A Growing “GREEN” Market

Today, private global climate-related markets are worth over $1 trillion. This includes renewable energy ($297 billion), energy storage ($2.5 billion), green buildings ($388 billion), climate-smart urban transport ($365 billion), water recycling ($23 billion), and municipal waste management ($160 billion). This rapid growth is expected to continue: By 2040, renewable energy investments world-wide could climb to $11 trillion annually with half that in the Asia-Pacific region according to the International Energy Agency.

The region’s biggest investment potential is in China, where the government has designated renewable energy as a strategic industry. The country now has more than one-third of the world’s wind power capacity and a quarter of its solar power, and is leading a revolution in battery technologies. China added 35 gigawatts of solar power and 23GW of wind power in 2016 — equivalent to energy use of over 40 million households.

Meanwhile, at the other end of the scale, in Papua New Guinea, global solar manufacturers are entering the local market for the first time. A $3.3 million investment — funded primarily by the Australian and New Zealand governments under an IFC program — has, since 2014, led to about 20% of the population now having access to off-grid renewable energy — including solar lighting and phone charging.

The potential is enormous, as noted in IFC’s latest report, Creating Markets for Climate Business, which illustrates the role business can play in helping developing countries meet their climate targets.

The e-logistics company Huochebang in China has developed an online platform that coordinates truckers, shippers and service centers. By the end of last year, the company was working with 2.3 million truckers and 350,000 shippers in more than 360 Chinese cities.

The business startup stands as a great example of innovation that is helping alleviate global carbon emissions. Its service reduces empty miles and waiting times between loads, making shipping more environmentally friendly.

In India, Attero Recycling is pioneering India’s nascent e-waste recycling market, using proprietary technology to extract metals from discarded electronics.

In the Philippines, Imperial Homes, through its Via Verde Homes unit, is erecting “green” buildings and helping low-income Filipinos save on electricity bills. It is demonstrating that low-cost, low-carbon housing can simultaneously help solve the country’s housing backlog and contribute to reducing emissions.

These cases highlight the huge business opportunities that exist in tackling climate change and the benefits delivered to people.