Global energy system is experiencing shake-up

Aerial photo taken on Aug 17, 2020 shows a photovoltaic power station at the green industrial development park in the Tibetan autonomous prefecture of Hainan, Northwest China's Qinghai province. [Photo/Xinhua]

The future competition for energy among countries will no longer be limited to contending for resources, but also technology.

In the field of new energy, China stands on the same starting line with developed countries. Its capacity in manufacturing and research and development, and its scale of investment and the size of its market make the country a competent player in new energy.

At present, China manufactures 70 percent of solar power equipment and 30 percent of wind-driven generators in the world.

Although China still relies heavily on fossil fuels, it has begun cutting its carbon emissions in the middle of its industrialization process. In contrast, the industrialization of the developed economies was almost completely driven by fossil fuels, leaving them large amounts of infrastructures that need to be weeded out.

For instance, the United States began promoting air conditioners in the 1950s, and now many of the air conditioners that should be outmoded are still in service in the country.

Yet, local governments in China also have a lot to do to balance emissions reduction and economic growth. For example, they should try to improve the efficiency of electricity consumption, and change their minds that the more electricity is consumed the more robust the economy is.

China should leverage investment, tax, price and finance policies so as to form a favorable policy environment for green development.

For example, the high tax reimbursement for exports in many industries prompts the enterprises to continue to stick to industries with high emissions and heavy pollution.

That said, while focusing on making breakthroughs in technologies of nuclear power and other renewable energy, China must overhaul its overall policy system to foster the simultaneous transformation of both its energy consumption structure and its industrial structure.

Also, the government should consider transforming its subsidy system for the fossil fuel industry of the huge State-owned enterprise system into funding for research and development on renewable energy. As renewable energy becomes cheaper and cheaper, the market will naturally embrace it, paving the way for the realization of green development.

Although the traditional energy still holds a large share in the country's energy consumption portfolio at present, as it is in many other emerging economies, it is predictable that its replacement by new energy will accelerate exponentially in the near future.