The comprehensive green transformation of industrial development is not only the need for harmonious coexistence between man and nature, but also a revolution in industrial upgrading worldwide. General Secretary Xi Jinping emphasized that green development is the background color of high-quality development, and new quality productivity itself is green productivity. Promoting the transformation and upgrading of the economic structure and forming the competitive advantage of green and low-carbon industries is not only a fundamental strategy to solve the constraints of resources, environment and ecology, but also an internal requirement for cultivating and expanding new kinetic energy and achieving high-quality development. On January 1, 2024, the "Regulations of Shanghai Municipality on the Promotion of Green Transformation of Development Mode" came into effect, which is the first of its kind in China, and will jointly promote the optimization of the city's energy structure, the upgrading of the industrial structure, and the transformation of lifestyles, so as to form a legal guarantee system that promotes the efficient use of resources and energy, the high-level protection of the ecological environment, and the high-quality development of the economy and society. Previously, in 2022, the "Shanghai Action Plan for Promoting the Development of "Green and Low-carbon" Industries Aiming at New Tracks (2022-2025)" was implemented, and the "Shanghai Three-Year Action Plan for Promoting the High-quality Development of Manufacturing Industry (2023-2025)" was issued in 2023, making a clear plan for the development of green and low-carbon industries in Shanghai.
Two urgent tasks
Where is the entry point for the comprehensive green transformation of Shanghai's industrial development? What is the main gripper?
In February 2024, General Secretary Xi Jinping pointed out at the fourth meeting of the Central Committee for Comprehensively Deepening Reform that it is necessary to improve fiscal, tax, financial, investment, price policies and related market-oriented mechanisms to support the green and low-carbon transition, and provide policy support and institutional guarantees for the green transition. The 2024 government work report also makes it clear that it is necessary to improve the fiscal, tax, financial, investment, price policies and related market-oriented mechanisms to support green development, promote the development of the waste recycling industry, promote the research and development and application of advanced technologies for energy conservation and carbon reduction, and accelerate the formation of a green and low-carbon supply chain. It can be seen that improving the market-oriented allocation system of resources and environmental factors, improving the market-oriented mechanism for the trading of environmental rights and interests in pollution reduction and carbon reduction, such as pollutant discharge rights, carbon emission rights, energy use rights, water rights, green certificates and CCER, and giving full play to the decisive role of the market in resource allocation, will be the focus of the comprehensive green transformation of industrial development under the dual carbon goals in the future.
Promoting the comprehensive green transformation of industrial development with a diversified market-oriented mechanism faces two urgent tasks.
First, the market-oriented mechanism should be used to guide various factors of production to concentrate in green, low-carbon and high-tech industries. To achieve the goal of carbon peak and carbon neutrality, technology is the fundamental foothold. China's photovoltaic, hydropower, and coal chemical industry are in the leading position in the world, but there is little investment in low-carbon technology innovation and research, the forward-looking and systematic layout of disruptive key technologies is insufficient, and the R&D and industrialization of controllable nuclear fusion, new hydrogen energy, advanced energy storage technology, carbon capture, utilization and storage (CCUS) and other technologies are progressing slowly. At the same time, the low-carbon transformation and zero-carbon substitution of carbon-intensive industries are also facing the problem of insufficient technical reserves. In July 2023, the National Conference on Ecological and Environmental Protection emphasized that it is necessary to strengthen scientific and technological support, promote self-reliance and self-improvement in green and low-carbon technologies, take climate change response and new pollutant control as key areas of national basic research and scientific and technological innovation, and pay close attention to key core technologies.
Second, use market-based mechanisms to deal with the adverse effects of international carbon tariffs and new rules on information disclosure. Major changes are taking place in international competition rules, and European and American countries continue to use industry, trade, technology and other means to hinder the mainland's industrial chain from climbing to the high-end. With the introduction of regulatory rules for product carbon footprints such as the European Union's Carbon Border Adjustment Mechanism (CBAM), the New Battery Act, and the U.S. Clean Competition Act (Act), the lack of national standards for product carbon footprint accounting in mainland China has become more and more prominent. To this end, on March 16 this year, Shanghai formulated and released the "Action Plan for Accelerating the Establishment of a Product Carbon Footprint Management System and Building a Green and Low-Carbon Supply Chain in Shanghai".
Four focus points
To promote the comprehensive green transformation of industrial development with a diversified market-oriented mechanism, it is necessary to identify the following four focus points.
First, accelerate the establishment of a unified and standardized carbon emission statistical accounting system. The formation of carbon footprint requires the measurement of product carbon emissions, and carbon emission statistical accounting is a complex system engineering. There are still problems in the statistical accounting of carbon emissions in mainland China, such as unreliable data quality, inconsistent accounting methods and inconsistent statistical standards, which limit the smooth development of carbon emission management. The key to strengthening the basic capacity building of carbon emission dual control lies in improving the basic capacity of government departments at all levels in carbon emission data accounting, so as to "know in mind". Statistical departments at all levels have further improved the basic statistical system and gradually incorporated industrial process emissions, so as to ensure the credibility and comparability of carbon emission data. Break the data silos, open up the converged data system, provide technical parameters for different levels of carbon accounting, and improve the accuracy of accounting. Promote the decomposition and assessment of carbon emission targets, explore supporting systems such as carbon budgets and carbon disclosures, and implement the dual control goals of carbon emissions. At the same time, due to the small number of greenhouse gas management standards such as carbon emission accounting, there are still a large number of standards in the fields of renewable energy, carbon capture, utilization and storage (CCUS), and carbon sinks.
