The Low-carbon Economy Is a High Global Priority

Zhiyan Yu, 17, has a deep passion. She’s a tireless champion of the low-carbon economy, which is an economy based on low-carbon power sources that don’t release carbon dioxide and other greenhouse gases into the air. A student at Guangdong Experimental High School in China, Yu first discovered the low-carbon economy while attending a Model UN event in 2016. Immediately, she was hooked. She and a team of other students started a low-carbon economy institute to generate interest among their classmates, soon spreading the word through a national business summit that Yu attended as a member of her school’s business club. And since then, she says that she has raised 70,000 yuan (about $10,000 USD) through crowdfunding to start the Beijing Chimaira New Energy Co.

“In the past two years, we have focused on spreading the idea of the low-carbon economy to high school and undergraduate students. And now we are searching for solar energy projects for the business,” notes Yu, who traveled to Washington, D.C. this June to attend the U.S. Energy Information Administration’s Global Energy Conference. “We have studied everything from the pioneering background of low-carbon economics to the low-carbon economic model, from the learning of environmental technology to how to estimate carbon emissions.”

Yu’s dedication to low-carbon economics is nothing if not timely. Countries around the world are focused on the threat of global climate change and how to achieve a low-carbon economy, while also taking advantage of the innovation needed to build and implement new energy technologies and strategies. Of course, they are thinking of the health of the planet. And there is also money to be made. The Global Commission on the Economy and the Climate announced in a recent study that action on climate change could contribute an extra $26 trillion to the world economy by 2030 and generate more than 65 million new low-carbon jobs by the same year.

The 2018 Global Climate Action Summit held this week in San Francisco, Calif., is expected to be a “launchpad for deeper worldwide commitments and accelerated action from countries — supported by all sectors of society — that can put the globe on track to prevent dangerous climate change.”

With all this in mind, here are five truths about the low-carbon economy:

  1. Feeling Energized. We all require energy to function, which we get from resources such as fossil fuels (coal or gas), nuclear fuel or renewable althernative forms of energy. This energy generates power for cars, lights, machines, cell phones, literally everything that keeps society moving, living and producing. The fact that energy is so fundamental to society’s survival leads to great opportunities for exploring how related goods and services are produced and consumed and how governments are forced to choose better policies.
  1. Low-carbon Clarity. A low-carbon economy has a minimal output of greenhouse gas emissions (carbon dioxides), which have been scientifically linked to cause climate change. Climate change refers to the changing weather, including patterns of temperature, precipitation, humidity, wind and seasons. According to the science behind it, climate patterns play an important role in shaping natural ecosystems and the human economies and cultures that depend on them. Reports like Washington State’s “Preparing for a Changing Climate” note that rising levels of carbon dioxide and other heat-trapping greenhouse gases in the atmosphere (think the exhaust emitted by vehicles and factories) have warmed the earth and are causing significant problems like rising sea levels and more extreme storms. Yu has her own definition of the low-carbon economy: “The low-carbon economy is a pathway that leads to technology development, business and employment, and better living quality by less consumption of natural resources and pollution,” she says. “The essence of a low-carbon economy is the promotion of technology efficiency, low-carbon products facing the public, and sustainable global development. In short, while countries are developing, industries are more environmentally friendly.”
  1. A Shift In Power. In the low-carbon economy of the future, most of our energy is likely to come from wind and solar power, also known as renewable energy. In order for a true renewable energy revolution, governments need to cap fossil fuel emissions – designate a level above which emissions can’t exceed. The oil industry opposes this move, but experts believe such drastic measures will lead to more green innovations and emissions-abatement technologies. Many countries are on a roll when it comes to producing their energy from renewables, with Denmark and Germany among the most aggressive. According to the 2018 Sustainable Energy in America Factbook, 18% of all electricity in the U.S. was produced by renewable sources in 2017, including solar, wind, and hydroelectric dams, up from 15% in 2016. China, despite many challenges, is the world’s leading source of renewable investment, as well as the largest solar manufacturer. Its renewable energy sector is reportedly growing faster than its nuclear energy and fossil fuel sectors. Yu is cautiously optimistic about the move toward a low-carbon economy in her country. “Although China’s main GDP [Gross Domestic Product] comes from industrial development, it is still moving toward a low-carbon economy structure step by step. But the low-carbon economy is not just an economic and commercial issue, it is also a social issue. China’s low carbon is not just a simple economic system about energy, environment, and business. It needs industry transformation, promotion of technology efficiency, and adoption for people’s living habits.”
  1. Taxing Choices. Standing in the way of a low-carbon future is the relatively high cost of financing utility-scale renewables, which makes them uncompetitive with fossil fuel power. One answer is to drive up the cost of fossil fuels with a politically difficult carbon tax (which charges a fee on the production, distribution or use of fossil fuels based on how much carbon the combustion emits) or indirectly through cap-and-trade mechanisms. The practice of taxing traditional fossil fuels is designed to promote wind, solar and other renewables and therefore decrease pollution. Yu points out that China does not currently have a carbon tax, adding that the country has only seven carbon trading market experimental cities, which means that most cities in China do not need to pay taxes or purchase carbon-emission permits. Some industry watchers have said that a so-called carbon tax may not be the best solution for a greener planet. Recent research from Serguei Netessine, a Wharton professor of operations, information and decisions, suggests that creating industrial-scale ways to store renewable energy may be a better way to go so you don’t have to rely on large amounts of carbon-emitting energy sources when, for instance, the sun goes down and solar energy is less accessible.
  1. Carbon Footprints. Many companies are finding ways to reduce their carbon footprints, that is to say, the amount of carbon dioxides and other compounds that they release into the environment through the use of fossil fuels. During this week’s 2018 Global Climate Action Summit in San Francisco, Lyft, the on-demand transportation company, announced that it has purchased enough carbon offsets to become a fully carbon-neutral company. A carbon offset is a reduction of carbon dioxide or other carbon emission made in one place to compensate for an emission made somewhere else. Lyft is also committing to purchase enough renewable energy to cover the electricity consumption of every Lyft office space, driver hub and electric vehicle mile. In its blog, Lyft writes, “As world leaders convene in San Francisco to address the urgent threat of climate change, we’re doubling down on our climate and clean energy commitments. And in the months and years ahead, we look forward to working with public and private partners to drive carbon out of the transportation system.”

