China vs. India – The Race to Be the Next Renewable Energy Giant

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Climate change is the frontier that mankind must conquer in the coming half a century. The thing is, this is the first truly global environmental challenge, with repercussions for the very survival of mankind. It is an accepted fact that global warming was accelerated by over-dependence on carbon-based energy sources, and the first world countries benefitted the most. Apart from the United States, which is responsible for twenty-five percent global warming today, China and India are the countries which emit the largest quantities of greenhouse gases. However, as both transition to mature economies, they are also racing to be renewable energy-dependent economies. This not only reduces dependence on external sources for crucial fuel but has long reaching impacts for the countries’ sovereignty, foreign policy and leverage on the world stage. Both countries are projected to emerge as the largest in terms of wind and solar power usage by the end of 2018. Let us explore how each country is facing this challenge.

First, China

China categorically refused to withdraw from the Paris Climate Agreement, and its support has gone a long way towards upholding the deal after the withdrawal of the United States. In 2017, China increased solar power generation by about fifty gigawatts. For perspective, that is more than the current solar power capacity of Germany and France combined. Its investment in solar power research has also paid off. Today, China produces the most technologically advanced solar panels in the world at the least cost. However, the government has recently reduced support for solar power in general. This was intended to reduce oversupply, which has seen the price of solar panels fall by nearly eighty percent since 2009. As a result, China will likely add twenty gigawatts less than previously expected.

Now, India

India is the third largest market in the world for renewable energy. Blessed with abundant and strong sunshine throughout the year, it is no surprise that India too extended support to the Paris Climate Agreement. India has hugely benefitted from the falling costs of both solar and wind technology. Already the fastest growing economy, India is well on its way to adding nearly thirty gigawatts by the end of the year 2018, a record growth rate. Indian solar panel manufacturers have benefitted from the government’s policies. In 2018, the Indian government slapped a twenty-five percent emergency tariff on solar panels which may be imported for future projects. This is in response to China’s huge output of cheap solar panels which are dumped in the international market. Local producers tend to lose out. There is now an incentive for manufacturers and developers to invest in solar energy in India and to earn attractive returns. Already, SoftBank has plans to invest in a twenty-gigawatt solar power facility in India, to be operational by the year 2025.

Analysts are of the opinion that this concerted effort by developing economies to become self-reliant in the energy sector is inevitable. The transition period may be bumpy, but the trend is unlikely to be reversed. This is encouraging, because if the predicted effects of climate change come to pass, not only will a large part of the earth be uninhabitable, it will also affect everyone, regardless of species, wealth, gender and location. China and India, together accounting for thirty-six percent of the world’s population, are well on their way to harnessing solar power to its full potential.

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