price needs to reach $75 per tonne by 2030, and the current global carbon price is $5/ton. However, countries are worried that unilaterally raising the carbon price will affect industrial competitiveness and uncertainty in other countries' policies, so the enthusiasm for a large increase in carbon prices is not high. His suggestion was that, depending on how strongly countries are to reduce carbon and the space for countries to implement, a lower carbon price limit could be explored in a small number of major emitters. In addition, the lower carbon price limit is more demanding for developed countries, and it is recommended to establish technology transfer and financial assistance to developing countries, and adopt other support policies to achieve emission reductions for countries that cannot achieve it.
The IMF is studying a series of non-priced policies/tools to generate a hidden carbon price (corresponding to an explicit carbon price) to ultimately achieve carbon reduction, which also evaluates the broader economic impact that various policies may have.
The EU first proposed a carbon border adjustment tax, that is, a carbon tax on imported products, which caused great controversy, especially in countries with close high carbon exports. On the issue of carbon border adjustment tax, Li Bo said that the starting point of the mechanism is to worry about carbon leakage, worry that carbon pricing in other countries is not high enough, and may also worry about leading to investment transfer and affecting industrial competitiveness. The carbon border adjustment tax needs to discuss many details, including the industries and sectors involved, whether to return the carbon tax on exports, carbon metering of imported products, and so on.
Paszot: The world needs to help each other to face up to climate justice
So, what is the role of green technologies in terms of carbon emissions? Carbon capture and storage (CCS), for example, is a method of reducing carbon emissions by capturing carbon dioxide produced by power generation or industrial activities, such as steel or cement manufacturing, transporting the captured carbon dioxide and then storing it deep underground.
Jonas Pasztor, executive director of the Carnegie Initiative on Climate Governance, noted the need to leverage existing green technologies and scale up their implementation while developing more advanced technologies to reduce emissions.
"We want to move from zero emissions to nearly negative emissions, two very important points: one is that the world needs to coordinate with each other, even if emissions are stopped tomorrow, the global temperature will remain at a very high level and will last for one or two hundred years; the second is climate justice, especially developed countries should start to move towards negative emissions early, and then promote developing countries, so that it may be easier to achieve economic transformation." Paszot said.
At the same time, government departments should continue to strengthen their engagement and cooperation with the private sector, as well as with other stakeholders. Civil society organizations can also play an important role in advocating for concrete solutions and accelerating change.
Lowe: I hope that China and the UK will jointly promote sustainable green financial products
London, England is the world's famous financial city, and China has the most green assets, including renewable energy electric vehicles, etc. are issuing green bonds in London, how can the two countries cooperate in green financing?
Alderman William Russell, 692nd Mayor of the City of London and co-chair of the Uk-China Green Finance Working Group, pointed out that he hopes that more Chinese asset managers can cooperate with Western asset managers to jointly launch sustainable green financial products.
The 26th United Nations Climate Change Conference can be said to be the climate change conference of the financial industry. In April 2021, the Glasgow Net Zero Emissions Financial Alliance was created. At present, 450 financial institutions in 45 countries have joined the Glasgow Net Zero Financial Alliance, and its alliance represents more than $435 trillion in assets, "The funds are there, and we are now going to put money into projects, with the goal of transforming the financial community." Lowe pointed out.
Zhu Min: The financial industry will undergo a paradigm shift, and natural capital is also one of the social capitals
Zhu Min, dean of the National Institute of Financial Research at Tsinghua University, further elaborated on the concept of "zero carbon finance".
He said that under the zero-carbon financial system, the financial stock will change, because the price of high-carbon products will fall, the price of low-carbon products will rise, so the national balance sheet, the balance sheet of enterprises and the houses and stocks invested by everyone will change because of the change in carbon valuation prices, and banks will help the financial industry to transform, which is a huge and not easy thing. "This is a fundamental structural change, what I call a general change in the financial industry, is a complete fundamental change, so the financial industry is facing great challenges and opportunities." he said.
In this context, the shortage of talents in the financial green industry is also a problem that will be faced. Society is no longer a consumer material product, but also to put the natural environment into it, which is part of the policy being fostered. He said that after the entire change in production mode and way of thinking, it is a difficult task and a challenge to cultivate a completely new generation of future talents with a new way of thinking and facing carbon neutrality, and the way of thinking of such talents will undergo changes from the production mode of the human industrial revolution to the way of production and lifestyle.
