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SpirE-Journal 2009 Q2

A Green “New Deal” for Asia?

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A Green “New Deal” for Asia?

Amidst the economic gloom, governments world-wide are pursing fiscal stimulus measures, recalling President Roosevelt’s “New Deal” fiscal programs which helped America recover from the Great Depression of the 1930s. One of the main avenues for this will be to expand the production and development of eco-friendly technologies – the so-called Green sector. Many Asia governments are rolling out ambitious plans to nurture “Green-collar” jobs in their economies, from assembling hybrid cars to cultivating bio-fuels. Spire examines what governments in Asia and the emerging world are doing to promote the Green sector – and the business risks and opportunities that are being created.

The Greening of Government spending

Since the United States Green movement began 20 years ago with the Green Committees of Correspondence (GCoC), founded in August 1984, Green thinking has entered the mainstream of public policy. In the face of today‟s global warming crisis, the debate among the world‟s governments has shifted decisively away from whether to take drastic steps to conserve the environment, to how.

The world‟s attention is now converging on the Copenhagen conference to be convened in December 2009. This event will decide the shape of a new emissions reduction treaty to replace the Kyoto protocol, which is due to expire in 2012. The expectations surrounding this event are reflected in the United Nations‟ “Seal the deal” campaign: “Delegates and NGOs have been stamping „Seal the Deal‟ on a banner that, with other banners collected at events around the world, will be presented at the Copenhagen Climate Change Conference in December. In addition, participants are being asked to sign an on-line petition calling for an effective climate deal at sealthedeal2009.org.”

Amidst this massive diplomatic pressure, as well as considerable public pressure in their own countries generated by citizens groups and domestic NGOs, the governments of Asia have been cultivating their own Green credentials. And increasingly, the needs of ecological conservation and economic growth are converging rather than conflicting. Public policy in Asia is recognizing that growing the Green sector is a key thrust necessary for sustainable economic growth.

In the USA, elements in the Democratic Party2 have long sought a “Green New Deal” whereby government support for the Green technology sector helps reinvigorate the US economy and create millions of new “Green collar” jobs. Emerging countries are determined not to be left behind, foreseeing that Green jobs will help to take economic value-added and
job creation to the next level. Their advantages include vast talent pools of university graduates, access to abundant natural resources and clusters of supporting industries enabling highly efficient R&D and production.

Take China and Singapore as examples of how ambitious Asian governments can be in promoting the Green sector. It is well known that China‟s vehicle fuel-efficiency standards have been (until recently) higher than those in the United States. The Chinese government has gone further, to launch a pilot program of energy-efficient vehicles to be rolled out to the public transport sector in 13 cities. On top of that, the world‟s first “sustainable city”, at Dongtan in Shanghai, China, is being developed. It promises to house urban ecological parks and world class leisure facilities.

The China government has also unveiled the Sino-Singapore Tianjin Ecocity, a joint project between Singapore and the People‟s Republic of China (PRC). The project is an attempt to develop an entire township on the basis of highly reduced net carbon emissions while enshrining biodiversity conservation. This venture signals the importance both countries attach to the notion of sustainable development.

The remainder of this article will focus on the sectors where Governments are doing the most to promote the Green agenda, so as to assess the resultant risks and opportunities for companies operating in Asia. These would be:

Road transport
Consumer durable
Building
Waste management
Utilities
Road transport

The transport sector accounts for 15% 3 of man-made CO2 emissions worldwide. Road transport contributes two-thirds of total emissions from the transport sector (see graph 1 on “CO2 emissions” below) – this is forecast to rise to 75% of total transport emissions in 100 years‟ time.

Particularly in large urban areas and where weak emissions standards are enforced, vehicular pollution can foster major public health problems such as higher incidence of respiratory ailments like asthma. Vehicular transport also increases dependence on imported oil from the Middle East, posing a potential national security challenge. This is aside from the obligation to meet internationally mandated emissions targets.

Governments can use a broad array of tools to control the environmental impact of the road transport sector. These include:

forcing the automotive industry to increase fuel efficiency standard
regulating engine and petrol specifications to make them less pollutive
promoting public transport over households owning their own vehicle
advancing the usage of cleaner fuels such as bio-fuels and Compressed Natural Gas (CNG)

Many emerging countries in Asia are posting tremendous rates of growth in the motorcycle and car population – in particular, the population giants of China, India and Indonesia. Some governments have been very successful in tackling the environmental fall-out from this – an outstanding example would be how the authorities in Delhi, India curbed vehicular emissions in the 1990s. However, many others are still struggling.

India, China and Taiwan offer good examples of road transport Greening in action. India and China are examples of emerging countries with giant urban centers and exploding vehicle populations. Taiwan is a middleincome country with high vehicle ownership and relatively high public awareness of environmental cum public health issues.

India

India launched the Global Environment Facility sustainable transport project in 2008. It is aimed at reforming the country‟s transport system. This program includes assisting states and cities to implement “Green transport projects.” These four-year projects are to be rolled out in nine cities, with Pune as the pilot city. Under this program, the transport system in each city is to be reformed to encourage citizens to switch their mode of transport to either public transport or non-motorized transport such as bicycles.

The Pune Municipal Corporation has noted that public transport only accounts for 15% of total vehicle kilometres travelled in the city. Hence improving public transport to encourage commuters to switch away from private vehicles is a key priority. In addition, construction projects, such as the building of cycle lanes, will be implemented to encourage people to switch from two-wheelers to bicycles. Over 20,0007 crores (US$ 4.1 billion) have been budgeted for plans to increase public transport usage and reduce traffic congestion during peak hours.

China

As a collaborative project between Renault-Nissan and the Ministry of Industry and Information Technology, China has pledged to introduce electric cars on its roads by 2011. The China government will introduce these zero-emission vehicles into the public transport sector in thirteen cities. Wuhan was selecte

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