Experts 5+5 high-level dialogue on Sino-German cooperation in the context of carbon neutrality

On July 28th, the 50th anniversary of the establishment of diplomatic relations between Germany and China, the European Study Centre of Wuhan University (WUESC), the Climate Change, Energy Economics Study Center of Wuhan University (CCEE) and the Institute for East Asian Studies at theUniversity of Duisburg-Essen co-organized the 5+5 high-level dialogue on Sino-German cooperation in the context of carbon neutrality.

More than 30 experts and scholars from Wuhan University, Tsinghua University, Fudan University, Hong Kong University of Science and Technology, City University of Hong Kong and the University of Duisburg-Essen, Ruhr-Universität Bochum, Friedrich-Alexander-Universität Erlangen-Nürnberg, Ruprecht-Karls-Universität Heidelberg and Universität Kassel, engaged in dialogues on development opportunities, challenges and the prospects for cooperation between China and Germany based on the target of carbon neutrality. Tang Qizhu, vice president of Wuhan University and Karen Shire, vice president of Duisburg-Essen University, delivered speeches.

Vice President Tang briefly introduced the background information of Wuhan University. He pointed out that Wuhan University valued the exchange and cooperation with German universities. On the occasion of the 50th anniversary of the establishment of diplomatic relations between China and Germany, Wuhan University hopes to take this ‘Sino-German 5+5 High-End Dialogue’ as an opportunity to motivate the in-depth exchange and cooperation in the fields of energy transition, low carbon development, carbon neutrality and also to make new contributions to the exchange and cooperation of humanities education between the countries.

Karen Shire reviewed the friendly interaction and cooperation between the two sides in recent years. She said this year marked the 50th anniversary of the establishment of diplomatic relations between China and Germany and also the 40th anniversary of the establishment of a friendly citiespartnership between Wuhan and Duisburg. She hoped both sides could cooperate at a higher level and in a wider field on the basis of reinforcing the cooperation in carbon neutrality to effectively promote educational and cultural exchanges between China and Germany.

In this high-level dialogue, two topics were set titled “Energy and Carbon Markets” and “Economics and Trades”. Ten professors from ten universities in China and Germany were invited to participate in the dialogue.

In the dialogue “Energy and Carbon Markets”, Prof. Qi Shaozhou, Director of WUESC and CCEE,delivered a keynote speech titled “Cooperation Potential of Sino-German International Trade, Carbon Emissions Trading and Energy Transition in the Context of Carbon Neutrality” looking at the three aspects of Sino-German trades, China's energy transition, and Sino-German carbon markets. Prof. Qi asserted that cooperation was the only way to address climate change; China and Germany couldcooperate in several fields to realize the carbon neutral goals of both countries, including joint participation in global climate governance, promotion of green low carbon innovation, co-construction of carbon neutral industrial parks and industrial transformation based on energy transformation. 

Prof. Qi Ye, director of the Public Policy Research Institute of the Hong Kong University of Science and Technology, discussed whether the ‘coal era’ was over or reviving under the theme of “The end or revival of coal? Temperature rise, wealth and war”, against the background of high temperatures, the COVID-19 pandemic, and the Russia-Ukraine conflict. Prof. Qi said countries with low and fast-growing economies would become increasingly dependent on cheap coal resources to meet their growing energy needs. Due to the COVID-19 pandemic, the Russian-Ukrainian conflict, and other reasons, coal consumption around the world, including China, was likely to rise, which deservedattention.

Prof. Andreas Löschel, director of the Institute for Environmental and Resource Economics and Sustainable Development at Ruhr-Universität Bochum, and chairman of the German Governmental Committee of Energy Experts, gave his presentation named “After the turning point of our times and before the arrival of tests: Germany's path to climate neutrality amid the Ukraine war and the elimination of coal”. After reviewing the important targets of energy development proposed by Germany, Prof. Löschel suggested that the emergence of some new troubles, such as the Russian-Ukrainian conflict, brought new challenges to the German government, demanding improvements of current policies to better increase energy efficiency and develop renewable energy.

Prof. Duan Maosheng, director of the China Carbon Market Research Center, Tsinghua University, spoke on “Will the EU's Carbon Border Adjustment Mechanism (CBMA) achieve its original design goals?” Based on the CBAM proposal of the EC and the European Parliament, he analyzed the extra cost and potential influence on the global carbon emission brought by the implementation of CBAM. He said that currently proposed policies such as the climate club were hardly effective in achieving goals of climate change mitigation in practice.

