Growing China Industry Helps Clean Energy Boom


Clean energy technology is on track to become the third largest industrial sector globally with a rapidly increasing share taken up by China, predicted a WWF report released at the UN climate summit in Copenhagen today.

Clean Economy, Living Planet – Building Strong Clean Energy Technology Industries is a first ever worldwide country ranking by clean energy sales, finding that relative to GDP it is wind energy and insulation pioneer Denmark and bio-ethanol giant Brazil that are leading the way. Germany, trading on a substantial manufacturing base and public support for wind and solar energy, is in third place.

The report predicted that by 2020 the industry would be worth €1600 billion a year in 2020, ranking behind automobiles and electronics as the third largest industrial sector. In 2007, clean energy technology had a sales volume of €630 billion and was already larger than the global pharmaceutical industry.

Sale revenues from energy efficiency products in 2007 were more than five times the revenues from renewable energy products, but this will change significantly by 2020 with the growth rate for renewables at 15 per cent a year being three times the still respectable five per cent annually of efficiency product and process revenues.

“This is the clean economy growth happening now with only a partial Kyoto protocol international framework supporting clean energy development, patchy national support for green energy and huge subsidies to fossil fuel use,” said Kim Carstensen, leader of WWF’s global climate initiative.

“Imagine what is possible with a successful Copenhagen climate deal and the national mechanisms to deliver its outcomes – clean energy is where the money is going to be and this is where energy security is going to be.”

The report advocates countries seeking to develop their clean energy technology sectors should “follow the leaders” with technology action plans to take technologies from research to demonstration and bridge the gap between research institutions and industry.

Central banks could help by encouraging the inclusion of “carbon risk” into financial modelling. Access to seed or venture capital has also been a factor in the success of clean energy in the leading countries

The report also emphasises the importance of developing a strong domestic market in technologies with a strong domestic fit.

“It allows companies to experiment, gain experience and quickly traverse the learning curve – both giving them a competitive lead and providing them with reference and showcase projects,” the report said. Governments can support such domestic markets with subsidies, renewables targets and procurement policies.

Countries which could benefit from such moves include the US, ranked 18 on the GDP weighted rankings and behind Germany even in absolute terms, and the UK, ranked 19. Illustrating opportunities lost, Australia – which squandered an early technical lead in solar energy – is ranked 28.

China is ranked fourth in terms of absolute sales, and sixth relative to its GDP.

“Clearly, from a national perspective there is much to gain and nothing to lose from investing in clean energy,” said Donald Pols, Head of the Climate Programme at WWF-Netherlands.

“Forgoing these opportunities for the sake of propping up an aging, polluting fossil fuel sector for as long as its lobbying power remains significant is acting for vested interests not the national interest.”