February 2011 | € 5.

00 Issue # 923 A New Europe Special Edition

NEW EUROPE
GREENING ECONOMIES CHINA
2 GREENING ECONOMIES
February 20-26, 2011
CHINA
The Green Risk for China
Suicide in the Name of the Environment?
by Alexandros Koronakis
China's theorized Green
transformation is not
without risks for China
- and the rest of the
world. Having visited
China recently, “Going
Green” was certainly
very high on the agendas
of political, academic,
and social spheres, but
the mantra comes not without the harsh reality that
Greening has a high cost.
In 2009 the EU imported €215 billion worth of
goods from China, providing 18% of EU merchan-
dise in trade. In 2010, the EU became China’s biggest
trading partner; European citizens have become in-
creasingly dependent on Chinese production.
It is without a doubt that China has become the
world’s production and manufacturing centre. The
very simple reason for this is that China has been pro-
viding corporations with such opportunities at a
lower total cost than many other countries; and here
the word cost incorporates all elements, from wages
to political stability, to lax environmental regulations.
But it is important to remember that production in
China is not done for the sole benefit of the Chinese.
The green transformation of the Chinese economy,
therefore, comes with a significant risk. Consumers,
at the end of the day, care very little about how envi-
ronmentally friendly the production process of their
toothbrush, or t-shirt, or laptop has been.
Though caring about the environment on a local and
global scale is becoming a fashion in European coun-
tries and the United States of America, the value at-
tached to a green product still does not offset the
additional expense required to procure it (and hence
produce it). It is here that lies China’s great green risk.
If China goes green too fast, hence increasing the cost
of manufacturing, corporations will simply move to a
different country, setting up manufacturing and pro-
duction plants where the total cost is lowest. Whether
or not China should be the world’s production cen-
tre is significant debate in itself, but one element re-
mains undeniable: the need for a greener China is the
response to a need for a Greener world.
However, if China becomes significantly Greener and
most production simply moves to a different country,
as may be economically beneficial to manufacturers,
China will have simply committed economic suicide
in the name of the environment.
NEWEUROPE
EDITOR
Dennis Kefalakos
dkefalakos@neurope.eu
SENIOR EDITORIAL TEAM
Kostis Geropoulos (Energy &
Russian Affairs)
kgeropoulos@neurope.eu
Andy Carling (EU Affairs)
acarling@neurope.eu
Cillian Donnelly (EU Affairs)
cdonnelly@neurope.eu
Ariti Alamanou (Legal Affairs)
aalamanou@neurope.eu
Alexandra Coronakis (Columnist)
acoronaki@neurope.eu
Louise Kissa (Fashion)
lkissa@neurope.eu
© 2011 New Europe all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic or
otherwise, without the permission of New Europe.
NEW EUROPE
A bright future
China has now overtaken Japan as the world's second
largest economy. Within a decade and a half, we are told,
it will be the biggest. The momentum, it would seem, is
unstoppable. But with this undoubted success comes added
pressure; with increased industrial activity comes increased
energy use. It is a simple equation, but one which China
must address as it moves forward: if more industry equals
more energy, how can China continue this economic mo-
mentum while preserving the natural environment and
protecting the health of its 1.3 billion citizens?
Some people have reacted with a certain amount of scep-
ticism to this prospect, suggesting that China's contin-
ued reliance on coal-fired power plants undermine its
efforts to clean up its energy sources. However, as Green-
peace note, the future need not be so bleak; a restructur-
ing of the existing tax structure to give incentives to the
development of green energy sources could break the coal
dependency.
This is not outside the realms of possibility. Some form
of cap-and-trade policy is expected to be included the
next 5-year economic plan, and the Chinese government
has been working on the development of green technol-
ogy. The government has committed itself to reducing
Co2 emissions per GDP by 40-45% by 2020 and is look-
ing at ways to conserve resources, and improving resource
efficiency, through changes in tax and fiscal policy, as well
as the strengthening of existing regulations, and the con-
trolling of pollutants through industrial restructuring and
extended recycling and waste management schemes.
China, like Europe and the US, has come to see that the
development of green technology, as well as benefiting
the environment, can boost the economy, or, in China's
case, keep that forward momentum going. China's green
industry has grown significantly in the past number of
years, and will continue to do so in the future. China's
new model for economic growth will be based on the up-
grading of traditional industries, the development of al-
ternative energy sources, and the promotion of
energy-saving, environmentally-friendly polices. As Zhou
Shengxian puts it on page 4 of this special: “We will es-
tablish a benign circle between socio-economic develop-
ment, resources, and environment, guide enterprises to
vigorously develop green technologies and products, and
develop sustainable use of resources and continuous im-
provement of the ecological environment”.
Finally, many companies from Europe are beginning
to see China as a partner in business. A willingness for
entrepreneurs and businesses to exchange ideas and
learn from one another is one of the key ways in which
the economies, and the environments, of both territo-
ries, can continue to grow and develop. Mutual under-
standing needs to be promoted; and mutual respect and
co-operation is the way in which China and the EU
can benefit from each other, while giving their citizens
a better future.
DIRECTOR BRUSSELS HEADQUARTERS
Alexandros Koronakis Av. de Tervuren/Tervurenlaan 96,
akoronakis@neurope.eu 1040 Brussels, Belgium
Tel. +32 2 5390039
MARKETING & ADVERTISING Fax +32 2 5390339
info@neurope.eu
Ania Lara
alara@neurope.eu PUBLISHERS
EXECUTIVE LAYOUT PRODUCER NEW EUROPE S.A.
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NEW EUROPE February 20-26, 2011
3
Features Contributions

Zhou Shengxian James Moeller Anna-Karin Friis

Promote green The rise of green The environmental
development, uplift china challenges in China's Far
ecological civilization West

Page 4 Page 12 Page 22

Dennis Kefalakos
Green finance should
stem from sweat, not
from paper
Arnaldo Abruzzini Tristan Edmondson
Europe’s SMEs: key Waste to energy – working
players for China’s with chinese governments
move from blue-collar to find european solutions
to green-collar

Page 5 Page 13 Page 23

Crescenzio Professor Zhu Dajian Cillian Donnelly
Rivellini MEP Experiences of green Better mutual
The rising green economic development understanding key to
dragon from european countries better EU-China business
relationship

Page 6 Page 14 Pages 24-25

Ambassador Song Dr. Zhou Fengqi Elizabeth Eckert
Zhe Chinese green economy Solar energy pushes
Develop green forward in china
economy for a better
future

Page 7 Page 15 Page 26

Anna-Karin Friis Cillian Donnelly Cillian Donnelly
A greener China - not A wind energy future for Energy efficiency: the new
as evident as it would China bubble?
seem

Page 8 Page 16 Page 27

Elizabeth Eckert David Maclean Bert De Graeve
Chinese green energy China has the smarts on Best Practices from
advances energy European companies in
China

Page 9 Page 17 Pages 28-29

Zhang Xin Graham Watson Dr. Marco Gemmer
Green economy, we MEP China’s year of the rabbit
are already on the way The EU, China and the inherits the tiger’s drought
green economy and frost

Page 10 Page 18 Page 30

Guoyu Tao Anna-Karin Friis
When yellow shakes Greenpeace: Taxing carbon
hands with blue to force power companies
go cleaner

