Climate change and the consequences it brings have become frequently discussed topics globally. As many developing economies take off, carbon emissions and energy consumption increase drastically to accommodate for the growing economic activities. Byproducts of economic development can severely or even permanently damage the earth. Extreme climates such as droughts, ﬂoods, record high and record low temperatures are evidences of such damage. Taking into consideration that consequences are felt internationally and not just in the countries polluting, many international institutions and seminars, as well as APEC, have included the issue of climate change into their discussions. This paper serves the purpose of using two particular case studies, China and Thailand, to observe sustainable development and green investment in the Asia Pacific.
Even though its growth has slowed down in the recent years, China's economy has been growing rapidly since its initiation of market reforms in 1978. China's GDP growth averages at about 10 percent a year, lifting more than 800 million people out of poverty. However, rapid economic growth comes with a major consequence - pollution. Air pollution, floods, and droughts are prevalent environmental issues and byproducts of economic development faced by the country. To bring problems to perspective, itis estimated that more than 1.6 million people per year die in China frombreathing toxic air. The environmental condition in China has declined to a point where it is impossible for the government to ignore.
China's 11th Five Year Plan from 2006 to 2010 successfully addressed the issue of sustainable development. The plan has three main goals: increase consumption of renewable energy sources, increase total investment in treating pollution by 15% annually, and environmental investment reach 1.33% of GDP by 2009. Moreover, the Chinese government also promised to grant public access to environmental information and updates. Unlike the 11th Five Year Plan which established broad goals but was not specific on how to reach these goals, the 12th Five Year Plan provided the details. The 12th Five Year Plan established that the central government will provide increased financial support to improve environmental public services and initiate environmental tax reform. As an incentive for enterprises to cut down on emissions, the environmental tax reform is a credit rating system for companies' environmental behaviors. Devoted to improving its environment, China spent more than 90 billion US dollars on the renewable energy sector in 2014, which was more than a quarter of the world's total investment in green technology.
To invest further into sustainable development, China, on December 22, 2015, became the first country to issue green bonds. These bonds are dedicated specifically to finance and raise the capital needed from private sectors globally to support the country's transition into a green economy. Issued by government qualified organization, they are exempt from taxes, which makes them more attractive than regular taxable bonds. The green bonds have six major themes, energy saving, pollution prevention and control, resource conservation and recycling, clean transportation, clean energy and ecological protection, and climate change adaptation. China, as a wealthy country with relatively huge impacts on the international level, is capable of spending large amounts of money to better their environment.
Amongst China and other developing countries that are investing a significant amount in the recent years in sustainable development is Thailand. As a much smaller and not as wealthy country compared to China, Thailand does not have the ability to solve the majority of their environmental issues with money. The environmental problems Thailand encounters due to climate change include water shortages, droughts, ﬂoods, and severe coastline erosion.
Comparatively later than China, it was not until the 1990s when Thailand started to pay attention to sustainable development. In 2002, the Thai government established something of similar nature as the green bonds in China- the Energy Efficiency Revolving Fund. This Fund offers credit lines at no interest to local banks so they could provide loans for energy efficiency projects. Moreover, in 2012, the country created the Thailand Climate Change Master Plan from 2012 to 2050. This plan was created in hope to mitigate greenhouse gas emissions, strengthen the capacity of human resources and institutions to manage the risks from the effects of climate change, and increase adaptation for coping with the negative effects of climate change. Thailand sets the goal of reducing green house gas emissions by 25% by the year of 2030. Even though ambitious goals were concluded to, Thailand fails to provide the steps and details.
Despite being developing countries, China and Thailand are actively investing in green economy. Both use strategies such as capacity building, awareness-raising, and demonstration to large scale investments to achieve their goal. However, wealthy, China is able to pump more resources into the process. China's economy has experienced different phases of development in the past two decades. It is now undergoing change and shifting its focus to consumption and service sectors rather than heavy polluting industries and manufacturing.
International organizations and forums such as APEC have also been tackling environmental issues in the world experiencing climate change. In November 2014, leaders from member economies of APEC gathered in Beijing to sign a declaration that agrees upon actions geared toward improving the environment and sustainable use of natural resources. The document emphasizes on the goals to double the share of renewable energy in APEC by 2030. Moreover, it promotes green investment in member economies. Despite the fact that the environment is not yet the biggest concern of APEC, there is a potential that it will be the center of discussion in the years beyond 2020.
Many scholars argue that economic growth will further damage the environment through increased greenhouse gas emissions and heavy polluting industries; however, the case of China seems to suggest the opposite. Rapid economic growth in China did hurt the environment initially, but also allowed China to better its environment through capacity building. As wealth accumulates in the country, China is capable of larger investments in green technology and consumption. Thailand, on the other hand, needs to focus more on capacity building. As it further advances in economic development, Thailand will be able to pump more money into sustainable development and set concrete goals. Whether China and Thailand will be successful in establishing a green economy or not has yet to be determined, but they are on their way.
(Tiffany Chiang is the Research Intern of TIER and Student of College of William and Mary.)
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