The carbon neutrality that will be achieved in 2060 represents the end of fossil energy. Can you see this day?
“Media Gospel” Musk has had a headache recently. “Car-roof rights protection” has brought traffic spree to the media and put the company into “public opinion hell.”
Musk may have a headache and softened his apology, but his previous arrogance did come from some confidence. Tesla’s sales in the first quarter hit a record high. With the latest news on April 25, Wall Street is generally full of confidence in the upcoming first quarter earnings report of Tesla.
And Tesla’s revenue in 2020 will be positive, and the secret of the financial report has long been seen. Not only is the car selling more and more profitable, as a new energy vehicle company, Tesla also has a secret weapon in revenue-carbon trading.
The 2020 Tesla financial report shows that the annual net profit is 721 million US dollars. By selling carbon emission credits alone, Tesla has earned 1.58 billion US dollars in revenue a year, which is more than twice the annual net profit . If it does not “sell carbon,” Tesla is still losing money.
Since last year, the concept of “carbon neutrality” has been pushed to the fore, and China has pledged to achieve carbon neutrality by 2060. Clear and urgent commitments make people feel that environmental protection is no longer a game for the distant future and the rich.
But what exactly is carbon neutrality? How did the carbon trading that made Musk make full use of and affect carbon emissions? What other companies have made money by “selling carbon”? Which companies have to lose money and have to join the game? Can you and I see the day when fossil energy ends?
End of fossil energy in 2060?
“Carbon neutrality”, as the name implies, is to absorb as much greenhouse gas as it emits, achieving “zero emissions” in the mathematical sense.
In September 2020, Chinese leaders proposed at the general debate of the 75th UN General Assembly that carbon dioxide emissions should strive to reach a peak before 2030 and strive to achieve carbon neutrality by 2060. As soon as this date came out, everyone was shocked.
This means that during the 40 years from 2020 to 2060, China’s carbon emissions will be reduced from 16 billion tons per year to almost no emissions.
Another concept of carbon trading sounds magical, how to trade carbon? What exactly is being traded?
In fact, it is a carbon emission allowance. Why do we need allowances for carbon emissions? Because the greenhouse gas emissions, mainly carbon dioxide, have caused the greenhouse effect, threatening the survival of mankind.
As a result, economists invented a system to quantify and commercialize carbon emission rights. The government sets carbon emission quotas for each company and issues emission reduction targets based on past carbon emissions.
This quota can be freely traded in the trading market. If companies run out of allowances, they will either shut down and stop production, or buy from companies with ample emission allowances, or they will be fined heavily. In this way, carbon emission rights become a commodity, and the “quota rich” can make money.
It can be understood by analogy with driving license score trading. The score “quota” is fixed. After one year, if the score is not enough, you have to buy it, otherwise the result will be more serious; if the score is too large, you can sell it to people who don’t have enough. However, after the analogy, we still have to say that the sale of driver’s license scores is not allowed.
In this way, by using the market to “punish” companies that exceed emissions and “reward” companies that exceed emissions reductions, the overall amount of carbon emissions can be gradually reduced and carbon neutrality can be achieved.
Zhao Bin, a professor at the School of Life Sciences of Fudan University, a doctoral tutor in the field of environmental remote sensing and global carbon cycle, and the current chairman of the China-US Carbon Consortium (USCCC), said to Geek Park, “China’s goals are actually quite tight. To achieve this goal, we should give up fossil energy.”
Most European countries reached their peak carbon emissions in the early 1990s, and energy demand began to continue to decline. There is nearly 60 years of emission reduction time before 2050. While China is still in the stage of rapid industrialization, energy demand continues to rise, and there is only 30 years to reduce emissions after reaching the peak of carbon emissions in 2030. These objective realities are huge challenges for China.
China has not had such a clear carbon emission commitment before. China’s carbon emission reduction commitments, from the 2009 Copenhagen Climate Change Conference to the 2015 Paris Climate Conference, only proposed to reduce carbon dioxide emissions per unit of GDP, and did not specify the year for achieving carbon neutrality.
