China To Spend Trillions On ‘Green Tech’
– Kenneth Rapoza 8/11/2015 @ 9:32AM
The Chinese government will spend upwards up $2.5 trillion over the next 15 years on clean energy projects designed to provide a lift-off to its most promising alternative energy firms.
Rae Kwon Chung, principal advisor on climate change of the United Nations Secretary-General, came up with the figures during the China Summit on Caring for Climate hosted by the U.N. Global Compact Network China. Chung said that China pumped $90 billion into the renewable energy sector in 2014, more than one quarter of the world’s total investment in green technology.
China submitted its climate change action plan to the U.N. in June, promising to cut carbon dioxide emissions and expand the share of non-fossil fuels in its primary energy mix. So far, solar is China’s biggest upside with dozens of companies facing overcapacity and no official support for the industry. Around 1% of China’s energy matrix is solar power.
Earlier this year, a documentary titled “Under the Dome” caught the attention of the Chinese, especially those in the crowded east coast cities that have more days of poor air quality than good days. The “Under the Dome” documentary was quickly called China’s “Inconvenient Truth”, the Al Gore documentary that put climate change on the map. “Under the Dome” put pollution high on Beijing’s agenda, even as the government tried to censor the film. Shortly after its release, the government said during an official plenary session that it would make fighting pollution a top priority.
China published its new Environmental Protection Tax Law on June 10, shortly after the release of the film. The law bolsters regulators to enforce policies designed to improve quality. Call it a de facto Clean Air Act, but China is increasing taxes on polluters.
Some companies will benefit.
One is electric vehicle maker BYD , which stands for Build Your Dreams. In the future, BYD will likely get contracts to build public busses in China as it has in northern Europe. China investment in this sector will present even greater opportunities for BYD as well as corporate investors looking to build EV charging stations.
The Shanghai police plans to gradually replace all of the city’s patrol cars with low-carbon alternatives. BYD will be one of them, providing the infrastructure is there. It’s been a problem in the recent past, but China’s new green tilt might force State Grid and Southern Grid to support the building of electric charging stations at the nation’s gas terminals.
Last month’s tax draft is a first step in a centrally-led environmental policy transformation that should bode well for China’s clean energy players.