Ultimately, Zhiyan Yu has learned — through her low-carbon economy work — that it’s important for people to understand the environment fully, along with its importance to society and economic growth. “I have seen many people trying to change people’s ideas and promote the importance and urgency of environmental protection,” she says. “But most people don’t understand why they must protect the environment. They think that climate change has little effect on their own daily lives. If I only get people’s sympathy from the topic that polar bears don’t have homes caused by global warming, it is not enough. [I need to] inform people how promotion of a low-carbon economy can lead to both development of GDP and environmental protection. And thus, people will pay more attention to the environment because it will help them financially.”

She adds that she does feel a sense of responsibility as a teenager invested in the future of her country and the world, and she encourages others to recognize their role as changemakers. “I hope that high school students can shoulder the responsibility of advancing a low-carbon economy in their communities and countries, so that everyone knows that developing a low-carbon economy will not only protect the environment, but also benefit society and its economic development. ”

Zhiyan Yu visited Peking University this year to attend a lecture by Wharton Dean, Geoffrey Garrett.
Zhiyan Yu visited Peking University this year to attend a lecture by Wharton Dean, Geoffrey Garrett.

Conversation Starters

What is the low-carbon economy?

Lyft is one example of how a company is making deep commitments to the low-carbon economy. What are some other examples?

Using the "Related Links" to the right of this article, research the 2018 Global Climate Action Summit. What did you learn about how the world is addressing climate change and fueling the low-carbon economy? Share your new insights with a partner or in a group.

One thought on “The Low-carbon Economy Is a High Global Priority

  1. I commend Yu’s efforts to learn about the low carbon economy and initiate action by finding an institute to tackle environmental challenges while encouraging others to do the same. Furthermore, I agree – fossil fuels will inevitably become depleted, thus incentivizing the development and nurturing of renewable energies and mitigation strategies like carbon taxing. It is astonishing how you could use your Model UN experience to inspire you to learn about such an urgent issue and successfully gain public traction through funding!

    As someone interested in learning about economic circularity and conducting research on the ways different governments took and are taking to combat GHG emissions and promote renewable energy, or even more sustainable alternatives like ethanol or biofuel, it is frustrating to see that the US decided to depart from the Paris Agreements a couple of years ago despite the following benefits: prevention of a precipitous decline in GDP, a substantial increase in jobs, and environmental advocacy. Furthermore, a common misconception people make, including legislative leaders, is that enacting sustainability policies contradict economic growth. However, I believe the reasons behind the immobility, even with the emergence of climate activists and corporate actions, could be due to psychological incentives, including the desire to prioritize short-term goals over long-term ones to ensure reelection or even phenomena like social loafing or groupthink. Regardless, the trend continues as the climate worsens, and companies like Lyft are starting to create change by striving for a net-zero emissions goal.

    Indeed, when thinking internationally and macroeconomically, European countries like Denmark and Germany are taking effective actions to reduce their carbon emissions. For instance, the EU has partnered with the European Investment Bank and some programs to fund circular projects, encouraging social entrepreneurs to create more sustainable businesses and showing political attention and inducement to battle the global climate issue. Additionally, Norway implemented mandates to promote the circular EV industry while China focused on expanding electric public transport services to minimize fossil fuels use.

    Moreover, as mentioned in the article, carbon taxing is perhaps the most popular method to mitigate energy usage by discouraging businesses from purchasing fossil fuels with the additional cost; however, it may also be inefficient or slow-paced. Therefore, I believe that setting performance standards, including fuel economy standards, renewable fuel standards, low-carbon fuel standards, and zero-emission vehicle standards on the automobile industry, for example, would greatly diminish the GHG emissions from the transport sector. Also, alternatives could include executing tax credits, which would benefit consumers and encourage sustainable shopping, and carbon credits, making sure businesses follow the emissions guidelines. In addition, with judicial support through funds and implementing these credit policies, initiatives like the sustainable farming project called Katingan Mentaya in Indonesia would come to fruition by overcoming commercializing or financial barriers. Hence, economic sectors significantly contributing to GHG, like transport and agriculture, could see their emission rates decline.

    All-in-all, I thoroughly enjoyed reading this article and seeing other like-minded peers taking the initiative to create change in their respective communities! Especially at an urgent time like today, Gen Z’s like myself would be the ones to take on climate change head-on as the race with time continues. However, with many businesses instituting or planning to establish remote working plans, there may be some complications regarding how our world would change post-Covid and what that would entail to our approaches to minimize emissions. Nonetheless, with the options presented before global leaders and people experimenting with different policies to create social and environmental awareness and change, including some climate education programs like those by MIWA, it would be a matter of time before the damage we have caused becomes irreversible.

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