The low-carbon tide has changed production modes and global trade
Both developed and developing countries are shuffling the carbon-intensive industries out of their markets, which has driven enterprises to reduce energy consumption and pollution through innovative technologies
By Li Xiaoyang  ·  2021-11-06  ·   Source: Web Exclusive

Climate changes can greatly affect global economic and trade rules. A sound natural environment has become a resource for countries which can export eco-friendly products, Yu Miaojie, a professor with the National School of Development at Peking University, said during a session on the Fourth Hongqiao International Economic Forum. The forum took place during the China International Import Expo in Shanghai on November 5. 

"Both developed and developing countries are shuffling the carbon-intensive industries out of their markets, which has driven enterprises to improve the added value of their products and reduce energy consumption and pollution through innovative technologies," Yu said.

Enterprises on action

Consumer options have become an influential factor in green production. "Consuming green is a fashion today. People now are willing to buy low-carbon goods. This has pushed companies to green their production chains," Kamran Vossoughi, Vice President of Michelin Group, a France-based tire maker, told the forum.

Green trade has propelled changes in production. As Vossoughi told the forum, Michelin has adopted smart solutions to make its production greener and save energy. It used to carry out tire tests before massive production; today, with the help of 3D models, these tests are no longer necessary.

According to Li Ping, co-founder of Contemporary Amperex Technology Co. Ltd. (CATL), a Chinese automotive lithium-ion battery maker, green transformation can lead to revolution in the supply chains and production modes. Since 85 percent of carbon emission during battery manufacturing is produced in supply chains, CATL tries to reduce emission in its supply chains by adopting clean energy, such as photovoltaic and hydro power.

Global carbon emissions need to be reduced to 20 percent of the current level to achieve the carbon neutrality goal, for which 80 percent of the current industries need restructuring. The ambition will drive enterprises to grow while also posing challenges. CATL has recycled over 90 percent of metal from used phone batteries to create new ones and built battery banks to launch the full-cycle management of production and reuse batteries, Li said.

Supply chains are also undergoing a transformation. Vossoughi told the forum that enterprises tend to develop more localized supply chains to reduce transportation costs, which will drive local development in terms of innovation and employment. Producers are supposed to adopt digital solutions to ensure the security of supply chains and make production smarter and greener.

CATL has cooperated with German chemical giant BASF to improve its localized services in the European market. The demands of the global market will drive the company to green its production and delivery through innovative technologies, Li said.

A regular hurdle

"To cope with climate change, countries need to shift to service industries which are less carbon-intensive than manufacturing industries. Efforts are also needed to develop new business modes and improve resource efficiency," Elliot C. Harris, Assistant Secretary General for Economic Development of the United Nations, said at the forum.

Government policies in pursuit of carbon neutrality should not be isolated. The package needs to involve policies on trade, tax, labor market, and overall environmental and socioeconomic policies, Harris added.

According to Yu, some countries are working on environmental tariffs on imports. To avoid trade protectionism under this context, countries need to seek consensus and develop common standards on green imports.

Copyedited by Elsbeth van Paridon

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