renewable energy

the Asian leadership in renewable energy investment

According to the United Nations, renewable energy could and should be a solution to energy-sourcing challenges posed by climate change and the need to switch to low-carbon economy. It is no secret that Asia, which is abundant in renewable resources, is slowly becoming a leader in the renewable energy sector globally – in 2015, more than a half of the global investment in renewable energy and biofuels was concentrated in Asia. China is one of the prime examples of how swiftly and widely the transition can be implemented, as

“although consistently reluctant to sign up to binding international commitments to reduce greenhouse gas emissions [up until now], China has also taken significant unilateral steps to develop its renewable energy industry and reduce emissions. (…) As a result of these policy directives in the last few years China has invested dramatically in developing its renewable energy industry and in 2011 earned over US$ 36 billion from the export of solar panels.”

Only in 2015, out of $330 billion invested in renewable energy sources globally, $103 was contributed by China. One might be even more impressed when takes into consideration the fact that the Chinese government is using the increasingly profitable sector to tackle poverty by planning to install solar energy systems in its poorest villages, where the energy produced would be sold by the local communities and could”help 200 million households generate over 3,000 yuan each in extra income every year”.

Following the suit, the Indonesian government has recently announced plans to fund green projects in rural areas of the country. The project focuses on boosting renewable energy development and preventing deforestation. The Indonesian forests are one of the last three major tropical forests in the world which act as carbon deposits and are depleted by the palm oil industry among others. The issues linked with palm oil have received extensive media coverage lately – the problem has also been highlighted in Leonardo DiCaprio’s latest documentary, “Before The Flood“. Encouragingly, a few big corporate names, such as Unilever and L’Oreal, have recently pledged to act against deforestation. Therefore, the news of the Indonesian government taking action are exciting – not only because it means that there might be some curbing implemented for palm oil using companies, but also it could be a sign that the extensively corrupted Indonesian government has finally realised it needs to address the issue. If this is happening in Indonesia, I don’t see why any other country wouldn’t be able to take steps for implementing climate change action.

I’m currently living in Vietnam and it is very interesting to see the way the growth in the renewable energy industry is spurred here too. As you would expect, Germany is one of the countries leading the way in investing into alternative energy solutions in Vietnam, as it does so in other parts of Southeast Asia too. However, some more unexpected investors are also present – Belarus, for instance. This is very interesting as Belarus itself is only just starting its way to a low-carbon transition – it is set to have all public buses running on electricity by the end of this year. What’s more, Belarus, as a developing country, is receiving ODA (official development assistance) funds from Poland, for instance, among others. And so how is it that relatively poor countries mentioned above are all investing in renewable energy? And why would countries only just developing its own low-carbon economy invest in similar projects in different countries?

The answer could be that the governments, like the one of Belarus, are analysing the current global energy market and are realising that the change is unavoidable and everyone will have to switch, sooner or later. Well, when organisations owned by people such as the Rockefeller family are divesting from the fossil fuel industry, and when Mark Zuckerberg, Bill Gates and Richard Branson are creating renewable energy investment groups, it only seems smart for governments to decide that there are perks in investing in the industry that is projected to be growing the most in the next five years out of the whole energy market.

There are many lessons the West could and should learn from the developing countries – one of them is that transitioning to low-carbon energy sources can be beneficial for all: the economy, the society and the environment. So why wait any longer? Investment into  the alternative energy sources should become a global trend, enabling the transition to low-carbon economy as soon as possible. The Paris Agreement is just a starting point to tackling climate change, as right now it would mean a warming of around 3 degrees by the end of this century, and we need more than that. The governments and businesses need to do more, they need to work together to spur the investment and create a momentum for the low-carbon transition globally right now to ensure building a better, healthier and safer future for everybody.

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