Abstract: Since the reform and opening-up in 1978, China’s economy has been growing for decades. At the same time, the total energy consumption and carbon dioxide emissions are increasing, which cause the dual pressure of energy supply and ecological environment. With the development of technology, the adjustment of energy consumption structure, Documento de Trabajo and the transformation and upgrading of industrial structure, China has put great efforts Serie Política de la Competencia y Regulación on the increasing of energy efficiency and decreasing of fossil energy consumption, which Número 61 / 2020 results in the decline of carbon intensity and the gradual decoupling of China’s economic growth and carbon emissions. It is significant to study the main reasons for the decoupling between China’s economic growth and carbon emissions, and to discuss the measures for the decoupling is momentous for exploring a green, low-carbon and sustainable development path for future in China. A Study on China’s Measures for the Decoupling of the Economic Growth Keywords: Decoupling; economic growth; emission; energy consumption. and the Carbon Emission Rao Lei Gao Min Partners of the Jean Monnet Network Jean Monet Network EU-China: Comparative experiences and contributions to global governance Chinese Academy of Social Sciences Fudan University College London Université Catholique in the fields of climate change, trade University de Louvain and competition Real Instituto Universitario de Estudios Europeos ISBN: 978-84-17385-95-8 Ref. 587904–EPP–1–2017–1-ES-EPPJMO-NETWORK Universidad CEU San Pablo Avda. del Valle 21, 28003 Madrid Teléfono: 91 514 04 22 | Fax: 91 514 04 28 [email protected], www.idee.ceu.es Documento de Trabajo Política de la Competencia y Regulación Número 61 / 2020 A Study on China’s Measures for the Decoupling of the Economic Growth and the Carbon Emission Rao Lei*1, Gao Min2 1,2 School of Economics, Sichuan University, Chengdu 610065, Sichuan, China. * Corresponding to: RAO Lei, School of economics, Sichuan University, No. 24, Section 1 South of first Ring Road, Chengdu 610065, Sichuan, China. El Real Instituto Universitario de Estudios Europeos de la Universidad CEU San Pablo, Centro Euro- peo de Excelencia Jean Monnet, es un centro de investigación especializado en la integración euro- pea y otros aspectos de las relaciones internacionales. Los Documentos de Trabajo dan a conocer los proyectos de investigación originales realizados por los investigadores asociados del Instituto Universitario en los ámbitos histórico-cultural, jurídi- co-político y socioeconómico de la Unión Europea. Las opiniones y juicios de los autores no son necesariamente compartidos por el Real Instituto Uni- versitario de Estudios Europeos. Los documentos de trabajo están también disponibles en: www.idee.ceu.es Serie Política de la Competencia y Regulación Documentos de Trabajo del Real Instituto Universitario de Estudios Europeos A Study on China’s Measures for the Decoupling of the Economic Growth and the Carbon Emission Cualquier forma de reproducción, distribución, comunicación pública o transformación de esta obra solo puede ser realizada con la autorización de sus titulares, salvo excepción prevista por la ley. Diríjase a CEDRO (Centro Español de Derechos Reprográficos, www.cedro.org) si necesita escanear algún fragmento de esta obra. © 2020, Rao Lei, Gao Min © 2020, por Fundación Universitaria San Pablo CEU CEU Ediciones Julián Romea 18, 28003 Madrid Teléfono: 91 514 05 73, fax: 91 514 04 30 Correo electrónico: [email protected] www.ceuediciones.es Real Instituto Universitario de Estudios Europeos Avda. del Valle 21, 28003 Madrid www.idee.ceu.es ISBN: 978-84-17385-95-8 Depósito legal: M-26147-2020 Maquetación: Gráficas Vergara, S. A. Contenido 1. INTRODUCTION ......................................................................................................................................... 5 2. LITERATURE REVIEW ................................................................................................................................. 5 3. THE DECOUPLING PROCESS OF CHINA’S ECONOMIC GROWTH AND CARBON EMISSION ......... 6 3.1. The decoupling turning of China’s economic growth and carbon emission ....................................6 3.1.1. China’s economic growth coupling the increasing growth rate of energy consumption ........6 3.1.2. China’s economic growth coupling with the slowdown growth rate of energy consumption .9 3.2. The causes for the decoupling of China’s economic growth and carbon emission .........................10 3.2.1. The decrease of carbon intensity as the most apparent cause ..................................................10 3.2.2. The energy saving and carbon reduction policies as the most important cause .....................11 4. THE MEASURES FOR THE DECOUPLING BY DECREASING CARBON INTENSITY IN CHINA ......... 