China and a global green system of innovation
Dora Marinova, Curtin University Sustainability Policy (CUSP) Institute, Australia
Xiumei Guo, Curtin University Sustainability Policy (CUSP) Institute, Australia
Yanrui Wu, University of Western Australia
Abstract
The evidence provided by the science of climate change has triggered heated political discussion and a variety
of economic measures aimed at reducing humanity’s ecological footprint. New sustainable technologies,
including renewable energy, are paving the way for community values to encourage greater sustainable
behaviour but technology impact assessment needs to be internalised in the innovation cycle in order to prevent
humanity getting locked in other challenges similar to climate change. There are encouraging calls for
sustainability to become the main focus of economic development. We describe this shift as a transition towards
a global green system of innovation (GGSI).
China’s contribution to the current environmental state of the planet is enormous, but so is its potential for
decarbonising the country’s economy. The paper analyses recent trends and concludes that for China to play an
active role in the changing global attitudes and the shift towards a global green system of innovation, it must
become a leader in major institutional transformation including the development of education, public
participation and governance. It also outlines why it’s unlikely that China will fulfil this role based on adopting
a western type consumerist society, as well as provides a suggested approach for China, to focus on building
balanced strategies that are representative of long-lasting Chinese cultural values.
Introduction
After three decades of high growth in GDP (9.7% per annum during 1978-20111), China has
made substantial progress in economic development. In the world’s most populous country,
associated with economic prosperity in recent years is the dynamic development in the area
of science and technology. For example, China’s research and development (R&D) spending
as a proportion of GDP (i.e. R&D intensity) amounted to 1.76% in 2010 and is anticipated to
reach 2.50% in 2020 (Wu 2010)2. By then, China’s R&D intensity will be above the current
mean for the OECD economies which stands at 2.33% (ABS 2010). The sheer volume of
R&D investment at present, estimated at US$ 198.9 billion (Batelle 2012)3, is second only to
USA with China recently overtaking Japan. The result of the expansion in R&D spending is
rapid technological progress which is taking place in the country. Examples include the
development of bullet (high-speed) trains, the surge of hi-tech export products and
advancement in clean energy technologies. In fact, China has become the world’s largest
investor in renewable energy and in 2010, 50% of all solar panels and wind turbines
worldwide were manufactured there (Pew 2011). These phenomenal changes are regarded by
some as a science and technology revolution (Zhang and Zheng 2009).
China is also making a significant effort to improve its environmental image as since
2008 the country has been singled out as the highest greenhouse gas emitter in the world 4 and
the current environmental performance index by Yale University ranks it 116th out of 132
countries5. More recently the government announced its commitment to the reduction of CO2
per GDP and a plan for transitioning towards a low-carbon economy (Guo et al. 2011). This
1
This growth rate was estimated using data from the National Bureau of Statistics of China (www.stats.gov.cn).
By comparison, Australia’s gross expenditure on R&D for all sectors (comprising business, government,
higher education and private non-profit) amounted to 2.21% of GDP in 2008/09 (ABS 2010).
3
Australia’s gross expenditure on R&D are estimated to be US$ 21.8 billion in 2012 (Batelle 2012).
4
The Netherlands Environmental Assessment Agency 2008 estimates show China’s GHG emissions 8% higher
than
US
(www.mnp.nl/en/dossiers/Climatechange/moreinfo/Chinanowno1inCO2emissionsUSAinsecond
position.html).
5
Environmental Performance Index 2012 (http://epi.yale.edu/epi2012/rankings); Australia ranks 48th.
2
'IAIA12 Conference Proceedings'
Energy Future The Role of Impact Assessment
32nd Annual Meeting of the International Association for Impact Assessment
27 May- 1 June 2012, Centro de Congresso da Alfândega, Porto - Portugal (www.iaia.org)
2
is expected to be achieved through further investments in R&D and the development of new
technologies.
However, there is still not much realisation as to what China’s role is in relation to the
greening the world’s economy. This paper puts into perspective some recent developments in
innovation and argues that there is enough evidence to claim that the world is re-orienting
towards a global green system of innovation in which China is already one of the most
significant, if not the most significant, players.
Systems of innovation
Since the 1970s, innovation theory has been a very strong area of policy research and advice
at government and industry level. It has predominantly focussed at the level of the firm,
business enterprise and the market sector, despite evidence that innovation can also occur in
public organisations, such as health, education or police (DIISR 2011). According to the
latest edition of the Oslo Manual (OECD 2005), there are four types of innovation: product,
process, organisational and marketing; all of which could be completely new or significantly
improved compared to their predecessors. Irrespective as to where it is developed, the novelty
criterion for innovation can be applied at the level of the firm (minimum requirement), a
particular market, new to the world, or radical (disruptive) to prior knowledge and practices.