Page 11 Page 19
4 GREENING ECONOMIES
February 20-26, 2011
Promote green development,
uplift ecological civilization
by Zhou Shengxian
Zhou Shengxian
photo credit: EPA/QILAI SHEN
A visitor takes a rest while sitting beside a poster showing high-tension power lines at an alternative energy convention in Shanghai, China on 19 No-
vember 2009. China is heavily investing in its solar power sector as it announced that the government has decided to subsidize 294 solar power plants
which will generate 642 megawatts of power.The subsidies are part of China's "golden sun" plan, a project meant to find alternative energy sources.
The development of human civilization has been
able occur while contacts between people,man and
nature, as well as man and society have been re-
sponded to and overcome. The pace of develop-
ment after industrialization was faster than at any
other time. Massive material wealth has been cre-
ated while a huge environmental cost has been paid.
The consequence of the sole pursuit of economic
increases will likely be that the people who have not
been entitled to enjoy the benefits of industrializa-
tion are driven to the corner as the result.Due to in-
tensified conflicts between man and nature,
development has encountered unprecedented ob-
stacles that have thus given rise to a rude awake-
ning of awareness of environmental problems as
well as exhibited the need for in-depth exploration
of environmental protection endeavors.
During the response to the international fi-
nancial crisis and then during the post-crisis era,
many countries have recognized the value of green
development. Green development has increasin-
gly become an important trend in global deve-
lopment. It has been generally recognized that
developing a green economy could effectively pro-
tect the environment, make use of resources, and
expand the market demand while providing new
jobs. It has made itself an important convergence
for protecting environment and developing eco-
nomies. Promoting green development is both a
necessary and conscious action for China. China
has 1.3 billion people and with its rapid indu-
strialization, urbanization, and development of
new countryside, the discharged amount of major
pollutants has exceeded its environmental carrying
capacity. The environmental issue has become a
bottleneck constraining both economic and so-
cial development. The fundamental approach to
addressing the increasingly bitter conflict between
socioeconomic development and the resource and
environment constraint is to vigorously develop a
green economy, expedite the shift of economic de-
velopment mode, and explore a new path to en-
vironmental protection featuring low costs, sound
efficiency, low emission, and sustainability in order
to uplift ecological civilization.
Based on the factual reality and oriented into
the future, the Chinese Government has identi-
fied development targets and blueprints for the
CHINA
next five years as set out in the recommendations
on the 12th Five-Year Plan for National Econo-
mic and Social Development. It will take scienti-
fic progress to accelerate the shift of economic
development to create a society with a focus on
resource conservation and environmentally
friendly policies. The shift of economic develop-
ment to focus on a green economy is a profound
reform that will affect both economic and social
development. To achieve this shift, there must be
strong, supporting external forces, similar to the
intense external conditions that turn graphite
structure into a diamond. Further strengthening of
environmental protection could provide such a
strong force.
The environment and economic develop-
ment go hand in hand. In nature, environmental
issues are economic in nature. To talk about en-
vironmental protection while ignoring economic
development is like “climbing a tree to catch a
fish”. To talk about economic development while
ignoring environmental protection is like “drai-
ning the pond to catch the fish”. Positive econo-
mic policies can also be positive environmental
policies. Green development is the reflection of
beneficial economic and environmental policies.
Environmental protection has the role of “gui-
ding”,“optimizing”and “expanding”economic de-
velopment. “Guiding” means clearly identifying
ecological functions of the region and then assi-
sting enterprises to develop the economy while
bearing in mind what should be developed, en-
couraged, limited, and prohibited. “Optimizing”
means utilization of the “target driven mechanism”
to facilitate industrial restructuring and shift of de-
velopment mode. “Expanding” means expansion
of environmental carrying capacity by further pro-
moting pollutants emission reduction to create
conditions for sustained economic development.
Giving full attention of the comprehensive role
that environmental protection has in optimizing
economic development will strongly promote
green development in China.
Presently and in the years to come, China will
actively promote green development and make
unremitting efforts in the following areas:
First, proactively address global climate change.
Climate change is an environmental and a
development issue.The Chinese Government has
announced that the CO2 emission per unit GDP
will be reduced by 40%~45% by 2020 in compa-
rison to 2005 levels. The Chinese government
will firmly promote the industrial structure, pro-
duction pattern and consumption mode condu-
cive to conservation of energy, resources, and
protection of the environment by adjusting the
energy consumption structure, increasing the per-
centage of non-fossil fuels, continuously promo-
ting afforestation, raising forest coverage, and
enhancing the capacity of carbon stabilization.
The statistical and monitoring system for gree-
nhouse gas emission and energy saving and pol-
lutants emission reduction will be established and
improved. A carbon emission trade market will
be gradually set up. Adhering to the principle of
“common but differentiated responsibilities”,
China will shoulder the carbon emission reduc-
tion responsibility and obligations meeting Chi-
na’s development stage.
Second, intensify the pollution treatment and re-
duction of pollutant emission.
The amount of major pollutants that will be
controlled will be increased from two to four kinds
of major pollutants,including chemical oxygen de-
mand, ammonia nitrogen, sulfur dioxide, and ni-
trogen oxide.The pollutant emission reduction to
be achieved by adjusting the structure will be put
to a more outstanding position. The pollutants
emission reduction will be achieved by implemen-
ting stronger corresponding projects and taking
administrative measures. The construction of se-
wage and garbage treatment facilities in cities and
towns will be accelerated, and the treatment rate
of sewage will be increased. The prevention and
treatment of water pollution in key river basins will
be further enhanced. Urban air pollution will be
effectively controlled. Desulphurization in coal-
fired power plants will be continuously strengthe-
ned. Concrete actions will be taken to strengthen
the de-NOx in power plants.Vehicle exhausts will
be rigorously controlled.The working mechanism
for joint prevention and control of air pollution in
regions will be structured. A new social norm for
environmental protection will be established and
NEW EUROPE
the entire society will be mobilized to work for the
reduction of pollutant emissions.
Third, vigorously develop circular economy.
Aiming at improving resource efficiency, the
planning and support of fiscal, taxation and fi-
nancial policies will be strengthened, the laws and
regulations will be improved, the extended pro-
ducer responsibility system will be implemented,
and the development of circular economy in each
link of production, circulation, and consumption
will be promoted. We will accelerate the develop-
ment of resource recycling industry, intensify com-
prehensive utilization of mineral resources,
encourage recycling of industrial wastes, improve
recycled resources recovery system and classified
refuse collection system, and facilitate the indu-
strialization of recycling of resources. We will de-
velop and apply technologies for waste reduction
at the source by recycling, re-manufacturing, wor-
king towards zero emission within the industrial
chains the circular economy.
Fourth, accelerate and foster strategic and emer-
ging industries including the energy-saving and
environment-friendly industries.
China’s environmental industry has maintai-
ned an average annual growth rate of more than
15% over the past few years with greater prospects
in the coming years. We will foster a new econo-
mic growth engine characterized by low-carbon
emission, adjust and upgrade traditional industries,
and develop emerging industries featuring alter-
native energy, energy-saving and environment-
friendliness. We will establish a benign circle
between socio-economic development, resources,
and environment, guide enterprises to vigorously
develop green technologies and products, and de-
velop sustainable use of resources and continuous
improvement of the ecological environment.
Fifth, establish and improve mechanisms con-
ducive to environmental protection.
We will quicken our steps in developing the
macro-strategic scheme for environmental protec-
tion, an overall pollution prevention and control
plan, a sound and effective environmental trea-
tment plan, and an improved scheme of environ-
mental laws, regulations, policies and standards.
We will work towards developing a mature envi-
ronmental management scheme and promote so-
cial action that our citizens can fully participate in.
We will focus on market tools, speed up the esta-
blishment of eco-compensation mechanism,com-
prehensively reform the resource taxation system,
initiate environmental protection tax, and improve
environmental protection economic instruments
such as green tax, green securities, green procure-
ment and green trade. We are now standing at a
historical point of the development of green eco-
nomies while building the future of a conservation
culture with great hopes and prospects.We are wil-
ling to work with other countries throughout the
world, to deepen communication and broaden co-
operation so as to obtain fruitful achievements th-
rough our combined efforts while contributing
even more to the welfare of our people.
NEW EUROPE
Green finance should stem
from sweat, not from paper
by Dionysis Kefalakos
Dennis Kefalakos
photo credit:EPA/HU HAO
Chinese President Hu Jintao’s most recent visit
to the US must have made clear to him, that
playing banker to Americans helps make one
heard in this modern Babylon that has become
Washington these days. Only a few years ago
on a similar visit to the U.S., Hu’s former host,
George W. Bush had offered him a mere wor-
king lunch. This time however President Jintao
was offered full honors and a State dinner at the
White House. There is no question, in today’s
world whether it be capitalist, communist, or
otherwise there remains an exceptional place for
bankers. It is not a small thing to have a capital
of almost three trillion dollars. Currently, it is
also not an easy task to find trustworthy borro-
wers, especially between governments. Many
governments, although deep in debt are trying
to save capitalism by over indebting their tax-
payer’s. As a result, those who have received the
bankers “benediction”, are really recognizant.
No doubt this last great credit meltdown
of the western financial markets in 2008, pro-
ved that no matter how you define your eco-
nomic system, if you take care not to spend
more that what you earn, it pays dividends in
the long run. It is not sufficient to be an an-
cient people in order to understand this con-
cept. The Greeks are probably more of an
ancient people than the Chinese, but for de-
cades they have been spending more than they
have earned. Today they ask others to save
their souls from drowning in their sea of debts.
On the contrary the Chinese people, a race as
old as Greeks, have discovered the positive
outcome of hard work and saving. This has not
come easily though. They themselves oscillated
between words and deeds in the past, and wat-
GREENING ECONOMIES
CHINA
Chinese stock investors check the price changes on computers at a stock trading center in Wuhan in central China's
Hubei province 08 November 2007.
Quote
However a greener economy is not only a matter
of reducing the CO2 release in the atmosphere.
It is also a strong marketing tool to promote the
new generation of products in many sectors, and
mainly in transportation
ched to their dismay their country result in
complete destruction during the Cultural Re-
volution. This was an unforgettable lesson for
the Chinese, laymen and leadership alike. So
the path to become the world’s banker was
born with endurance by the average man and
woman in the streets of the main cities and the
countryside. Even today there are hundreds of
millions of Chinese people living on subsi-
stence conditions, but at the same time there
other hundreds of millions which enjoy living
conditions comparable to developed world
standards. What is even more important is that
nobody is starving as in the aftermath of the
Cultural Revolution.
The Chinese society is recognizant of the
prodigious economic growth achieved. It is for
this reason that China shows such a strong so-
cial and political coherence. On more than one
occasion the west has tried to challenge this
coherence, with those attempts repelled by the
strong and decisive governing structure within
the country. Of course there were times when
the authorities, or rather the regime, resorted to
violence at disproportional dimensions, either
in suppressing political insurgency or in imple-
menting with an iron hand massive investment
projects. In any case, the system still works ef-
fectively.
On the financial front now Beijing is very
careful to use its powers in a balanced way.
The government does not want to be seen as
exploiting its position as the banker of the
world to serve political goals. Everybody
knows that Washington is up to its neck in
Chinese debt, so there is no need for Beijing
to underline this fact. Western public opinion
would be appalled if China tried to derive po-
litical gains, and not just a logical pecuniary
return out of those credits. Bankers should al-
ways expect only positive interest to their
loans. If Beijing wants to retain the advanta-
5
February 20-26, 2011
ges of its position in the long run, it must be
careful not to be seen as having other non-
economic goals. In view of this, China does
not want to oppose western public opinion.
In this line of thinking, Beijing also wants
to drastically change the image of not paying
attention to the environmental side of indu-
strial or energy projects. However a greener
economy is not only a matter of reducing the
CO2 release in the atmosphere. It is also a
strong marketing tool to promote the new
generation of products in many sectors, and
mainly in transportation. Green cars and
bikes are now the largest products in this field,
and Beijing wants to spearhead these new
markets.
On top of the leading position that China
has acquired in the money markets, by accu-
mulating the largest financial reserves, it has
opened the way to create a base for a large and
completely green Chinese industry. Being the
largest creditor on earth, why would the Chi-
nese let the American, British, German, French
and Japanese banks control the world money
and capital markets from New York, London,
Frankfort, Paris and Tokyo? Why should they
not make Shanghai the largest financial centre
the world ever knew? But in this field too
China is not exerting pressure. Last year the
Shanghai Stock Exchange surpassed the rest of
the world’s stock markets in Initial Price Of-
fers. It is obvious that China will not ask for a
larger stake of the world, if this does not occur
naturally.
Green finance is finance created by the real
sweat of people and not by issuing paper assets
without value, as is the practice in New York.
6 GREENING ECONOMIES
February 20-26, 2011
The rising green dragon
by Crescenzio Rivellini MEP
Crescenzio Rivellini
photo credit: EPA/ADRIAN BRADSHAW
With $51.1 billion invested in 2010, a 30%
increase in investment compared to 2009,
China is now a central player regarding re-
newable energy. In particular in the pho-
tovoltaic solar sector, the overall
production of models for this kind of
power plants have exceeded the 8 GW
(GigaWatts) throughout the whole 2010
year in China. Consequently, more than
half of the total production of solar panels
has come from China last year. This pro-
duction volume is quite extraordinary, con-
firming that China's mentality is geared
towards renewable energy and attests the
emergence of an almost incontestable lea-
dership in China.
China's Five-Year Plan 2011-2015 also
demonstrates that China is aiming to raise
the proportion of renewable energy and is
foreseeing to implement its 40-45%carbon
intensity reduction target first announced
in Copenhagen and recently formalized in
the Cancun Agreements. In the framework
of the new Five-Year Plan, China will
adopt a 17.3% energy intensity reduction
target and by 2015 China should add 38
GW of nuclear power capacity (nowadays
CHINA
Visitors to an exhibition on nuclear energy view models of various power stations on stands of industry representatives from all over the world in Bei-
jing, China, 25 March 2008. China's energy requirements challenge both fuel resources and capacity to build power stations of all kinds with one large
plant coming on line each week on average.
Quote
It is easy to guess how important it is for the EU
Member States to try to increase the cooperation
with the Chinese collosus in the development of
technologies with low energy consumption, in
particular by investing in China
it is equal to 10 GW ), 140 GW of hydro-
power capacity (nowadays it is equal to 200
GW ) and 90 GW of wind power capacity.
In order to achieve these targets China
is preparing itself to launch a huge inve-
stment plan in the energy sector, which
could inject an estimated $753 billion in
the development of alternative energy in
the next decade. It is easy to guess how
important it is for the EU Member States
to try to increase the cooperation with the
Chinese colossus in the development of te-
chnologies with low energy consumption
in particular by investing in China.
China is indeed open to European in-
vestors. The aim is to attract investments
from small and medium enterprises that
have a strong expertise in the green tech-
nology sector in order to have an exchange
of technological know-how, which is use-
ful notably for improving environmental
conditions. Indeed, if China keeps develo-
ping at the current rate of growth, the
number of vehicles on China's roads will
NEW EUROPE
more than double to at least 200 million
by 2020. Moreover according to a study, if
China's economy continues to expand ra-
pidly and rely heavily on coal and other
fossil fuels until the middle of the century,
its power demands could exceed what the
entire planet can withstand. This perspec-
tive leads both China and the EU to the
conclusion that a new and sustainable
model of growth is essential and should
encourage European companies to have a
stronger foothold in China's growing clean
technology market.
In this framework, the European
Commission encourages the EU Mem-
ber States to move towards the Chinese
green economy by implementing a set of
concrete actions such as the development
of instruments or packages of policies
which are meant to facilitate the setting-
