China’s ‘green’ five-year plan
Facing backlash in European and US markets (through trade war and tariffs backed
by government and initiated by competing firms) against the success of its nascent
solar industry in lowering prices, China opted to revise its domestic solar power
development goal to 20 GWs by 2015, at a time when just three GWs existed in
the country (Patton, 2012). Complementing these targets are regional feed-in tariffs
that fix the price of energy produced by wind and solar projects on more favourable
terms (Landberg, 2012). Other incentives for Chinese energy developers ensure
that today’s technologies can recover their costs in seven years, and generate returns
for decades, while manufacturers continue to improve tech nologies (Liu, 2011).
China’s goal of 100 GWs of wind power by 2015 and 1000 GWs by 2050 is a
second aggressive goal-promoting economic development and reduced carbon
emissions (Liu, 2012). So far, China’s targets have only been revised upwards,
suggesting that ample opportunity for domestic industry will persist into China’s
foreseeable future.
What is more, China’s green strategy is guided by an overarching vision
encapsulated in its ongoing twelfth five-year plan (2011–2015). China’s visionary
and ambitious plan aims to invest US$1.5 trillion (or 5 per cent of GDP) across
multiple industries: energy-saving and environmentally friendly technologies,
biotechnology, new generation ITs, advanced manufacturing, new materials,
alternative fuels and electric cars (Mathews et al., 2011; Yuan and Zuo, 2011b).
Overarching these investments are intentions to adopt a ‘circular’ approach to
economic development that places sustainability first, a directive which defines
pollution- and waste-control as forms of competitive advantage (Mathews et al.,
2011). Accompanying invest ment in industrial development are energy-intensity
reduction targets, emission controls and renewable development goals – a
combination of supply-side and demand-side policies.
Recognizing that the competitive advantage of the future depends on effective
resource management as well as reduced waste and pollution, China’s ‘green
development’ strategy is reframing the notion of how ‘optimal’ economic develop -
ment unfolds with aggressive demand- and supply-side measures. China’s ‘win–win’
plans make ‘profit’ and ‘environment’ complementary pursuits rather than tradeoffs, as they are often treated in many Western economies. As a result, China is
poised not only to continue as a major manufacturer of solar PV panels, but also
to become a major market for them.
In sum, China now prioritizes clean technologies as part of a strategic vision
and long-term commitment to economic growth. While already providing billions
of dollars for new renewable energy project finance, China is in fact just beginning its serious investment in solar and wind technology (Lim and Rabinovitch,
2010; Zhang et al., 2014). Given the huge size of its economy, however, China’s
GHG emissions are still poised to grow in absolute terms, and it is still to be seen
whether the country will be able to decouple economic growth from GHG emis -
sions, which would represent an original development path, never before seen in
the history of industrialization.
142 Mariana Mazzucato
Facing backlash in European and US markets (through trade war and tariffs backed
by government and initiated by competing firms) against the success of its nascent
solar industry in lowering prices, China opted to revise its domestic solar power
development goal to 20 GWs by 2015, at a time when just three GWs existed in
the country (Patton, 2012). Complementing these targets are regional feed-in tariffs
that fix the price of energy produced by wind and solar projects on more favourable
terms (Landberg, 2012). Other incentives for Chinese energy developers ensure
that today’s technologies can recover their costs in seven years, and generate returns
for decades, while manufacturers continue to improve tech nologies (Liu, 2011).
China’s goal of 100 GWs of wind power by 2015 and 1000 GWs by 2050 is a
second aggressive goal-promoting economic development and reduced carbon
emissions (Liu, 2012). So far, China’s targets have only been revised upwards,
suggesting that ample opportunity for domestic industry will persist into China’s
foreseeable future.
What is more, China’s green strategy is guided by an overarching vision
encapsulated in its ongoing twelfth five-year plan (2011–2015). China’s visionary
and ambitious plan aims to invest US$1.5 trillion (or 5 per cent of GDP) across
multiple industries: energy-saving and environmentally friendly technologies,
biotechnology, new generation ITs, advanced manufacturing, new materials,
alternative fuels and electric cars (Mathews et al., 2011; Yuan and Zuo, 2011b).
Overarching these investments are intentions to adopt a ‘circular’ approach to
economic development that places sustainability first, a directive which defines
pollution- and waste-control as forms of competitive advantage (Mathews et al.,
2011). Accompanying invest ment in industrial development are energy-intensity
reduction targets, emission controls and renewable development goals – a
combination of supply-side and demand-side policies.
Recognizing that the competitive advantage of the future depends on effective
resource management as well as reduced waste and pollution, China’s ‘green
development’ strategy is reframing the notion of how ‘optimal’ economic develop -
ment unfolds with aggressive demand- and supply-side measures. China’s ‘win–win’
plans make ‘profit’ and ‘environment’ complementary pursuits rather than tradeoffs, as they are often treated in many Western economies. As a result, China is
poised not only to continue as a major manufacturer of solar PV panels, but also
to become a major market for them.
In sum, China now prioritizes clean technologies as part of a strategic vision
and long-term commitment to economic growth. While already providing billions
of dollars for new renewable energy project finance, China is in fact just beginning its serious investment in solar and wind technology (Lim and Rabinovitch,
2010; Zhang et al., 2014). Given the huge size of its economy, however, China’s
GHG emissions are still poised to grow in absolute terms, and it is still to be seen
whether the country will be able to decouple economic growth from GHG emis -
sions, which would represent an original development path, never before seen in
the history of industrialization.
142 Mariana Mazzucato