China leads the way on carbon trading

Filed in archive strategy on July 23, 2010

With Democrats in the United States abandoning, or at least putting on hold, plans to introduce climate change legislation and with Australian Prime Minister Julia Gillard's decision to effectively outsource any decision on global warming to a citizen's assembly of 150 people randomly selected off the street, it's time to take a look at some real leadership on the issue. Notably from China.

Beijing has announced plans to start carbon trading in China from next year. While the rest of the world is agonizing over targets, China plans to cut its carbon emissions per unit of economic growth by 40 to 45% by 2020 from 2005 levels.

At the same time, Bloomberg reports that Chinese manufacturers, who already have 43% of the global photovoltaic-panel market, are slashing costs to dominate the solar energy market in the way Japanese manufacturers ruled consumer electronics decades ago.

While the rest of the world is sleeping, China is emerging as the dominant power in solar energy. Any bargaining and deals in this emerging market will have to go through China and that will give it even more economic muscle.

In the end, it's not just about saving the planet. It's also about business and economics. Unfortunately, the political leaders outside of China don't see that.