(Originally published on 04/15/2010)

Introducing an evolutionary low-rate carbon tax system in sectors where costs of carbon reduction are not high or perhaps even negative and then earmarking the revenue to subsidize R&D on state-of-the art technologies, is one of the urgent policy recommendations advanced by the latest China Human Development Report entitled, China and a Sustainable Future, Towards a Low Carbon Economy and Society. Commissioned by the United Nations Development Programme (UNDP) in partnership with Renmin University of China, the publication suggests that a gradual and smart shift to low carbon development is the best option in allowing China to better balance further economic development with environmental sustainability. Given the inherent challenges and opportunities that lie ahead, selecting the right policies at the right times will be a key component in advancing the country’s future progress.

By tackling low carbon challenges, China can safeguard the gains it has achieved in the areas of economic development and poverty reduction while laying a strong foundation for future success in the years ahead. The report’s recommended urgent policies include: 

* Strengthening coordination and integration of policies that deal with poverty alleviation, improvement of living standards through the provision and improvement of basic infrastructure, services and social security, reduction of GHGs, and adaptation to climate change;
* Introduction of a cap and trade system in the medium and long term based on a national carbon intensity target with an enhanced system for monitoring and enforcement, and enhanced capacity of governments, enterprise, and consumers; and
* Defining the responsibilities of enterprises, the central government and local governments in emissions control on the basis of their socio-economic functions, legal authority, their capacities, and the direct role they play in emitting greenhouse gases.

“Anyone who has witnessed this year’s drought in south-west China will be acutely aware of the potential for climate change, if left untackled, to threaten the livelihoods of the population, particularly the country’s poorest and most vulnerable communities,” said Khalid Malik, UN Resident Coordinator and UNDP Resident Representative in China. “Fortunately, China’s leadership attaches great importance to achieving balance between the economy and the environment,” he continued.

In addition to the suggested urgent measures, a broader menu of policies regarding mitigation, carbon sink enhancement, the promotion of innovation and technology development, and targeting regional needs are also highlighted throughout the report. For example, the publication suggests that policymakers strengthen the coordination and integration of economic development, low carbon economy, and human development strategies in more developed regions of the country while focusing more on local economy efforts in less developed regions. 

“Through these incentives and by further investing in a green economy which is underpinned by emerging green technologies, China could leapfrog over decades of traditional development based on high polluting fuels,” stated Malik. 

Similarly, the report also recommends that China strengthen its research programmes on the benefits of a low carbon economy and society as a whole. The publication concludes that such an initiative yields at least two important results: a better grasp of the magnitude and nature of the climate change problems, and a better basis on which to formulate targeted policies with greater impact. 

Although challenges will arise from the relatively long period of time needed for identifying, formulating, approving, and issuing strategies and initiatives; the selection, timing and sequencing of low carbon policies will play a critical role in ensuring China’s smooth transition to a more sustainable and successful economy. 

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ABOUT THIS REPORT: Since UNDP produced the first global Human Development Report (HDR) in 1990, HDRs have emerged as its flagship publication and one of UNDP’s most important policy analysis and advocacy tools. Since 1997, China has produced six National Human Development Reports (NHDRs). These NHDR exercises have proven to be successful and valuable, playing a unique role in UNDP’s endeavor to influence China’s development policy-making. Over the years, China’s NHDRs have also become useful resources for academics and UNDP China’s development partners worldwide. These publications are gradually evolving into one of the principal instruments for UNDP’s collaboration with Chinese national think tanks, policy makers and development researchers. 

Download the report: English version Chinese version

UNDP China took the initiative to focus this National Human Development Report on the topic of “Sustainable Future: Towards a Low Carbon Economy and Sustainable Society”. By analyzing both the risks and potential benefits to China of a shift to a low carbon economy and society, it is hoped that this report will provide a considered contribution to China’s rapidly evolving policies in this area. The report highlights that, if China can fully grasp the opportunities at hand, it will be possible to move to a society which is not only environmentally sustainable, but which creates the conditions for greater job creation, greater resource efficiency and energy security, enhanced food security, and better health outcomes for its people; a society which, in line with China’s own Xiaokang vision, is well balanced and moderately prosperous.