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China’s low-carbon strategy a boost for global green development

GUANGZHOU – China’s low-carbon path serves as a boost for green development globally, noted participants in the 2021 Understanding China Conference (Guangzhou).

Themed “Whence and Whither – Unprecedented Changes in the World and China and the CPC,” the event, scheduled from Dec 1 to 4 in the southern Chinese city of Guangzhou, has attracted nearly 80 celebrated figures in the global political, academic, and economic communities.

China has pledged to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060, making the world’s biggest cut in carbon emission intensity in the shortest time frame in history.

In September, the country announced that it will stop building new coal-fired projects overseas.

Xu Huaqing, director of the National Center for Climate Change Strategy and International Cooperation, said the carbon pledges highlight China’s strategic purpose and direction, and that the country has a strong track record in tackling climate change.

China’s carbon intensity in 2020 was 48.4 percent less than that in 2005, which means that China had more than fulfilled its commitment of achieving a 40-45 percent reduction in carbon intensity from 2005 levels by 2020, he noted.

Experts say that China’s carbon pledges are set to have global significance as the country is a major player in fighting climate change and a strong force in promoting global development.

Guven Sak, managing director of Economic Policy Research Foundation of Turkey, called China’s move away from coal-fired projects overseas “a step in the right direction in limiting the cost of human activity on our planet.”

Jusuf Wanandi, a senior official of the Center for Strategic and International Studies, said: “Given the sheer size of China and the story of its development success, going the green path would cement China’s reputation and leadership in the transitioning to the green path of development.”

He added that China’s Belt and Road Initiative (BRI) presents new green opportunities for participating countries.

Khurshid Mahmud Kasuri, former foreign minister of Pakistan, echoed the view, saying that China is in a position to share its solar technology, environmental achievements and experience with the rest of the world.

He noted that some coal power plants have already been built in Pakistan with Chinese cooperation using advanced technologies to keep emissions under check.

“It (The BRI) is a golden opportunity to elevate participating economies to a higher preparedness in the planning and acquisition of China-originated innovative technologies in favor of a green economy,” said Wanandi.

Turkish exporters to EU face EUR 771 million burden due to carbon border tax

Turkish companies that sell their cement, aluminium, electricity, and steel to the European Union could face additional costs estimated at EUR 399-771 million with the introduction of the carbon border in 2026.
Turkey is among the top ten exporters of cement, aluminium, and steel to the EU, so it is set to be heavily affected by the carbon border adjustment mechanism (CBAM).
The additional costs amount to EUR 771 million in the first year, or EUR 399 million if just the direct emissions are charged
A study by the European Bank for Reconstruction and Development (EBRD) found businesses in Turkey would be paying EUR 771 million more in 2026 than the average measured between 2017 and 2019, or EUR 399 million if just the direct emissions would be charged.
According to the Fit-for-55 package, presented last month by the European Commission, CBAM will be introduced in 2026, after the preparatory period from 2023 to 2025. The commission said the tax would be paid only on direct emissions, but that by the end of the transitional period it would evaluate whether to extend its scope to more goods, including indirect emissions (like those from the electricity used in production).
The EBRD study is a result of cooperation with the Ministry of Environment and Urbanization on CBAM’s consequences for Turkey. The aim is to foster an informed debate about the monetary implications and transitional risks for Turkish exporters to the EU.
CBAM payments can represent up to 50% of current prices for cement, 18% for aluminium and 9% for steel
The study found CBAM payments can represent a significant share of current prices for some products, for instance up to about 50% for cement, 18% for aluminium and 9% for steel. In total, CBAM payments would represent 0.07% of Turkey’s gross domestic product forecast for 2023, provided that the commission’s proposal enters into force at the beginning of that year, the EBRD said.
In addition to delivering cost estimates, the study analyses ways to adjust to the coming changes and their medium- and long-term implications.
Turkey already has a measurement – a reporting and verification system similar to the EU emissions trading system or ETS, but in order to meet and enhance its climate targets, the country could ratify the Paris Agreement, set sectoral and national net zero carbon targets and introduce a national emissions trading scheme.
Access to financing will be conditioned by climate risk management
The analysis also warns Turkish companies that, in order to access financing, climate consideration and, in particular, climate risk management would be increasingly important. The EU and the G7 plan to make requirements of the Taskforce on Climate-Related Risk Disclosures mandatory.

Carbon pricing is an example of climate transition risk

One such climate transition risk is carbon pricing, and financiers will want to know how corporations are managing them. Carbon markets across the world are growing, and carbon prices, which have almost doubled in the EU this year, are placing increasing pressure on emitters to decarbonise.

Şule Kılıç, EBRD Deputy Head of Turkey, said the international lender is working on a set of strategic policy choices for the government to mitigate trade risks and foster domestic low-carbon economic development in line with the EU climate policy objectives.

Together with advising on policy, the EBRD is offering financing.