up and the activity of European small
and medium enterprises in China.
Various bodies on the EU side play
indeed a crucial role: the European
Union Chamber of Commerce in China
(EUCCC), the EU Chambers of Com-
merce and Eurochambers.
NEW EUROPE
Develop green economy
for a better future
by Ambassador Song Zhe
Ambassador
Song Zhe
photo credit:EPA/JEAN-CHRISTOPHE BOTT
The Chinese government is fully committed
to resource conservation and environment
protection. With sustainable development as
one of its national development strategy,
China has made enormous progress in envi-
ronmental undertakings. We have fulfilled the
emission cut target for the 11th Five Year Plan
(2006-2010) ahead of schedule, and are ex-
pecting to meet the target for energy conser-
vation on time. By the end of last year, we have
successfully reduced energy intensity of GDP
by 20% off the 2005 level and major pollutant
discharge by 10%. As a lower middle income
economy, we have covered huge grounds on
this cause, and what we have accomplished is
the strong evidence of the commitment of
both our people and the government to a bet-
ter global environment.
Today, the development of the green eco-
nomy has become a popular policy choice for
governments around the world. Like many
countries, China puts great energy in the de-
veloping green industry in an effort to pro-
mote more effective economic restructuring.
From this year on, China will begin to imple-
ment the 12th Five Year Plan (2011-2015),
opening a new chapter for the growth of our
green economy. In the proposed 12th Five
Year Plan, the Chinese government will acce-
lerate the shift of growth pattern, adjust eco-
nomic structure, actively respond to global
climate change, and develop circular economy.
We will remain committed to a resource con-
serving and environment friendly society that
appreciates the importance of green and low-
GREENING ECONOMIES
CHINA
Johann N. Schneider-Ammann, left, Swiss Federal Concillor and Chen Deming, right, Minister of Com-
merce of the Republic of China, shake hands after signing a memorandum of understanding to launch nego-
tiations on a China-Switzerland free trade agreement in Davos, Switzerland, 28 January 2011. China has been
working for closer relations with Europe, including clean energy relations.
Quote
We are confident that through balancing the
interests of the different regions, pursuing
sustainable use of resources, and constantly
improving ecological environment, we will be
able to bring about healthy recovery and
sustainable growth of the world economy
carbon development. We will exercise stronger
management of resources, intensify environ-
ment protection, incorporate green economic
growth across all sectors of our national eco-
nomy, and do all that we can to boost our ca-
pacity for sustainable development.
On the part of the Chinese government,
we have already put in place a bunch of poli-
cies with massive investment support to pro-
mote new energy, energy conservation and
environment protection. In response to the in-
ternational financial crisis, the Chinese go-
vernment has adopted a 4 trillion RMB Yuan
stimulus package to promote domestic de-
mand. 210 billion of this fund goes to energy
conservation, emission cut and ecological en-
gineering. We have promised that by 2020, we
will cut carbon intensity per unit of GDP by
40-45% off the 2005 level, and increase the
share of non-fossil fuels in the primary energy
consumption to around 15%. We plan to in-
crease the forest stock volume by 1.3 billion
cubic meters and the forest coverage by 40
million hectares, equivalent to the size of ten
plus Belgiums.
The development of green economy be-
nefits not only China, but also the whole
world. As the pressure for energy, resources
and environment continues to push up aro-
und the world, efforts of China to grow green
economy will help promote rational distribu-
tion and use of global resources. We are con-
fident that through balancing the interests of
different regions, pursuing sustainable use of
resources, and constantly improving ecological
environment, we will be able to bring about
healthy recovery and sustainable growth of the
world economy. China is a responsible mem-
ber of the international community. Our en-
gagement and efforts at the Copenhagen
7
February 20-26, 2011
Conference and Cancun Conference are the
best proof. In the Durban Conference, China
will continue to work together with all other
countries to promote international coopera-
tion in meeting climate change.
Both China and the EU have made en-
vironment protection and green economy
part of our future development strategy. Such
an idea provides us with enormous prospect
for cooperation. The EU 2020 Strategy and
China’s 12th Five Year Plan share a lot of si-
milar grounds. For instance, there is huge op-
portunity and potential for our cooperation
in the development of green economy. Eu-
rope has been the forerunner of green energy
resources and is home to the world’s largest
green industry. Europe has advanced tech-
nologies, while for China, we need advanced
technologies. More importantly, we have a
rapidly growing market for environment
protection industry, which will soon become
the world’s biggest. If China and Europe
could cooperate in this area, we can give full
play to the complementarity of our indu-
stries, promote favorable engagement, and
achieve win-win progress as we jointly pur-
sue green growth. In fact, the ship of our co-
operation has already gone out sailing. Last
year, as a signature project of our cooperation,
we have jointly launched the China-EU
Clean Energy Center. We look forward to
strengthening ties with our European coun-
terparts. And we are fully confident that
green economy will grow into another high-
light of China-EU cooperation.
8 GREENING ECONOMIES
February 20-26, 2011
A greener China - not as
evident as it would seem
by Anna-Karin Friis
Anna-Karin Friis
Nothing would indicate that China's re-
liance on coal can be broken. Although the
share of renewables in the energy mix
grows, and grows not only as percentage of
the increased energy consumption but of
the total, the energy intensity remains high
and it is questionable whether the 'greener'
energy means cleaner energy.
The abundance of coal in China and the
reliance on coal for 70% of the energy pro-
duction has lead analysts to conclude that
carbon emission will peak in the decade
between 2030 and 2040. Others set the
peak of emissions later, in 2050.
China's 12th five-year economic plan
will boost the use of renewables, such as
wind, solar and hydropower, to help reduce
the reliance on coal. Analysts estimate that
the aim is set for 11.4% of China's fuel mix
by 2015. By 2020 that share may be 15%.
However, Chinese government-linked
think tanks have also hinted that it would
be unrealistic to expect that China would
shift its heavy reliance on coal to alternative
energy any time soon. It seems renewables
cannot replace coal as the main source of
energy. Despite large-scale wind power ge-
neration and the ever more frequent use of
solar panels, only a reduction in the growth
of emissions through power generation can
be achieved, as energy use is constantly on
the increase. A curb of the rise in energy
consumption could only be achieved by in-
creased energy efficiency, which still seems
to remain very much a challenge. There is,
CHINA
The sun sets over Beijing, but will the dawn be green?
Quote
A curb of the rise in energy consumption could
only be achieved by increased energy efficiency,
which still seems to remain very much a
challenge
however, serious discussion among scientists
and environment authorities on the need of
putting a ceiling on the coal consumption
in order not to exhaust that resource.
Jonathan Watts, formerly correspondent
for The Guardian in China, relates in his
book 'When a Billion Chinese Jump' the
scepticism of the carbon capture and sto-
rage technique. He refers the work done at
China's National Laboratory for Clean
Energy in Dalian; director Li Can is of the
view that burying carbon dioxide is expen-
sive and energy-intensive in itself, apart
from being potentially dangerous in terms
of contamination and ruptures in storage fa-
cilities. The laboratory for clean energy is
developing techniques to convert carbon
dioxide into other chemicals that can be
used. The efficiency of coal is improved th-
rough conversion to natural gas; in the same
process polluting emissions such as sulphur
and carbon dioxide are dealt with by con-
versions into fuels such as methanol.
Analysts quoted by The South China
Morning Post on 14 February, 2011, cau-
tion against what they consider a current ir-
rational expansion of the clean energy
sector. The government's push for clean
energy is even seen as a 'strategic error' and
a huge waste of investment, as the renewa-
ble energy capacity in reality has not been
turned into safe and reliable sources of clean
energy. Wind power is not stable and fairly
expensive and considering China's relatively
low price of electricity, connecting it to the
power grid has proven an obstacle. Most of
the photovoltaic solar panels are produced
for exports. Moreover, environmentalists
warn that the Chinese production of poly-
silicon causes toxic pollution. Experts note
NEW EUROPE
that it seems the push for growth in the re-
newable energy sector follows China's tra-
ditional model of growth at the expense of
the environment and natural resources.
The cost of China's reliance on the use
of coal in terms of damage to the environ-
ment, human health and the social impact is
a controversial figure. Some set that cost at
7% of GDP, counting air and water pollu-
tion, ecological degradation, health costs
and mining accidents, but not the impact on
climate change.
The central government's plans to in-
crease hydropower capacity by half within
five years is equally controversial. The in-
tention is to continue the dam-building that
came to a halt due to environmental con-
cerns and public criticism. However, offi-
cials in charge of pollution control do
recognize that hydropower potentially cau-
ses more severe pollution than coal-fired
power plants, as the dams not only threaten
the ecological balance and carry a geogra-
phical hazard, but also carry the social cost
of resettlement. Critics point to the hydro-
power industry using the pollution reduc-
tion targets for 'greenwashing' their energy
production.
Independent Chinese climate experts
say the country should shift the focus from
target-setting to the quality of development
and the reform of the energy and pollution
control sectors, as well as attempting a ch-
ange to systemic problems and the mindset
in this regard.
NEW EUROPE
Chinese green energy advances
by Elizabeth Eckert
Elizabeth Eckert
photo credit:EPA/ADRIAN BRADSHAW
The world’ most populous country of 1.3 bil-
lion people, the largest coal consumer, and the
largest emitter of green house gasses in the
world, has also became the world’s leading re-
newable energy producer.
In 2006, China surpassed the United Sta-
tes to become the largest emitter of greenhouse
gasses, according to an environmental research
group, the Netherlands Assessment Agency.
The following year, the BBC reported that
China was building an average of two coal
plants per week. Currently an estimated 70%
of electricity in China is powered by coal.
But China’s reliance on coal may be chan-
ging. A renewable energy law introduced in
2006 and updated in 2011 calls for 15% of
energy to come from non-fossil fuel sources by
2020, comparable to the European Union’s
2020 Plan which calls for 20% of energy to ge-
nerate from non-fossil fuel sources.
As electricity demand and consumption in
China rapidly outpaces the rest of the world,
the shift of focus towards green technology and
renewable energy does not come as a surprise.
Wind and solar power energy sources have
been making headlines across the world as
China begins to invest in clean energy. We-
stern nations, particularly the United States and
the EU love to criticize China for its heavy coal
consumption and greenhouse gas admissions.
But Chinese investment in green techno-
logy has already surpassed the rest of the deve-
loped world and the country has become the
current leader in renewable energy investments.
In 2009 alone, China’s investment in renewable
energy technology was approximately $34.6
billion, almost double the amount of the Uni-
ted States, according to New Energy Finance.
China has strong incentives to invest in
GREENING ECONOMIES
CHINA
Two men rest from the summer sun next to solar powered water heaters in a display at the International Energy Saving and Environmental
Protection Exhibition in Beijing, China 10 June 2007. As environmental degradation and energy costs become a major political concern of the
Chinese leadership hundreds of firms have stepped up to address the challenges with creative and cost effective solutions for the global market.
Quote
It is estimated that currently there are over 1.12
million jobs in the renewable energy industry in
China, with the possibility of an additional
100,000 jobs being added per year in the sector
clean technology. Domestic demand for elec-
tricity is rapidly increasing by 15% per year, na-
turally surpassing the size of markets in other
countries.
New energy plants need to be built because
of increasing demand, and developing clean
energy sources instead of relying on coal is only
to China’s advantage. It is estimated that cur-
rently there are over 1.12 million jobs in the re-
newable energy industry in China, with the
possibility of an additional 100,000 jobs being
added per year in the sector.
In 2010, China became the country with
the world’s largest wind power capacity, accor-
ding to the Official Xinhua News Agency. 16
gig watts (GW) of wind capacity were instal-
led last year, compared to only five GW in the
U.S.
The Global Wind Energy Council repor-
ted that by 2010, wind power replaced 150 mil-
lion tons of coal consumption with the
possibility of wind power becoming China’s
main energy source.
China is expected to outpace Europe for
wind power by 2013.
China’s domestic wind turbine manufactu-
ring industry is the largest in the world. The
wind turbine market is encouraged by friendly
government policies towards renewable energy
sources. The government began actively pro-
moting renewable energy sources in 2004, and
official policies are often cited as being respon-
sible for outstanding growth in the markets for
renewable energy products.
The Renewable Energy Law of 2006 bro-
ught momentum to clean energy development.
Since the law was passed, there has been 100%
growth of the Chinese wind market each year.
This law also established a Renewable
Energy Fund, designed to subsidize the costs
of integrating renewable energy sources for
Chinese grid companies by mandating a cer-
tain share of electricity come from clean energy
sources.
Solar energy is also on the rise in China’s
greening economy. In 2010, China owned 43%
9
February 20-26, 2011
of the global sun panel market, exporting eno-
ugh energy to power 2.6 million homes in the
United States.
The increasing demand for energy has mo-
tivated manufacturers to produce clean energy
products on a mass scale, resulting in a less-co-
stly production process. Increasing demand as
well as a high amount of subsidies available
from the Chinese government has lowered the
selling cost of these goods.
Chinese government subsidies have given
power to the renewable energy sources market.
In 2010, the Chinese Development Bank lent
a combined $17 billion to the three largest Ch-
inese firms producing clean energy products,
Yingli, Suntech, and Trina.
The central government’s program, Gol-
den Sun was developed to provide subsidies to
solar energy businesses. It is estimated that
70% of solar projects are subsidized by the Ch-
inese government.
A Chinese investment research company,
Pacific Epoch reported in January 2011 that
China renewed the Golden Sun program
which was supposed to expire in 2012. The
program was extended in order to support an
additional installation of one GW of photo-
voltaic capacity.
By the end of 2011, the Chinese govern-
ment is expected to have approved 150 addi-
tional projects eligible for subsidies from the
Golden Sun program.
The high amount of Chinese subsidies has
been a controversial issue in the European
Union and the United States. Unable to com-
pete at the Chinese level, both have resorted to
criticism of Chinese energy policies, rather than
take recognition of the dramatic steps the na-
tion has taken to clean up their energy sector.
10
February 20-26, 2011
Green economy, we are
already on the way
by Zhang Xin
Zhang Xin
Beijing Normal University is one of the most
famous universities in China, located bet-
ween the second Ring and third Ring of
North Beijing, the most valuable location of
the capital city. Her historic and tasteful style
comforts this old city’s rich culture and civi-
lization very well. There are 20,000 students
study in her narrow space; I am one of them,
coming from the only directly governed city
of western China, Chongqing City.
In school, studying is not the whole of
my college life. I devote myself to social ac-
tivities, keen to us the knowledge I have le-
arned in different ways. In April 2009, several
students and I founded the Group of Che-
mistry and Society of BNU (GCS). In GCS,
we went to universities, middle schools, ju-
nior high schools and social groups to hold
presentations on environmental, health and
life issues. Therefore, the green economy in
the context of Chinese development is not a
new concept to me.
The development of China’s green eco-
nomy has achieved large increases in deve-
lopment during the past several years,
attracting attention from all over the world.
The third World Protect Meeting in China
in 2010 was held according to our country’s
theme of 2010: China’s Green Economy. In
the same year, the use of different kinds of
recyclable materials and the practice of low-
carbon theory during the Expo 2010 Shan-
ghai China won the world’s praise and
attention.
In my opinion, powerful control at the
GREENING ECONOMIES
CHINA
Members of the Group of Chemistry and Society of BNU (GCS) in discussion with professor
Martin King Whyte of Harvard University
Quote
A green economy is China's dream for the 21st
century. We can see that the development of
China's economy has gone in that direction in
even just the past year.
national level, useful government actions, and
the attention of Chinese society have all
made positive contributions to the success of
the development of China’s green economy.
In the summer of 2009 at the Davos mee-
ting, China’s Premier Wenjiabao declared
that our country would accelerate the deve-
lopment of low-carbon and green economy
technologies and policies, and that we would
try our best to take a leadership role in the
world in these practices. Of course, that was
not the first time China took notice of the
importance of a green economy. Several years
ago in the national development plan, China
noted the significance of the development of
green economies. In Chinese, we say we are
developing in scientific ways and developing
constantly. In the history of China, the great
thinker Lao-Tzu, a Chinese philosopher, said
that if we catch all of the fish, we will no lon-
ger have fish to eat, and people should cut
down trees with a time plan because we must
leave some time for the trees to grow . So
from one perspective, we can see that the
huge development of the China’s green eco-
nomy is not an accident but also influenced
by historic reasons. The government’s actions
