Staring at Beijing on a smoggy winter day you wouldn’t think it, but in 2013 China strengthened its position as the world’s leading investor in clean technology. According to a recent research published by the Pew Charitable Trusts – a non-profit organization – last year the People’s Republic solidified its global preeminence, attracting US$54.2 billion in investments. Among other data, the paper points out that the People’s Republic has “the world’s most robust wind market” which alone attracted US$28 billion.
This may seem contradictory given that the Chinese market has shrunk by 6 percent in absolute terms. But at a time when clean energy investments worldwide have declined 20 percent from a 2011 record of $318 billion, the losses were offset by others’ troubles, while fast-growing countries – such as Japan – are still no match for the Chinese numbers.
The trend is deeply uneven. G-20 countries have generally underperformed: total investments in clean technology have declined overall by 16 percent. Only three of them – Japan, Canada, and the United Kingdom – have been bumping up investments, with Japan at the forefront. In 2013 the land of the rising sun increased investments by 80 per cent and broke its national record, reaching an expenditure of $28.6 billion.
Looking at the global picture, it emerges that the most significant decreases come from a region which covers Europe, the Middle East and Africa, where “clean energy investment [..] declined sharply for the second year in a row, falling 42 percent in 2013 to levels not seen since the mid-2000s.” Overall, investments shrank to $55 billion, says the paper, “less than half the region’s 2011 record of $115 billion.” The last two years have inverted a trend which had been going on for a while, since this part of the globe used to be “the world’s most attractive clean energy market over the past decade”.
Much is to be blamed on Europe, where “major clean energy markets decreased considerably in 2013, with year-over-year investments down 55 percent in Germany, 75 percent in Italy, and 84 percent in Spain.” The only one going in the opposite direction is the United Kingdom, where “a few large offshore wind projects gained significant financing and several were completed.”
The two largest markets in the Americas are not having a great time either – the United States and Brazil were down 9 and 55 percent, respectively – but the situation is different on the other side of the globe, in Asia and Oceania. There, in the only region where investments were rising in 2013, “steady, uninterrupted growth in clean energy investment [..] continued apace in 2013, with overall levels increasing 10 percent, to $102 billion.”
Being the top investor in clean technologies testifies to Beijing’s willingness to clean up the country’s deteriorated environment, a policy which is much needed in the People’s Republic. Beijing’s air pollution got so bad last winter that a report by the Shanghai Academy of Social Sciences deemed the city’s air “barely suitable” for human life. Earlier this year, a report by Hurun focusing on rich people leaving China reported that among the top reasons for packing up are food security and pollution.
Authorities in Beijing are increasingly aware of the need to curb environmental degradation – and willing to back up words with Renmimbi. In the 12th Five-Year Plan, which covers the years from 2011 to 2015, the government foresees that the financing of environmental protection will go beyond $816 billion. In February this year, it was also reported that China will spend about $330 billion to tackle water pollution.
The benefits of a better environment would not be limited to improved health and economic performance, but could include better relations with the public, which has become increasingly intolerant of pollution. Last week, thousands of people took to the streets in Maoming, Guangdong Province, to protest against plans for a paraxylene factory. The protestors clashed with the police but may have obtained what they wanted: municipal authorities have stated that the plant will not go ahead if the majority of local residents do not want it to.
It remains to be seen whether increasing toughness against polluters and investments in clean energy will be enough to fight off environmental degradation. Just last week, the environmental ministry said that almost 2,000 enterprises were caught violating state pollution guidelines, a sign that the fight against pollution remains a tough one.