Hydropwer accounts for the overwhelming share of China’s alternative energy mix, but is perhaps also the one of the more controversial alternative energy options due to the ecological and social impacts of dam construction. This guest post by Peter Bosshard, policy director of International Rivers Network, examines China’s growing pains in its increasing role as an exporter of hydropower technology and expertise.
A few years ago, Chinese dam builders and financiers appeared on the global hydropower market with a bang. China Exim Bank and companies such as Sinohydro started to take on large, destructive projects in countries like Burma and Sudan, which had before been shunned by the international community. Their emergence threatened to roll back progress regarding human rights and the environment which civil society had achieved over many years. However, new evidence suggests that Chinese dam builders and financiers are trying to become good corporate citizens rather than rogue players on the global market. Here is a progress report.
In December 2003, China Exim Bank approved $519 million in loans for the Merowe Dam in Sudan (pictured right). It thus helped kick off a project which would displace more than 50,000 people from the fertile Nile Valley into desert locations, and for which the Sudanese government had failed to attract funders for many years. China Exim Bank also provided support to projects in Burma which no other funder was prepared to touch. “The Bank specializes in financing projects that no other financial institutions would fund”, International Rivers and Friends of the Earth warned in July 2004.
Chinese dam builders wasted no time rolling up the international market. Low costs, access to cheap loans and a big portfolio of domestic projects make them attractive partners for clients around the world. We are currently aware of at least 216 dam projects in 49 countries which have some form of Chinese involvement – and counting. The president of Sinohydro recently estimated that his company controls half the Read the full story
In it to Win: How China is developing its Clean Energy Economy through Markets, Finance and Infrastrucuture
Yesterday on March 4, my colleagues and I finally released this long-awaited report “Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind” (picture of the report cover, pictured right). As the title implies, it is a survey of how three countries with very different political economies are each adopting comprehensive policies to develop their clean energy sector in a way that the United States isn’t. The table of page 5 of the report really sums it all up. Germany, Spain and China have comprehensive and coherent and long-term approaches to developing their clean energy industries, while all the United States has for the most part are state-by-state and temporary policies. The result? The United States ranks only 19th in the world in clean energy product sales as a proportion of GDP compared to Germany at third, Spain at fourth, and China at sixth.
The report was launched at a major event co-sponsored by the Center for American Progress and Apollo Alliance on March 4th (conference agenda here) in which I spoke on a panel, walking through the main elements of the report. The report was picked up by the New York Times.com, which featured a few nice quotes from me.
I re-post the chapter on China below (look at the full report for an equally thorough examination of Germany’s and Spain’s policies). The first part of the chapter looks at China’s accomplishments thus far across the clean energy value chain of innovation, manufacturing, deployment, exports and job creation. The second part takes a closer look at the policy tools, using the three-pillar framework of market creation, financing and infrastructure that I have previously articulated in a conference at RETECH 2010 last month (but also take note in that lecture that I point out that the fourth and fifth pillars of information transparency and international collaboration will be important for China’s future development of its clean energy economy). Here’s the China section: Read the full story
I had the opportunity to answer this question as a member of a panel discussion at the Center for Strategic & International Studies, a Washington DC foreign policy think tank, two weeks ago. The event was held on February 17 to mark the one year anniversary of the American Recovery and Reinvestment Act, and sought to explore the effectiveness economic stimulus packages in the US and globally in catalyzing green investments. My remarks begin at about 24’21 into the video below:
My simple answer? There is no simple answer. The lack of transparency of what exactly is being allocated, how those allocations are being spent, and how the uncertainty around the lesser known story of bank lending (or monetary policy), that is separate from the fiscal stimulus figures into clean energy investments makes it nearly impossible to know just how much money is hitting the clean energy road in China.
The following is the prepared outline on which I based my remarks on, in case you find it onerous to sit through the video presentation:
I. Basic Facts – first thing to highlight is the opacity of it all.
a. Central vs provincial contributions: Of 4 trillion yuan ($586 bill) total, 1.18 is from central government while the rest is from sub-national govt and private sector. OECD says 600 bn yuan is from sub-national govt while rest is from private sector (and most of this is from bank loans to private sector). This is last bit is significant as we shall discuss in a bit.
b. Change in allocations: from Nov ’08 to March ’09 – not clear what implications are for “green”
i. Sustainable development share decreases from 350 bn yuan (9%) to 210 bn yuan (5%)
ii. Infrastructure decreases from 1.8 tr yuan (45%) to 1.5 tr yuan (38%)
iii. Technology advances and industry restructuring increases from 160 bn yuan (4%) to 370 bn yuan (9%).
c. How much new versus repackaged is also a source of uncertainty.
II. There have been bullish estimates of the “greenness” of China’s stimulus package.
a. What do we know? Read the full story