China should aim to reduce its carbon intensity by 4 or 5 percent year-on-year if it is to achieve its goal of low-carbon development by 2050, says a leading environmental think tank.

If the annual target is met, carbon emissions per unit of economic output will fall by between 85 and 90 percent by the middle of the century, compared to the 2005 baseline, said the China Council of International Cooperation on Environment and Development (CCICED). The organization comprises 200 world experts who regularly offer policy suggestions to the Chinese central government.

It was the first time such a high-level organization had put forward a concrete proposal for emissions reduction since President Hu Jintao committed to making a "notable cut" at the UN climate change summit in September.

The proposal, which was exclusively obtained by China Daily yesterday, will be put before China's top leaders, said a source close to the council.

The expert panel is holding its annual conference and is scheduled to be received by Premier Wen Jiabao tomorrow.

If China is to meet the target of year-on-year emissions cuts of between 4 and 5 percent, it will need to reduce energy intensity by between 75 and 85 percent by 2050.

In addition, the proportion of manufacturing industry within the national economic structure would need to be cut from the current 50 percent to around 30 percent by the middle of the century.

By 2030, more than half of new energy demand should be met by low-carbon energy and by 2050, all new energy should be clean energy, said the document.

In addition, carbon capture and storage technology should be promoted by 2030.

"It is crucial for China to take the path toward a low-carbon economy, and to get started on it quickly," said Margaret Biggs, CCICED's executive vice-chairperson.

"This will ensure China retains a competitive edge globally and avoids the carbon lock-in effects in its economic growth."

The report also suggested China reforms its environmental tax system as soon as possible. It says the time is ripe for the country to begin to collect taxes from companies that emit pollutions and carbon dioxide because of the burning of fossil fuels.

"China needs to introduce a carbon tax by 2020, otherwise it will be too late for the country to fulfill its goals in coping with climate change," the report said.

Daniel Dudek, chief economist with the Environmental Defense Fund and a member of CCICED, said the recommendation is consistent with what China has already achieved.

"It comes at an important time, while China is developing its 12th Five-Year Plan (2011-15), with the consideration of a further 20 percent improvement in energy efficiency. Now here is a carbon reduction plan that will go along with that," he said. "It is a very strong signal to the rest of the world of how seriously China is taking the challenge of combating climate change."

However, Zou Ji, an environment policy professor with Renmin University of China, said the carbon intensity cut proposal is unlikely to become policy because industrial restructuring would be difficult and require a huge investment.

"Urbanization and industrialization in China will have to continue until around 2030," said Zou. "The industrial sector will still take up about 46 percent of the whole economy by then, which means carbon emissions will continue to grow."

An analysis of low carbon development conducted at Renmin University of China by a team led by Zou estimated that China can reduce its carbon intensity by 83 percent by 2050 from the 2005 level at a cost of about 2.3 percent of GDP.

The study suggested a 90 percent reduction in carbon intensity by 2050 would be very expensive, costing around 7 percent of GDP.

Zou said Chinese people need to change their lifestyle if the country is to achieve low carbon growth. He said that would entail avoiding luxury housing and high-emission cars.

Dudek also pointed out that it will be crucial for China to communicate carbon intensity targets to enterprises and the public as well as encourage more investment in the low carbon sectors.

Vice-Premier Li Keqiang said at the opening ceremony of CCICED's annual meeting that China will incorporate a carbon intensity target in its 12th Five-Year Plan.