Guido Giacconi | China Europe Possible Cooperation in Fighting Climate Change and Tackling Emerging Economic and Social Challenges

Guido 00.jpg

On December 22, 2021, on the first anniversary of the establishment of the Peking University Institute for Global Health and Development (PKU-iGHD), the “2021 Peking University Global Health and Development Forum: Human Health and Medical Innovation in the Era of Low Carbon Economy”was successfully held. Mr. Guido D.Giacconi, Vice President of the European Union Chamber of Commerce in China delivered a keynote speech at Global Health and Low-Carbon Economic Transition.

I would like to provide my considerations and contribution for facilitating what China and Europe should do, could do, or must do in this period with unprecedented challenges of the pandemic and fighting climate change. I don't want to repeat what my distinguished predecessors have already talked about, very inspiring speeches finding my full alignment.. Instead, I'd like to outline what are the issues about the global health and low-carbon economic transition.

My impression is that the more the global leaders talk about decarbonization, the more they miss the focus of what's the challenge. From my standpoint, the challenge is to keep the increase of the planet temperature under possibly 1.5 degrees versus the pre- industrial era levels. And now, unfortunately, the COP26 outcome already stated that the challenge is to keep it under 2 degrees. If the temperature over the next 20 years will increase 2 degrees, it could bring unprecedented, uncontrollable, and unexpected consequences from the economic, the social, and the biodiversity standpoint.

The challenge is not local, but rather global. Green House Gases (GHGs) don’t have passports and Climate Change will hit with no political discretion. China, Europe, and the US have the highest share of greenhouse gases emission, not only CO2; that’s why they also have the biggest responsibility for fighting climate change. With different footprints, China represents 27% of greenhouse gas emissions on a global scale while Europe represents 6% even though their GDP are generally comparable. This implies that that Europe is advanced in terms of containing the greenhouse gases emissions, and its practices, models, technologies, regulations could help China to accelerate the pace towards Carbon Peak and Neutrality. How could it be done? We already talked about analyzing the healthcare systems, in the meantime there should be a common wisdom that it cannot be done if it’s not through a holistic and systemic approach, where technology is only playing a partial and, paradoxically, not decisive role. If the technology is not embedded and harmonized in a global design and in an effective design, technology alone doesn't work, and in some cases, it could be even worse. For example, in China, the carbon footprint of electrical vehicles is worse than vehicles fueled by natural gas. Why? Because in China, more than 75% of electricity is produced by coal fire plants, while, for example, in Denmark, 95% of the energy is produced from renewable sources. This means that every new electrical vehicle in China worsens the carbon footprint while in Denmark it improves. Therefore, technologies and solutions, including simple and basic technologies like electric vehicles, have to be properly localized and tailored to local conditions. We can find many other cases of “mis localization” without taking local conditions into account.

Let’s now talk about the healthcare system, which is often discussed based on the cost-based economic and financial levers, and mainly on the cost related to labor. Typically, the effectiveness of the healthcare system is measured by the quality of the quality of system’s outcomes, especially the quality of human health evaluated by certain KPIs such as the average life expectancy or capability to treat diseases vs the total cost to be brne to maintain the system itself. But for the first time in human history, not only in the healthcare system, since the launch of the first Emission Trade System (ETS) and accelerated by Europe’s pledge to become carbon neutral by 2050 and China by 2060, the game changers in economic global models came into the stage, i.e. CO2/GHGs. Until the confirmed awareness of GHGs role in global warming and climate change, economic values of goods were largely based on the cost of human labor, and human labor was in history and is the fundamental asset regulating economic models. Current and future monetization of emissions has introduced a new asset we might call “negative”, i.e. the stock of entities’ emissions reduces the entities “value”, on top of the carbon trading and ETS mechanisms or taxation systems. The greenhouse gases are a negative asset and a negative commodity playing a decisive role in forthcoming economic models. Nevertheless, we still have not found a way to properly asses and quantify this asset negative value (ETS is only one of the possible ways).

In any case, the pledges major economies took for achieving carbon neutrality, whenever it will happen, imply a radical changes of economic models, including healthcare systems whose carbon footprint is significant in the global scale and will increase with the forthcoming economic development.  Hence, the healthcare systems carbon footprint must be taken into consideration and must be valued or used as a lever for improving not only the quality of services, but also how the services are produced and provided and how much greenhouse gases they directly or indirectly produce. The healthcare systems must and will be intertwined with climate change dynamics, both with a direct dynamic through healthcare systems emissions and indirectly from the climate change that put healthcare systems under stress due to the negative impact on human health in multiple ways.

The direct negative impact on human health of climate change has been already discussed. It’s worth noting that the healthcare system carbon footprint has been calculated as about 4% of global greenhouse gases. In some countries like the United States, it can be close to 10%, while in other countries it's less than 4%. There is a correlation between healthcare system carbon footprint and GDP per capita; and this would bring to a risky “Catch-22”: Climate change will hit human health, and the human health worsening will further stress the healthcare system. The further stressed healthcare system will increase its carbon footprint with negative impact on human being and plant health. We must cut this perversion in a way that has been discussed and is going to be discussed.

I won't go into further detail on how the climate change impacts the human health, but I want to propose the methodologies that have already been applied in other industrial sectors, which are from the greenhouse protocol and now have also been piloted in the healthcare system. First of all, the definition of the boundary in the healthcare system needs to be assessed before designing a pathway towards carbon neutrality: it’s an extremely complex exercise. On average, 70% of the healthcare system carbon footprint comes from hospitals, but this varies from country to country and is highly dependent from the healthcare system design in that specific country. In China, it's very high because of its centralized healthcare system design. In other countries like those in West and North Europe, with the distributed healthcare system, this impact is lower. But in any case, the hospital design, down to the quality of service and the number of average treatment days per disease, is going to have a direct impact on the emissions generated by hospitals themselves.

What China and Europe could do for facilitating acceleration of fighting climate change and carbon neutrality in the healthcare systems?  Both Europe and China have taken peak and neutrality with specific pledges, there is apparently no way of return on that. Now the challenge is how to make it, what are the priorities, and how it can be done. Europe can leverage its know-how to support China in fighting climate change and accelerating carbon neutrality. Unfortunately, still we do see confusion in properly tackling carbon neutrality, but the priority now is to make pledges to be followed by actions. Europe with the Green Deal has already done and China with the One Plus Ten policy has launched it. The two economies must to sit together, overcoming global tensions and establishing comprehensive and thorough discussions.

In3act, a European business strategy advisory company with energy as one of the focus sectors in China, is very concerned about the possibility and progress of how China is sticking to its commitments to achieve carbon peak by 2030 and carbon neutrality by 2060.

For doing that, the focus should be put not only on energy but rather on global economic models their openness and transparency and, for healthcare, on the combination of models and quality of services in a holistic way.

So, again, what should be done is to approach the problem in a holistic way, also with the support to the social changes that are happening in China and in Europe with the aging population that would stress the healthcare system even more. The healthcare system needs to put a priority on understanding how to reduce its carbon footprint for avoiding further stress in the near future.

We have identified priorities in China and Europe. Also as Vice President of the European Union Chamber of Commerce in China, I am also trying to facilitate a continuous and long-term dialogue for the sake of bringing into China all the experience, competences, technologies and solutions we developed in Europe over the past decades, not only in how to tackle energy transition, but also for designing an effective and efficient, effective, transparent and open healthcare system, keen to make European players to proactively contribute, with a very low carbon footprint in a long term perspective for the sake of human being and planet health.

Related News