With regard to China’s BAU scenario, firstly, China’s energy consumption and GHG emissions will continue to increase for a long period given that China is still at the middle stage of industrialisation and in the process of accelerated urbanisation. This kind of growth path, which is in line with development norms, should certainly be reflected in the BAU scenario. Secondly, the formulation of a BAU scenario is closely related to the choice of the starting point. If we take China’s ’10th Five-Year Plan (2001-05)’, characterised by fast industrialisation and urbanisation as the starting point, then the policy targets proclaimed and the achievements in the ’11th Five-Year Plan (2006-10)’ should not be included in China’s BAU scenario.
Second, the distinction between ‘relative reduction’ and ‘absolute reduction’ should be specified. ‘Relative reduction’ means the amount of GHG emissions that can be reduced in the future compared with the BAU scenario by adopting suitable policies. ‘Relative reduction’ does not mean the amount of emissions is cut to less than that of the benchmark year, rather it means less emissions than that emitted by the previous development path. It is the margin or deviation of two different development paths. ‘Absolute reduction’ means the amount of emissions some time in the future is absolutely less than that of the benchmark year.
The two emission reduction models adopt different scenarios as well as different benchmarks. However, what is neglected by a majority of people is that when developed countries pursue ‘absolute reduction’, it would grant them more emission quotas compared with adopting ‘relative reduction’ if their peak amounts of historical emissions are taken as the benchmark and they commit to the same reduction range as the developing world. The story is just opposite for developing countries, for which the ‘relative reduction’ model is more favorable.
Therefore, we cannot come to the conclusion that the path of ‘absolute reduction’ can definitely contribute more toward curbing global warming than the approach of ‘relative reduction’. In this regard, it is a question of different national interests. For wealthy countries that have passed the peak of emissions, the commitment of ‘absolute reduction’ theoretically could let them discharge more than their BAU scenario, of which they are well aware.
Third, wealthy nations are demanding an exorbitant goal of emission reduction from the developing world. According to the calculation of the average value of the six SRES (special report on emission scenarios) in the fourth estimate report of the Intergovernmental Panel on Climate Change (IPCC), in order to reach the most practical target of intensity at 550ppm, if developing countries reduce emissions by 30 per cent by 2020 under their BAU scenarios, the amount of emissions of developed nations not only need not to be cut to less than the 1990 level but could also increase by 15 per cent.
Obviously, once the target of global emission reduction is confirmed, the reduction amount of developed nations and the developing world would plunge to a relation of ebb and flow. The demand that developing countries should cut 15-30 per cent under their BAU scenarios by 2020, in fact, creates conditions for developed nations to reduce or even escape from undertaking obligations in cutting emissions.
Fourth, China’s reduction promise is ambitious no matter what kind of BAU scenario is applied. The BAU scenario is a sort of forecasting of the future based on various assumptions, which should be in line with facts and truly reflect the economic and social development course. China’s BAU scenario should be formulated on the basis of the ’10th Five-Year Plan (2001-05)’ period during which China saw rapid industrialisation and urbanisation.
Therefore, China’s promise of 40-45 per cent cuts per unit of GDP is by no means inferior to any commitments made by wealthy nations. Moreover, if the factors of energy structure readjustment and the changing forms of forest and land use are included, China’s reduction target would be more significant.
Ma Xin works for the National Development and Reform Commission, China. Li Jifeng and Zhang Yaxiong are from the State Information Center, China.
This article first appeared here in the China Daily.
It is unbelievable why most people just don’t talk directly about a simple, fair and transparent measure of emissions and emission reductions.
People talk about absolute or relative reductions. But as this article shows, neither can be objectively measured. This leads to the situation that developed countries say the target by developing countries relative the BAU is no good because of problems with measures or BAU; and developing countries say that the absolute reduction target by developed countries are no good, because their BAU can actually be lower than their proposed target emissions.
So, there are no objective measures of BAU for both camps.
The most fundamental issue in carbon emissions is it has global negative externality that affects the wellbeing of everyone detrimentally no matter who is emitting.
So the simplest solution is the “user pay” principle, that means those who emits pay for the negative externality they cause.
But paying to whom? They should pay for everyone on the earth.
This naturally leads to an equal per capita emission criterion that can be used to calculate which countries should pay and which countries should be paid as a result of unequal emissions per capita between countries, irrespective rich or poor.
Further, due to the global nature, the most efficient and effective way to undertake emissions reduction or limitation is to employ a global carbon tax that will achieve the emission reduction target and use that to calculate each countries emissions tax liability.
A country’s share of the tax revenue is its population share of the total global carbon tax collections calculated using the above method.
In this way, there is no room for dispute or argument about BAU, relative or absolute reduction.
Every country can focus on how to manage its economy under a global emissions regime that has no distortions.