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China can build 'green economy' by 2030

By Zhao Tingting (chinadaily.com.cn)
Updated: 2009-02-26 17:08

China has the potential to build a "green economy" over the next decades, said a report on energy and the environment by McKinsey & Company, a global management consultancy firm.

Related readings:  Greener growth top priority for policy makers  Environmental forum urges green nation  Pilot projects mapped for green economy  Environmental labeling to promote China's green economy

By 2030, China is expected to reduce its oil imports by up to 30 to 40 percent, its coal demand by 40 percent and greenhouse gas emission by 50 percent, through investing in technologies that are commercially available and those not widely understood or deployed today, said the report.

Transforming China into a "green economy", McKinsey estimated that from now until 2030, up to 1.5-2 trillion yuan on average would be needed in additional investment each year to effectively deploy the green technologies needed to achieve the substantial improvements.

On an annual basis, the investment required is equivalent to 1.5-2.5 percent of China's GDP, with this spending bringing China enhanced energy security.

For example, by comprehensively rolling out electric vehicles over the next two decades, China could cut its projected demand for imported oil by up to 30-40 percent in 2030.

By significantly ramping up investment in clean energy technologies such as nuclear, wind, solar and hydropower, China could cut its reliance on coal as the source of energy for its power plants from 81 percent of total electricity generation today to 34 percent by 2030.

By comprehensively implementing energy efficiency improvement technologies in the building and industrial sectors, and by actively recovering and utilizing waste and by-products in the industrial sector, China could cut its projected demand for electricity and coal in 2030 by over 10 percent.

Meanwhile, the report revealed that China has consistently improved the "carbon efficiency" of its economy over the past 15 years.

Through a combination of government policies and industry-wide initiatives, China has reduced the amount of carbon dioxide and other greenhouse gases that it produces for every unit of GDP by 4.9 percent each year on average over the past 15 years, compared with just 1.7 percent in the US and 2.7 percent in Germany.

The report was based on McKinsey's study of 200 technologies that China could deploy to improve energy efficiency and reduce emissions and pollution in six key sectors, including power, automobiles, heavy industry and waste management, buildings, agriculture and forestry, urban design and consumer behavior. More than 100 experts from government, business, and academia were interviewed for the report.