have placed the development of the China’s
green economy into a high speed circle. In
my hometown Chongqing, the government
put out 5-Chongqing development plans,
with the Health Chongqing, Forest Chong-
qing and Livable Chongqing plans all rela-
ting to green economy development closely.
Every time I return from Beijing to Chong-
qing after I finish my university term, I no-
tice changes that have occurred. There are
more trees along the road, the air is cleaner
and the noise is reduced. As a result, many
other cities of China use the city of Chong-
NEW EUROPE
qing as a development model. Society’s at-
tention to developing a greener economy na-
turally lets progress occur. For example, every
college has student organizations which have
great relationship with environmentally and
health friendly practices in Beijing universi-
ties. They organize activities to teach college
students more about green technology and a
green environment. These organizations may
also go to middle schools, to teach them
what they can do as individuals to make a
contribution to the development of a gree-
ner economy. As we know, the youth are the
hope of the future. If all of the youth regu-
larly practice habits to save water and elec-
tricity, refuse to use one-used paper, recycle
wasted bottle by others and many other en-
vironmentally friendly practices, this country
will have a very bright future.
A green economy is China’s dream for
the 21st century. We can see that the deve-
lopment of China’s economy has gone in that
direction in even just the past year. Though
our world is facing a difficult economic si-
tuation right now, if every country worked
hard on developing a green economy, this
dream would not be so far away. Since this is
it the dream of 1.3 billion Chinese people, it
has gained the attention of 1.3 billion people.
In the words of our Premier Wenjiabao, “a
problem divide into 1.3 billion is not still a
problem.’’ I believe that the Chinese dream
of a green economy will come true in the
near future without a doubt. Let us wait for
that day!
NEW EUROPE
When yellow shakes
hands with blue
by Guoyu Tao
Guoyu Tao
photo credit:EPA/PETER PARKS / POOL
“Starry starry night” is not only a dream of
Van Gogh; Zuying Song, a popular Chinese
singer, also sang about “blue blue sky” as part of
the depiction of Shangri-la, implying that
money accumulation doesn’t fill our dreams and
we now endeavor to seek a balance between
economic growth and environment protection.
On this account, green economy, a new econo-
mic growth pattern that combines environ-
mental optimization with social boom, seems
to be an appropriate direction.
As we can see, China is an emerging na-
tion with impressive eco-growth rate. But at the
same time, it is also a nation of 1.3 billion peo-
ple and of limited resources, which force us to
take both the status quo and future possibilities
into consideration when issues about overall
economy and society development are raised.
How to achieve the highest growth at the least
cost, how to aggrandize our GDP while enh-
ance the life quality of every of our citizens by
providing them with sufficient electricity, clean
air and tracts of pastures for entertainment are
our real concerns. Therefore, for sure, green eco-
nomic transformation is a mountain peak we
will and must conquer. It is comforting to see
that some big cities like Hong Kong, Guang-
zhou have already taken the lead and made
some achievements. However, Shanghai and
Guangzhou are facets of China. Our north-
west area is still in considerable poverty with
challenging weather condition and fragile en-
vironment which can’t endure even slight da-
mage, reminding us of the urgency and
necessity of our task that economic progress sh-
ould be made and would be made in a low-car-
GREENING ECONOMIES
CHINA
An overview of the third EU-China High-level Economic and Trade Dialogue at the Diaoyutai State Guesthouse in
Beijing, China on 21 December 2010.
Quote
Now, China-EU relations have become the most
important pair of bilateral relations in the world.
And we have every reason to aspire that this
strategic partnership will get further expansion in
a beneficial way along which we can march on
ultimate win-win result
bon way. It is never a piece of cake, and, of co-
urse, China shouldn’t do it alone.
Fortunately, China is not alone. Globaliza-
tion not only affords us the joy of appreciating
the charm of Gucci but also provides a chance
for us to find a good partner - Europe. It is wi-
dely known that “green economy” was first bro-
ught up by a European environmentalist, David
Pierce, who alerted us to the tolerance limits of
nature and advocated the sustainability of so-
ciety. What is more, Europeans’ consistent ex-
ploration on this subject has led to abundance
of experience and technological advancement,
which would offer admirable assistance to Ch-
ina’s economic transformation.
Undoubtedly, bilateral cooperation is a two-
way road. Hence, it is essential for us to realize
that confronting the varying world, we perhaps
embraces respective benefits which set us into
two sides, but most basically, we are so small
and sometimes helpless contracting with de-
creasing water availability and quality, oil crisis,
soil erosion, forests degradation, the economic
crisis that broke down thousands of enterprises
as well as the dreams of millions of our honest
and hard-working citizens overnight, the glo-
bally increasing temperature that brings about
rising sea level, melting glaciers in Europe’s
Glacial areas, and reducing species of plants and
animals, etc, that we have to join forces to ach-
ieve or maintain prosperity, and to turn our
globe into a more sustainable place for our de-
scendents’ survival. Nothing can list ahead of
cooperation when challenges are to be over-
come and chances are to be grasped and made
the best of.
In fact, collaboration would not be so at-
tractive if a win-win result can’t be expected.
China has large domestic demand, and it has
appeared as one of the most potentially magne-
tic places for investment in green technologies
worldly with its massive investments in rene-
11
February 20-26, 2011
wable energies and energy security. At the same
time, Europe, China’s largest trading partner,
controls superior technology in various areas
such as CCS, clean transport, S&T innovation,
green energy and managerial expertise. It is also
reported that off-shore wind farms, which could
then be established in China, are being develo-
ped in Europe at present. On the basis of such
huge market demand, there are possibilities that
profits are attained by European companies
while progress and devotion are made to Chi-
na’s further development on the condition of our
bilateral collaboration. Further more, a strategic
partnership is more than mere economic coo-
peration. Political understanding and mutual
trust, making our voice more powerful on glo-
bal issues and providing a desired environ for
both of us, is the foundation of profound and
sustainable economic cooperation. Now, China-
EU relations have become the most important
pair of bilateral relations in the world. And we
have every reason to aspire that this strategic
partnership will get further expansion in a be-
neficial way along which we can march on ulti-
mate win-win result.
In other words, China’s development is not
a threat but should be a chance, which leads to
more exports, faster development, more sup-
port in global issues by our collaboration based
on mutual respect and trust, for Europe. It may
be no more than common sense for us that yel-
low represents utmost authority as well as re-
spectability in China and blue, representing the
west, is the bottom color for the Flag of Eu-
rope. Magically, when yellow shakes hands with
blue, green emerges.
12
February 20-26, 2011
The rise of green china
by James Moeller
James Moeller
photo credit:EPA/LAURENT GILLIERON
While the geopolitical and economic rise of
China has been hailed as one of the momen-
tous occurrences of the late 20th Century, the
rise of “Green China” in the first half of the 21st
Century may eclipse it in terms of lasting im-
pact on the planet.
China’s rapid economic growth has exac-
ted a significant environmental toll. In the first
half of 2010 alone natural disasters left 3,514
people dead, 486 missing and caused approxi-
mately $31.19 billion of direct economic loss,
according to the Ministry of Civil Affairs. Ab-
normal droughts and floods affected at least 44
different areas in 2010. Air quality in the major
cities, especially Beijing, is frequently at dange-
rous levels.
Yet while the West struggles to recover
from the economic crisis, failing to a large de-
gree to embrace the link between long-term
prosperity and a green economy, China has set
a clear course toward becoming the leader in
greening their currently very gray economy.
Why? It’s not because of a sudden heart-
felt embrace of Al Gore and the principles of
climatology. The shift is based on a calculated
vision of the future – one in which innovation
and growth will hinge on green technology at
home and abroad.
With its massive central planning and de-
veloped educational and engineering infra-
structure, China has the ability to leapfrog the
West in terms of rolling out quality, price-com-
petitive alternative energy products.
Consider that, according to China Daily,
China invested a total of $301 billion in efforts
to save energy and reduce emissions during its
GREENING ECONOMIES
CHINA
Chinese Minister of Commerce Chen Deming (L) is seen prior to an informal meeting with
twenty-five Ministers responsible for the World Trade Organization WTO, on the sideline
of the 41st Annual Meeting of the World Economic Forum, WEF, in Davos, Switzerland,
on 29 January 2011.
Quote
With its massive central planning and developed
educational and engineering infrastructure,
China has the ability to leapfrog the West in
terms of rolling out quality, price-competitive
alternative energy products
last Five-Year Plan (from 2005-2010). In 2010
alone, China boosted spending on low-carbon
energy by 30 percent to $51.1 billion, “by far
the largest figure for any country,” according to
Bloomberg New Energy Finance.
At the World Economic Forum in Davos
last month, Christiana Figueres, Executive Se-
cretary of the UN Framework Convention on
Climate Change, stated “China is going to
leave all of us in the dust. They’re committed
to winning the green economy race.”
If indeed this is true – if it is a race and if
China is poised to win it – what does that hold
for the West as we slowly emerge from reces-
sion?
As with most momentous shifts, there are
opportunities and significant challenges – for
both sides. While policy and business decisions
will drive the pace and size of the shift, com-
munications will play a major role in determi-
ning winners and losers.
For China, the stakes couldn’t be higher.
Their ability to continue their upward econo-
mic and social trajectory is dependent upon sol-
ving their environmental issues. Importantly,
their place as an undisputed global leader also
requires a serious effort to improve their own
environment and to play a constructive role on
global climate issues.
Based on the investment levels and policy
initiatives likely to be included in the 12th Five-
Year Plan (2011-2015) that will be unveiled
later this year, it is clear that China is taking
very concrete steps toward developing a true
green economy. According to China Daily, The
National Development and Reform Commis-
sion (NDRC) has significant plans for driving
China’s green industry, including energy saving
and environment protection, new energy deve-
lopment and ecological construction.
NEW EUROPE
The Five-Year Plan is the key economic
blueprint that government at all levels follow
virtually to the letter. The reported emphasis
on the green economy is a concrete demon-
stration of China’s growing commitment.
China also took important steps at the
most recent UN Climate Conference in Can-
cun in December 2010. Unlike one year earlier
in Copenhagen at COP 15, when China was
seen by much of the international community
as intransigent on key climate issues, in Can-
cun, China offered to adopt a binding UN re-
solution on carbon emissions and was viewed as
playing a constructive role in the talks.
But too frequently perception lags reality
and this is certainly the case with China’s com-
mitment to environmental issues. For many
Westerners, the enduring image of China is
one of a coal-fueled economy scouring the
globe for natural resources to stoke their unfet-
tered growth.
The emerging reality of China as “com-
mitted to winning the green economy race” will
need to be cultivated and communicated con-
sistently and credibly by the Chinese govern-
ment and Chinese businesses. Without this
effort, China’s environmental image will conti-
nue to lag.
Greening Brand China will require more
than a slick marketing campaign, however. The
concrete commitments and achievements will
need to be communicated directly to key sta-
keholders and influencers around the globe in
a transparent fashion. Credibility will have to
be established through ongoing dialogue and
communications between policymakers,
NGOs, business leaders and civil society.
China has a good story to tell and now
needs to tell it. In a shift, this will require wor-
king with stakeholder groups that might be
considered strange bedfellows – standing side-
by-side on the need for investment in green te-
chnology. Already we have seen budget slashing
finance ministers putting an end to feed-in ta-
riffs subsidizing alternative energy from Spain
to Germany.
For the West, the rise of a “Green China”
should be embraced. It is obviously important
for the environment and also for global security.
The West needs to make clear to China that
they are prepared to assist and support their
greening.
Western businesses need to ensure that
their priorities in China are aligned with the
government’s commitment to the green eco-
nomy and they need to aggressively demon-
strate and communicate that fact.
The color of growth in the 21st century is
green – for the West and China. Transparent
and honest communications on both sides can
help ensure that the rise of China’s Green Eco-
nomy is greeted with the enthusiasm it deser-
ves and does not create greater global economic
disparity and mistrust.
NEW EUROPE
Europe’s SMEs: key players for China’s
move from blue-collar to green-collar
by Arnaldo Abruzzini
Arnaldo Abruzzini
photo credit:EPA/PETER PARKS / POOL
The future looks green: China, after having
faced fierce criticism that its fast and reso-
urce-intense economic development would
cost the Earth, is sending clear signals that
it will change its growth model. The 12th
five year plan, to be released in March 2011,
is expected to bring a shift from the current
“growth at all cost” philosophy towards “in-
clusive growth” which is supposed to bene-
fit all Chinese citizens, aiming at decreasing
the income gap, redistributing wealth and
increasing general welfare, especially in the
less developed inland. This new growth
model, which also addresses points like the
use of resources and new energy, would lead
to a growth which is slower in pace but
more sustainable, in economic, ecological
and political terms.
The plan not only refers to energy con-
servation and environmental protection as
such, but also identifies key sectors to be de-
veloped to facilitate a sustainable growth,
namely clean energy, new materials, clean
and low energy automobiles, advanced ma-
nufacturing, etc.
These sectors will benefit from special
support and will require not only know-
how for building new infrastructure and
production plants but also for the manage-
ment of those: software for running the
production, solutions on how clean energy
can be fed into the grid, how grids can be
smartened up, how waste can be recycled or
managed safely, etc.
European companies, and in particular
small and medium-sized ones (SMEs), pos-
GREENING ECONOMIES
CHINA
General view of the 3rd EU-China High-level Economic and Trade Dialogue at the
Diaoyutai State Guesthouse in Beijing, China on 21 December 2010. Increasing EU-
China relations are seen as beneficial to both parties.
Quote
The developing green economy in China and the
need for advanced solutions thus offers huge
growth potential for EU companies – an
opportunity they cannot miss considering the
stagnation of their domestic markets
sess very advanced, if not world market le-
ading solutions for these challenges. Ha-
ving been faced with rather strict
environmental legislation since an early
stage, they developed innovative solutions
and eco-friendly technologies for many
areas and specific niches.
The developing green economy in
China and the need for advanced solutions
thus offers huge growth potential for EU
companies – an opportunity they cannot
miss considering the stagnation of their do-
mestic markets. But a lot of them are still
hesitant as they cannot adequately judge the
risks related to entering the Chinese mar-
ket: the protection of their intellectual pro-
perty is at the core of their concerns and
some SMEs have paid dearly their attempt
to get a foot into the market without an in-
depth research on the legislation in their
specific cases. The Chinese government’s
initiatives to promote indigenous innova-
tion leave European companies with the
doubt to what extent – and for how long –
they would be allowed to really benefit from
the green growth in China.
Apart from this perceived legal and po-
litical uncertainty, European SMEs are also
facing scepticism as to whether they can re-
ally deliver the solutions they promise. Ch-
inese large companies, state-owned
enterprises and decision-makers are very fa-
miliar with Europe’s top 100 companies but
would mostly not expect that a company of
thirty five people from Eastern Poland
might have developed the solution they are
looking for. Getting in contact with key
Chinese counterparts is a serious challenge
for European SMEs, even if they have iden-
tified a concrete business opportunity.
13
February 20-26, 2011
To be able to take advantage of the op-
portunities the green growth in China of-
fers, European SMEs need two things:
firstly, access to up-to-date information and
services related to market, legislation and
procedures in their specific sector in China
and, secondly, a platform which helps them
build up a certain standing for being taken
seriously by their Chinese counterparts.
Concrete initiatives to support SMEs
The European Commission responded
to these needs by launching different pro-
jects, directly or indirectly benefiting Euro-
pean SMEs eyeing the Chinese market:
- The Understanding China pro-
gramme, implemented by EUROCHAM-
BRES leading a consortium of 11 partners
. It aims at enhancing EU-China policy
dialogue and increasing the understanding
of the Chinese economy among European
companies. One key element of the pro-
gramme is a training programme for China
experts in European business representative
organisations, enabling them to provide hi-
gher quality services and up-to-date infor-
mation to SMEs throughout Europe.
- The newly-created EU SME Centre
in China, managed by a consortium of Eu-
ropean bilateral Chambers of Commerce in
China, the European Chamber of Com-
merce in China and EUROCHAMBRES,
led by the China-Britain Business Council.
As of mid February 2011 the EU SME
Centre in China will provide market access
information and services to European com-
panies, with the core areas being of legal ad-
vice, standards and conformity assessments,
business information and training for en-
trepreneurs. The green economy has been