Wang Jun, a carbon neutral industry personage, believes that the previous target data actually has GDP variables, and the latest proposed goal of reaching the peak in 2030 and achieving carbon neutrality in 2060 is specific and clear, and the difficulty of achieving it can be said to be the difference between the sky monkey and the rocket. .
Wang Jun also mentioned, “my country’s current carbon emissions have exceeded 16 billion tons. Our current food, clothing, housing and transportation are all permeated with the smell of greenhouse gas emissions, and 40 years later, all of this will completely disappear and be replaced by clean energy and Compared with the changes before and after the industrial revolution, this epoch-making change in raw materials is only overwhelming.”
Carbon trading is not limited to Ant Forest
I don’t know what the year 2060 will be like, but now we can care about how carbon trading makes money.
The activities that most people have participated in for personal calculation of carbon emission reduction are probably only in the ant forest. Public welfare is synonymous with nobleness, and everyone has a yearning heart. The daily activity of Ant Forest illustrates this point.
Every day you can use Alipay to pay offline, walk and ride a bicycle, you can get “green energy”, and you can plant a tree in the Gobi over time. The “stealing green energy” “stealing food game-like fun” is Ali’s tricks to fill up social shortcomings, increase open rates, and increase user stickiness.
The real carbon trading is still between companies.
The most obvious is the new energy car company, the most eye-catching is undoubtedly Tesla. After Tesla’s 2020 earnings report was released, Musk has been ridiculed as “selling carbon monks.”
In 2020, Tesla earned US$1.58 billion in operating income by selling carbon credits alone, which is more than twice the annual net profit. According to Tesla’s 2020 financial report, the total revenue in 2020 will be 31.536 billion U.S. dollars, 499,600 vehicles have been delivered, and the net profit will be only 721 million U.S. dollars. In contrast, the US$1.58 billion gained from selling carbon emission credits can be regarded as “laying profit.”
At present, the domestic new energy credit system is gradually improving, and the price is also showing a trend of rising. Li Jinyong, the executive chairman of the All-China Federation of Industry and Commerce Automobile Dealers Chamber of Commerce and the chairman of the New Energy Automobile Special Committee, mentioned, “By the end of 2020, the transaction price of positive points for new energy vehicles between enterprises has reached 3000 yuan per point, and the highest in 2019 That is more than 800 yuan.”
Weilai Auto’s 2020 full-year financial report data revealed traces of carbon sales, which some Tesla followers mean. The data shows that Weilai is still losing one car by selling one car. Up to now, Weilai still has a loss of 53,000 yuan per car sold, but the “selling carbon emission points” contributed nearly 100 million yuan in revenue last year.
In November 2020, Li Bin, the founder of Weilai Automobile, revealed that Weilai will generate 200,000 points in 2020 and will be sold in 2021. If calculated at a price of 3,000 yuan per minute, this part of the integral income will reach 600 million yuan. This can be regarded as opening a revenue-generating channel for Wei Lai.
How the giants are “carbon neutral”
The business of carbon neutrality in various other paths is hyped around the world.
Around the Spring Festival in 2021, a series of economic reports from the “Nihon Keizai Shimbun” spread in the investment circle. Japanese reporters made estimates based on public data from institutions and universities in various countries and pointed out a huge business opportunity: China, the United States, Europe, and Japan have all given a carbon neutral timetable. From 2021 to 2050, the four major economies will complete their carbon neutral goals The total investment required is approximately US$85 trillion.
In fact, the major technology giants have already begun to deploy carbon business.
At the press conference last fall, Apple announced that it would cancel the headphones and plugs that came with the iPhone, which was widely ridiculed by everyone. It was called environmental protection to reduce costs. But many people have not calculated that, in addition to actual cost reductions, this measure will reduce carbon emissions by 2 million tons per year in production and logistics, which is equivalent to reducing 450,000 cars per year. Reduced emissions can also participate in carbon trading, which can be described as killing two birds with one stone.
