[ccebook.cn]The World in 2010

Business
Asia's green-tech rivals
Nov 13th 2009
Clean-energy competition in the region will be intense
The battle lines are being drawn in Asia over green technologies, as governments adapt their tradition of state
influence on industry for an era in which eco-friendly products may spell export success. In China, Japan,
South Korea and elsewhere, a big portion of fiscal-stimulus measures is dedicated to green projects. It is seen
as a way to create new jobs, cut carbon emissions at home—and sell products abroad.
Globally, governments have budgeted as much as $500 billion for “Green New Deal” projects, estimates
HSBC, a bank. Asia accounts for more than three-fifths of the total. Around 20% of this will have been spent
by the end of 2009, with most of the rest to be lavished in 2010. Private capital is also pouring in.
Yet where the money is going varies across the region. Some countries are emphasising particular sectors
(like solar power) or early-stage technology (such as fuel cells) with an eye towards building a future market.
Other initiatives simply apply current technology to reduce domestic emissions (carbon-capture at power
plants, for example). Only 15% of the spending is aimed at R&D, notes New Energy Finance, a marketresearch
group.
China, by some measures, has the most ambitious policy. It has dedicated around $220 billion, or one-third of
its overall fiscal stimulus, to projects such as wind, solar, hydropower and clean-coal technologies. This will
help the country achieve its target of increasing the share of renewable energy to 10% by 2010.
In 2010 a generous subsidy will become available for low-emission cars in 13 big cities, including Beijing,
Shanghai and Dalian. China will also subsidise 50-70% of the cost of large solar-power projects.
The emphasis on solar energy is as much a lifeline for floundering Chinese firms as it is an effort to reduce
emissions. Without subsidies, solar is about four times more expensive than energy from the coal-powered
grid. But Chinese firms have emerged as the biggest solar-panel producers in the world—almost all of it
exported—just as the industry faces a massive supply glut that is forcing firms to close. By boosting domestic
demand, China’s programme has the added goal of absorbing the excess supply, and helping the firms to live.
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Corbis