'Fundamental change' in investment, innovation and systems highlightedThe transition toward carbon neutrality is a paradigm shift and policymakers have to bring this concept into the policy-forming process while they are thinking about how to balance development and climate objectives, experts said.Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, said: "The paradigm shift is, we believe, the growth story of the 21st century. It is going to give us resource efficiency much better than the wasteful approaches of the past … At the heart of that story of a fundamental change, there are investment, innovation and the restructuring of key systems — energy, transport, cities and land, as well as manufacturing as a whole."On the global stage, China's examples are enormously important and problems that China will solve will be instructive to other economies. China's scale will help drive down costs for the world as it has done with solar panels. The country will invest in new technologies and new activities around the world. In addition, it will help influence international institutions as the world will need to expand a multilateral development banking system rapidly to contribute to financing for investment, said Stern at a recent high-level workshop discussing pathways to carbon neutrality in China.Carbon neutrality is not just a technology issue or an energy issue but a fundamental change of everything, said Zhu Min, former deputy managing director of the International Monetary Fund and former deputy governor of the People's Bank of China."We defined five fundamental principles for policies to guide a transition toward carbon neutrality in China. First, we have to have a broad view using the paradigm shift concept. Second, we have to make China's '1 N' policy framework work in detail and be able to implement it in detail.Third, it is very important to enhance the role of the government in terms of providing guidelines, incentives, a lot of public investment and a policy framework. Fourth, we have to let the market better work because the market still plays a principal role in reallocating resources. Fifth, the balance of transformation, coordination and cooperation is the most challenging and important issue for managing this process," Zhu said at the workshop.Last year, China reaffirmed its efforts to put in place a "1 N" policy framework for carbon peak and carbon neutrality.The framework consists of a guiding document that sets out the overarching principles of all forthcoming policies that aim to facilitate China's carbon peak and neutrality goals, representing the "1", and a series of auxiliary policy documents targeting specific industries, fields and goals, representing the "N"."We have to make this framework workable, letting different companies, different departments and different sectors understand this policy and integrate the policy into their daily activities. We need further detailed plans for the '1 N' policy framework, making the goals such as emissions, energy consumption and renewable energy goals clear phase-by-phase," Zhu said.He noted that policymakers should also provide proper incentives and measurements through the framework to different parties, regions and sectors so that they will move together for the same purpose.Reducing China's greenhouse gas emissions while continuing to grow and develop will involve fundamental structural changes to the economy, including China's energy and transport systems, cities and land use patterns. Achieving this transformation is going to be very important to securing long-term development not only in China but the world. It will not be easy, however, especially given the short-term economic challenges, including the impact of the COVID-19 pandemic and the need to recover, said Manuela V Ferro, World Bank regional vice-president for East Asia and the Pacific."Directing fiscal stimulus toward greener investments rather than the traditional investment in infrastructure would support short-term recovery but also contribute to a medium-term shift toward a more inclusive and more sustainable growth. So, a well-designed and well-coordinated green transition could catalyze this shift and unlock new sources of economic growth, innovation and job creation, with the added benefit of lowering Chinese reliance on imported fuels and enhancing China's energy security," Ferro said.'Fundamental change' in investment, innovation and systems highlightedThe transition toward carbon neutrality is a paradigm shift and policymakers have to bring this concept into the policy-forming process while they are thinking about how to balance development and climate objectives, experts said.Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, said: "The paradigm shift is, we believe, the growth story of the 21st century. It is going to give us resource efficiency much better than the wasteful approaches of the past … At the heart of that story of a fundamental change, there are investment, innovation and the restructuring of key systems — energy, transport, cities and land, as well as manufacturing as a whole."On the global stage, China's examples are enormously important and problems that China will solve will be instructive to other economies. China's scale will help drive down costs for the world as it has done with solar panels. The country will invest in new technologies and new activities around the world. In addition, it will help influence international institutions as the world will need to expand a multilateral development banking system rapidly to contribute to financing for investment, said Stern at a recent high-level workshop discussing pathways to carbon neutrality in China.Carbon neutrality is not just a technology issue or an energy issue but a fundamental change of everything, said Zhu Min, former deputy managing director of the International Monetary Fund and former deputy governor of the People's Bank of China."We defined five fundamental principles for policies to guide a transition toward carbon neutrality in China. First, we have to have a broad view using the paradigm shift concept. Second, we have to make China's '1 N' policy framework work in detail and be able to implement it in detail.Third, it is very important to enhance the role of the government in terms of providing guidelines, incentives, a lot of public investment and a policy framework. Fourth, we have to let the market better work because the market still plays a principal role in reallocating resources. Fifth, the balance of transformation, coordination and cooperation is the most challenging and important issue for managing this process," Zhu said at the workshop.Last year, China reaffirmed its efforts to put in place a "1 N" policy framework for carbon peak and carbon neutrality.The framework consists of a guiding document that sets out the overarching principles of all forthcoming policies that aim to facilitate China's carbon peak and neutrality goals, representing the "1", and a series of auxiliary policy documents targeting specific industries, fields and goals, representing the "N"."We have to make this framework workable, letting different companies, different departments and different sectors understand this policy and integrate the policy into their daily activities. We need further detailed plans for the '1 N' policy framework, making the goals such as emissions, energy consumption and renewable energy goals clear phase-by-phase," Zhu said.He noted that policymakers should also provide proper incentives and measurements through the framework to different parties, regions and sectors so that they will move together for the same purpose.Reducing China's greenhouse gas emissions while continuing to grow and develop will involve fundamental structural changes to the economy, including China's energy and transport systems, cities and land use patterns. Achieving this transformation is going to be very important to securing long-term development not only in China but the world. It will not be easy, however, especially given the short-term economic challenges, including the impact of the COVID-19 pandemic and the need to recover, said Manuela V Ferro, World Bank regional vice-president for East Asia and the Pacific."Directing fiscal stimulus toward greener investments rather than the traditional investment in infrastructure would support short-term recovery but also contribute to a medium-term shift toward a more inclusive and more sustainable growth. So, a well-designed and well-coordinated green transition could catalyze this shift and unlock new sources of economic growth, innovation and job creation, with the added benefit of lowering Chinese reliance on imported fuels and enhancing China's energy security," Ferro said.
