Three transformative paths for China as it develops truly effective and sustainable low carbon development policies, says Khalid A. Al-Falih, President and CEO Saudi Aramco.
Your Excellencies, distinguished guests, ladies and gentlemen, zao shang hao and good morning.
As we explore China’s options for developing a low carbon economy, we should perhaps take our lead from the recent declaration of Premier Li Keqiang’s war on pollution – which he called “nature’s red light warning against the model of inefficient and blind development.
Let me first acknowledge that China has come a long way.
Compared with 1970, China’s economy is 40 times larger today in real terms, while it consumes only12 times as much energy – indeed a phenomenal improvement in energy intensity.
However, my friends to turn natures light to green, I believe there are three transformative paths which must be triangulated as China develops truly effective and sustainable low carbon development policies.
First, as China moves with confidence to continue its healthy growth without falling into a middle income trap, I believe the economy will need careful rebalancing toward greater emphasis on services and more advanced, less energy-intensive industries.
Achieving higher energy efficiency will be a key opportunity.
And critical to this is the deregulation of the energy market and energy pricing, as market signals are the most effective means of attracting investment and encouraging consumers to be judicious in energy use.
Second, the energy mix of stationary applications will need suitable rebalancing, with a larger role for gas beyond the current 6% in China, when considering the global average of about 30%, and a determined switch to clean coal must be one of China’s highest priorities.
Third, given China’s expanding mobility needs, a steady and healthy rise in transportation energy is likely, and oil will continue to dominate the transport sector because of multiple hurdles facing electric and fuel cell alternatives. This means China’s oil demand growth is expected to remain fairly strong
This only reinforces the value to China of being able to access reliable supplies of oil from major producers like Saudi Aramco, and we remain strongly committed to China’s energy security and the associated oil-related investments. Likewise, I remain confident that China will create an enabling commercial and regulatory environment to attract these investments
My friends, I firmly believe that sustainable economic development and low carbon development are not mutually exclusive. At Saudi Aramco, we are committed to supporting China’s efforts with both, and by doing so help turn nature’s red light to green.
Thank you, and xie xie.