Second, improve the market regulation mechanism to encourage green and low-carbon technology innovation. Although various localities are actively exploring policies such as fiscal and tax incentives, income distribution systems, green financial products and green procurement to encourage green technology innovation, the R&D and promotion of green and low-carbon technologies still need to encourage more social capital to participate and stimulate the enthusiasm of financial institutions and technology R&D enterprises in financing models and financial instrument innovation. On January 22, 2024, the National Certified Emission Reduction Mechanism (CCER) was officially relaunched, and the first batch of CCER methodologies only covered CSP and offshore wind power methodologies, providing support for these two types of cutting-edge technologies and industries that are not yet mature but are important for carbon neutrality. In March 2024, the "Implementation Plan for the Collection and Promotion of National Key Low-carbon Technologies" clearly put forward the key directions of key low-carbon technologies in the mainland. The CCER mechanism can actively promote the introduction of new CCER methodologies and promote the development of green and low-carbon technologies in accordance with the key directions of scientific and technological development. At the same time, government investment funds such as the National Green Development Fund have given full play to their leverage to support green and low-carbon technologies that are in line with future development but have low technological maturity.
Third, we need to enhance the role of information disclosure, ESG evaluation and green consumption in promoting the construction of green industrial and supply chains. On the one hand, through digital empowerment, we will accelerate the establishment of a standard measurement system for product carbon footprints and improve the carbon footprint database management service system, so as to promote the international and domestic convergence and mutual recognition of carbon footprints. Shanghai can play the role of the Yangtze River Delta Green Supply Chain Alliance to guide and help enterprises and their suppliers follow the concept of green and low-carbon development, and promote enterprises to become the main body of green and low-carbon actions. On the other hand, the effective connection between carbon label certification, product carbon footprint information, ESG and green consumption forces enterprises to actively participate in the carbon reduction practice of the whole industry chain. At present, the consumption of green products in green procurement is less than 4%, and comprehensive and transparent product environmental information disclosure is conducive to cultivating consumers' awareness of green consumption, and by improving the overall level of social green consumption, it will affect the carbon emission management in the field of circulation and production from green consumption. At the same time, corporate information disclosure, ESG rating, and carbon labeling should also be regarded as an important basis for the adoption of green finance and transition financial services. Shanghai can play an active role in the construction of the national carbon market trading system and the first batch of pilot projects for climate investment and financing in Shanghai Pudong, explore the construction of regional climate investment and financing mechanisms, and promote the carbon market and carbon finance as important policy tools to help the construction of green industrial and supply chains.
Fourth, promote the construction of the trading market and steadily promote the construction of the financial attributes of the carbon market. Article 22 of the Regulations of the State Council on Ecological Protection and Compensation, promulgated in April 2024, stipulates that the trading mechanism for carbon emission rights, pollutant discharge rights, water rights, and carbon sink rights and interests should be improved. To promote the construction of the trading market, we can rely on the national carbon trading market to promote the integrated development of multiple trading markets. The first is to promote the coordinated development of trading rules, trading systems and data, and improve the construction of trading platforms. Taking the carbon market as an example, at present, the mainland's national carbon market only includes the power industry, with a single trading product and only performance-based spot trading. Therefore, it is necessary to support more key areas, industries and emitting entities to participate in national carbon emission trading, strengthen the allocation and management of carbon emission allowances, and gradually include institutional investors, so as to enhance the activity and market liquidity of the carbon trading market. The second is to increase the supporting role of the financial factor market in the construction of the mainland carbon market, and enrich the financial products and trading methods linked to carbon emission rights. For example, Pacific Property Insurance Co., Ltd., Shanghai Environment and Energy Exchange, Shenergy Carbon Technology, and Bank of Communications carried out cross-domain cooperation of "carbon quota + pledge + insurance", and landed the country's first carbon emission quota pledge loan guarantee insurance, effectively revitalizing carbon assets. Third, in accordance with the requirements of national policies, we will actively promote the coordination and convergence of the carbon market with the green electricity and green certificate market, CCER and other environmental rights and interests markets, financial factor markets and other related markets, explore and develop cross-market products, and provide support tools for reducing the production and operation risks of enterprises. In various market dimensions, it is interconnected, complementary and coordinated to form a fully functional market system.
(The author is a professor at China Executive Leadership College in Pudong, director of the "Double Carbon" Research Center, and a researcher at the Shanghai Xi Jinping Research Center for Socialism with Chinese Characteristics for a New Era; This paper is the interim result of the National Social Science Foundation project "Research on Multi-objective Synergy and Policy Effectiveness Evaluation of Green Development in the New Era")