Microsoft founder Gates, who is also a well-known “carbon lover”, has invested in many carbon neutralization-related projects. In Gates’ view, carbon capture, utilization, and carbon storage technology (CCUS) is the key to carbon-negative technology. If carbon emissions cannot be eliminated from the source, then carbon must be reduced in an indirect way.
Domestically, domestic Internet companies such as Tencent, Alibaba, and Baidu are also closely following the trend of carbon reduction.
Tencent’s T-Block energy-saving technology can save 3,500 tons of standard coal each year, and reduce carbon dioxide emissions by 23,300 tons, which is equivalent to planting 36,000 trees each year. Alibaba’s “green IT” technology can reduce the energy consumption of data centers by more than 70%. From 2018 to 2020, the electricity saved in three years is equivalent to the power generation of a medium-sized hydropower station in one year.
In 2019, Baidu started construction of three ultra-large cloud computing data centers in the hinterland of North China, saving more than 100 million kilowatt-hours of electricity per 100,000 servers per year, which is equivalent to the annual electricity consumption of 100,000 residents.
Although the cost is huge at this stage, and it will not bring directly equivalent income. But conscious technology giants have already played various roles in the “carbon business” and assumed the utilitarian cause of human destiny.
Has the energy revolution started?
Jeremy Rifkin, an American writer who put forward the concept of the “third industrial revolution”, predicted in “Zero Carbon Society” that the carbon bubble will be the largest economic bubble in human history. The end of fossil energy civilization may occur between 2023 and 2030.
my country’s clear and urgent carbon neutrality goal also reminds us of the significance of carbon neutrality for the international voice and the future energy state of mankind. Not only is it creating new clean energy, it’s not just replacing road traffic with new energy vehicles.
Achieving the goal requires a complete carbon trading market and rules, as well as a series of emission reduction paths.
However, the construction of China’s carbon market is almost at a blank stage, and the core issue is still “stuck neck”.
On December 31, 2020, the Ministry of Ecology and Environment of the People’s Republic of my country announced the “Administrative Measures for Carbon Emission Trading (Trial)”, which stipulated the trading principles, institutional framework and implementation process of the national carbon trading market, which came into effect on February 1, 2021. The first compliance cycle of the national unified carbon trading market with the power generation industry as the entrance was officially launched.
The 2,225 key emission units in the power generation industry have been allocated emission quotas, and the excess quotas need to be offset by corresponding carbon elimination and carbon trading.
Recently, Zhou Xiaochuan, former governor of the People’s Bank of China and vice chairman of the Boao Forum for Asia, stated in a speech at the Boao Roundtable that China’s carbon trading still cannot form a reasonable, stable and predictable price. Many organizations and companies are also not clear about what parameters and measurement methods should be used for calculation. Most of the parameters are not measured by actual measurement of carbon dioxide in the air, but measured by production methods and industrial methods.
In addition to establishing a carbon trading market and achieving carbon neutrality, it faces decarbonization in both the demand side and the supply side. The main pressure for decarbonization on the demand side comes from the industrial side, such as industry, agriculture and animal husbandry, while the decarbonization on the supply side includes energy production methods such as electricity, hydrogen energy, and biomass, as well as carbon capture, storage, and utilization. The realization path mainly includes clean energy production, carbon capture and carbon consumption, and energy efficiency optimization.
Professor Zhao Bin believes that the energy structure is the top priority of the carbon issue. “Although the development of new energy has been promoted in the past, the existing energy structure has been stable and solid, but it has not been launched. It just so happens that the policy is now putting pressure on the new energy. There is a good breakthrough period that can accelerate the transformation of the energy structure.”
Only when the industrial base has accumulated to a certain level can there be enough confidence to promote energy conversion. The fight for the right to speak in carbon emissions is basically the game of the big countries. When the vast majority of developing countries still struggle to squeeze into the poker table, all major countries have realized that carbon neutrality is the key to the next era and must be won at an accelerated pace.
Because behind the energy revolutions that have completely changed the way of human existence, it is an industrial revolution.
In 2060, we may be lucky enough to see the end of fossil energy, at least on the eve.