Is carbon neutrality an opportunity or a challenge for businesses?
Gaines: Continue to strengthen investment in green transformation technologies and turn challenges into opportunities
Elizabeth Gaines, CEO of FMG Group, said that the current demand for green energy is increasing, and although there are continuous changes in the international situation, it has not affected the demand for green energy, but has promoted the green transformation.
Gaines also pointed out that in order to further achieve the goal of "carbon neutrality" by 2030 and "carbon peak" by 2040, FMG is increasing investment in the green transition and renewable energy. Renewable energy resources and technologies actually exist, such as the use of solar clean energy to generate electricity and store energy. In terms of technology, FMG will also increase investment in the entire supply chain link such as energy production, distribution and transportation, and continue to maintain its leading position in the industry.
Gao Jifan: Solar energy is the first main force to achieve "carbon neutrality"
Gao Jifan, chairman of Trina Solar Co., Ltd., pointed out that the development of solar energy is not only the first main force to achieve "carbon neutrality" in the future, but also an important force to resolve the future global geopolitics. It is not only a clean, low-carbon and safe energy source, but also a civilized, scientific and technological energy.
Gao Jifan estimates that by 2050, 50% of electricity energy will come from solar energy. To achieve this ratio, there are three things to be done at the moment: one is to continue scientific and technological innovation to improve the conversion efficiency of solar energy, reduce (utilization) costs, solar energy in 2050 may cost 1/3 or even lower than the current; second, vigorously develop energy storage systems, and power plants, power grids, home end users to build a stable energy use system; the third is to vigorously develop high voltage and transmission, most of the solar energy generation places are in the Gobi Desert desert, such as Europe in the relatively sparsely populated places to build power plants Through the Mediterranean Sea, high-voltage power is sent to other countries, so photovoltaic power generation continues to innovate and reduce costs, and the vigorous development and common application of energy storage technology coupled with the local system of high voltage and ultra-high voltage will build a new zero-carbon energy system in the future.
Xu Shansong: The criticality of virtual twin technology to the goal of net zero carbon emissions
In its research, Dassault Systèmes found that 70% of business leaders believe that virtual twin technologies play a key role in achieving net zero carbon emissions. They firmly believe in the potential of virtual twins in the green transformation of the industry. In the new energy vehicle industry, virtual twins can speed up the product concept design, refinement design and design verification phases, reduce physical testing, and reduce the embedded carbon footprint through optimization. In the construction industry, virtual twin technology can save operating costs and optimize the use of resources for buildings in the use stage, such as lighting, heating, water supply and so on.
Shansong Xu, Executive Vice President of Dassault Systèmes Asia Pacific, pointed out that to help customers achieve carbon neutrality goals, they should achieve a green transformation through the entire life cycle of software from product to service by introducing digital advanced technologies such as big data and machine learning. Dassault Systèmes is also committed to achieving zero carbon by 2040, working with customers in different industries to reduce the impact of carbon emissions.
Liu Qiao: It is imperative to ensure the formation mechanism of carbon prices
Liu Qiao, dean of the Guanghua School of Management at Peking University, pointed out that carbon neutrality is actually a very profound problem in economic management. Achieving global carbon neutrality requires huge investment, and for China, the challenge may be even more daunting. According to the Guanghua research group, in the next 30 to 40 years, more than 250 trillion yuan of investment will be generated. If carbon emissions are understood as a factor of production, it will have a significant impact on the growth paradigm of enterprises.
Liu Qiao pointed out that the current financial system has three things to do: one is to ensure the formation mechanism of carbon prices, and reflected through financial products and financial markets; second, carbon neutrality may itself be a change in a new civilization form, requiring a lot of infrastructure investment, if you return to the Chinese development model, fiscal policy should play a more active role; the third is the development of green finance, green bonds, green credit, PE, VC will be more active in promoting investment in technologies related to carbon neutrality.
Liu Qiao also pointed out that carbon neutrality is now very focused on the supply side, but in fact, a large number of studies have shown that more than 70% of carbon neutrality comes from the demand side, such as travel, food, and residential use. From this perspective, companies providing products and services for consumers, with a low-carbon concept to meet the changes in future consumer demand, etc., in fact, they are also involved in carbon neutral actions.
