Emission cuts won’t hold economy back

According to the agreement recently reached by China and the US on greenhouse gas emission reduction, China pledged to cap its carbon emissions by 2030. Some hold that the promise will bring huge challenge and pressure to the country's employment and local fiscal system, but my research indicates that this is not the case. The target may well be achieved earlier than 2030.

Reaching a peak of carbon emissions has to be based on a peak of coal consumption, and then reduced emissions from coal will be used to offset a growth in the carbon emitted by oil and natural gas.

As the whole country is choked by smog, finding substitutes for coal has become critical to clean up the air. This is consistent with reducing carbon dioxide emissions.

Research shows that China's coal demand will peak by 2023 under the current pace of tackling air pollution, and accordingly, carbon emissions will then hit the peak around 2028. Many factors have a bearing on the peaking time of carbon emissions, including energy price reform, carbon tax and trade, but smog control is most directly connected. Therefore with stricter measures to deal with the smog, China can reach the peak of coal use and carbon emissions by as early as 2020 and 2024 respectively.

Are there any difficulties in this process? Generally, a peak of coal demand depends on two elements. There should be sufficient clean energy to substitute for coal and meet the energy demands of the economy. Moreover, cost has to be considered. Substituting coal with natural gas in the short term or other clean energy in the long run will entail an increase in the cost, as these substitutes are all more expensive.

China also pledges to make non-fossil fuels above 20 percent of its energy mix by 2030, which were only 9.8 percent of the total in 2013. To this end, developing nuclear power is critical, as it can satisfy both the energy demand and the cost issue.

By the end of 2013, China's installed nuclear power capacity was 14.61 gigawatts. Nuclear power represented only less than 2 percent of electricity generated, with 19 percent in the US and even bigger gap compared with the situation in France.

Currently hydropower, wind power, solar power, biomass and geothermal energy only make up a small percentage of China's primary energy, which is unlikely to increase dramatically in the future. So it has become an unavoidable option for China to develop nuclear power.

A portfolio of policies is necessary to address air pollution and make an early peaking of carbon emissions. In the short term, there should be an environmental threshold and indicators as well as energy price reform to reflect the cost of environment and resource scarcity to make coal demand peak early. In the long run, technological advances and innovation in business models are needed to address the high cost of coal substitutes.

When connecting smog control with the peak of carbon emissions, the latter will be reached by 2030 after China puts enough efforts into tackling air pollution. There will be no extra pressure on economic development.