Over the past ten years we’ve been observing the large-scale overflows of global investment in the development of clean energy. China, which among others have joined the train of non-carbon energy sources development later, now accounts for 40% of the total global investment flow. What have made China a leader in green solutions and is it one in a boat in tackling climate change?
The conditional start of the global green energy industry can be declared 2004. From this moment the sector begins to be tracked systematically by one of the world leaders – consulting company Bloomberg New Energy Finance (BNEF), having seen a promising trend in the clean energy sector with significant cash flows .
The sunset of Europe
From 2004 to 2008 financing green energy, which includes the development of all types of generation based on renewable energy and the development of smart technologies, demonstrates strong growth in full accordance with the basic western approach of sustainable development. A small stumble occurs in the crisis 2009 year, mainly because of the United States, which then was clearly not up to the green energy industry, and then again the same steady growth, up to 2011, where the most interesting begins.
Alexandr Kamenets, the president of the Eastern European Association of the Greens, outlines that the local maximum of global investments in the sector in 2011 in the amount of $ 324 billion by 43% was provided by Europe, which not only called the green energy as its absolute priority, but also earnestly began to pursue the outlined targets. However two years later, its record-breaking investments in the history of $ 138 billion fell by half – to $ 70 billion in 2013. At the end of 2017, this figure fell to $ 57 billion (17%). At the end of 2017, this figure fell to $ 57 billion (17%). Thus, the gap with a maximum of 2011 was 2.5 times, and this is too much to go unnoticed.
Taking into account the stable share of the United States in global investments at the level of 16-19% and the participation of all other regions of the world within 20-30%, the main intrigue is around Europe and China. Alexandr Kamenets points out that there is an obvious change of the long-term leader – Europe – to a new and very energetic participant in the green race – China, who entered this sector much later than the others. Moreover, this change took place in 2013, when the investments of European and Chinese investors were almost equal.
China is leading
In addition to the obvious change in leadership, another crucial point is important in the changing picture of global green investment. Mr. Kamenets says that if it were not for China’s tough concern for its depressing ecology, forcing this country to invest serious money in alternative energy not for the sake of political attitudes and profits, then the overall flow of global investment in the sector would have long gone slack.
Without China the cumulative financing of new energy by all other countries from a maximum of $ 272 billion in 2011 would have dropped by 26% to $ 200 billion by the end of 2017. But hopefully at that moment China’s multi-billion investments poured in, now accounting for 40% of the global flow. China literally saved the situation, providing an impressive increase in overall dynamics. If ecology situation was different in China, with its coal dominant and terrible smog of megacities, where the green energy without exaggeration is a matter of survival, the general picture of the world would have become depressive for a long time. In general, since 2014, developing countries in terms of financing the green energy sector have confidently seized the initiative from developed countries, by now they are significantly ahead of them. At the same time, developed countries have reduced their investments in energy based on renewable energy from 2011 to 2017. almost doubled – from $ 197 billion to $ 103 billion.
An even more detailed picture is given by analyzing the behavior of investors in the leading countries, where, apart from the totally dominant China and the relatively stable United States, all other countries show a significant reduction in investment. The European leader is Germany – from $ 40 billion in 2010 to $ 15 billion in 2017. Italy, from $ 32 billion in 2011, has so far almost refused to finance such projects. Spain did it even earlier. The UK has reduced its investment in the sector by 2.5 times in the past two years. Green investment in Japan has fallen by half.
Looking at how this green puzzle develops today, supporters of clean non-carbon energy, designed to be the future for all of the world, must be grateful for China. This country has not only a categorical imperative to reduce the anthropogenic influence on the environment, but also unlimited financial opportunities to achieve goals. If it were not for one of these two components, it would be difficult for the authors of a green idea to find reasonable excuses for why less and less money comes to this sector from year to year. In the meantime, thanks to China, the picture looks quite prosperous.