'Going Green' goes red in China

For China, “Going Green,” has taken on almost the same level of importance as “Going Red.”

China is now the world’s leader in alternative energy manufacturing. Why the sudden urgency to “Go Green in China?”

“Going Green” in China is important on several levels, specifically:

• Pollution as National Crisis: China has a serious and well-documented problem with pollution; Going Green not only makes sense from a business perspective; it will directly benefit China’s 1.3 billion citizens lead healthier, happier and more sustainable lives.

• Green Economic Benefit: Going Green will reduce China’s overall dependence on imported oil while increasing “Made in China” alternative energy technology - for consumption within China and for export globally.

• Green Infrastructure and Green Jobs: the drive to go green in China will enhance and modernise China’s energy infrastructure while providing an entirely new job industry sector – many new jobs will be created.

Expected to become the world’s largest economy in the next 20 to 40 years, the next steps in the development of China’s alternative energy market will have global ramifications. China is indeed leading in the manufacture and Top-down Government emphasis on Greentech; however, it is again important to temper the hype found in the recent pages of the New York Times with some on-the-ground perspective: the Greentech market is still in its infancy and China has demonstrated an early lead in manufacturing – China will still need to emphasise Green innovation and the development of proprietary Greentech to truly lead.

The problem of pollution in China is severe and pressing.

The Government has watched as some of its natural resources and population have been negatively impacted by the effects of pollution. The problem has been a call to action for China’s Government – and it has attempted to create an economic and development policy synergised with the goals of “Going Green.”

According to the “China Greentech Report 2009” by the China Greentech Initiative, “China is now the world’s largest emitter of greenhouse gases (GHGs), responsible for over 20 per cent of annual CO2 emissions from the burning of fossil fuels, although emissions per capita are still low relative to most developed countries.”

In “Hot, Flat, and Crowded,” influential New York Times columnist Thomas L. Friedman wrote, “what got the Chinese leadership to move towards Green GDPism? Probably nothing more than looking out the window.”

Friedman also wrote that according to the US Environmental Protection Agency, “on some days almost 25 per cent of the polluting matter in the air above Los Angeles originated in China.”

According to the China Greentech Report 2009, “China has less than 7 per cent of the world’s fresh water resources” and “at current growth rates, China’s CO2 emissions could represent nearly 30 per cent of the world’s total by 2030.”

China has moved quickly to take the lead in two important sources of alternative energy: wind and solar.

In the past year, China has become the world’s leading producer of wind turbines. Chinese wind turbines are now being used the United States – even in far-flung Minnesota. China plans to lead in alternative energy for domestic consumption and also as a lower-cost export.

China has recently become the world’s leader in manufacturing solar panels. It’s not just domestic Chinese companies who want to take part in China’s Green revolution. Foreign companies specialising in Greentech recognise the unprecedented opportunities presented in China’s Greentech market – a unique moment in time. Danish company Vestas recently built the world’s largest wind turbine complex in China.

According to the New York Times, “China intends for wind, solar and biomass energy to represent 8 per cent of its electricity generation capacity by 2020. That compares with less than 4 per cent now in China and the United States. Coal will still represent two-thirds of China’s capacity in 2020, and nuclear and hydropower most of the rest.”

China is a huge consumer of energy with domestic demand for energy increasing 15 per cent a year.

In addition to Green being great as vehicle for exports, China will also need to address its own significant energy demands.

Going Green has become a priority of great importance to China’s Central Government. China’s Premier Wen Jiabao recently announced that he will personally head up National Energy Commission.

China is planning massive alternative energy projects.

Many jobs have already been created in China as a result of Going Green: in 2008, 1.12 million people in China were working in renewable energy jobs with 100,000 new jobs being added every year. China’s State Banks are also funding the development of many critical Green Energy projects – it helps when an issue has the support of the Central Government.

Given all of the above, it’s important, still, to separate the facts from the hype: China is leading as a relatively low-cost Greentech manufacturer but still has work to do become the alternative energy knowledge leader.

While China will lead as a global manufacturer and exporter of wind turbines and solar panels, China needs to focus on the IP issues that have slowed innovation in core Greentech technology.

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