Under the current imperatives of climate change, all
types of innovation are very important when the main
aim is to achieve a radical change in human behaviour
(see Figure 1). New technology (product and process
innovations), which is at the core of innovation, plays a
crucial role in breaking up the dependence on fossil
fuels and employing more environmentally sustainable
ways of production, including food production, and
living. However these new technologies will become
innovation only after they have been commercialised
and accepted by the market (OECD 2002). There is a
Figure 1. The Innovation Concept
wealth of knowledge about the importance and impacts
of innovation for the performance of individual
companies and countries but there is very little understanding as to the fact that innovation is
only a means to achieving broader societal aims and goals. Hence impact assessment should
be an internalised aspect of innovation rather than an add-on, external or after-the-invention
activity. The innovation concept requires researchers, developers and all stakeholders to be
assessing the impacts from the potential use of new technologies at the stage of its
development. Preventing nuclear proliferation is an example of a ban on innovation based on
its potential impacts; however there are many examples of new technologies being developed
(e.g. nanotechnology) when there is hardly any understanding about their potential impacts.
Technology development tends to follow certain trajectories or waves. The Natural
Edge Project (Hargroves and Smith 2004) describes the current 6th technological wave as
determined by sustainable technologies, such as renewable energy, biomimicry, green
chemistry and green nanotechnology. According to Nisbet (2011), there is a strong need to
merge the innovation network (motivated by energy insecurity) and the green network
(motivated by climate change) which coined the new term grinn. The greening of technology
is the essential characteristic of the new wave and this requires not only attention to societal
goals but also to potential impacts in order to prevent another global crisis as we are currently
experiencing in relation to climate change.
At a policy level, innovation has been encouraged as the main way to achieve a
competitive advantage. According to Scott-Kemmis (2004), there are significant differences
Social impacts of mining at a local community level and the role of CSR for long-term sustainability
3
between countries in the way they invest in R&D, education, offer support to industry, take
risk or encourage cooperation. The interplay of institutions and the interactive processes that
generate and diffuse knowledge (OECD 2005) create national patterns of specialisation, or
national systems of innovation, which tend to persist over prolonged periods of time making
some countries better than others in the development and use of particular technologies.
With the globalisation of the world economy, innovation has also changed. It has
become: faster, multidisciplinary, collaborative (to reduce time, cut costs and share risks),
democratised (no longer the domain of researchers, users/customers are also involved) and
globalised (can originate from anywhere). These days the largest and the most
technologically advanced US economy faces challenges from both ends of the spectrum –
low and high – as far as its competitiveness is concerned (Council on Competitiveness
2006). Most importantly, the biggest challenge that the worldwide economy faces is to
reform itself into a green economy where national innovation systems are geared towards
supporting a global green system of innovation.
Global green system of innovation
The need for a fundamental change in the current technological wave is unprecedented as
never before has humanity been subjected to impetus that it cannot control (see Figure 2).
Individual national systems of innovation (as that of South Korea) alone will not guarantee
the uptake of green technologies and super-national policies and innovation systems are
needed that allow for development across the globe, including developing countries. A
determining factor to achieve this is for the global community to adopt a vision for a
sustainable world which will translate into changes in values and everyday practices as well
as in a surge of human inventiveness activities.
The signs of this are already appearing with the OECD countries signing the
Declaration on Green Growth in 2009 and the UNEP’s Report on the Global Green New Deal
(UNEP 2009) following the global financial crises. In 2011, the OECD officially released its
Green Growth Strategy, which is about “fostering economic growth and development while
ensuring that natural assets continue to provide the resources and environmental services on
which our well-being relies. It is also about fostering investment and innovation which will
underpin sustained growth and give rise to new economic opportunities” (OECD 2011: 4).
The Strategy also includes specific recommendations, tools and indicators for measuring the
progress.
Business attitudes are also
changing. According to a survey
of
1,000
senior
business
executives from 12 countries (GE
Global Innovation Barometer
2011), innovation will help
“green” the world: 90% believe
innovation to be the main lever
for greener national economies
Figure 2. Characteristics of the 6th technological wave
and 85% are confident that
innovation
will
improve
environmental quality. There is also strong research evidence that green innovation
contributes to competitive advantage (Chen et al. 2006). Green innovation is also becoming a
significant area of research (Schiederig et al. 2011) with 88% of the publications clustering in
the areas of business, humanities and social sciences.
Social impacts of mining at a local community level and the role of CSR for long-term sustainability
4
The momentum building and the actual blocks of the emerging global green system of
innovation are presented in Figure 3 and 4.
