Big brands drive change in China’s manufacturing hub

In just a few days I, along with EDF+Business’ Xixi Chen, will be traveling across China to talk with companies and students about corporate energy management. The trip comes one week after China’s “Golden Week”—the country’s eight-day-long national celebration. Each year, the holiday marks the largest week for tourism, bringing in over 700 million tourists at home and abroad to the nation’s streets and roughly $87 billion in revenue.

But while the streets are bustling, China’s industrial and manufacturing powerhouse comes to a standstill. This is a mandatory national holiday for all citizens, which means, for the entire week, almost everyone is off of work, businesses and factories are shut down, shipping lines are put on pause, and companies with suppliers in China are busy preparing for a week of silence.

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China: the new leading voice on climate change?

This is the first of a three-part blog series covering corporate sustainability in China. Experts from EDF Climate Corps examine how businesses are shifting the ways they approach energy management in response to increasing climate commitments.

This past June, 197 countries reaffirmed their commitments to reduce GHG emissions in an effort to curb global climate change. The U.S. was not one of them. This decision, a major backpedal for America, made room for a new frontrunner to take the reins on global climate leadership. And that’s exactly what has happened.

After President Trump backed away, China, the largest GHG emitter and coal consumer, recommitted to forge ahead with the Paris agreement. The nation recognizes climate change as a major challenge faced by all mankind and a threat to national security, which is why Beijing has deemed the Paris agreement its “highest political commitment”. China’s participation in any international agreement on climate is not only critical, it’s an opportunity to dominate the clean energy sector and inspire others to take action.

Manager, EDF Climate Corps

Here are three ways China is positioning itself to meet its targets (America, take note):

1. Enforce goals at every policy level.

China has set aggressive targets aimed at reducing the nation’s greenhouse gases that are supported and enforced by climate policies at the international, national and local level. This alignment allows for greater consistency and cooperation between the private and public sectors, enabling greater efficiency in working towards these common goals.

At the international level, China reaffirmed its promise to meet the commitments (working closely alongside the EU) outlined in the Paris agreement, including peaking CO2 emissions by 2030. Domestically, China has both short-and long-term plans to help ensure their energy goals are met. The Strategic National Energy Plan was completed this past April and China is on track to achieve its energy goals outlined in the 13th Five-year plan.

At the local level, cities have their own carbon-cutting plans. Shenzhen, one of China’s manufacturing hubs, aims to peak the city’s carbon emissions by 2022—eight years ahead of the national target. Companies, too, are ramping up their efforts.  For the past two years, EDF Climate Corps has placed four fellows in IKEA’s Shenzhen offices to help meet these targets by focusing on increasing the sustainability of the company’s supply chain (Stay tuned for more on this kind of corporate engagement in the next post of this series).

2. Invest in clean energy.

China continues to expand its dominance in renewable energy. Recently, they committed to investing $360 billion in clean energy development. According to China’s National Energy Administration, renewable energy already employs 3.5 million people in China (compared with less than a million in the US) and this new investment is expected to create 13 million more jobs in the renewable energy sector by 2020. That’s enormous growth.  

The private sector is tapping into this market as well. Chinese companies already dominate among the most profitable clean energy companies in the world with 35% of the top 200 publicly traded corporations earning significant revenue from renewable energy being Chinese. Simply put, in China, clean energy is viewed as smart business and smart economics.

3. Use a multi-faceted approach:

Manager, EDF+Business

China is coming at climate change from all angles. In addition to the policy mechanisms and promotion of clean energy mentioned above, China is securing long-term investment and sustained financing to encourage innovation and the adoption of new technologies. For example, this year China launched five pilot zones to promote “Green Finance”, a vehicle aimed at raising funds for pollution clean-up.

Also this year, President Xi Jinping pledged to launch the world’s largest national carbon market; a decision EDF played an important role in by providing the Chinese government with critical technical support and consultation. The market will hasten the transition to a low-carbon economy and send a message to the world that China is serious about finding solutions. Additionally, this presents an enormous opportunity for the private sector to curb emissions. Companies are incentivized to innovate and reduce their emissions, selling excess allowances and opening up new revenue streams.

The road forward for China

The momentum we’re seeing in China is in sharp contrast to Trump’s America. It’s this strong leadership and creativity that is needed to address GHG emissions within China. And it sets an example for others to follow. Delivering on its many commitments and aspirations won’t be easy, but for China to declare them as necessary is a big step in the right direction–one that has the potential to create massive positive change.

In our next blog post, we’ll take a closer look into how companies are already making and delivering on plans to do their part in helping China achieve its climate commitments.


Follow Scott and Xixi on Twitter, @scottwood_, @Talk2Xixi


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