Prof Veronika Grim, a member of the German Council of Economic Experts, and the director of the Economics Theory Department of the University of Erlangen-Nuremberg, spoke on “The Quit of Coal against the New Background: How Does the Russia-Ukraine Conflict Influence the German Transition to Carbon Neutrality?” She suggested that the possibility of Germany disusing coal before 2030 should be assessed again, which could provide a decision base for the expansion of electric power plants and infrastructure planning. She also believed that since it is unavoidable to provide hydrogen energy to electric power plants, the advancement of hydrogen infrastructures should be accelerated at present.

In the following dialogues, the experts engaged in an exhaustive discussion and analysis on issues including the influence of the EU and the German carbon markets on German industry, the coal usage of China and Germany, the development of clean and efficient use of coal technology, the opportunity and feasibility of coal to hydrogen and coal to oil technology, the method to form the cooperation mechanism that combines international trade and carbon neutrality, the impact of the Russia-Ukraine conflict and the resulting energy crisis on the climate policies of all countries.

During the “Economy and Trade” dialogue, Prof. Markus Taube, the director of the East Asia-China Economy Research Center of the University of Duisburg-Essen, and the vice president of the IN-EAST East Asia Institute, gave key remarks on the subject of “Methods and Potential of the Cooperation in the Green Transformation of China and Europe”. He pointed out that thorough, speedy and constant carbon reduction was required, and the EU should combine the Green Deal with digital transformation, whether the target of temperature control was 1.5℃ or 2℃. In the meantime, China and Germany could enhance cooperation in green finance, low-carbon technology innovation, carbon neutrality, digital transformation and other fields.

Prof. Martin Kesternich, director of the Europe Economy Research Center and Economics of Environment and Climate Research Center of the University of Kassel, introduced his research onthe real effects of Germany’s plan for low income families to change to energy-efficient refrigeratorsunder the theme of “The Demand Side Responses to Energy Aid Programs-The Evidence from German Low-income Families”. He found that if the subsidy was increased by 50%, the replacement rate of the energy-efficient refrigerator in German low-income families would increase by 9-16%.

Prof. Wu Libo, the director of the Institute of Big Data of Fudan University and the Shanghai Strategy Research Institute for Energy and Carbon Neutrality, made her speech on the subject of “Carbon Pricing: Whether or Not It Will Promote the Carbon Neutrality of China”. She stated that the power market reform in China now would influence the carbon market in three aspects: policy restraint, market competitiveness and technological innovation. Meanwhile, the deregulated power market and carbon market would interact in five channels: production, consumption, competitiveness, technology and intertemporal choices. Therefore, it is necessary to have in-depthdiscussions on the effects of power market reform on the carbon market.

Prof. Anja Senz, the vice president of the University of Heidelberg, and the principal of the Contemporary China Research of Asia and Cross-cultural Research Center, compared the Chinese auto industry with Germany’s by looking at the political economic background, public perception, the key to the transition of electric vehicles, purchase intention and restrictions of new forms of transport under the theme of “The electric vehicle in the contradiction between environmental concern and economic innovation”. On that basis, she further stated that battery recycling of electric vehicles boasted a promising future, and she expected to spread the definition of new electric vehicle to the world.

Zhang Xiaoling, a professor of the Public Policy Department at City University of Hong Kong, shared an introduction on the subject of “Carbon Pricing Globalization: Assigning, Pricing and Linking of Carbon Emissions Rights-a Conceptual Framework”. She introduced the carbon neutrality target, the sources of carbon emission and the carbon sink capacity of Hong Kong. Moreover, she calculated the gap to carbon neutrality under different circumstances. Using this, she further clarifiedthe crucial questions in business accounting and assigning of carbon emission rights, and introducedher research framework of carbon emission right pricing.

During the dialogue on this special topic, the experts delved into the implementation of aid programs aimed at increasing the energy efficiency of low-income families, the methods of estimating the influence of electric vehicles on the economy and the environment, the strengths and weaknesses of the electric vehicle industry in Hubei province and other issues.

According to the relevant person in charge, this “Sino-German 5+5 High-End Dialogue”, throughstrengthening the bilateral dialogue between China and Germany on green and low carbon development in the context of reinforcing carbon neutrality will enhance the bilateral cooperation to jointly explore innovative plans of carbon neutrality, and realize mutual learning and benefit in this crucial period when the world is promoting energy transformation and carbon neutrality.

Rewritten by Wen Puwen & Wang Ziyan

Edited by Shen Le, Sylvia, Xi Bingqing