How Chinese Innovation is Changing Green Technology

Beijing's Big Gamble on Renewables

For energy enthusiasts, China has become the main event. The country uses more energy and emits more greenhouse gas than any other on earth. Its production of power is booming, too. Every year, China generates nearly 100,000 megawatts more than the previous year -- more than the total generated by California or Texas. The scale of the accompanying infrastructure change is staggering: every week, a new large coal plant opens somewhere in China. This has led to widespread pollution, health problems, and environmental degradation -- to the cost to the Chinese economy of about 11 percent of GDP.

But this is not the same old cautionary tale of dirty development: China has taken these challenges, and the need for energy and 20 million new jobs per year, as an spur to invest in clean technology. Indeed, with the government putting over $50 billion into clean energy R&D every year, China has become a global hub for energy innovation.

The country's progress is driven by a combination of government mandate and direct investment. Examples are many. A 2007 law required four percent gains in energy efficiency each year through 2012, including in the transportation and industrial sectors. Since then, total efficiency in the power sector has increased by nearly ten percent and is likely to continue rising. Such mandates have been matched by requirements for sulfur emissions control and cleaner water, the closure of many low-efficiency coal mines and cement plants, and new investment in solar, wind, and other renewable power.

To all this, China's twelfth five-year-plan, introduced earlier this year, added goals for developing clean technology indigenously. Mostly these innovations will be for domestic use, although there is growing interest in international export markets for clean tech. Many state-funded projects now require that 80 percent of the technology used be indigenous. Two agencies are responsible for overseeing compliance. First is the National Energy Administration (NEA), which approves the financing and construction of virtually every large energy project. Second, the Ministry of Science and Technology (MOST) runs the more than 100 Chinese academies that conduct clean tech research. In 2010, China funneled tens of billions for green innovation through these two organizations.

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