A Shanghai streetDespite economic downturn, China’s domestic markets continue to scale-up low carbon technology A new report by The Climate Group shows that in an incredibly short space of time China has taken the lead in the race to develop and commercialise a range of low-carbon technologies.
On the back of ambitious government policies and a new breed of entrepreneurs, Chinese businesses are amongst the top producers of electric vehicles, wind turbines, solar panels and energy-efficient appliances, according to the report.
Even with this growth, the opportunities for Chinese and foreign companies are huge. A successful agreement in Copenhagen later this year will open the door to further collaboration and growth.
Building on The Climate Group’s 2008 report, the new report, China’s Clean Revolution II: China’s opportunity for a low carbon future is a synthesis of the latest information on China’s progress towards a low-carbon economy and aims to keep pace with a rapidly evolving green agenda in China, as well as expanding to cover new industries including geothermal power.
In the last year, the global economic turndown has hurt China’s exports of renewable and low-carbon technologies and created a new impetus to expand its domestic markets. The Chinese government’s 4 trillion Yuan (USD 585 billion) stimulus package put a strong emphasis on clean development and is backed by many new laws and policies focused on increasing the uptake of low-carbon technologies.
Green areas
The report examines four key areas of China’s low carbon economy: low carbon vehicles, energy efficiency in industry, renewable energy and low carbon buildings and urban design. In each of these areas Chinese businesses, supported by the Chinese government, are demonstrating solid progress:
• Thirteen Chinese cities have signed up to a government scheme to purchase 13,000 electric vehicles (EVs) this year in total. The aim is to manufacture half a million EVs in China in 2011;
• The energy intensity of the Chinese economy has fallen by over 60 per cent since 1980, and the government has set a goal of reducing it by a further 20 per cent between 2005 and 2010;
• Internationally, mainland China supplies 30 per cent of the world’s solar PV technology (or 40 per cent including Taiwan); domestically, China is the largest wind power generator in Asia and fourth in the world;
• China’s energy conservation goals include a 50 per cent energy conservation standard for all new buildings and a 65 per cent standard for new buildings in some major cities by 2010.
Liu Yanhua, Vice Minister of China’s Ministry of Science and Technology of China says, “Along with the penetration of efforts on energy-saving and emissions reduction in addressing climate change, China has made remarkable progress: China’s installed wind power capacity is doubling annually; China has produced nearly 40 per cent of the world’s solar PV products; China has the world’s largest raw material resource for bio-fuel; and China’s auto industry is working to lead the world’s new energy automotive industry.”
The barriers
The report also acknowledges the barriers that exist to China realising its low carbon economy. China is struggling hard to catch up with international peers and to move from lower-end to higher-end technology, but technological and political gaps still exist. Creative, market-based financing mechanisms are also required. It is estimated that China will need to invest 4 trillion Yuan (USD 585 billion) a year to meet its energy conservation and emissions reduction goals.
Changhua Wu, Greater China Director at The Climate Group says, “It’s a 70-30 situation. We have 70 per cent of the solutions today, but they are not all proven technologies and none are at the scale we need. Thirty per cent of the solutions will be found in the future. Therefore we still need foreign investment to drive the revolution.”
As both a major emitter and provider of the solutions to climate change, China’s role at the heart of the international climate negotiations is essential to their success and their ability to accelerate the transition to a prosperous low carbon global economy.
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