China is already the world’s leading renewable energy producer [1], and is over-taking more developed economies in exploiting valuable economic opportunities, creating green-collar jobs and leading development of critical low carbon technologies, says a new report to be published July 2008 by The Climate Group. [2]
The report – China’s Clean Revolution - shows that China’s transition to a low carbon economy is well underway, led by supportive government policies which are not only driving innovation in low carbon technologies but also diverting billions of dollars of investment into energy efficiency and renewable energy.
The report reveals that the low carbon economy is just as attractive to developing nations like China, as it is for richer countries such as the UK, Japan and Germany.
China’s combination of cost advantages, a clear policy framework, a dynamic and entrepreneurial business environment and abundant abatement opportunities, is proving that developing nations have as much, if not more, to gain from investment in low carbon solutions creating green-collar jobs, social benefits and economic growth.
Despite its coal-dependent economy, the report reveals Chinese government and businesses have embarked on a Clean Revolution that has already made it a world leader in the manufacture of solar photo-voltaic technology (Solar PV) where its six biggest solar companies have a combined market value of over USD $15 billion.
China is also set to become the world’s leading manufacturer of wind turbines, with production capacity expected to reach 10GW per year by the end of 2009, and is competing aggressively in other low carbon markets including solar water heaters, energy efficient home appliances, and rechargeable batteries.
Quotes[]
Steve Howard, CEO of The Climate Group says: “For too long, many governments, businesses and individuals have been wary of committing to action on climate change because they perceive that China – the world’s largest emitter – is doing little to address the issue. However, the reality is that China’s government is beginning to unleash a low carbon dragon which will power its future growth, development and energy security objectives.”
Changhua Wu, China Director, The Climate Group, says: “Far from ignoring climate change, Chinese leaders have already committed to improving energy efficiency and scaling up the growth of low carbon industries. China is beginning to pull its weight on climate change and the targets and policies in place are in line with those being taken by ‘leading’ countries like the UK and Germany.”
Investment in renewable energy in China - almost USD $12 billion in 2007 - is almost level with world leader Germany as a percentage of GDP. Stronger policies from the Chinese government are creating increased demand for low carbon investment and China will require a further USD $398 billion (USD $33billion per year) to meet its 2020 renewable energy goals.
Steve Howard says: “China’s current trajectory will ensure it remains a strategic global hub for low carbon investment, innovation and growth over coming decades.”
Key findings[]
• China has recently over-taken the USA as the world’s leading emitter of greenhouse gas and will play a key role in solving the climate change challenge facing the world. China’s 1.3 billion population currently accounts for 24 per cent of total global emissions. Although China’s CO2 per capita is still relatively low, should China’s citizens ever emit as much CO2 per capita as Americans now are, China’s total emissions would be roughly equivalent to the entire planet today.
Often described as the factory of the world, 23 per cent of China’s CO2 emissions were produced in the manufacture of products for export in 2004, mainly to the developed world. However, it is precisely its ability to manufacture technology in large volumes and at competitive prices that will enable it to dominate the world’s renewable technology market.
• China is already the leading renewable energy producer in the world in terms of installed generating capacity, with the largest hydro-electric fleet and fifth largest wind power fleet in the world. It plans to double the proportion of renewable energy to 15 per cent by 2020. China has seen investment of USD$12bn in renewable energy - more than than any other country in the world except Germany.
• China is already a leading manufacturer of solar photo-voltaic technology with 820 megawatts of production by the end of 2007, second only to Japan. Output of solar panels has doubled for each of the last four years. By 2009, China will also become the world’s leading manufacturer of wind turbines, with leading companies Goldwind and Sinovel branching into exports. It is also taking the lead in solar water heaters, energy efficient home appliances, and rechargeable batteries.
• China leads the world in low carbon transport. China is introducing fuel efficiency standards for cars which are 40 per cent higher than those in the US. 21 million electric bicycles and 1.64 million energy efficient compact cars were sold in 2007. China is the world’s third largest ethanol producer, and by converting an area of marginal land half the size of the UK, it plans to grow 12 million tonnes of low carbon fuel per year by 2020.
• China is making successful efforts in reducing energy intensity. China has targeted a 20 per cent reduction in energy intensity by 2010, on 2005 levels. Using high efficiency, super critical technology to replace small, inefficient coal plants, China has avoided CO2 emissions of approximately 37.6 million tonnes a year (since 2007). China has set energy efficiency targets for its 1000 largest energy consuming companies.
• China has a strong and comprehensive low carbon policy framework in place. In addition to an over-arching 20 per cent energy intensity reduction target and a 15 per cent energy reduction target a comprehensive set of complementary regulations have been developed to cover almost every sector of China’s economy. These include fuel economy regulations, mandatory efficiency and labelling standards for home appliances, green car taxes, strict building efficiency design codes, and renewable subsidies.
• Chinese entrepreneurs are riding a low carbon wave of investment. A low carbon wave has swept up tens of thousands of Chinese companies and created some of China’s most successful business leaders. China’s six largest solar PV manufacturers had a market value of over USD$15bn in July 2008; the market for solar water heaters is worth over USD$2bn a year and is growing at 20 per cent; and the market for electric bicycles (e-bikes) is around USD$6bn.
• The report highlights the massive investment opportunity that will be created around China’s low carbon development. Returns on energy efficiency improvements often exceed 50 per cent per year, equivalent to a pay-back period of only two years. China is the second largest recipient of sustainable energy investment (USD$12bn) of any other country in the world except Germany. Taking advantage of international markets, China has already become the largest supplier of Clean Development Mechanism (CDM) credits in the world which is now funding billions of dollars worth of carbon reductions. It is estimated that China will require a further USD $398bn (USD$33bn per year) to meet its 2020 renewable energy goals.
References[]
- ↑ In terms of installed renewable capacity, China leads the world, reaching 152 Gigawatts in 2007
- ↑ The Climate Group, July 31
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