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Paulson Institute Report Argues that Jing-Jin-Ji Region Can Become National Model for Sustainable Economic Growth

The Honorable Henry M. Paulson, Jr.

(The Paulson Institute) – The Paulson Institute today released a report entitled China’s Next Opportunity: Sustainable Economic Transition. The report focuses on the Beijing-Tianjin-Hebei region (or Jing-Jin-Ji), making the case that this region—the seat of China’s central government, one of its fastest-growing urban areas, and one of the most important industrial zones in China—has the potential to dramatically reduce emissions and lead the way for China’s nationwide transformation toward a more sustainable economic model.

The Jing-Jin-Ji region is home to the world’s largest steel production area, in Hebei Province, and to eight of China’s ten most polluted cities. Responsible for 10 percent of China’s GDP, the region is also urbanizing at a fast pace. China’s government has targeted the region as a test case for a new approach to economic growth, with detailed objectives for reducing air pollution.

To achieve the transition to low-carbon economic growth in the Jing-Jin-Ji region, the report argues, China must improve its existing industries to meet the highest building and process efficiency standards, and also must transition to new and emerging industries that have a lower carbon footprint and, therefore, can help improve air quality and reduce climate change impacts. In doing so, the country has the opportunity to be among the most innovative energy generators and users in the world.

The report notes that the Jing-Jin-Ji region is well-positioned to become a model for the rest of the country, and potentially the globe, for several reasons: 1) The region’s size, diverse economic mix, and strong policy and regulatory environment contribute to its potential to transition its economy. 2) Hebei Province, currently the most industrial part of the region, has existing manufacturing infrastructure and strong wind and solar resources that could provide the basis for a significant increase in clean, renewable energy production and deployment.

“All eyes are on the Jing-Jin-Ji region as a testing ground for innovative solutions to China’s complex sustainable development challenges. By concentrating investments in renewable energy sources and upgrading the energy efficiency of industry, Jing-Jin-Ji has the potential to play a tremendous leadership role in demonstrating how existing industries can become cleaner and more efficient, while also incubating new clean-energy technologies that are tomorrow’s economic drivers,” said Paulson Institute Chairman Henry M. Paulson, Jr.

The China Center for International Economic Exchanges (CCIEE) is the report’s Chinese Supporting Organization.

The report’s key recommendations for Jing-Jin-Ji include:

Prioritize reducing emissions and increasing efficiency in Jing-Jin-Ji, particularly in the industrial and public heating sectors. Analysis from Tsinghua University provided exclusively for this report reveals that a 30% reduction in emissions from these two sectors would have the greatest impact on ambient air quality throughout Jing-Jin-Ji.
Within the industrial sector, prioritize energy efficiency improvements for iron and steel production. While many might assume that the only way to cut industrial emissions is to scale back production, modeling by Energy Innovation shows that efficiency improvements in this sector could have an immense impact on reducing emissions, in some scenarios leading to as high as a 52% reduction in PM2.5 and 41% reduction in CO2 by 2030.
Prioritize emerging industries in Hebei, particularly in renewable energy and energy efficiency since these industries have strong growth and job creation potential. Currently 90% of Hebei’s energy comes from coal. But given the region’s high local demand, excellent wind and solar resources and good transmission connection to neighboring regions, the report argues that the province can benefit economically and environmentally from greater investment in wind and solar.

The report also highlights case studies from four U.S. states and cities: California, Cleveland, Toledo and Pittsburgh. Each of these cases offers examples of once-industrial and heavily polluted cities and states finding ways to achieve economic growth while also addressing environmental and climate concerns.

“China’s Jing-Jin-Ji region has the opportunity to move toward a truly sustainable economy, in both financial and environmental terms. Lessons from the U.S. and its own experiences with this kind of transition—whether positive or negative—are highly relevant to China. But China is urbanizing and developing at such a fast pace, and impressive scale, that ultimately we see regions like Jing-Jin-Ji as potential models for the rest of the world, as countries try to reconcile economic growth with the realities of climate change,” said Paulson Institute Vice Chair of Climate and Sustainable Urbanization Kate Gordon, one of the authors of the report.

The latest report builds on the Paulson Institute’s Stronger Markets, Cleaner Airseries, which argues for strong energy policies that can promote private sector innovation to address air quality and climate impacts across China. Previous publications are all available for download at paulsoninstitute.org.

About the Paulson Institute: The Paulson Institute is a “think and do” tank that promotes environmental protection and sustainable development in the United States and China, while advancing bilateral economic relations and cross-border investment. Established in 2011 by Henry M. Paulson, Jr., the Institute is committed to the principle that today’s most pressing economic and environmental challenges can be solved only if the United States and China work in complementary ways.

The non-partisan, independent Institute works at the nexus of economic and environmental issues in the United States and China. Its programs in China focus on improving climate and air quality, advancing ecological conservation and promoting sustainable cities. The Institute’s Think Tank publishes papers on the most important macroeconomic issues facing China today, energy strategies and issues in US-China relations. The Institute promotes bilateral cross-border investment that will improve US-China relations and help create jobs and works to reduce economic risk from climate change. The Institute is headquartered at the University of Chicago and has offices in Washington and Beijing.

About China Center for International Economic Exchanges: China Center for International Economic Exchanges (CCIEE), founded on March 20th, 2009, is registered with the Ministry of Civil Affairs, and operates under the guidance and supervision of the National Development and Reform Commission in terms of its business scope. The main scope of work for CCIEE is: to conduct research on major international and domestic economic issues; to conduct international exchanges and cooperation; to provide government with intellectual support; and to provide enterprises and other sectors of society with a platform for economic exchanges.

CCIEE is committed to serving China’s development, improving people’s livelihood and promoting exchanges and cooperation. By adhering to the socialist theoretical system with Chinese characteristics and the values of Originality, Objectively, Rationality and Compatibility, CCIEE actively conducts research on significant domestic and international theoretical and strategic issues. CCIEE compiles periodicals such as Research Report, Think-tank’s Voice, Information Feedback and a monthly journal called Globalization.

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