identified as one of the key fields to be co-
vered. The Centre will not duplicate struc-
tures already in place but bundle existing
information and act as a joint platform for
SMEs from all 27 EU member states,
which can also temporarily use the Centre’s
office space.
Apart from these programmes, Euro-
pean businesses also need an enhanced
European economic diplomacy in China.
Better Intellectual Property Rights protec-
tion and enforcement, legal certainty for
investors, recognition of European stan-
dards, etc have to be promoted actively
with one voice uniting the whole Europe,
enabling EU companies to compete with
confidence. Shaping a European identity
will help unknown SMEs to enter the Ch-
inese market: a joint perceived quality
identity like “green technology made in
Europe” would provide SMEs with a bet-
ter standing to get in contact with their co-
unterparts – and to actively push the green
growth in China, with a direct benefit for
both the Chinese and European economy.
14
February 20-26, 2011
Experiences of green economic
development from european countries
Professor Zhu Dajian
by Professor Zhu Dajian
photo credit:EPA/QILAI SHEN Qilai Shen
The development of China since its foun-
ding in 1949 can be divided into three
stages. From 1949 to 1979, we had a poli-
tical China. Between 1979 and 2009, we
saw an economic China. In the 30 years
time from now, what we will see is a
China that focuses more on the wellbeing
of its citizens. Our priority in this period
is to improve the quality of development
by shifting to a green economy. The deve-
lopment of a green economy in Europe is
of particular relevance and importance, in
that Europe offers both valuable theories
and practical experiences in this area. As I
understand it, in the future bilateral exch-
anges and cooperation between China
and Europe, China should draw on the
development experiences of the green
economy in Europe in three main aspects.
The first concept is of “decoupling
growth”. Decoupling growth is a core
concept of Europe’s green development
approach. The essence of the concept is to
achieve growing economic and social re-
sources while reducing environmental and
resource consumption. Countries like the
Netherlands, Germany, and Switzerland
have already adopted relevant four-fold or
GREENING ECONOMIES NEW EUROPE
CHINA
Traffic moving through crowded downtown Shanghai, China on 13 January 2011.
how to shift to green production through
technological innovation. Because of the
Quote restraints we face in energy, land, water,
and ecological resources, it is imperative
Because of the restraints we face in energy, land, that we significantly increase energy effi-
water, and ecological resources, it is imperative ciency in the manufacturing, transporta-
tion, and construction sectors in order to
that we significantly increase energy efficiency in shift our economic growth patterns from
the manufacturing, transportation, and an extensive kind to an intensive kind.
The third concept is the green policy
construction sectors in order to shift our of a long-term eco-tax. Europe has pione-
economic growth patterns from an extensive kind ered in proposing as well as implementing
a long-term eco-tax. This kind of appro-
to an intensive kind ach is different from both floating market
price policies and permit system policies
ten-fold strategies. This concept has much is focusing on green technologies that for total emission allowance. Today reso-
value to contribute to China’s green deve- boost resource efficiency. European coun- urces are considered capital, the scarcity
lopment strategy. If the Chinese economy tries attach great importance to technolo- of which may profoundly impact world
continues to grow around 7-8%, our per gical innovation and believe that in this economic growth. In light of this deve-
capita GDP will reach USD15,000- new time period, we should work for lopment, a long-term eco-tax could in-
20,000. During this period, China could long-wave economic growth patterns that tensify efforts to reduce resource and
set a relative decoupling growth target focus on increased resource efficiency. The carbon intensity in production activities.
combing the factors of both natural reso- goal is to increase productivity and reduce Such a taxation policy would also be dee-
urce consumption and economic growth. energy intensity in the manufacturing, med as less personal because it targets at
Once our GDP has entered that bracket, transportation, and construction indu- non-labor factors. These approaches could
we can shift to absolute decoupling gro- stries through green innovation. Relevant benefit China enormously as we explore
wth target. undertakings by European countries will more efficient ways of government inter-
A second important develop concept provide China with valuable insights as vention to promote green growth.
NEW EUROPE
Chinese green economy
by Dr. Zhou Fengqi
Dr. Zhou Fengqi
photo credit:EPA/IRIS SA
In facing the global climate change crisis and
the increasingly serious energy resource deple-
tion, the development of green economy has
become the common choice of people around
the world. For China, developing a green eco-
nomy is not only a need for global governance,
or taking international responsibility, but also a
realistic choice in the context of Chinese fun-
damental realities of large population, unbalan-
ced development, the relative shortage of
natural resources and a fragile ecological envi-
ronment, and etc.
The Chinese government has recognized
the contradiction between the resource and en-
vironmental constraints and the rapid econo-
mic growth has been posing a serious challenge
to Chinese economic and social development.
Developing green economy is the best ch-
oice to achieve sustainable development. In the
past five years, China has formulated a series of
policies to address climate change problems. In
the meantime, China is making the greatest ef-
fort for its transition into the real green eco-
nomy. To some extent, China has effectively
reduced the energy intensity, achieved the na-
tional carbon reduction targets, reduced pollu-
tion, and improved people's quality of life.
In the initial stage of “the Eleventh Five
Year Plan”, the Chinese government formula-
ted the green development strategic planning
on the five key areas of coordinate structure of
land, environment and economy and compre-
hensive planning of regional development, re-
source protection and conservation, green
industry and economic development, ecology
protection and construction, comprehensive
treatment of environmental pollution.
GREENING ECONOMIES 15
February 20-26, 2011
CHINA
Photo shows the wind turbines in service at the Dabancheng Wind Power Plant in Urumqi in northwest China's Xin-
jiang Uygur Autonomous Region,20 October 2007.Xinjiang now has five wind power plants in service,the most in Ch-
inese provinces, started with foreign help in 1989.
vision has intensified than ever.
The environmental quality has also been
Quote noticeably improved. Mr. Xie Zhenhua, Vice
Chairman of the National Development and
Through the efforts of the government and the whole Reform Commission, revealed on the Second
society, the past five years have witnessed China's rapid China Summit Forum on Urban Energy Sa-
ving, that it was preliminary estimated that
development of its green economy, industrial restructuring, energy consumption per unit of GDP fell by
rapid technological progress, the establishment of a number about 3% in the first three quarters of 2010.
The reduction target set in "the Eleventh
of effective systems, such as binding targets, energy-saving Five-Year" plan was expected to be fulfilled as
mechanism, exit mechanism of backward production scheduled while sulfur dioxide, COD and other
emission reduction targets were completed
capacity and environmental policy coordination mechanism ahead of schedule.
According to statistics, during the period of
Moreover, the target of decline of the tion Law", "Cleaner Production Promotion "the Eleventh Five-Year" plan, an average an-
energy consumption per GDP and the total di- Law", "Energy Conservation Law", "Environ- nual growth rate of China's energy-saving and
scharge major pollutants were used as the "one- mental Impact Assessment Law", "Renewable environmental protection industry is between
vote veto" restrictive criteria of the assessment Energy Law", "Solid Waste Pollution Preven- 15% and 20%. In 2009, the whole output value
of main leaders of the government. Meanwh- tion Law", and etc. Besides, "Civil Energy Or- of energy-saving and environmental protection
ile, such green policies as green fiscal, green re- dinance", "Energy Conservation Ordinance in industry, including energy saving, environmen-
source price, green government procurement Public Institutions", "Genetically Modified tal protection, comprehensive utilization of re-
were put on the agenda to promote institutio- Organisms Safety Regulations" and "Imple- sources was 1.9 trillion yuan. Although the
nal reform of green system of national account, mentation Regulations of Forest Law" were development of China's green economy has
national ecological compensation system, green also stipulated. stepped on the right track, a lot of work still
financing, and etc. Through the efforts of the government and needs to be done, which requires unremitting
In terms of climate change, China, in 2007, the whole society, the past five years have wit- efforts. China is still in the process of indu-
has set up a special leading group and released nessed China's rapid development of its green strialization and urbanization, which indicates
the "China National Climate Change Pro- economy, industrial restructuring, rapid tech- rapid energy consumption, the reliance on coal
gram" to address climate change problem. nological progress, the establishment of a num- and oil, and the overall increase in carbon emis-
In order to make the policy more authori- ber of effective systems, such as binding targets, sions will continue for some time. The Chinese
tative and consistent, the National People’s energy-saving mechanism, exit mechanism of Government and society should take further
Congress and its Standing Committee actively backward production capacity and environ- measures to gradually establish and improve a
lifted the above green concept and practice to mental policy coordination mechanism. comprehensive system of green taxes, earnestly
the stipulation of 28 laws and administrative Moreover, it has achieved remarkable re- improve the market trading mechanism of
regulations in the field of environment and re- sults in environment governance through an green economy, strengthen green education and
sources, such as "Recycled Economy Promo- engineering way and the environmental super- form social consensus on green development.
16
February 20-26, 2011
A wind energy future for China
by Cillian Donnelly
Cillian Donnelly
photo credit:EPA/XIAO LI
China, the worlds second largest eco-
nomy and most populous country, has, it
will be unsurprising to hear, huge energy
demands. To this end, the country has
been seeking to diversify its energy mix,
away from the traditional, heavily-pollu-
ting coal-fired power stations and into
different forms of low-carbon, greener
energy. As with Europe and the US, this is
seen as both a way of reducing harmful
CO2 in the atmosphere, and also boosting
the economy. Green technology is seen as
the industry of the future.
Currently, China is the world's largest
energy consumer, most of it still produced
by coal-fired power plants, something
which the authorities hope to change as
the years go on.
From 2010 a huge effort has been
made to increase wind capacity in China,
with an additional 62% wind power in-
stalled last year, amounting to about 16
gigawatts (gw), over 3 times the growth
rate of of the US, which increased by
about 5gw. According to the official Xi-
nhua News Agency, China now has 41.8
gw of installed wind capacity, compared to
the US, which now stands at about
40.2gw. There are further plans for 2011;
a 5gw wind power project in the Gansu
province, with additional projects amoun-
ting to 5.5gw in Xinjang, the Jilin pro-
vince and Inner Mongolia.
GREENING ECONOMIES
CHINA
A worker looks at the blades of a wind power generator being pulled up in Nanhui district of coastal Shang-
hai Thursday 12 May, 2005. The Nanhui wind power project, consisting of 14 1.5-megawatt generators pro-
duced by GE, was completed Thursday. Shanghai plans to increase its wind power to three percent of its
electricity consumption by 2015.
Quote
Currently, wind energy resources closely rival
those of the US, and outstrip other wind energy-
friendly nations, such as Germany and India.
China is now expected to overtake Europe for
wind power growth by 2013
In an effort to diversify its energy mix,
to move away from coal dependency, and
to ensure the momentum of the kind of
green technology projects mentioned
above, China passed the Renewable
Energy Law in 2005. Since it took effect
at the beginning of 2006, the law has seen
much support given to the renewables in-
dustry, as well as a boost to the kind of
momentum needed to ensure long-term
sustainability. In 2005, there was a 60%
growth in wind energy. Between 2006 and
2010, after the law can into effect, wind
has grown by about 100% each year.
According to the Global Wind
Energy council, success in China can be
attributed to local content requirements,
evenly distributed costs throughout the
provinces for wind power, and a minimum
mandatory renewable energy market share
for the big utility companies. In 2009,
China represented the largest domestic
wind manufacturing industry, as well as
globally the second largest.
In addition to its medium-term goals,
China has also begun to take a more long-
term view of things; at least until 2020,
with the introduction of renewables tar-
gets, a targeting of priority sectors, and
the introduction of a national implemen-
tation strategy, which has seen govern-
ment policies become increasingly aware
of the need for environmentally-friendly
policies in areas such as energy and agri-
culture. The long-term vision, which was
set out in 2007, also saw the introduction
NEW EUROPE
of the Renewable energy fund, a central
fund for covering the cost of integration
of renewable energy into the national
grid.
The China Wind Energy Outlook
Report 2010, compiled by the Global
World Energy Council, makes for encou-
raging reading. According to the report,
wind power as calculated to have cut aro-
und 150 million tonnes of coal consum-
ption prior to 2010. More encouragingly
for the Chinese wind energy market is
that, according to the report, wind has the
very real possibility of becoming the co-
untry's main energy source in the long
term. Currently, wind energy resources
closely rival those of the US, and outstrip
other wind energy-friendly nations, such
as Germany and India. Chian is now ex-
pected to overtake Europe for wind power
growth by 2013.
In addition to domestic support, the
Asian Development Bank is also provi-
ding capital; around €240 million to de-
velop wind farms in China, particularly in
rural areas which allow for maximum im-
pact. Additionally, both Chinese and in-
ternational companies, both European
and American, continue to invest in wind
technology across the vast country. Things
are looking up for the renewable energy
market in China, and, in particular, the
wind energy sector, it would seem.
NEW EUROPE
China has the smarts on energy
by David Maclean
David Maclean
photo credit:EPA/HOW HWEE YOUNG
The People’s Republic of China (PRC) has
the fastest growing economy in the world,
but how it is applying energy efficient me-
asures including the introduction of rene-
wable energy is, on the whole, unclear. All
too often portrayed as anti-environmenta-
list, it appears, some say, immune to global
mitigation efforts. But is the country really
asleep when it comes to resource efficiency?
A recent decision regarding smart metering
demonstrates there is a clear positive trend
in China towards both a low carbon eco-
nomy and furthering of its energy effi-
ciency commitment.
In 2009, China announced a plan to so-
urce 15% of its energy capacity from wind,
solar and other renewable energy sources
by 2020. According to reports, the Chinese
Government successfully reduced its
energy consumption per unit of gross do-
mestic product (GDP) by a fifth over the
last five years to hit its 2010 target – but at
the price of shutting down industrial
plants.
Two years ago, the country also anno-
unced its intention to reduce the intensity
of carbon dioxide emissions within the Ch-
inese economy by 40-45% by 2020, as com-
pared with a 2005 baseline and reported
this goal to the United Nations Framework
Convention on Climate Change Secreta-
riat in early 2010.
In China’s shift towards a low carbon
economy, the efficient use of energy reso-
urces is more crucial than ever. With the
GREENING ECONOMIES 17
February 20-26, 2011
CHINA
The sun rising over the city in Beijing, China on 19 January, 2011. China's economy grew 10.3 per cent in 2010,
up from 9.2 a year earlier, according to the National Bureau of Statistics. China’s investments in green technology
are expected to support continuing economic growth for the country.
mers manage energy better in the world’s
fastest growing economy. The Chinese
Quote market is all about opportunities rather
than risks. In fact, in the next ten years,
When it comes to doing business with China, there are a Landis+Gyr expects China to deploy 200
few boxes to tick for a successful commercial relationship. million smart meters, which will make
China the largest, single smart metering
First, it is about listening to and then understanding the local market globally.
Chinese requirements. What are the drivers for renewables? When it comes to doing business with
China, there are a few boxes to tick for a suc-
How can their requirements be fulfilled? Companies should cessful commercial relationship. First, it is
avoid trying to cover the country with other, blanket global about listening to and then understanding
the local Chinese requirements. What are
solutions, but instead adjust their offer for each market the drivers for renewables? How can their
requirements be fulfilled? Companies sh-
growing implementation of green techno- 300 employees focusing on both domestic ould avoid trying to cover the country with
logies such as wind farms and solar plants, and international markets. other, blanket global solutions, but instead
the need to have smart meters capable of Earlier this year, we were selected by the adjust their offer for each market. A techno-
managing an entire network is essential. State Grid Corporation of China, the co- logy that is displayed globally will not ne-
Smart metering provides the ability to mo- untry’s leading power-grid operator, to sup- cessarily work in China. Local knowledge is
nitor and manage energy use, thereby pro- ply over 10,000 commercial and industrial crucial. With smart metering, developing
viding the basis of a dynamic energy supply advanced electricity meters for upcoming local solutions is the key to success.
system. deployment in six provinces. The company China represents an opportunity to
The country’s commitment to smart was the only international smart meter ven- drive business forward and fulfil global re-
metering was clear in March last year, in an dor to win a contract to supply the polyph- quirements, such as supporting utilities the
annual report to the National People’s ase commercial and industrial smart world over to help their customers achieve