12 4.1. The measures on energy-activities for the decrease of carbon intensity in China ..........................12 4.1.1. Adjustment of industrial structure to decrease carbon intensity..............................................12 4.1.2. Optimizing of Energy Structure to decrease carbon intensity ..................................................13 4.1.3. Improvement of energy efficiency to decrease carbon intensity ..............................................15 4.2. The measures on carbon reduction for the decrease of carbon intensity in China .........................16 4.2.1. China’s ETS as a significant measure for the carbon reduction ................................................16 4.2.2. China’s pilot ETS test providing successful experience for the implementation ....................17 4.2.3. EU-China cooperation in the emission reduction .....................................................................19 CONCLUSION ................................................................................................................................................... 20 BIBLIOGRAPHY ................................................................................................................................................ 21 1. Introduction China’s economy has been developing at a continuously rate of the average annual growth rate of 9.36% since the economic reforms and open-door policies in 1978, which has become the fastest growing economy in the world. China’s GDP in 1978 was 367.87 billion yuan, which accounted for 1.8% of the world economy1, while in 2019, China’s GDP has exceeded 99 trillion yuan, which is expected to account for more than 16% of the world economy2. However, since the foundation of China’s national economy was weak and the economic development lagged far behind western developed countries at the time of 1978, China has started with the extensive economic growth mode based on the low level of technologies, resulting excessive energy consumption, causing the rapid increase of carbon dioxide emissions and environmental pollution from then on. As China has made considerable progress in the economic development and technologies, the awareness of energy saving and emission reduction has been gradually enhanced as well. At present, China is at a critical period of national economic development, accompanying with the reduction of the consumption of fossil energy and reducing carbon emissions. As a big and responsible country, China has made a commitment to reduce carbon dioxide emissions per unit of GDP by 40% to 45% by 2020, based on the level of that in 2005, and has successfully fulfilled the commitment in advance. Then China has announced to reach the peak of CO2 emissions at around 2030 and strive to achieve it even ahead of that time. Another commitment for 2030 is that the CO2 emissions per unit of GDP in China is to be reduced by 60% to 65% than that in 20053. Therefore, it is significant to study the causes and the measures for the decoupling of China’s economic growth and carbon emissions to find out the more efficient measures for the further carbon reduction. 2. Literature review The current study on the relationship between economic growth and carbon emissions focuses on the following aspects: firstly, using economic analysis tools to study the law between carbon emissions and economic growth Zhang (2013) has used environmental Kuznets curve (EKC) to analyze the relationship between per capita income and per capita CO2 in the study of carbon emissions and economic growth in Beijing. Via EKC hypothesis and the decoupling theory, Zhang et al. (2017) have found that the coordination of carbon emissions and economic growth between EU and other countries is very good, but in the developing countries, such as China and India, it needs to be strengthened. Qi (2018) has analyzed the fluctuation trend of the “expansion connection –weak decoupling– strong decoupling” between China’s economic growth and carbon emissions by using the decoupling model. Secondly, by summarizing empirical data, analyzing empirically the relationship between economic growth and carbon emissions Wang (2010) has analyzed the relationship between energy consumption and economic growth in China, basing on the historical data from 1990 to 2007, and has pointed out that at certain stages, the economic growth and energy consumption can be in absolute decoupling or in relative decoupling. Peng et al. (2011) have has analyzed the relationship between carbon dioxide emissions and economic growth from a national or regional perspective, which shows a weak decoupling phenomenon in China then.