China’s Clean Energy Investment Goes Beyond Combating Pollution

Poor air quality and smog are realities of living in China’s cities. This past December, 460 million people were affected by a government issued “red alert”. A red alert is the highest level in China’s four-tier pollution alert system. Beijing has been particularly affected by the pollution, as can be seen in this time-lapsed video showing a wave of smog moving into the capital. So, how does China intend to combat its pollution woes and will its efforts make China the world leader in clean energy?

While there is ongoing debate in China as to the cause of the air pollution, natural disaster vs. man-made, the government is responding to public outcry. Part of this response is a gradual move from coal-fired power plants in order to reduce greenhouse gases. To add to this action plan, China’s National Energy Administration (NEA) recently announced an initiative to invest over $360 billion through 2020 on renewable energy such as solar and wind. According to the NEA, the investment will create more than 13 million jobs in the renewable energy sector by 2020. This investment, combined with the fact that China is already a leader in solar energy, puts China in a position to dominate the clean energy industry.

China’s push toward renewable energy comes at a time when the Trump administration is unraveling clean energy policies in the US. This past March, President Trump signed an executive order to undo various clean energy initiatives put forth by the Obama administration, in particular calling for a review of the Clean Power Plan. With the reversal of these policies one must consider the impact it will have on jobs, innovation and investment opportunities in the clean energy industry. If the US is not going to push forward as a world leader in driving the conversation about climate change, then the door is wide open for China to assume the role. With that role comes a lot more than just fewer greenhouse gases. Think jobs, and a platform from which to export its innovative clean energy products and services.

So, while China may be poised to climb to the top of the clean energy industry, will it necessarily solve its pollution crisis? Recent research highlights the fact that the pollution has much to do with climate conditions outside China, which will make China’s efforts to combat smog and poor air quality even more difficult. Interestingly enough, these findings may push China to more quickly assume its role as a leader in the climate change conversation.

Kate McCabe

MBA Candidate 2017