Using challenge prizes to help China cut carbon emissions

Last week we held a workshop in Beijing with the UNDP and China’s National Centre for Climate Change Strategy and International Cooperation (NCSC).The goal of the workshop was to introduce challenge prizes to China and to get policymakers thinking about how they could help the country cut its carbon emissions.

China is the world’s largest emitter of carbon dioxide. While many countries blame China for driving global climate change by not doing enough to cut emissions, the Chinese government also recognises that “China is one of the countries most vulnerable to the adverse impact of climate change.” Extreme weather events, the rise of dengue fever in the south of China and loss of biodiversity have all been attributed to climate change.

China's overreliance on fossil fuels also causes serious air pollution that is estimated to have cost the country up to 13 per cent of its GDP in 2010. Pictures of marathon runners wearing face masks at the weekend show just how bad it can get.

The Chinese government is making a serious effort to reduce carbon emissions, from setting up carbon trading pilots to committing substantial funds to clean energy R&D. Yet despite all its efforts, coal use is predicted to increase by 50 per cent in the next 20 years and emissions aren’t expected to peak until after 2030.

It’s clear that top down initiatives alone aren’t going to solve the problem. China needs fresh thinking and it needs to motivate more people to get involved in reducing emissions. This is where challenge prizes could play a useful role.

At the workshop we introduced the concept of challenge prizes and gave examples of where they have been used successfully to reduce carbon emissions (e.g. the Big Green Challenge). We then asked participants to work in groups on a design your own challenge prize exercise. The exercise uncovered lots of interesting ideas, with participants suggesting prizes that could:

  • Encourage the use of grey water in rural areas
  • Create an app to reduce congestion in Beijing by improving driver behaviour
  • Encourage the adoption of energy saving technology by SMEs
  • Develop a low cost method for processing waste in small towns

The exercise showed that cutting emissions is a complex task, with technical, cultural and legislative hurdles. For example, switching from coal to cleaner forms of electricity generation is difficult because coal is cheap and many coal fired power plants have decades of useful life left. Shutting them down would also lead to huge numbers of job losses.

This is why creative approaches are needed. One avenue to explore could involve reducing the demand for energy by incentivising behaviour change. The Chinese government is keen for citizens to adopt low carbon lifestyles and in August the Ministry of Environmental Protection released the quirkly named 'Principles of citizen behaviour in the united struggle to breathe easier' (Chinese, PDF).

The document encourages citizens to “Choose public transport first, share cars if possible, walk or cycle…be frugal, be a thrifty consumer, reuse stuff, sort your rubbish.” Like most Chinese policy documents, the paper is long on ideals and short on concrete measures. Could a challenge prize be the right tool to help encourage these behaviours?

Climate change is a major problem which requires large scale, government led solutions: international agreements, radical new technologies, systemic change. But it also requires incremental, bottom up approaches which could, collectively, lead to dramatic reductions in carbon emissions.

We are looking forward to working with the UNDP and Chinese counterparts to explore the role that challenge prizes could play in discovering, incentivising, and scaling up these approaches.


Tom Saunders

Tom Saunders

Tom Saunders

Principal Researcher

Tom was a Principal Researcher in the inclusive innovation team.

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Marco Zappalorto

Marco is Head of European Development and he is currently developing a coherent European strategy for Nesta to expand the organisation's European reach and core partnerships.  Prior to…