China’s Green Economy Faces Significant Challenges, Report Says

china environmental industry growth

by | Dec 2, 2013

china environmental industry growthChina has a strong policy framework in place to transition to a green economy, but significant challenges stand in the way including its pollution problems and the technology gap between Chinese firms and their international competitors, according to a study sponsored by the United Nations Environment Programme and the Chinese Ministry of Environmental Protection.

The joint report recommends China increase its investment in research and development to tackle the country’s environmental challenges and to help its green industries compete globally. Stricter enforcement of environmental regulations, clearer policies for grid capacity construction, sewage treatment and local pollution of the cement sector also are required to drive green development, the report says.

The report, China’s Green Long March: A Study of Renewable Energy, Environmental Industry and Cement Sectors says the country has become a world leader in renewable energy technology investment, with the most installed capacity of wind farms and the biggest manufacturer of solar PV modules. Green investment formed 5 percent of China’s 4 trillion yuan stimulus (about $570 billion at the time) package in 2008, a move that helped the environmental industry grow to represent more than 3 percent of GDP. China also has invested in industrial energy efficiency, which has led to a 19.1 percent fall in energy intensity per unit of GDP.

And yet, China is the world’s largest emitter of greenhouse gases largely to due to its heavy reliance on coal and oil, which accounts for nearly 90 percent of energy consumption. The country also consumes 60 percent of the world’s cement, 49 percent of the iron and steel and 20 percent of the energy, the report says.

Pollution is also a major issue that threatens to slow the development of a green economy, the report says. An estimated 90 percent of the urban water bodies are polluted and outdoor air pollution has contributed to 1.2 million premature deaths per year.

The report suggests China not only develop energy efficient buildings and invest in clean energy, but also create greener supply chains that reduce waste generation, water and material consumption and energy use. Greening the building sector supply chain could be a key opportunity for the country, UNEP says.

State-owned oil and gas company PetroChina bought 10,000 Chinese carbon offsets from wind power producer Longyuan on Friday for 16 yuan ($2.62) each — six times higher than international prices.

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