Chinese government bolsters clean tech spending

Chinese prime minister Wen Jiabao yesterday announced plans to increase spending on clean technology and bolster agricultural output, as part of a plan to cut carbon emissions while simultaneously preparing for the potential impact of climate change on food yields.

Speaking in his annual budget address, Wen said spending on the science and technology sector would increase 25.6 per cent on 2008 levels to 146.1bn yuan (£15.1bn) with extra funding assigned to wind, solar, nuclear, and clean coal technologies.

The investment forms part of China's $586bn fiscal stimulus package, which secured praise recently from the HSBC Climate Change Centre of Excellence for assigning more than 30 per cent of the package for spending on low-carbon projects.

Wen said the government would also continue to emphasise energy conservation across the industrial, transportation and construction sectors as it seeks to build on recent improvements in energy efficiency of 10 per cent over the past three years.

The address came on the same day as the National Development and Reform Commission said the government would also accelerate its plans for regional climate change programmes and shut small coal mines and inefficient power plants. It said it would also press ahead with plans announced last year to pilot regional cap-and-trade emissions programmes.

The latest funding further underlines China's commitment to establishing itself as a clean tech hub. While the country has overtaken the US as the world's largest emitter of carbon, the country is also home to many of the world's largest solar and wind energy firms and major investment programmes have led to an improvement of energy efficiency of 10 per cent over the past three years.

In addition to new funding for renewables, Wen said the government would invest an extra 121bn yuan ($17.6bn) to increase agricultural production by 20 per cent this year. Commentators said the move was partly motivated by a desire to ensure the country is better prepared to cope with climate change-related droughts and potential falls in food production.