Remarks at the Sustainability Forum Hosted by the New Zealand Embassy in Beijing
June 28, 2023
Hon. Trade and Agriculture Minister, O’Connor;
Hon. Tourism Minister, Henare
Distinguished guests, ladies and gentlemen – good afternoon.
We meet in China at a fascinating and critical moment.
In the 40 plus years since its ‘Reform and Opening-up,’ China has come a long way.
Now the second-largest economy, it remains the main contributor to global growth, transforming China and beyond.
This includes progress towards the Sustainable Development Goals. Since 1978, China has lifted more than 770 million people out of poverty - almost three quarters of all people brought out of extreme poverty globally.
Rapid growth driven by fossil fuels however also means that China has become the world’s largest emitter, accounting for one third of global GHGs emissions .
President Xi’s pledge to peak China’s emissions before 2030 and achieve carbon neutrality by 2060 seeks to address this.
Since the announcement of these so-called dual carbon goals two years ago, the Government has issued more than 60 policy documents, which form the foundation of China’s low-carbon transition architecture, under the “1+N” policy system.
Concrete actions have followed. Last year, China installed around 125 GW of new solar and wind capacity, more than double that installed in the EU. Non-fossil fuel sources now account for more than half its total energy generation capacity, meeting its 2025 target two years early.
China also leads on a range of technologies critical for renewable deployment, such as long-distance energy transmission and storage, along with battery technologies.
It’s also at the forefront in transport electrification, accounting for around 60 percent of electric car sales globally in 2022. China also plans for at least 70 percent of domestic urban travel to be eco-friendly by 2030.
Internationally, China announced it will stop financing coal power plants abroad, to promote green growth in developing countries. Upholding such commitments is critical, as 63 percent of China’s overseas energy engagements are still linked to fossil fuels. This risks overshadowing China’s increased emphasis on green energy overseas investments that rose by 50 percent in 2022 from 2021.
China’s stewardship was also crucial at the recent UN Biodiversity Conference, facilitating the adoption of the Kunming-Montreal Global Biodiversity Framework.
Through this journey, UNDP has assisted China’s shift from fossil fuels, promoting innovation, efficiency and nature-based solutions.
We played a key part, for example, in developing China’s hydrogen and fuel-cell industry, with the Ministry of Science and Technology and others. UNDP also supports new technology to boost energy efficiency, particularly in public buildings. Additionally, we’re working to leverage nature-based solutions to absorb emissions and promote biodiversity conservation, by protecting and expanding carbon sinks.
To support the SDGs globally, UNDP offers our platforms for two-way dialogues to share technology, know-how and best practices. We also facilitate South-South and Trilateral Cooperation for peer-to-peer support of partner countries to achieve their SDG priorities, while assisting countries of the global South to access China’s expertise, experience and financing. Within China, we also inform policies and practices of Chinese aid providers, to ensure demand-driven engagements that support the low-carbon transition and the SDGs.
To accelerate low-carbon sustainable development, China – as all countries – must decarbonise every sector, including energy and other hard-to-abate industries, as well as phase-out fossil fuels, while also expanding renewables and pursuing efficiency gains, to meet the increasing energy demands of its growing economy. To be socially and politically acceptable, such a transition must also be just and fair for vulnerable people.Beate Trankmann, Resident Representative, UNDP China
All this, however, may not be enough to meet China’s carbon goals and keep its trajectory within in the 1.5 degrees target of the Paris Agreement.
Like other countries, China faces major energy and financing challenges.
First, a fast-growing demand for energy that will continue to be highly-reliant on coal in the short term.
As of 2022, 56.2 percent of China's energy still comes from coal. Energy and other commodity shortages globally last year, exacerbated by the Ukraine war and geopolitical divides, highlight the challenge of balancing short-term priorities – like energy security and economic stability – with long-term sustainable development.
For example, new coal power permits issued in China last year were at their highest since 2015, while 50 GW of new coal plants started construction - up 50 percent from 2021.
To accelerate low-carbon sustainable development, China – as all countries – must decarbonise every sector, including energy and other hard-to-abate industries, as well as phase-out fossil fuels, while also expanding renewables and pursuing efficiency gains, to meet the increasing energy demands of its growing economy.
To be socially and politically acceptable, such a transition must also be just and fair for vulnerable people.
Secondly, increased levels of finance need to be directed towards low-carbon development
The World Bank estimates about USD 14 trillion of cumulative additional investments in China’s power and transport sectors are needed up to 2060 to achieve carbon neutrality and its Nationally Determined Contributions. Annually, this equates roughly to 2% of current GDP.
And thirdly, we must step-up international sustainability cooperation
Firstly, for a just, low-carbon transition:
Policy action is critical. China’s coal industry employs 3.4 million people. Dismantling it will disrupt livelihoods in the short-term. The IEA estimates that up to 2.3 million fossil fuel jobs may be lost.
At the same time, however, roughly 3.6 million new clean energy jobs may be created by 2030.
UNDP works with policymakers to ensure that vulnerable people and places are protected when entire sectors are phased-out. Retraining various groups, including women, in new economy sectors that will account for much of GDP and high paying jobs of the future, is critical to leaving no one behind. Where retraining is not possible, compensation is key, including through unemployment insurance.
Second: to close the financing gap for a just, low-carbon transition, Chinese authorities have developed a comprehensive body of guidelines and regulations since 2016, to redirect private and corporate finance towards green sectors. From barely any issuance seven years ago, China is now the largest green bond issuer. China and the EU are also driving efforts to harmonise finance standards, exemplified by their Common Ground Taxonomy-Climate Change Mitigation, the first comprehensive step towards mutual approaches to green financing.
To further accelerate financial flows to where they are most needed, strengthening impact measurement, disclosure and reporting is critical.
To this effect, UNDP has been joining hands with different partners to foster sustainable financing. Examples range from:
- Supporting the issuance of SDG bonds in China, such as with New Development Bank and financial regulators;
- Showcasing investment opportunities that generate both economic and SDG impact through SDG Investor Maps; and
- Promoting UNDP’s Biodiversity Finance Initiative, for nature-based solutions and biodiversity finance plans. In Shanghai, green finance regulations are now incorporating biodiversity considerations.
Besides boosting private finance and regulations, public finance must also be greened. This includes repurposing harmful subsidies, to make room for pro-nature and pro-climate finance. Globally, subsidies for fossil fuels, agriculture and fisheries now exceed 7 trillion dollars per year, about 8 percent of global GDP.
Thirdly, we need more international exchanges, to share sustainability strengths across countries: given the scale of transformation required to achieve the SDGs, no country can do this alone.
New Zealand’s green development transformation is remarkable, including working towards a carbon-neutral public sector by 2025. Many lessons around challenges and opportunities, along with best practices, can be shared, including in areas such as sustainable farming and eco-tourism, where China is expanding.
Meanwhile, China can share its world-leading renewable energy technology, experiences and know-how.
At the same time, broadening partnership platforms that build on both countries’ strengths and complementarities would help promote sustainable development in third countries, like Small Island Developing States (SIDS), or ASEAN members.
Whether we live in China, or New Zealand, we share one home: our Earth. And we must act as one now to save it.
As the saying goes here, “功在当代、利在千秋” – meaning: “efforts we are making now will benefit not only this generation, but many to come”. I believe there is a similar saying in Maori : “for us, and our children after us” – a shared hope, 11 thousand kilometers away, to leave this world a better place for those who follow.
I hope today inspires closer cooperation to achieve that.
Thank you for inviting me to speak.