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KEY POINTS Supporting Low-CarbonEnergy Transition in Small andMedium-Sized Towns of thePeople’s Republic of China •Low-carbon developmentin counties is one of the keyelements in achieving thePeople’s Republic China’sgoal of peaking carbonemissions by 2030 andcarbon neutrality by 2060. •A range of actions isneeded to unlock thepotential of technicalsolutions for reducingcarbon emissions, includinginternalizing greenhouse gasemission costs, enhancingmarket mechanisms andrationalizing tariff signals inthe power sector, developingsmart energy systems,implementing demand-sidemanagement and improvingenergy efficiency, and takingan integrated approach tosystem planning. Charity TorregosaPrincipal Energy OfficerEnergy Sector Office, SD1, ADB Lei Zhang Project Administration Unit HeadSectors Department 1 (SD1)Asian Development Bank (ADB) Jinlong MaTianjin UniversityConsultant, ADB Gloria Gerilla-TeknomoPrincipal Transport Sector OfficerTransport Sector Office, SD1, ADB Fuzhou XuTianjin UniversityConsultant, ADB •Public and private financing,along with support frommultilateral developmentbanks, can spur innovationand create new businessopportunities in low-carbontechnologies. BACKGROUND The People’s Republic of China (PRC) is committed to addressing air quality,environmental sustainability, and low-carbon development. In September 2020,the Government of the PRC declared what is being referred to as the “dual carbongoals”—that carbon emissions should peak by 2030 and that carbon neutrality shouldbe achieved by 2060. Since this declaration, the PRC has entered a new era, witha strategic focus on low-carbon development along with high-quality growth. Thegovernment has stipulated a series of policies and initiated a range of programs tocontrol carbon emissions. Shifting from control of energy consumption, it establishedthe “1+N” policy framework to achieve the dual carbon goals and is implementingcoordinated governance on emissions reduction.1 •Based on counties’ specificconditions, it is appropriateto formulate road mapsthat will chart their pathtoward net zero that is anintegral part of the nationalenergy transition and greengrowth strategies. ISBN 978-92-9277-423-3 (print)ISBN 978-92-9277-424-0 (PDF)ISSN 2071-7202 (print)ISSN 2218-2675 (PDF)Publication Stock No. BRF250343-2DOI: http://dx.doi.org/10.22617/BRF250343-2 ADB BRIEFS NO. 354 Energy transition that is centered around more renewable energyin the energy mix and greater energy efficiency and smarter energysystems is among the key elements of the government’s efforts.With carbon emissions at the county-level2accounting for morethan 60% of the nation’s total, promoting the transition towardclean energy in counties is crucial for achieving the national dualcarbon goals.3Green energy transitions will also contribute tooptimizing the economic restructuring and green growth.4 The urbanization in counties is the driver of nationaldemographic changes and is a salient characteristic of thePRC’s social and economic environment.5Counties are in theprimary position in the urbanization process. As an importantlink between rural areas and cities, the urban areas of counties,i.e., small and medium-sized towns (SMTs), are pivotal in definingthe new urbanization trend and implementing the national ruralrevitalization strategy.6A large proportion of counties’ economicactivities, energy consumption, and carbon emission occur inSMTs, which places counties at the crux of the national greenenergy transition strategies. This brief presents the research supporting the developmentof low-carbon energy systems in the PRC’s SMTs and providingreference for energy transition efforts in the PRC’s counties andto similar administrative divisions in other developing countriesin Asia and the Pacific.7 COUNTIES AND THEIR PROFILES The local jurisdictions or administrative divisions in the PRCare composed of four levels: (i) provincial, (ii) prefectural,(iii) county, and (iv) village township. By the end of 2019,there were 34 provincial-level, 333 prefecture-level, and 2,846county-level administrative divisions, as listed in Table 1. structure, and existing energy infrastructure among counties indifferent regions in the PRC. It is necessary to identify technicalsolutions and measures for energy system optimization based ontheir specific local conditions. A multidimensional spatial clusteringand hierarchical clustering method is used to generate profiles ofthe 2,846 counties across the nation based on 27 indicators in13 categories (Figure 1). Categorizing Counties’ ProfilesThere are significant differences and diversity in geographical characteristics, resource endowment, population density anddistribution, social and economic development level, industrial Supporting Low-Carbon Energy Transition in Small and Medium-Sized Towns of the PRC Each category is divided into four levels: (i) high, (ii) upper middle,(iii) lower middle, and (iv) low. An exception is the climate zone,wh