China well placed to turn green into gold
China has been reluctant to give way on climate change issues, as the stalemate at the Copenhagen summit shows. But the desire to be tough negotiators shouldn’t get in the way of green initiatives. China may have more to gain than most from a global push towards a greener world, both as a heavy commodity user and as an exporter into a potential $1 trillion market.
China is already by far the world’s largest producer of solar panels, accounting for more than 40 percent of global supply. Among the world’s top 15 wind turbine manufacturers, three now hail from China, each accounting for about 4 percent of global market share.
The market for green technology could reach $1 trillion by 2013, according to PricewaterhouseCoopers. If China could capture ten percent of that, which could prove conservative based on its share of solar and wind, it could reap $100 billion. That’s what all of the G77 developing countries have demanded from rich nations during the Copenhagen talks.
Meanwhile, China has an opportunity to replace its falling low-value exports with a more sustainable, high-value green alternative. Developed nations would struggle to match the “China price” — a result of a large domestic market, state subsidies, cheap loans and low-cost labor. That should help China achieve another goal: nurturing domestic champions.
There is another reason China should support a world accord on low-carbon energy: it is one of the world’s biggest commodity consumers, and the second-largest user of oil. That leaves the country worrying about energy security, and heavily exposed to spikes in commodity prices, such as the 39 percent rise this year. Reducing a reliance on the fickle fuel markets makes a green compromise more than worth it.