The Chinese economy would benefit from a faster switch to renewable energy and a reduction in carbon emissions. A study launched in Beijing by the The Global Commission on the Economy and Climate, says a low-carbon development path is now “unavoidable for China”. The good policy design could limit the cost of peaking carbon emissions by 2030 to less than 1% of GDP. If the associated benefits of cleaner air and better health are taken into account, moreover, even that cost could largely be cancelled out. The report assessed that if China maintains 7% growth but allocates 1% of GDP to spending on energy-saving and developing new energy technology, it will be much easier to improve China’s environment than under the low-growth scenario. The findings also have implications for China's air quality. In fact if energy-saving and emissions-reduction efforts continue unchanged, almost half of Chinese cities may still be afflicted by poor air quality in 2030. The report calculates that, if energy-saving and emissions-reduction measures are accelerated, China’s carbon emissions from energy would peak around 2030 and start to fall soon after, while 2030 carbon intensity would be 58% lower than in 2010. Add in strict rules on cleaning up air pollution at the point of release and structural reforms and by 2030 all Chinese major cities could enjoy air up to quality standards. The current investment-driven model of economic growth is unsustainable; while the economic drag of resource constraints is already becoming apparent. If China cannot mitigate that through new technology and efficiency gains, it may fall into the middle-income trap of low-speed growth. Following the joint China-US Statement on Climate Change, the report recommends imposing initial emission caps only on energy-hungry sectors with surplus capacity, and in the economically developed east of the country. First, coal consumption should be brought under control, and new and renewable energy sources will become the economic growth points of the future. Finally, the fossil fuel price reforms should be implemented alongside controls on greenhouse-gas emissions and total energy consumption. These reforms would account for the external environmental costs of fossil fuels and gradually create the market environment for development of clean and renewable energy sources. A competitive market would encourage companies to invest in low-carbon technology and stimulate innovation and development in the low-carbon technology sector. The gLAWcal team EPSEI project Monday, 24 November 2014 (Source: China Dialogue)