Strong developments in trade of renewable energy technologies amongst developing countries

The Business Recorder from Pakistan provides good news about trade in renewable energy technologies amongst developing countries.

Renewable energy sector: trade among developing states growing rapidly

A study shows that renewable energy (RE) trade among developing countries is growing faster than global and North-South RE trade as developing countries, led by China, take advantage of decreasing manufacturing costs, increased investment, and the falling costs of renewable energy.

Solar Photovoltaic (PV) capacity installed globally during 2013 was almost a quarter larger than in 2012, observed the Green Economy report, ‘South-South Trade in Renewable Energy: A Trade Flow Analysis of Selected Environmental Goods’, produced by the United Nations Environment Programme (UNEP). Whereas there was a further decline in growth in Europe, there was strong growth in China and several developing country markets. Developing countries collectively accounted for well above one-third of new capacity additions in 2013.

The report identifies key growth markets for trade in environmental goods and services (EGS). It focuses on the renewable energy sector and maps the flow of trade of RE goods among developing countries. It also outlines how countries can accelerate more inclusive growth in South-South RE trade. The global market in low-carbon and energy-efficient technologies is projected to nearly triple between 2010 and 2020. The report highlights how these expanding markets are opening new economic opportunities for developing countries and provide a key means of better integrating economic, social and environmental dimensions of sustainable development.

The job generation potential of RE is particularly high. Estimates suggest that by 2030, 20 million people could be employed in the renewable energy sector, either directly or indirectly. Job generation potential is most pronounced in manufacturing and services activities related to solar PV and wind-powered energy.

While the report focuses primarily on RE markets, it also points out that small and dynamic emerging markets in water treatment equipment and water supply, valued at $50 billion globally, present developing economies with promising growth potential, and the opportunity to provide more than 700 million people with access to improved drinking water.

The South-South trade in organic food and beverage, with a global market value of over $63 billion, is also identified as another growing market, where greater regional co-operation could help generate commercially-viable products for export to developed-country markets.

The report calls for increased South-South trade co-operation, with a focus on more low-cost environmental goods, establishing favourable trade policies and agreements, and developing a skilled energy labour force, to increase significantly South-South trade in EGS, and accelerate the green economy transition. The study observed that challenge for policymakers is to unlock the potential for South-South trade, in particular intra-regional trade, in EGS. The report issues key findings across the board, looking at the role renewables can play in the transition to a green economy, trends in trade and the domination of solar power.

The report made a number of recommendations that includes that for renewables to replace fossil fuels at a rate necessary to mitigate climate change, enabling policy environments should keep pace in both developed and developing countries. Countries can seek to improve South-South trade co-operation for the installation, innovation and dissemination of renewable energy technologies. Standards, mutual recognition and labelling initiatives, both globally and regionally, can facilitate South-South trade in environmental goods. Also, organic agriculture, water purification equipment and installation, certified timber goods, sustainable fisheries and eco-tourism all present opportunities for growth, which should be pursued. “Appropriate targets, incentives and flanking environmental and social policies can be put in place to help developing countries to take advantage of current favourable conditions for renewable energy generation,” it added.