Page 8 - THE SOUTH CHINA BUSINESS JOURNAL

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The third and final aspect involves striking a
balance between development and the reduction
of emissions. This means that the reduction of
emissions must be carried out while effectively
guaranteeing crucial elements of the economy
and society, such as food security, energy
security, and industrial chain supply chain
security, as well as preventing disruption to
people’s livelihoods.
Opportunities and challenges for
companies under dual emissions
controls
The shift to carbon emissions controls will
present a range of benefits and opportunities,
as well as various challenges, to companies
operating in China.
For instance, the pivot to controlling the total
carbon emissions of a region or an entity will
require a high degree of emissions monitoring on
the part of both governments and companies.
Under China’s current carbon trading rules,
companies are required to disclose accurate
information on their greenhouse gas (GHG)
emissions. The collection and analysis of
emissions data will require the allocation of
additional resources and may therefore increase
operational costs for companies. At the same
time, implementing the tools and mechanisms
for reducing carbon emissions and improving
energy conservation may also be costly and
time-consuming. This could be burdensome
for companies that have not already begun
accounting for the costs of reducing their carbon
footprint in their business plans.
However, the shift is also poised to bring several demand for energy conservation and carbon
benefits to companies and will help to grow
demand for green industries.
5 AMCHAM SOUTH CHINA
First, environmentally conscious companies will
benefit from the change as it will help to make the
renewables market more competitive. Companies
that are already seeking to reduce their reliance
on fossil fuels due to global climate pledges will
therefore be able to increase their consumption
of renewables without exceeding energy
consumption controls, as would be the case under
the total energy consumption controls.
Meanwhile, high-energy consuming companies
will no longer be restricted in the amount of total
energy that they can use, if they are striving to
reduce their reliance on fossil fuels and improve
energy conservation over the longer term.
The limits on energy-intensive industries also
inhibited these industries’ overall development,
and by extension also the economic development
of various regions that are reliant upon these
industries in China. The change could therefore
provide a much-needed boost to resource-rich
regions that rely on energy-intensive industries
for economic growth.
Companies will also have more flexibility in
the types of mechanisms they can employ to
reduce energy consumption and thereby reliance
on fossil fuels, as the end goal is to reduce
total carbon emissions, rather than overall
consumption. This will allow companies to
utilize various tools, such as carbon credits and
emissions reduction technology.
The shift is also good news for companies
operating within the renewables industry, as
well as carbon asset management and financial
companies. With companies and other entities
under increasing pressure to decarbonize,
reduction products and services will increase,
presenting a significant growth opportunity for
these industries.