Congress, Chinese Premier Wen Jiabao meters, which will provide unparalleled di- an energy efficient way of life, without the
called for the country to “push forward gital accuracy and reliability. Twenty-five need to compromise comfort for efficiency.
with building a smart grid”. meter suppliers competed in the bidding We believe that everyone should see Chi-
As the leading global provider of energy process, widely seen as the first phase in a na’s commitment to rolling out smart me-
management solutions, Landis+Gyr saw larger and more ambitious country-wide ters as the key to realising the full potential
entering the Chinese market as a natural deployment. for renewable energy, essential to the on-
step. Landis+Gyr has operated manufactu- We are delighted at the prospect of going and future smooth operation of the
ring and research and development facili- partnering with the State Grid Corpora- world energy market – and to helping so-
ties in China for 15 years, with more than tion to help Chinese businesses and consu- ciety to manage energy better.
18
February 20-26, 2011
The EU, China and
the green economy
by Graham Watson MEP
Graham Watson MEP
photo credit:EPA/RAINER JENSEN
There is a common perception in Europe
and the West that China is not interested in
climate change, the environment or greening
industry; it wishes only to grow rapidly and
industrialise.
However, this view is not entirely accu-
rate. In recent years climate change and en-
vironmental concerns have moved up the
Chinese political agenda. The green eco-
nomy featured prominently in the 11th Five
Year Plan for 2006-10 and many expect it to
be the headline issue in the Plan currently
being finalised. Ironically, authoritarian go-
vernment has also set environmental targets
that democratic and environmentally consci-
ous Europe can only dream of; new buildings
with reduced emissions of 50-65% and 7,467
inefficient thermal generators taken offline
six months ahead of schedule, to give just two
examples.
The reason for this is not a sense of moral
responsibility for the levels of CO2 in our
atmosphere, but is instead threefold.
The first reason is energy security. China
relies heavily on domestic coal supplies and
although it can continue to do so in the short
term, this is ultimately unsustainable. In ad-
dition to this, China became in the 1990s a
net-importer of oil.
Second, and quite simply, the Chinese
Government has recognised that the green
economy represents a huge- €3,500bn per
year- economic opportunity, and is in a posi-
tion to act.
Finally, the impact of carbon intensive
industry is hitting home in China in a way
GREENING ECONOMIES
CHINA
German Environment Minister Norbert Roettgen (L) and Chinese Minister of Science and
Technology Wan Gang (R) shake hands after signing a declaration concerning the project
'Climate Change and Electric Mobility' in Beijing, China, 16 July 2010. Various mutual de-
clarations were signed in the afternoon.
Quote
So we are left with the question not of what
“green” Europe can teach China, but what
stuttering Europe can learn from China
that it perhaps isn’t in the West. The World
Health Organization (WHO) has estimated
that air and water pollution kills over
750,000 Chinese citizens each year. In addi-
tion to this, black carbon, of which China is
a major source, is accelerating the melting of
ice caps in the Himalayas and causing vola-
tile regional weather patterns. These effects
are visible and directly attributable to the
burning of fossil fuels, making them a do-
mestic concern for China.
China’s elite is therefore aware that it
needs to green the economy, and it has made
huge financial investments.
The results are clear. In September, the
Ernst and Young Renewable Energy Attrac-
tiveness index revealed that China had over-
taken the US to take the number one spot.
Meanwhile, European countries like the UK,
Germany and Spain have been struggling to
make gains. This demonstrates brutally the
fact that Europe is not winning the race to
become the global green energy leader. As
Christiana Figueres, head of the UN Frame-
work Convention on Climate Change, said
at January’s World Economic Forum in
Davos, China is “going to leave all of us in
the dust” because they are committed to win-
ning the green economy race.
So we are left with the question not of
what “green” Europe can teach China, but
what stuttering Europe can learn from
China.
I, along with many others, have long cal-
led for Europe to build an integrated “smart”
energy grid that will allow electricity from
renewable energy to be transferred effectively
across the continent and thus encourage its
generation. China faces a similar challenge,
and the government is expected to announce
NEW EUROPE
a $300 billion investment in a smart energy
grid.
Although the EU cannot emulate this
mammoth state investment, we must find a
way to make similar investments in our
energy infrastructure. One proposal on the
table is the issuance of Eurobonds, the reve-
nue from which can be used to pay for such
projects.
However, the contrast with Europe sh-
ould not give a false impression of the situa-
tion in China. The Economist has pointed
out that China and India host 27 of the 30
most polluted cities in the world. And the
International Energy Agency estimates that
between 1990 and 2005 China’s CO2 emis-
sions rose by 129% with China now widely
accepted to have overtaken the US as the lar-
gest emitter of greenhouse gas in the world.
Nonetheless, as Duncan Freeman and
Jonathan Holslag point out, on a per-capita
basis China still consumes far less energy
than developed nations. This is not because
of energy efficiency; rather that economic
prosperity has yet to peak. As the economy
continues to grow, so too will demand for
energy and unsustainable carbon emissions.
This reality must prompt a change in the
rationale behind China’s green economy. It
must be driven less by economic and security
concerns, and more by a desire to protect the
world as an inhabitable environment for
mankind. We must breakdown the barriers
that prevent the transfer of technology and
expertise between countries.
The EU’s High Representative Cathy
Ashton has rightly marked the Doha trade
talks as an important vehicle to cut tariffs on
environmental goods. And intellectual pro-
perty right protection and investment rules
need to be streamlined to allow China (and
European companies) to benefit from the
on-going research into things like clean coal
technology. After all 70% of China's energy
needs are satisfied by the fossil fuel.
This must also be matched by political
dialogue at all levels. I am Chairman of the
Climate Parliament, a non-governmental or-
ganisation that helps more than 18,000 le-
gislators from around the world share policy
experience and best practice. China's green
economy might benefit from a similar pro-
cess, especially as the government considers a
cap-and-trade scheme. Whether the coun-
try's political and constitutional set-up would
allow for this is another matter.
And perhaps this point helps us to come
to valuable conclusions about the future of
the green economy in China. For all the good
that powerful industrial policy and state in-
tervention has achieved, China must now be-
come more open. More open politically to
benefit from new ideas, and more open to the
foreign companies that will bring the requi-
red technology.
NEW EUROPE
Greenpeace: Taxing carbon to force
power companies go cleaner
by Anna-Karin Friis
Anna-Karin Friis
Greenpeace analysis of China's energy pro-
dution is not as grim as it could be. In fact,
it is cautiously optimistic, but lets the cat
out of the bag; embarking on a sustainable
low-carbon path requires the most biggest
energy companies to play along in comba-
ting climate change. Greenpeace reckons
that an energy and environment tax for coal
would both drive the biggest power compa-
nies to move to renewable energy and en-
sure that coal is used as efficiently as
possible.
China is the world’s largest producer
and consumer of coal, with more than 70
per cent of its energy needs coming from
coal. The Chinese electricity sector is Chi-
na’s biggest consumer of that fuel. China is
the world’s second largest producer and
consumer of electricity, with a total genera-
tion of 3,433.4TWh in 2008, smaller only
than the United States. The electricity sec-
tor plays a critical role in deciding China’s
climate performance. In 2008, these 10 big-
gest companies accounted for 57% of Chi-
na’s total installed electricity capacity and
58% of China’s total electricity output. By
the end of 2008, the installed capacity of
electricity generation had reached 792 gi-
gawatt. Coal-fired plants account for three
quarter of that capacity. Calling for stricter
standards to reduce the average coal con-
sumption per energy unit, Greenpeace urges
the Chinese government to save emissions
by having inefficient power plants under
200 megawatt shut down by 2015.
Involving the big ten
Any reduction of carbon dioxide emis-
sions, or at least a cut in the growth of
those emission, depends on a transforma-
tion of the energy industry, a powerful
GREENING ECONOMIES 19
February 20-26, 2011
CHINA
A haze of pollution engulfs Beijing, but the future does not have to be so bleak, says
Greenpeace
panies to install new technologies.
"What the government does goes is in
Quote the right direction, but there is a need to in-
troduce carbon tax and trading to decrease
Pointing to the environmental and social cost of energy consumption.
China's overreliance on coal, Yang says the Rather 30% by 2020
Non-governmental working on China's
government should make full use of existing environment would rather like to see a 30%
aim for the use of renewable energy by
potential to reduce emissions from the energy 2020. However, there do not seem to be
industry by obliging companies to install new prospects for that yet. Ms Yang with Gre-
enpeace China points to the 15% renewa-
technologies bles target for 2020 and doubts there will be
any more ambitious target-setting, or if so,
only some intermediary goals may be pre-
lobby with huge political clout in China. Towards voluntary sented in the upcoming five-year plan. Yang
China’s electricity sector is dominated by emissions trading? expects more emphasis on measures to ach-
large-scale power companies. Greenpeace There is a great deal of excitement ieve the energy target of improving energy
identifies the top ten power companies in among energy experts as to what the 12th intensity by 40-45% and points to the need
terms of installed capacity as China Hua- economic five-year plan will entail. It seems for effective implementation.
neng Group, China Datang Corporation, a voluntary emissions trading scheme is "What normally happens is that China
China Guodian Corporation, China Hua- about to be introduced with a view to the tends to achieve and exceed its targets", she
dian Corporation, China Power Inve- later development of a cap-and-trade sy- says. "However, so far progress has relied on
stment Corporation (CPI), China Three stem. The question remains whether there government administrative orders to shut
Gorges Project Corporation, Guangdong will be a clear timeline and the detailed na- factories shut and cut emissions in provin-
Yuedian Group, Zhejiang Provincial ture of the obligations that may be introdu- ces. Such measures are not cost-effective
Energy Group, Shenhua Group Corpora- ced with the new measures. and the effect is only short-term. A carbon
tion and China Resources Power Holdings "The next five years will see a voluntary tax would be crucial in order to achieve la-
Company (CRP). Any move away from trading scheme. The main goal is to test the sting change!"
the coal dependency will require the co- feasibility of carbon markets in China. It The controversial carbon capture and
opting of the major power companies in seems China sees the importance of using storage technology is being flagged as the
the national environment policy and into a market-based mechanism to meet the panacea for China.
ensuring the aims of increased use of rene- emissions control goals", says Yang Ailun, "CCS could play a bridging role bet-
wables. By burning 20% of China’s coal in climate campaign manager with Greenpe- ween now and carbon-neutral future", Ms
2008, the companies emitted an equivalent ace China. Yang with Greenpeace China says.
of 1.44 billion tonnes of CO2. In 2008, the Pointing to the environmental and so- "We cannot rule out CCS as an option.
largest three (Huaneng, Datang and Guo- cial cost of China's overreliance on coal, What is important now is to develop a re-
dian) together emitted more than the Uni- Yang says the government should make full gulatory framework for CCS, as it is new
ted Kingdom’s total emissions in the same use of existing potential to reduce emissions and there are risks that people cannot ma-
year. from the energy industry by obliging com- nage yet."
ADVERTISEMENT
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22
February 20-26, 2011
The environmental challenges
in China's Far West
by Anna-Karin Friis
Anna-Karin Friis
Xinjiang, an arid and landlocked region, is
China's stretch into Central Asia that bor-
ders eight nations, of them Kazakhstan,
Kyrgyzstan, Tajikistan, Afghanistan and Pa-
kistan. The province comprises a sixth of
China's territory. Nowhere on the planet is
further from the sea. And nowhere else in
China are the effects of climate change
more evident, despite not being due to po-
pulation pressure in this still sparsely popu-
lated province.
The Xinjiang Institute of Ecology and
Geography cites as the aims of China's We-
stern Development strategy to shift 'the
heavy environmental pressures' from the co-
astal regions of Eastern China to the interior
West. That implies intense usage of water re-
sources, excessive land use and construction
that may further decrease the forest coverage
and pollution through investments in infra-
structure and the rapid population growth.
Ma Ming, professor and researcher with
China Academy of Sciences, recognizes in a
study that the ecology of Western China,
especially in Xinjiang, is extremely vulnera-
ble. He worries that the Western Develop-
ment strategy has irrevocably changed the
landscape and the biodiversity of the region.
Xinjiang's demographic structure is ch-
anging rapidly. Historically known as East
Turkestan and populated by the Uighur pe-
ople, nomads who established the Silk Road,
and also Kazakhs, Tajiks and other minori-
ties, Xinjiang (which literally means 'new
frontiers' in Mandarin) has in the last five
years seen heavy infrastructure development
and witnessed the building of entire new ci-
ties. The cities will house internal migrant
from China's densely populated coastal pro-
vinces. They come to work on the construc-
tion of new pipelines, gas and oil extraction
and increased coal production. At present
GREENING ECONOMIES NEW EUROPE
CHINA
Xinjiang: the most serious environmental problems have occurred due to the reclaiming of
land for agriculture
ecological living on the countryside. Further
reservoir construction together with the mel-
Quote
ting glaciers and intense irrigation giver rise
to official estimates that the waterflow in ri-
The Xinjiang Institute for Ecology and Geography vers may increase still this decade due to
meltwater, but in ten years time the water le-
cautions that the most serious environmental vels cannot be sustained. Water depletion in
problems have occurred due to the reclaiming of Xinjiang leads to a shortage of freshwater in
other regions in China that depend on large-
land for agricultural use over the last fifty years. scale water diversion systems for their wate-
Apart from forests, riverbanks and grasslands were rutilization.
There is an initiative for a government
turned into farmland, destroying vast areas, among response towards restoring dried-up lakes
them the Aksu river and aquifers and the policy may involve
paying farmers to cease irrigation, as the
share of the water consumption used for
less than one per cent of Xinjiang's territory the Aksu river. Worryingly, the trend of clai- agricultural is alarmingly high. Degraded
is forested. The forests that previously hosted ming land for agricultural use continues, al- land, destroyed freshwater system and over-
many rare species that have degenerated alar- though there are government-backed cultivation cause internal migration within
mingly in the last fifty years due to the in- initiatives that aim at ecological restoration. Xinjiang and beyond, as farmers cannot su-
crease in agricultural production, severe The land is used for cash crops, mainly cot- stain their living. Internal migration resulting
desertification and soil erosion. The chan- ton, that require intense irrigation; as such in slums in the vicinity of the bigger cities in
ging ecology of Xinjiang has resulted in the highly problematic in the arid region that in- the province threatens to further exacerbate
drying up of lakes, in rivers retreating and creasingly suffers from water shortage but social problems and ethnic tensions. The si-
glaciers diminshing at a speed of up to ten still spends most of its water resources on tuation is worsened by unemployment; new
metres a year. Environmentalists warn that agricultural production. investments tend to bring jobs only to ne-
time is running out for the last remaining fo- Another serious problem is the construc- wcomers moving in from other regions to
rests in the nort of the province. The natural tion of large-scale water reservoirs. Three work in the companies that hold concessions
forests that used to form a green corridor large reservoirs have been built in the last fi- for the extraction of minerals.
surrounding the Tarim River, one of the two fteen years in the Tarim riverbasin area and There is at the moment increased reali-
main river basin areas, have been drastically scientists note that such construction that zation in China of the causes and the extent
degraded and no longer offer protection drastically alter the ecosystems do not even of the ecological disaster in Xinjiang. There
against drifting sand from the desert, causing appear on maps. Apparently they were built are some attempts at restoring the depleted
the population and agriculture to suffer from with a view to short-term economic gain wi- aquifers and at reversing the trend of overu-
sand and salt storms. thout regard to the ecological balance of the tilization of water, whereas other planning
The Xinjiang Institute for Ecology and river basins in Xinjiang. These projects have aims at investing in the extraction of coals in
Geography cautions that the most serious also had the unfortunate consequence of ca- still undeveloped coal reserves. Water may be
environmental problems have occurred due using a severe lowering of the groundwater diverted to mining instead. At the moment,
to the reclaiming of land for agricultural use level. NGOs, such as the Xinjiang Conser- there is investment in liquifying coal to over-
over the last fifty years. Apart from forests, vation Fund, campaign against the overutili- come the difficulty of transport. Xinjiang
riverbanks and grasslands were turned into zation of natural resources and aim at may be heading towards becoming a large-
farmland, destroying vast areas, among them greening Xinjiang by promoting new ways of scale coal producer also by global measures.
NEW EUROPE
Waste to energy – working with chinese
governments to find european solutions
by Tristan Edmondson
Tristan Edmondson
photo credit:EPA/MARK
China’s local city governments are facing a
