NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

In Ecclesiastes, the son of David describes the resilience of earth and the futility of human action, explaining that, ?One generation goeth, and another generation cometh; but the earth abideth for ever.? In the last two decades, ever since China began liberalizing its economy, a new generation of tech-savvy consumers has emerged, replacing the aging generation scarred by the excesses of the Cultural Revolution.? But as one generation replaces another here, it seems that the earth will not abideth for ever.? The air in China’s mushrooming cities, which are powered by coal-burning power plants, is so polluted that, on certain days, residents are advised to stay indoors lest they suffer severe health complications.? Now, according to the New Scientist, air pollution has become so bad that it is actually preventing condensation and exacerbating China’s current draught.? Realizing that its environmental situation is untenable, the Chinese government announced this January that it will end its addiction to coal?China burns more coal than the US, India, and Russia combined?by spending a whopping $200 billion on renewable energy sources over the next 15 years.? Such vast sums of money have captured the attention of industry giants, which are now scrambling to get a piece of the action.

In Sorbastow, a remote village in the mountainous region of Northwest China, Gulinar Sitka sits in front of the television, mesmerized by the peculiar people in faraway places that she watches on the screen.? Her new television is possible thanks to the government’s efforts to introduce solar panels into China’s most isolated regions.? According to National Public Radio, Sitka’s solar panel was designed and supplied by Shell Solar, a subsidiary of Royal Dutch Shell, which has provided 40,000 solar panels to ethnic minorities throughout China’s Xinjiang province.? The panels are subsidized by the Chinese government and sell for $60 each, about one tenth of a typical nomad’s income here.? They are expensive, but not unaffordable; Sitka’s neighbors recently received a panel as a wedding present from their parents.In addition to Shell Solar, other international players vying for a piece of China’s alternative energy market include General Electric, Vestas Wind Systems and Gamesa.? This past June, General Electric announced the opening of its first wind turbine assembly plant in China, which is designed to support the growing wind power industry in the region.? Domestic competitors, like China Solar Energy Holdings and Suntech, have also stepped up their efforts in the market.? Since the end of 2005, shares of China Solar have tripled and the company expects to make as much as $25 million in 2006/2007.

If China’s Herculean effort to promote renewable energy is to alleviate grinding poverty and promote environmental sustainability, it must do more than provide multimillion dollar contracts to industry giants.? In many cases, small and medium size enterprises are the most capable providers of alternative energy.? Yuxi Tongle Energy Company, which sells an anti-freeze solar powered water heater, is just one promising company looking to fill this niche.? Other emerging businesses have gained financial support from the China Environment Fund, a private equity fund that invests in environmental technology.

Small and medium size enterprises in China could also follow the example of Fabio Rosas, who has spent the last several decades providing off the grid electricity in rural Brazil.? Through his efforts, Rosas has found that it is more profitable to rent solar panels than it is to sell them.? Perhaps this is also true in China.

According to the World Bank’s report, ?Connecting Asia,? which is described in the International Herald Tribune, air pollution costs China the equivalent of 7.7 percent of gross domestic product each year.? The report also estimates that air pollution causes 178,000 premature deaths in China’s urban areas.? With these staggering figures, China’s environmental crisis demands immediate action.? Will $200 billion dollars in government spending be enough?? Most likely not.? It will take the rise of a new generation to show that all is not vanity and that profit can come from protecting the earth.?