Environment business and the changing business environment – Leo Horn-Phathanothai

One of the World Bank’s environmental consultants writes in the Bangkok Post on the profound effects of China’s new environmental push on prospects for business there. The piece begins with an look at the bevy of new restrictions and barriers that have emerged from the country’s ecological panic and warns of the State Environmental Protection Administration‘s sudden success in going after firms with poor environmental records.

Yet, as the article explains, China’s strategy in protecting its environment from the bad effects of business does not consist entirely of sticks:

The energy sector provides a good example of how different types of carrots have been systematically deployed to achieve the policy goal. A range of tax breaks and other fiscal incentives for energy-saving technologies and cleaner alternative energies have been introduced to support achievement of the energy intensity target. China further aims to increase the proportion of renewable energy to 16% of total energy consumption in 2020 from 7% in 2005. A Renewable Energy Law was passed last year to provide the instruments to attract investments in this sector.

The legislative framework supporting environmental businesses is getting more sophisticated by the day. As a leading investment bank, CLSA, put it: “If environmental legislation in Asia were a stock, it would be a raging Buy.” [Full Text]

Perhaps not by coincidence, the International Herald Tribune also has an article describing the beginnings of a new investment trend for venture capitalists: alternative energy in China.

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