municipal waste mountain, existing landfill
sites are filling up and finding or building new
sites or incineration plants is increasingly dif-
ficult. In 2006 about 80% of China’s collected
municipal solid waste (MSW) was dumped in
landfills and left untreated, around 16% was
incinerated and only 4% biologically treated.
Since Chinese MSW is often contains 70-
80% organic matter, it is hard to incinerate but
easy to decompose. With over 5,000 “brown-
field sites” from poorly managed landfills and
the likely need for 1,400 additional landfills
over the next 25 years, the issue of municipal
solid waste represents a major land-use chal-
lenge in China.
China also faces a serious power supply
problem. To feed the country’s rapid economic
growth electricity consumption increased by
14.56 percent in 2010 to well over 4.19 trillion
kWh, according to the China Electricity Co-
uncil. However, in 2010 capacity grew by only
10 percent and brown-outs are a common pro-
blem in China’s industrial heartlands. The coal
price shows no sign of declining either, and the
environmental and health effects of burning it
are costing China’s economy dear.
Economic growth also means that China
is importing more and more fossil-fuel based
fertiliser as its agricultural system strains under
the pressure of increasing demand, resulting in
increased global emissions and local environ-
mental damage as fertilisers leach into water
systems.
These issues are creating something of a
GREENING ECONOMIES 23
February 20-26, 2011
CHINA
Workers recycle plastic waste at a centre in in Shenyang, northeast China 19 October, 2010. An estimated 10 million pe-
ople work in the recycling industry in China, processing upwards of 100 million tons of plastic waste annually.
larly suited to Chinese waste because of its
high organic content, and is a cheaper solution
Quote due to its relative lack of moving parts. Anae-
robic digestion produces bio-methane which
To feed the country’s rapid economic growth electricity can be burnt in combined heat and power
consumption increased by14.56 percent in 2010 to well over plants of around 2MW in size to gain reve-
nues from China’s feed in tariff for bio-energy
4.19 trillion kWh, according to the China Electricity power. Since December 2009 Chinese grid
Council. However, in 2010 capacity grew by only 10 percent companies must buy biogas electricity at a rate
and brown-outs are a common problem in China’s of 0.61 RMB per kilowatt hour, approxima-
tely €0.06.
industrial heartlands. The coal price shows no sign of Revenues also come from fees that would
declining either, and the environmental and health effects of otherwise have to be paid to the landfill com-
pany, and from selling the fertiliser that is left
burning it are costing China’s economy dear over after waste digestion. Currently the ave-
headache for local officials who are measured with six cities of around one million inha- rage cost in China for waste disposal is 60
on their environmental performance. bitants in China’s eastern provinces. Cities RMB/ton and 200 RMB/ton in Shanghai.
Last year our operations director, Emilis of this size are more receptive to new ideas, Carbon Emission Reduction credits (CERs)
Gustainis, was approached by a local govern- have less bureaucracy and are largely igno- through the Clean Development Mechanism
ment wishing to use his expertise gained as Li- red by Chinese and foreign investors. We (CDM) provide a bonus layer of income on
thuania’s deputy environment minister during have found that the reception we receive top, and decent changes to CDM ownership
Lithuania’s accession to the EU. By deploying from officials has been overwhelmingly po- rules in China allow Hong Kong investors to
anaerobic digesters with combined heat and sitive, and the already large market for this claim CERs for biogas projects. However, the
power units attached, Emilis described how ci- type of waste management system is set to key to these projects are that they are com-
ties could reduce the amount of landfill, feed grow over the coming years. According to mercially viable without carbon subsidies.
green power into China’s electricity grid and the World Bank urban areas of China ge- The six proposed 2MW plants are the first
produce high quality fertiliser. nerated about 190 million tonnes of MSW stage in a much larger roll out of dry decom-
Emilis approached myself and Dr Steph- in 2004, and by 2030 this amount is projec- position biogas plants – according to the
ane Grand to form Mint Power so that we ted to be at least 480 million tonnes, nearly McKinsey Global Institute in 2005 there were
could develop anaerobic digestion plants across double the amount the United States. 173 cities in China with a population of 0.5m
eastern China. At the time Dr Grand and I Our chosen methodology is dry anaerobic to 1.5m with 280 such cities expected by 2025.
were helping to finance energy efficiency pro- decomposition of kitchen waste, and we are We are currently looking for bridging fi-
jects through his company SJ Grand Financial engaged in a tender process with a number of nance to enable the projects to be fully develo-
& Tax Advisory, based in China. European firms with different digestion tech- ped before being sold to a number of interested
Since then we have been negotiating nologies. Dry anaerobic digestion is particu- investors.
24
February 20-26, 2011
Better mutual understanding key
by Cillian Donnelly
Cillian Donnelly
The continued integration of European
and Chinese business practices can “only
have huge potential for both markets”,
Yin Zonghua, Minister Counsellor of the
Mission of the People's Republic of China
said in Brussels at the end of January.
He was speaking on the occasion of
the assessment of five years of the EU-
China Managers Exchange and Training
Programme (METP), a joint initiative of
the European Commission and the Chi-
nese government, which aims to facilitate
the exchange of ideas and best practice
between entrepreneurs and business peo-
ple form both territories. The programme
was initially set up in 2006, and is due to
end in March of this year.
The programme has been highly suc-
cessful, says Yin Zonghua, in “giving a
boost to a new round of trade between the
EU and China”, as well as fostering better
relations. However, he says, things are still
not perfect; “there is still an inadequate
acknowledgement of each other's culture,
and way of doing things”.
Despite these words of warning, the
programme can lay claim to some succes-
ses. Its ethos of promoting bilateral co-
operation fits in perfectly with the wants
and needs of both the EU and China. Ac-
cording to a METP statement, “While
GREENING ECONOMIES NEW EUROPE
CHINA
Participants in the EU-China Managers Exchange and Training Programme, 2007
million by both the EU and China (€17
Quote
and €6 million, respectively), the pro-
gramme bills its long-term aim as an op-
portunity to “enhance and sustainably
The METP, set up to enhance business relations improve the EU's relationship with China
between China and the EU, is a ten month programme through exchange and economic co-ope-
ration”. It values the importance of inter-
which focuses on executive management training and national networks and intercultural
which takes place in both China and the European knowledge, and understands that “in
Union, where 24 member states are participants (the China a new generation of enterprises and
organisations is interested in broadening
three exceptions being Cyprus, Luxembourg and the scope of its managerial expertise about
Malta). Since 2006 about 450 managers from Europe Europe”.
and China have participated in the program Fundamentally, says Stefan Hell, an
METP Team Leader based in Beijing, the
the EU and China become increasingly The METP, set up to enhance busi- programme is “all about learning”, which,
co-dependent trade partners, a growing ness relations between China and the EU, he says, should not be thought of a some-
number of Chinese policies still restrict is a ten month programme which focuses thing “superficial”. Instead, “through un-
the investment possibilities for European on executive management training and derstanding language and culture, we can
companies in China. To successfully enter which takes place in both China and the learn something about China, and also so-
this challenging market, comprehensive European Union, where 24 member sta- mething about Europe”.
knowledge and targeted preparation is tes are participants (the three exceptions The programme, he says, supports the
vital for European companies and their being Cyprus, Luxembourg and Malta). reform process in China, and over the
managers. On the other hand, Chinese Since 2006 about 450 managers from Eu- years has taken in a wide range of enter-
policies strongly encourage foreign inve- rope and China have participated in the prises from sectors including environ-
stments by Chinese companies. As inter- programme. mental protection, renewable energy,
national competition for such Chinese China, which accounts for around computing and IT and agriculture. For
investments steadily intensifies, Europe 7.5% of the global economic activity, has Hell, the key to METP is “promoting un-
must position itself as an attractive inve- been the EU's largest trade partner since derstanding”.
stment location in order to be on the re- 2004, a fact that the METP has been keen And it is this promotion of understan-
ceiving end”. to capitalise on. Funded to the tune of €23 ding that is a “necessity if we are to meet
NEW EUROPE
to better EU-China business relationship
the demand for EU-China co-operation
in improving management and intercultu-
ral exchanges”, agrees XU Liang, Director
of the Division of European Affairs at
CCPIT and METP Project director in
Beijing. As the economy expands, China
is now the second largest in the world,
“there is more of a need for attracting po-
tential investors”, he says, particularly Ch-
inese investors in Europe.
The economic relationship between
Europe and China has developed quickly,
and must not be allowed to dip in mo-
mentum, he says. “The economic bond
between the EU and China has developed
extraordinarily fast. Two decades ago,
there was almost no trade at all between
China and Europe. Today, we form the se-
cond biggest economic relationship in
world”. Therefore, programmes such as
the METP are needed to keep the part-
nership fruitful and moving forward,
“METP highlights a very important
aspect of the Sino-European relation-
ship”, he says. “Confidence in one another.
Building that confidence will be the key if
we are to continue to develop a deep and
lasting relationship. International net-
works and intercultural knowledge have
become an increasingly important asset
for successful trade relations. This deve-
lopment specifically applies to China and
GREENING ECONOMIES 25
February 20-26, 2011
CHINA
Team building: Entrepreneurs from China and the EU have a lot to teach each other
is “still a need to do much, much more”.
With the formation of the EEAS, says
Quote
Jessen, comes the “possibility to further enh-
ance education and training”. But this kind
of education should not just be confined to
The economic relationship between Europe and recent graduates and young entrepreneurs.
China has developed quickly, and must not be It can start earlier; “we can get a broad base
allowed to dip in momentum, he says. ''The of young people, and their skills”, something
which can help close what Jessen calls the
economic bond between the EU and China has “conceptual gap”, and which Jessen defines
developed extraordinarily fast. Two decades ago, as “the different things we think about
when we discuss the same issue”. He cites
there was almost no trade at all between China and trade unionism as an example. It is, he says,
Europe. Today, we form the second biggest “important to get closer to each other”, and
economic relationship in the world important to create a “harmonious society”.
Despite the METP coming to an end,
the European Union”. Union remained committed to focusing there still exists a desire to maintain and
The EU-China Managers Exchange on human resources development, espe- evolve business relations between the EU
and Training Programme builds on work cially in the field of language training, in and China from both sides. Summing up
that begun in the 1980s with Japan, and the context of the EU’s business relations the work of the METP, and possible fute
out of the desire to improve upon mana- with China. avenues, Yin Zonghua, argues that “We
gement training programmes that were In the past 12 years, he says, EU- should have more programmes like this in
developed in the late 1990s, explains Chian relations have taken a huge step which young professionals from China
Franz Jessen, the Head of the China Unit forward. Trade, too, was “on different and the EU meet to promote mutual un-
at the newly-formed European External scale”, about a fifth or sixth of what it is derstanding, explore potential business
Action Service (EEAS). For Jessen, pro- now. Today around 1.5 million Chinese opportunities, and help deepen further the
grammes like these are “instrumental” men and women come to Europe each economic and trade relations between
building relations between the EU and its year either to work or follow the tourist China and the European Union”. Thank-
trade partners. Despite the METP co- trail. But, despite this evolving relation- fully for the Minister Counsellor, many in
ming to an end, he says that the European ship, which appears to be on the up, there Europe, and in China, appear to agree.
26
February 20-26, 2011
Solar energy pushes
forward in china
by Elizabeth Eckert
Elizabeth Eckert
photo credit:EPA/QILAI SHEN
By the end of 2008 China may have installed
only a total of 140 megawatts (MW) of solar
photovoltaic (PV) energy, but with plans to in-
stall 1800 megawatts of solar capacity by 2020,
this renewable energy source will help the coun-
try meet its rapidly increasing energy demand.
Solar energy is not the leading source of re-
newable electricity in China compared to the in-
stalled capacities of hydro,wind, and even nuclear
energy sources, but current market conditions
will ensure growth in the solar sector.
Although the goal for installed solar capa-
city by 2020 is only 1800 MW, the assistant di-
rector for the Energy Research Centre, a
department of the National Development and
Reform Commission in China, Wang Zhon-
gying, said he believes that China will likely ex-
ceed this goal by a great deal, and has potential
to install 10,000 MW or more by 2020 of solar
energy.
Solar energy in China mainly comes from
the Gobi Desert, in the north-western part of
the country. Solar energy ranks last in developed
renewable energy sources, but its importance to
the energy sector continues to grow.
As a country with such a large geographic
area and differentiated resources, this gives China
the advantage of harnessing different types of re-
newable energy. Although solar energy is lar-
gely produced in the north-west, it mainly
powers the more populous area of eastern China
and the country’s expansive cities, where electri-
city demand is greatest.
Solar energy in recent years has taken off in
light of the financial crisis. The cost of develo-
ping solar electricity declined by over 50% from
GREENING ECONOMIES NEW EUROPE
CHINA
A visitor takes a rest while sitting beside a poster showing high-tension power lines at an alternative energy convention in Shanghai,
China on 19 November 2009. China is heavily investing in its solar power sector as it announced that the government has decided to
subsidize 294 solar power plants which will generate 642 megawatts of power. The subsidies are part of China's "golden sun" plan, a
project meant to find alternative energy sources.
petitor.
In 2010 the US Congress passed a law ban-
ning purchases of Chinese solar panels by the
Quote Department of Defense, citing the need to invest
in U.S. solar energy.
As a country with such a large geographic area and However, US solar energy companies are not
differentiated resources, this gives China the advantage of interested in staying in the United States as pro-
duction costs continue to rise while the consu-
harnessing different types of renewable energy. Although mer cost of their products fall. The third largest
solar energy is largely produced in the north-west, it mainly U.S. solar panel manufacturer, Evergreen Solar
powers the more populous area of eastern China and the announced in early 2011 the closing of its US
factory to operate solely in China. They cited
country’s expansive cities, where electricity demand is greatest the lack of financial support from the US go-
vernment, and loss of profit from the increasing
cost of the production process as well as lower
2006-2008 according to RenewableEnergy- expand into new international markets. demand for their products.
World.com. The prices for the raw materials China currently owns 43% of the global sun The rapidly increasing demand for electricity
needed for production, including PV technology panel market. Their products cost on average and energy provisions gives Chinese solar com-
fell, resulting in cheaper production prices. The 20% less than similar European products. panies incentive to produce on a mass scale.
cost of polysilicon, another important material Shawn Kravetz, founder of an investment firm Mass production of such products also provides
in the production process fell by a stunning focusing on Chinese solar companies, Esplanade the advantage in exports and investment abroad.
87.5% during the financial crisis. It was during Capital, LLC reports that the Chinese proces- The state-run Chinese Energy Conserva-
this time that solar projects were eagerly being sing cost for solar technology is 30% less than tion Investment Corporation has been making
developed as electricity demand continued to rise European competitors. plans to finance and operate solar projects in
and prices continued to fall. It seems that the Chinese have attained an Germany, Spain and Italy, according to the Wall
Domestic solar projects in China have also advantage in the global market over both the Street Journal. The public investment body will
benefited from generous government subsidies United States and Europe through careful inve- finance these projects with lines of credit from
programs promoting solar development such as stment in solar technologies at the best possible the Export-Import Bank of China.
the Golden Sun program. Local financial insti- time in the market for such products. As China continues to develop their solar
tutions also tend to be friendly with domestic As the Chinese expand into new markets, energy potential, it is likely they will surpass the
producers of renewable energy, particularly in exports of solar technologies have risen. 90% of levels they have set for installed capacity in the
comparison with their European counterparts. Chinese modules have been exported to the future. The energy demand in China has far
Decreasing costs and an increase in global United States and Europe. In 2010 alone, $6.6 outpaced that in Western countries, giving
demand for solar technologies such as solar pa- billion worth of solar panels were shipped just to China an incentive to further produce the vo-
nels have allowed Chinese solar companies to the United States, where solar companies are fe- lume of clean energy sources that the rest of the
take a larger role in the global market as well as eling the pressure from their advantageous com- world does not yet have.
NEW EUROPE GREENING ECONOMIES 27
February 20-26, 2011

