China leads as green en­ergy in­vest­ment plans hit record high

The Pak Banker - - 6BUSINESS -

China helped push global green en­ergy in­vest­ment plans to record heights in 2015, off­set­ting a sharp fall in Ger­many, au­thors of a UN-backed re­port said on Thurs­day, pre­dict­ing fur­ther growth.

So­lar and wind power, es­pe­cially in de­vel­op­ing coun­tries, are driv­ing spend­ing higher and last year for the first time re­new­ables made up more than 50 per­cent of new elec­tric­ity ca­pac­ity plans, the Frank­furt School of Finance re­port said. "The term ' niche prod­uct' no longer ap­plies to re­new­ables," said Ulf Moslener, pro­fes­sor for sus­tain­able en­ergy finance at the school and one of the re­port's au­thors.

"In­vest­ments are be­com­ing less ex­pen­sive, due to fall­ing equip­ment costs, which will also en­able fur­ther growth, es­pe­cially in light of the new mo­men­tum from the Paris cli­mate sum­mit goals," he told re­porters.

Firmly com­mit­ted re­new­able in­vest­ment plans to­taled $286 bil­lion last year, up 5 per­cent from $273 bil­lion in 2014, ac­cord­ing to the study, which is pre­pared an­nu­ally by the Frank­furt School-United Na­tions En­vi­ron­ment Pro­gramme (UNEP) Col­lab­o­rat­ing Cen­tre and Bloomberg New En­ergy Finance.

So­lar power ac­counted for $148 bil­lion, up 12 per­cent partly driven by an on­go­ing so­lar boom in Ja­pan.

Wind ac­counted for $107 bil­lion, up 9 per­cent helped by off­shore projects. Biomass ac­counted for just $5 bil­lion of in­vest­ment pledges, down 46 per­cent. The study ex­cludes large hy­dro­log­i­cal power projects be­cause of en­vi­ron­men­tal con­cerns. Other stud­ies which in­clude such data there­fore may ar­rive at larger sums.

China ac­counted for $103 bil­lion of the to­tal, up 17 per­cent, ahead of Europe with $49 bil­lion, the United States with $44.1 bil­lion and Asia, ex­clud­ing China and In­dia, at $48 bil­lion. China ex­pects its green­house gas emis­sions to peak by "around 2030" as part of its com­mit­ments to a global pact to com­bat global warm­ing signed in Paris last year.

China, In­dia and Brazil and other emerg­ing na­tions jointly out­did de­vel­oped na­tions, with $156 bil­lion or 55 per­cent of the to­tal.

Spend­ing plans in Ger­many, a leader in re­new­able projects, tech­nol­ogy and re­search, fell by 46 per­cent to $8.5 bil­lion in their steep­est fall in 12 years, the re­port said.

Fac­tors be­hind that fall in­cluded lower costs, lim­its to avail­able land, and reg­u­la­tory changes aimed at forc­ing re­new­ables into mar­ket-based re­mu­ner­a­tion and away from fixed tar­iffs, it said.

Mean­while, the ma­chin­ery in­dus­try in China is ex­pected to see mild growth this year as struc­tural re­form of­fers hope to the over­ca­pac­ity sec­tor.

The value-added out­put is ex­pected to rise 5.5 per­cent year on year, said Wang Ruix­i­ang, pres­i­dent of the China Ma­chin­ery In­dus­try Fed­er­a­tion (CMIF), on Thurs­day.

The CMIF will pro­mote the up­grade of the in­dus­try, boost in­no­va­tion and en­hance com­pet­i­tive­ness through struc­tural re­form in 2016 as well as putting in­tel­li­gent man­u­fac­tur­ing as top pri­or­ity, said Wang .

China's ma­chine in­dus­try grew at an an­nual rate of more than 25 per­cent in the decade from 2001, when the coun­try's eco­nomic en­gine main­tained strong mo­men­tum. But the prof­itable sec­tor has be­gun to suf­fer from se­ri­ous over­ca­pac­ity since 2011 as de­mand weak­ened and in­ven­to­ries piled up, weighed on by an over­all eco­nomic slow­down.

In 2015, the value-added out­put of the ma­chin­ery in­dus­try in­creased 5.5 per­cent year on year, down from the 10 per­cent growth rate seen in 2014, CMIF data showed.

More­over, a new tax sys­tem will be im­ple­mented for cross-bor­der e-com­merce re­tail sales, said Chi­nese Min­istry of Finance, the General Ad­min­is­tra­tion of Cus­toms and the State Ad­min­is­tra­tion of Tax­a­tion on Thurs­day.

The im­ple­men­ta­tion, which will come into ef­fect on April 8, will of­fer cross-bor­der busi­nesses as well as tra­di­tional re­tail­ers a more fair com­pe­ti­tion mech­a­nism.

As Chi­nese cus­tomers' overseas shop­ping spree and cross-bor­der ecom­merce craze get red hot, de­spite of a 7 per­cent down­fall in China's im­port and ex­port data, the growth rate of cross-bor­der e-com­merce went up to 30 per­cent.

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