China once had a strong reputation for being one of the worst air polluters the planet has ever known. For several years, life getting disrupted by high levels of smog was the norm. But in recent years, things have been changing and the growth of clean and renewable energy has been experiencing a period of acceleration.
Today, China (the world’s largest energy market) is leading the way in renewable energy and is expected to spend more than $374 on renewable power generation by 2020.
Furthermore, the Chinese authorities are also expected to spend $1.9 trillion (almost 3% of the total national GDP) over the next five years on technological initiatives that are designed to reduce greenhouse gases and protect the country’s environment.
A budget that large will certainly attract a lot of attention. That’s why the Canadian government sent a clean energy-focused mission to China at the end of last year to strengthen ties. But while China might be hogging the clean technology headlines at the moment, this is essentially global.
The desire to invest in zero-polluting, low-carbon technologies has never been higher. So what does it mean for Canadian CleanTech companies?
Look Abroad to Scale
If Canadian CleanTech startups are serious about growing their business, they have to start looking at going abroad. This means that they have to start thinking about penetrating the largest electricity markets in the world, namely, China, India, and the U.S. They were also collectively responsible for half of the world’s investment in clean energy last year.
When compared to the largest electricity markets, Canada is quite different because 80% of the power grid is already powered by emission-free sources. As a result, investment in clean energy locally has been in steady decline.
In fact, it has been on a downward trajectory for many years and this is evidenced by its international market share dropping from 2.2% to 1.3% (between 2005 and 2014). This was the end result despite CleanTech exports doubling during the same period.
However, recently the industry is starting to show signs of revitalization. As the federal government also gets involved in trying to unlock the sector’s immense potential, the future looks promising for Canadian CleanTech.
Companies within the sector should continue to maintain their foothold within the country as there is renewed focus on clean energy. This is evidenced by the recent federal budget which showed that a transition to a low-carbon economy was still a priority.
So while things are moving backward south of the border, the Trudeau government has clearly committed to enhancing the CleanTech’s contribution to the national GDP. Further, the government has also backed it up with more than $2.2 billion in new CleanTech spending.
It also shows that the government is committed to moving beyond research and development to enhance demonstration, adoption, and export of Canadian environmental and energy technologies.
CleanTech is the Next Big Thing
Whether some governments agree with it or not, science dictates that it’s imperative to save the planet. As evidenced by what’s happening in China, the consequences of not making the switch to clean energy can be huge.
Clean energy technologies present a massive economic opportunity as every nation will need to get on board to continue to conduct business within this new paradigm. As a result, Canada’s research and development over the years and extensive experience in CleanTech can make the nation a frontrunner in the race to change the world.
But to be a global leader, Canadian CleanTech enterprises, venture capitalists, and the federal government have to step up to the plate and make plans that must be put into action.