Sustainable Business Focus Group Quarterly Update - Q2 2014

Published on 2014-06-23

How can China meet its 2015 energy targets? - Climate change concerns are driving sustainable business

How can China meet its 2015 energy targets?
Climate change concerns are driving sustainable business

China accounts for around 11% of global GDP but consumes a fifth of the world's energy. Whilst it remains the world's largest emitter of CO2 it has committed to reducing CO2 emissions by 40-45% per unit of GDP below 2005 levels by 2020. The challenge is clear: how can China grow its economy sustainably yet create a structure which will enable growth? It is clear that meeting 2015 targets will be tough.

In order to assist in the achievement of such ambitious targets, the first half of 2014 saw a number of initiatives and agreements which indicate that businesses operating here are going to face tougher implementation of laws together with clean-tech opportunities. Examples have included:

February: China and the United States agreed to work together on initiatives including:, Smart Grids, Carbon Capture Utilization and Storage, and Energy Efficiency in Buildings and Industry.

March: Premier Li Keqiang urged coordinated work on environmental work and economic expansion with a view to creating significant business potential for new, green industries.

April: China’s top lawmakers, in response to achieving challenging targets, recommended tougher enforcement of controls and harsher penalties for companies who disregard environmental standards.

China aims to cut energy consumption by more than 3.9% in 2014 .and there are plans to cut steel production capacity by a total of 27 million tonnes, reduce cement production by 42 million tonnes and decommission 50,000 small coal-fired furnaces. China also launched its first carbon-linked financial product, a debt note linked to the performance of carbon offsets on the Shenzhen Emissions Exchange.

As it strides to meet its targets, impact will be felt by businesses in the form of tougher enforcement of regulations. Meanwhile, technology which can support these environmental targets will be welcomed.

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