In the future, the entire carbon trading may also be included in the trading system. If carbon emissions are reduced through products and services, the credits they receive can enter the trading system, which also contributes to carbon neutrality. For enterprises, the market opportunities are considerable.
Song Ben: Combine the "Belt and Road" and the promotion of green energy transformation
Benedikt Sobotka, CEO of Eurasia Resources Group, said: "Green transformation is not a slogan, but something to actually be done. Before China's "Belt and Road" framework was officially proposed, Eurasian Resources carried out a lot of engineering cooperation with China. Eurasia Resources is the world's important copper, cobalt, ferroalloy, aluminum producer, is also the second largest cobalt producer, is also in the context of the "Belt and Road", with Chinese partners to jointly promote green energy and green transformation projects, this is a great opportunity.
In addition, in view of the value and impact of ESG in the current financial market, Song Ben stressed that green cooperation is not only upstream and downstream, but also considers the entire value chain, taking into account civil society or civil society, etc., so it is necessary to have a larger platform, and the development institutions and enterprises of different economies participate in the contribution to the ESG agenda, which is very challenging.
Zhang Yue: Mandatory standards can be adopted for carbon reduction indicators
As a representative of multinational enterprises, Zhang Yue, chairman and president of Yuanda Technology Group, said that the region/country with the greatest efforts to reduce carbon in the world is the European Union, and the eu has two of the most important things in the zero carbon or net zero emission policy: one is building energy conservation, the other is the lightweight of transportation, and the indicators in both aspects are mandatory directives.
At present, there are too few simple and effective measures to take action against the zero-carbon target, which is a common problem. The construction sector is the area with the highest carbon emissions in the world, and the easiest to achieve carbon reduction is the construction sector. For example, buildings are insulated and then shaded outside the window, which can easily reduce carbon emissions by 90% without any technical difficulties. In addition, it can also increase the utilization of waste heat, enhance the durability technology of the building, reduce construction waste, etc.
He analyzed that China's current carbon reduction indicators are still relatively low, for example, in the building energy efficiency may be 30% to 50% energy saving, in fact, the energy saving of the building is not done, to do energy-saving transformation should be in place in one step, like the European Union to do 90%, is the mandatory standard; lightweight is very simple, the car is stipulated that its weight can not exceed 600kg, decreasing by 5% year by year, after 20 years, the weight of the car may be reduced to 400, 300kg.
Why is green hydrogen energy the focus of cracking energy security?
Forrest: Use diversified energy sources and avoid dependence on a single source of energy
Andrew Forrest, director of the Boao Forum for Asia and chairman of FMG Group, pointed out that the need to achieve green hydrogen energy development is an important topic around the world. A country's energy consumption or energy policies affect countries around the world. "We should strengthen our cooperation to achieve a sustainable and profitable future that benefits all."
Regarding the development path of green hydrogen energy, Forrest pointed out that different economies have their priorities and priorities in the development of green hydrogen. Many sovereign countries have a problem of dependence on energy, some using traditional energy sources, and some switching to clean energy. Whether using natural gas or oil, it is necessary to abandon short-term vision and rely on green electricity and green hydrogen to replace fossil energy.
Forrest believes that on the one hand, it is necessary to have its own energy reserves, and on the other hand, it is necessary to use diversified energy sources and avoid dependence on one energy source. The world is facing not only solving current real problems, but also taking into account future problems and ensuring a step-by-step long-term solution.
At present, hydrogen energy has the advantage of 24/7 operation, but like solar energy and wind energy are often limited by resource problems, and technology is needed to make up for the shortage of natural resources.
Mertz: Actively develop hydrogen energy in China
Martina Merz, CEO of ThyssenKrupp Group, noted that thyssenkrupp Group is the world's supplier of gigabit-class hydrogen production technology, while making outstanding contributions to infrastructure.
Individual action is not enough, and green transformation is a challenge for the world. Its success is relevant to countries and the world at stake, and in the context of geopolitical uncertainty, the challenges of green transition are not diminished, and every effort must be made to deal with this situation. At the same time, infrastructure needs to be put in place so that a green transition can be implemented quickly. The thyssenkrupp Group is actively working with local partners on hydrogen energy development projects in China.
