China as a Role Model for Green Economic Development

May 30, 2011 Posted by China Briefing Reading Time: 3 minutes

By Tommaso Carnaroli

SHENZHEN, May 30 – The 3rd Nobel Laureate Symposium on Global Sustainability was held in Stockholm, Sweden on May 18 with the aim of preparing a document to be presented during the World Conference on the Environment which, exactly 20 years after its debut, will take place next year in the city that hosted it for the first time – Rio de Janeiro. Among the event’s distinguished participants was former Norwegian Prime Minister Gro Harlem Brundtland, who is famous for coining in 1987 the often-quoted definition of sustainable development as: “Development which meets the needs of the present without compromising the ability of future generations to meet their own needs.”

In an exclusive interview with Xinhua on the sidelines of the May 18th event, the three-time Norwegian prime minister and former head of the World Commission on Environment and Development congratulated China on its efforts towards a greener economy, saying that the emerging Asian giant represents an example to follow in a world which has seen very few improvements on sustainability from the time when she directed the work of the Commission.

“I think the leadership in China know that the pattern of development in China cannot be coal-based, oil-based, transport-based in private cars, so they talk about green economy, because they know they have different energy resources, they have to use solar and they are entering into changing all these technologies and implementing them,” Brundtland said, adding that “the rich world has to change the pattern, the newly emerging economies cannot do what we did because the world will suffocate under the pressure.”

On the same day that Brundtland conducted her interview in Stockholm, a new development model characterized by low greenhouse gas emissions was being discussed more than 8,000 kilometers away in the southern Chinese city of Shenzhen.

In a seminar organized by the American Chamber of Commerce in China’s Pearl River Delta region, experts analyzed the potential implications of implementing pollution-reducing measures in China – showing how such a process would not only be vital to the country, but also possibly beneficial to its economic growth. One of the many mechanisms established by the Kyoto Treaty in order to achieve a reduction in worldwide greenhouse gas emissions is the so-called Clean Development Mechanism (CDM), which provides for the creation of highly sustainable projects in developing countries. Such projects, if working effectively, would be capable of giving rise to transferrable pollution rights to be resold to the companies of those Western nations which signed the treaty itself (thus being subject to stringent restrictions on emission levels). With 11 plants, China maintains the highest amount of such projects, being followed at a considerable distance by India, where five of them are located.

Hence, Brundtland’s considerations are reflected in the factual reality: the Asian giant, while not yet being a signatory of the aforementioned Treaty, not only hosts a large number of facilities relating thereto, but is also preparing to play a pioneering role in what the Harvard Business Review has called the “megatrend” of sustainability.

Notwithstanding the fact that the 78 percent of the country’s energy production is still coming from highly-polluting coal, recent years have seen an upsurge in the use of alternative energy sources, with geothermal energy in the lead (covering 17 percent of national demand). Although solar is not particularly developed, China is now the world’s largest producer of photovoltaic panels and has recently experienced the construction of record size plants, such as new plant in Xuzhou, Jiangsu Province which is capable of producing 26 million kW per hour – equivalent to 20,000 tons in carbon emission reductions per year.

Except for nuclear, which is also growing, Director of SGS China Dr. William Lau underlines the rapid growth of Chinese wind power, now constituting 23 percent of the energy output of its kind worldwide. Lau suggests the possibility of the country reaching full coverage of its energy needs through this single source by 2030.

An important role for such optimistic forecasts has been certainly played by the birth control policy pursued by the Chinese government, which was another object of praise by the former Norwegian Prime Minister during the Stockholm summit earlier this month. The contents of China’s recently drafted 12th Five-Year Plan provide for the gradual “greening” of five provinces and eight cities and makes establishing a low-carbon economy one of its pillars.

China has all the credentials to serve in the future as a model for other countries wishing to follow a sustainable path of development, and much will depend on its government’s ability to instill in its citizens – be they consumers or producers – an increasingly greater awareness of the subject. In any case, the race towards a green economy is on.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, Vietnam and India. For information on China market entry in the green energy field, please email info@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

China Renewable Energy Industry Report: May 27