CHINA

Energy efficiency: the new bubble?

by Cillian Donnelly
Cillian Donnelly

photo credit:EPA/SHERWIN A worker seen in the maintenance of solar panels in Chongming near by Shanghai, China, 23 October 2009. Within
the next five years, China's total investment in new energy sector will reach 30 billion euros

China is currently undertaking its biggest en-
vironmental makeover. Its current fiver-year
economic plan, the twelfth in all, which runs
from 2011-2015, contains many an effort to
upend its traditional dependency on coal-fired
power, as well as its traditional image as a glo-
bal polluter. The government has already de-
clared it will reduce carbon emissions by
40-45% compared to 2005 levels, which, ac-
cording to the National Development and Re-
form Commission, will mean ensuring that
15% of energy production comes from alter-
native sources by 2020. According to the latest
estimates, the country is already half-way there.
To achieve its aims, this means China ha-
ving to go above and beyond the spending of
the last five-year plan, a figure which amoun-
ted to 1.5 million Yuan. According to estima-
tes, this would mean a 45% increase in
spending if the stated carbon- reduction goals
are to be achieved. The fear, however, is that a
bubble – the kind that brought down the we-
stern banks – could emerge, as new companies,
keen to capitalise on this new venture will cap-
size the market.
Those companies which spy money to be
made from energy efficiency technology are in
a good mood right now. According to Ray
Cheung, Principal of Dao Partners in an arti-
cle published in Caixin Online, Chinese com-
panies expound about 30% more energy than
their western counterparts, which means that
those who can offer energy saving solutions
can clean up right now. Energy efficiency, he
says, makes a “compelling case” for business in-
vestment.
“Energy consumption is a cost and thus
Quote
The government has already declared it will reduce carbon
emissions by 40-45% compared to 2005 levels, which,
according to the National Development and Reform
Commission, will mean ensuring that 15% of energy
production comes from alternative sources by 2020.
users have an economic incentive to reduce
their energy expenditures by finding ways to
use less energy. The potential for energy cost
savings is particularly high in China given that
Chinese firms have been estimated to consume
as much as 30 percent more energy than their
industrialized peers for the same economic
value of output. As a result, estimates for the
market value of China's annual energy savings
are in the trillions of Yuan with one estimate at
over 3 trillion Yuan a year”.
To capitalise on this market potential, may
energy service providers employ what is known
as Energy Service Company Business Model
(ECSO), in which companies provide energy
saving technologies to their customers at a mi-
nimal (or, even, no) cost in return for cash sa-
vings on energy bills, through an arrangement
known as an Energy Performance Contract
(EPC).
In April 2010, the government announced
that energy efficiency service providers would
enjoy tax exemptions, leading to a sudden in-
crease in start-ups, and a boom in the amount
of ECSO companies. The fear, though, is that
these providers are untested. Potential clients
are, understandably, unsure of how to engage
with this new phenomenon.
According to Ray Cheung: “But as with
everything in China, nothing is as easy as it
seems. First, the majority of ESCOs in China
have unproven EE technologies. As a result,
potential users are not sure whether the pro-
ducts and services offered by the ESCOs can
actually reduce their energy costs, and are re-
luctant to purchase them. Second are the pay-
ment risks – in which many users are unwilling
to share the energy cost savings with the
ESCOs even though they gained these eco-
nomic benefits at little or no cost. Another ch-
allenge is the length of the contracts – many
ESCOs require paybacks from the users'
energy savings for over 5 years to earn a decent
profit. As a result, the user may be out of busi-
ness before the terms of the EPC are comple-
ted. To make things even more complicated,
many of the ESCOs are small and medium
enterprises who lack the capital to finance their
EE technologies and services for their users.
As a result, they cannot sell their products at
scale”.
This makes for a potential future risk,
with unscrupulous operators taking advan-
tage of market loopholes and uncertainty,
which in turn leads to companies failing to
make profits. But, says Cheung, with vigi-
lance, and the correct business model, suc-
cess can be achieved, and companies need
not be undone by bad business practices:
“The keys to success usually include the fol-
lowing core qualities: The most important
and obvious one is that the technologies
and services do actually reduce energy con-
sumption. This requires that the EE
(energy efficiency) companies in some way
guarantee the energy savings for the user.
Another is the firm's arrangement with the
users, in which the economic benefits of the
energy savings are enjoyed by the user in a
direct manner and create incentives for the
user to report and pay for the large energy
savings. To protect itself from payment
risks, the EE company must have a method
to prevent non-payment, usually through
some technology solution or a shorter pay-
ment schedule. Meanwhile, investors can
help EE companies they invest in by fin-
ding ways to provide some kind of user fi-
nance. The EE companies that have such
strengths will not only survive in China, but
will reap the profits and thrive”.
28
February 20-26, 2011
Best Practices from European
by Bert De Graeve
Bert De Graeve
photo credit: . EPA/LUCAS DOLEGA
European companies have broad kno-
wledge of environmental, health and sa-
fety issues and long experience in
providing environmental technology de-
sign and consultancy services. They are
global leaders in the field of environmen-
tal services. Hereafter follow some best
practices from our companies in China.
Bekaert and green technologies :
drawing from experience…
Bekaert (www.bekaert.com) is a global
technological leader in its two core com-
petences: advanced metal transformation
and advanced materials and coatings, and
a market leader in drawn wire products
and applications. Bekaert is present with a
manufacturing platform in China since
the early nineties. The company experien-
ced significant growth in China in recent
years and operates 17 sites at 8 locations
there (Shenyang, Weihai, Jiangyin, Wuxi,
Shanghai, Suzhou, Chongqing, Huizhou),
including 13 manufacturing plants, an
R&D center and Engineering plant, a tra-
ding company, and the Regional Head-
quarters Bekaert Asia in Shanghai. At
present, 10 000 people are working for
Bekaert in China.
Like China, Bekaert’s activities in the
region have grown at a fast pace and con-
GREENING ECONOMIES NEW EUROPE
CHINA
President of EADS, Louis Gallois (R) delivers a speech as Chinese Vice President On Construction and Materials Frankie Wong
(C) and President of Schneider Electric Jean Pascal Tricoire (L) listen while attend the symposium 'Europe/ China: Facing our
common challenges' organised by the French directorate-general of the Treasury at Bercy, in Paris, France 16 June 2010
in the construction of industrial floors by
Quote
43%, when compared to classical reinfor-
cement solutions. Dramix® was used to
build the Beijing and Shanghai Pudong
'Green innovation' is indeed a recurrent and common International airports as well as the
CCTV Tower in Beijing, to name a few
theme in many of Bekaert's research and development examples. Bekaert’s offering of the highest
programs. Much of the technology development strength steel cord enables our car and
truck tire customers to reduce the amount
executed in our R&D center in Jiangyin is aimed at of steel in a tire by more than 10%, the-
helping our Chinese customers in the automative and reby lowering the weight and also the rol-
ling resistance of a tire, having an
renewable energy sector to improve their environment important effect on fuel consumption. In
performance and their energy efficiency too addition, we develop a range of products
that are used in the solar and wind energy
sequently our appetite for energy too. workspace comfort. sectors.
From the beginning we identified energy Besides applying the newest technolo- ‘Green innovation’ is indeed a recur-
efficiency as a significant opportunity to gies for energy-conservation to our own rent and common theme in many of Be-
quickly enhance the resilience and envi- production processes, we also put effort in kaert’s research and development
ronmental performance of our company developing products that help our custo- programs. Much of the technology deve-
and turn it into a competitive advantage mers and end-users reduce their environ- lopment executed in our R&D center in
even. mental impact. Bekaert’s core technical Jiangyin is aimed at helping our Chinese
In 2010 Bekaert actually grasped the competences in the areas of metal tran- customers in the automotive and renewa-
opportunity of our local expansion to sformation and coating technologies, ena- ble energy sector to improve their envi-
build the greenest steelcord plant ever in ble us to do so. ronmental performance and their energy
the world, and the first of its kind in in- Several of our products are energy-sa- efficiency too.
dustry in Shenyang. In order to build the ving or contributing to emissions reduc-
greenest steel cord plant, we pulled toge- tion. Bekaert’s Dramix® Green steel fibers UMICORE - Bringing clean
ther the newest technologies for optimi- for example, which are used to reinforce technologies to China
zed energy conservation, reduced concrete constructions, allow a reduction Umicore is a materials technology
environmental impact and enhanced in the energy consumed per square meter group. It focuses on application areas
NEW EUROPE
companies in China
where it knows its expertise in materials
science, chemistry and metallurgy can
make a real difference. Its activities are
centred on four business areas: Catalysis,
Energy Materials, Performance Materials
and Recycling. Each business area is divi-
ded into market-focused business units, be
it in products that are essential to every-
day life or those at the cutting edge of new
technological developments.
Umicore generates approximately 50
% of its revenues and spends approxima-
tely 90 % of its R&D budget in the area of
clean technology, such as emission control
catalysts, materials for rechargeable batte-
ries and photovoltaics, fuel cells, and pre-
cious metals recycling. Umicore’s
overriding goal of sustainable value crea-
tion is based on this ambition to develop,
produce and recycle materials in a way
that fulfills its mission: materials for a bet-
ter life.
The Umicore Group has industrial
operations on all continents and serves a
global customer base; it generated a tur-
nover of € 9.7 billion (€ 2.0 billion exclu-
ding metal) in 2010 and currently employs
some 14,400 people.
Umicore set up its first commercial of-
fice in China in 1982 and has not stopped
expanding since. It now has an extensive
presence in China, comprising 12 indu-
strial plants and 6 commercial offices
overseen by its regional headquarters in
Shanghai, employing about 2,000 people.
Umicore’s recent investments prove
GREENING ECONOMIES
CHINA
Hungarian Minister of Economy Janos Koka (2-L), Speaker of the Hungarian Parliament Katalin Szili (3-L) and China's top legislator Wu Banggu
(4-R) talk during the Hungarian-Chinese Business Forum in the Parliament building in Budapest, 24 May 2007 | EPA/ATTILA KOVACS HUNGARY OUT
Umicore’s ongoing commitment to both
China and environmentally friendly pro-
ducts and processes. For example, auto-
motive catalysts started being used in
China in 2002, and Umicore launched
production in China (at its Suzhou site)
in 2005, trippling capacity since. Umicore
is also constructing a technology develop-
ment centre in Suzhou, including test ca-
pability for heavy duty diesel applications.
Umicore is also expanding production
capacity for Li-ion (cathode) materials at
its Jiangmen site to support not only con-
tinued growth in battery materials de-
mand related to portable electronics, but
also new applications such as hybrid elec-
tric vehicles and power tools.
Umicore’s expansion in China provi-
des a perfect fit with the Group’s Vision
2015, focusing on such growth drivers as
rechargeable batteries, emission abate-
ment, recycling and photovoltaïcs.
VITO’s experience in China
The Flemish Institute for Technologi-
cal Research (VITO) conducts customer-
oriented contract research and develops
innovative products and processes in the
fields of energy, environmental protection,
materials, and remote sensing and earth
observation processes. It does this both for
the public and the private sector. Central
to all projects are the protection of the en-
vironment and the sustainable use of
energy and raw materials.
VITO counts approximately 600 hi-
ghly qualified scientists from diverse spe-
cialisations and collaborates with industrial
companies within and outside Flanders. In
2010 the total VITO budget was 92 mil-
lion euro of which the contribution by
contract research was 55 million euro.
While VITO, the Flemish Institute
for Technological Research, may have
Flanders in its title, this in no way restricts
the research centre's geo¬graphical scope.
In fact, for a knowledge centre such as
VITO, internationalisation is not an
option; it is the only logi¬cal path to fol-
low. Dirk Fransaer: “VITO intends to be-
long to at least the European top in a
number of research areas. We can only lay
claim to this title if we attract and develop
sufficient international and internationally
recognised talent. Hiring top researchers,
however, is only possible if you yourself
are also an international player. It helps of
course when the research areas in which
you are active also have global relevance.
In VITO's case, no doubt is possi¬ble
here. Cleantech, the common thread run-
ning through our activi¬ties, is also the
key to solving many problems worldwide.
Think of the fight against global warming
and the evolution of the energy sup¬ply:
we have a lot to offer in this area. VITO is
able to compete with the large internatio-
nal players in a number of research areas
such as sustainable energy and spatial mo-
delling. ”
VITO has been taken recently a si-
gnifi¬cant step in China with the es¬ta-
29
February 20-26, 2011
blishment of VITO Asia in Hong Kong.
The establishment of a subsidiary in
China should be considered as a logical
sequel to former cooperation projects du-
ring the last five years in China. All of
these projects were conducted in coopera-
tion with a local scientific partner or a
local environmental authority and co-fun-
ded by the EU or the Belgian or Flemish
Government.
The applied Vito’s expertise was mo-
stly about remote sensing technology
(agricultural crop monitoring, desertifica-
tion monitoring) and air quality modeling
(urban air quality management).
“This subsidiary will be par¬ticipating
in two joint ventures with Chinese Anti-
pollution (in turn a subsidiary of the Ch-
inese hold¬ing ALB, ed.). The first
collabora¬tive effort concerns environ-
men¬tal studies.
The second joint venture exam¬ines
whether sustainable electric¬ity can be
produced at an oilfield in China using ge-
othermal energy. In this project, ground-
water with a temperature of 130 to 140 °C
will be pumped and the heat con¬verted
into electricity. This repre¬sents a nice
point of contact with the feasibility study
on geother¬mal energy that VITO is pre-
sently conducting in the Kempen region
in Flanders.”
These and many more European tech-
nologies will contribution to the further
development to China’s green innovation
drive.
30
February 20-26, 2011
China’s year of the rabbit inherits
the tiger’s drought and frost
by Dr. Marco Gemmer
Dr. Marco Gemmer
photo credit:EPA/DIEGO AZUBEL
Beijing celebrated the official end of the spring
festival at full moon with city-wide fireworks
on 17 February. In Chinese astrology the rab-
bit year started on 3 February and stands for
harmonious and quiet months to come. It has
succeeded the year of the fearless but fiery
Tiger. Many people in China and the North-
ern provinces in particular will remember the
Tiger Year as a dry Tiger, putting the environ-
ment and society under extreme, long-lasting
water stress. Unfortunately, the Rabbit has inh-
erited the Tigers drought and the frost which
are China’s severe climate and weather risks
during this year’s spring festival period.
Frost in Central and South China has dis-
rupted the beginning of the annual Spring Fe-
stival travel rush, with temperatures reaching
their lowest since 1961 in Guizhou, Hunan
and Hubei provinces. Spring Festival is the
most important Chinese festival for family re-
union. People return to their homes, often th-
ousands of kilometres away from work or
study, to have a reunion dinner with families
on the New Year's Eve. Its importance can be
compared with Christmas break in Europe or
Thanksgiving in the US. The only difference:
it is often the only paid leave for workers thro-
ughout the year and the travel season, or Ch-
unyun (spring transportation), is an annual test
on China's transportation systems with 300
million passengers who spend several days in
overcrowded buses or trains. Fortunately, this
year’s travel season has not been hit as badly as
in 2008 when millions of passengers got stuck
in railways, buses, or stations for several weeks
during an extreme snow and frost disaster.
Several frost warnings have been published
by the China Meteorological Administration
this year for large parts of Central and South
China. In January, freezing rain has swept
GREENING ECONOMIES
CHINA
Acrobats perform outside a Daoist temple during a temple fair in Beijing, China, 06 February 2011. Chinese people are celebrating
the lunar year of the Rabbit which began on 03 February 2011
Quote
Climate change is projected to increase the
frequency and intensity of climate and weather-
related hazards in China, imposing more risks to
a society that has been emerging on its path to
sustainable development
south China's Guizhou Province, Hunan Pro-
vince and Guangxi Zhuang Autonomous Re-
gion.
Beijing’s 20 million inhabitants will re-
member historical period of no rain. The capi-
tal city did not receive any rainfall in nearly
four months. Since last October, North China
and the Yellow-Huaihe River valley have seen
continuously less rainfall up to 90% below ave-
rage which led to drought in China’s eight im-
portant winter growing areas in Shandong,
Henan, Hebei, Shanxi, Anhui and Jiangsu, Sh-
aanxi and Gansu and left some 7 million hec-
tares or farmland short of water supply. East
China's Shandong Province, one of the coun-
try's major grain producers, recorded the worst
drought in 200 years.
Large-scale drought relief works have star-
ted when the meteorological drought became
an agricultural drought this year months ago.
China's central and local governments have
supported the irrigation of more than 1 mil-
lion hectares of winter wheat farmland by dig-
ging more than 10,000 wells and carrying
360,000 cubic meters of water.
The reason for the long-lasting drought
can be found in the above-normal strength of
the cold air which affects China during winter
(the winter monsoon) and below-normal moi-
sture conditions from the South, in brief by
anomalous Arctic Oscillation and La Niña. In
January, the atmospheric circulation in the
middle (Central China) and high (North
China) latitude areas of the northern hemi-
sphere produced the typical winter monsoon
cold and dry airflow from North to South. La
Niña, the phenomenon describing cold ocean
surface temperatures in the South Pacific, ca-
used that the subtropical high in the North-
west Pacific Ocean was weaker than it is
usually in January. Less moisture entered the
atmosphere over China from the Pacific
Ocean and the moisture from the Bay of Ben-
gal was blocked by the strong cold air flow in-
stead of reaching areas North of the Yangtze
River which would be usual this time a year.
Since February, the atmospheric circula-
tions in middle and high latitude areas have ad-
justed. The Arctic Oscillation turned to a
positive phase and weakened the northern cold
air. The moisture from the Bay of Bengal ente-
red China which resulted in two rounds of
NEW EUROPE
snowfall between 9 and 13 of February. They
have brought some short relief for the drought-
hit areas of Beijing, Tianjin, Hebei, Shanxi, Sh-
andong, Henan, Anhui, and Jiangsu. The area
that suffered from severe drought has decrea-
sed. Although some light rainfall is predicted
for next week, irrigation is further required to
avoid larger damages to the winter crops.
China’s climate is controlled by the winter
and summer monsoon and the country hosts
the basins of the third and fifth longest rivers
in the world, the Yangtze and the Huanghe.
Drought, flood and other climate or weather
extremes have always belonged to China and
have been reconstructed by quaternary scien-
tists for thousands of years and even histori-
cally documented for the last two thousand
years by the imperial bureaucracy. However, in
the last Tiger Year, 2010 in Western analogy,
China suffered the most severe weather-cli-
mate events in decades. Severe high tempera-
ture and severe rainfall happened in higher
frequency, higher intensity and in larger scope.
Different from historical records they happe-
ned more simultaneously. In autumn, only half
of the average number of Tropical Cyclones
has developed in the West North Pacific, but
the double number has made landfall on
mainland China. Extreme weather last year ca-
used more than 4,800 casualties and resulted in
direct economic losses of more than 500 billion
yuan (€56 billion).
Climate change is projected to increase the
frequency and intensity of climate and wea-
ther-related hazards in China, imposing more
risks to a society that has been emerging on its
path to sustainable development. Many peo-
ple hope that the weather conditions develop
to what the Year of the Rabbit is supposed to
bring: harmony, quiet and balance.
ADVERTISEMENT
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EU-China Year of Youth 2011

Why?
The EU and China have declared 2011 as the EU-China Year of Youth with a view to "further promoting and deepening partner-
ship between Europe and China". The Joint Statement of the 12th EU-China Summit held in Nanjing on 30 November 2009 also
focused on "strengthening exchanges and cooperation on cultural relations" and on pushing forwards the "dialogue mechanism on
educational policy". Youth exchanges cooperation is a key area to strengthen people to people contacts and to promote dialogue, mu-
tual tolerance, intercultural awareness and solidarity beyond borders, contributing to break down prejudices and stereotypes and
helping to build up societies based on common understanding and respect. The training of those active in youth work and youth or-
ganizations as well as exchanges of experience, expertise and good practices in the field of youth also contributes to promote youth
activities and may lead to the establishment of networks, high quality projects and long-lasting partnerships in the field of youth.

Who?
Young people from the EU and China will be participants in the flagship events, but will also be important for the implementation
of partnership processes throughout the year.

Where?
The flagship events will take place in China(Beijing and Shanghai mainly) and in Europe(Brussels mainly). Other events will be or-
ganized by youth organizations throughout the regions and new media tools shall ensure wide participation from both sides.

How?
The year will be implemented through five different categories of events.
a) Flagship events
b) Partnership programmes
c) Youth highlight programmes
d) Youth policy dialogue
e) Media and publicity programmes

Tentative calendar of events

Date Location Event

January Brussels Opening Ceremony
February Beijing Opening Ceremony
May 9-15 China EU-China Youth culture Week
End of May Brussels and around Europe European Youth Week
August Shenzhen EU-China Youth Festival for Universiade
September Brussels II Youth Convention on Volunteering
November Beijing Closing Ceremony