"The thyssenkrupp Group is the largest steel company in Germany and currently accounts for 2.5% of Germany's CO2 emissions," Mertz said. We want to reduce the steel sector by 30% by 2030 and become climate neutral or carbon neutral by 2045 at the latest. At present, every ton of green hydrogen used can reduce 26 tons of carbon dioxide emissions. To fully achieve climate-neutral steel production, thyssenkrupp needs to consume 720,000 tons of hydrogen energy per year, which is equivalent to 25% of the total electricity consumption of German households today. ”
Deng Jianling: New energy and technology cannot go the way of relying on government subsidies
Deng Jianling, general manager of China Huaneng Group Co., Ltd., pointed out that new technologies and green energy cannot rely on government subsidies, but must rely on the voluntary acceptance of the market, so that such products have broad application prospects and strong product vitality.
Deng Jianling believes that the green hydrogen industry is very promising and will bring huge business opportunities for the future economic transformation and development of enterprises. At present, there is a green hydrogen industry with an output value of about 3 trillion yuan in China, including convenient production, transportation and storage, commercial development and utilization, and the realization of liquid hydrogen products.
However, at present, the development of hydrogen energy is still in a process, whether the cost of hydrogen energy can be accepted by the market and whether it is competitive will depend on the progress of technology and the convenience of hydrogen energy trading and use. Deng Jianling is optimistic about the development prospects of hydrogen energy.
For example, urban public transportation, residential quarters and other scenarios can use hydrogen energy to solve the distributed cold, heat and power trigeneration; in the southwest region of large hydropower photovoltaic bases, comprehensive hydrogen energy application scenarios can be built; in the long-distance transmission of hydrogen energy, in addition to compressing hydrogen, it can also be converted into liquid hydrogen, used for bus transportation and unmanned aerial vehicles.
From the perspective of medium- and long-term projects, green hydrogen will also be used for the replacement of urban energy, that is, through digital means to combine wind power, photovoltaic and energy storage systems to build a clean green energy platform, so as to effectively convert components, power supplies and excess power into green hydrogen.
Wang Naixiang: Investment and financing is one of the bottlenecks in the development of the hydrogen energy industry
Wang Naixiang, chairman of the Beijing Green Exchange (hereinafter referred to as "Beijing Green Exchange"), said that the Beijing Green Exchange should do a good job in public service platforms for green energy and green assets, build green financial infrastructure, and serve the real economy with financial innovation.
He believes that from the perspective of investment and financing, the development of hydrogen energy, the first point is to break through the bottleneck of investment and financing. According to the International Hydrogen Energy Commission, under the premise of achieving net zero emissions, hydrogen energy will account for 22% of the global energy consumption structure in 2050. Among them, the whole hydrogen energy industry chain needs 700 billion US dollars of direct investment by 2030, including 300 billion US dollars of hydrogen production, 200 billion US dollars of transportation allocation, and 200 billion US dollars of hydrogen energy terminal utilization. In the future, this market will definitely become a trillion-level large market.
At present, the Beijing Green Exchange is building green financial infrastructure such as corporate carbon accounts, green project libraries and environmental information disclosure standards, and is also studying the ways to organically combine CCER with green financial products such as green credit and green bonds, so as to provide good financing tools for enterprises.
Zhang Lei: To overcome zero-carbon technology, hydrogen energy is a new oil in the modern sense and has cost competitiveness
Zhang Lei, CEO of Envision Technology Group, pointed out that hydrogen energy has appeared as a "new oil". In this process, because of the rapid decline in the cost of renewable energy, electrolytic hydrogen technology not only flexibly consumes renewable energy, but also produces green hydrogen very efficiently and cheaply, so the large-scale application of hydrogen energy has begun.
Zhang Lei believes that according to the energy calculation equivalent comparison, hydrogen energy has a cost advantage over natural gas, "In Inner Mongolia, using renewable energy to produce hydrogen energy, we can produce more than 10 yuan to produce 1 kilogram of hydrogen." ”
It is understood that Envision and FMG will jointly develop and achieve 10 million tons of hydrogen energy by 2030. To achieve this goal, Envision has pioneered the world's first "zero-carbon industrial park" to effectively produce hydrogen energy, including hydrogen energy, liquid ammonia and other green zero-carbon chemicals, so that hydrogen energy and its carriers can be efficiently integrated into the new global oil trade. He believes that green hydrogen energy not only plays an important role in the new energy system, but also as a very good energy storage medium, it can effectively smooth the volatility of renewable energy.