Global Green System of Innova on
Build
momentum
Coordinated
ac vi es
Green
innova on
clustering
Adap ve
governance and
global ins tu onal
alignment
Visioning
and longterm
perspec ves
Innova ve
business and
access to
capital
Global
skills
and talent
Informa on flows
and innova on
exchange
Green values
and green
innova on
clustering
Infra
structure
and
suppor ng
networks
Educa on, R&D
Global sustainability
integra on
Figure 3. Momentum building for a Global
Green System of Innovation
Figure 4. Building blocks of a Global
Green System of Innovation
China’s innovation system
China has been widely criticised for the negative impacts its fast economic development has
had on the country’s environment and its people. In the last ten years however the country
has developed a very ambitious national innovation system targeted to become a world leader
in green technologies. A major component of this was a 20.8% annual growth rate of increase
of gross R&D expenditure, which has made the country the second largest investor in
absolute terms (DIISR 20110). Cooperation with other countries is also strongly encouraged.
For example, China is Australia’s 3rd most important research partner and 6th highest partner
in publications (DIISR 2011). Its international patents have also skyrocketed (see Figure 5).
In 2004 China became the world’s leading exporter of ICT, including mobile phones, digital
cameras and laptops (OECD 2005). There has also been a concerted effort to reduce
greenhouse gas emissions. Between 1990 and 2005 China reduced its carbon intensity by 44
%, a further 40-45% reduction by 2020 was pledged in Copenhagen, including the 17%
reduction by 2015 in its current 12th Five-year Plan. China is now the world’s largest
China’s innova on
Figure 5. US patents by China by date of
application, 1976-2008 (absolute number
and per 100,000 US patents
Clean Development Mechanism
Figure 6. Approved CDM projects in
China, 2005–2011
Social impacts of mining at a local community level and the role of CSR for long-term sustainability
5
investor in clean energy and in 2009 surpassed US in total installed clean energy capacity
(Pew 2011).
Interestingly, China’s national budget is very much oriented towards addressing the
priority of climate change with $1 spent on climate change against $2-3 spent on traditional
military tools in 2011, compared with $1 to $41, respectively, for US (Pemberton 2010). The
country’s political stability has also attracted the lion’s share and growing numbers of CDM
(clean development mechanism) projects (see Figure 6 and 7).
Clean Development Mechanism
The governance model used in China’s
national innovation system is described
as populist authoritarianism (Dickson
2005),
meritocracy,
consultative
Leninism, economic pragmatism or
good governance with Chinese
characteristics (Tzang 2011) but it aims
to unite its people in building the
country’s resilience and capacity to
deal with climate change.
Conclusion
The innovation system concept is
ultimately about people – “the
knowledge, technology, infrastructure
Figure 7. International distribution of CDM, 2011
and cultures they have created or
projects projects
adopted, who they work with, and what
new ideas they are experimenting with” (DIISR 2011: iii). People’s voices are most loudly
heard when they are directly affected by pollution, droughts, floods or other climate related
calamities, but they also have an active role to play in gearing the world towards a green
economy. A global green system of innovation will not put a stop to competitiveness and/or
collaboration. It is however a realignment of priorities and making a change on a new path of
innovation activities. It also requires impact assessment to become an inherent aspect of
innovation which assists in achieving the broader societal aims.
We are already seeing the global role of China emerging through its efforts to
decarbonise its economy and invest in green technologies (domestically, internationally and
for capacity building in other developing countries). Most importantly, for the global green
innovation system to become a reality, there is a role to play for every nation and every
researcher as we are all sharing the same concerns and love for the planet Earth.
Acknowledgement
The authors acknowledge the support of the Australian Research Council.
References
Australian Bureau of Statistics (ABS) (2010), Research and Experimental Development
Australia 2008–09, Cat No. 8112.0, Canberra.
Batelle (2012), 2012 Global R&D Funding Forecast,
http://www.battelle.org/ABOUTUS/rd/2012.pdf (16.02.2012).
Chen, Y., Lai, S. and Wen, C. (2006), “The Influence of Green Innovation Performance on
Corporate Advantage in Taiwan”, Journal of Business Ethics, 67: 331–339.
Council on Competitiveness (2006), Regional Innovation – National Prosperity,
http://www.compete.org/images/uploads/File/PDF%20Files/Regional%20Innovation%20
National%20Prosperity.pdf (8.04.2012).
Social impacts of mining at a local community level and the role of CSR for long-term sustainability
6
Department of Innovation, Industry, Science and Research (DIISR) (2011), Australian
Innovation System Report 2011, Australian Government, Canberra.
Dickson, B. J. (2005), “Populist Authoritarianism: The Future of the Chinese Communist
Party”, Conference on “Chinese Leadership, Politics, and Policy”, Carnegie Endowment
for International Peacehttp://www.carnegieendowment.org/files/Dickson.pdf (8.04.2012).
GE Global Innovation Barometer (2011), An Overview on Messaging, Data and
Amplification, http://files.gereports.com/wp-content/uploads/2011/01/GIB-results.pdf
(8.04.2012).
Guo, X., D. Marinova and J. Hong (2011), “China’s Shifting Policies towards Sustainability:
A Low-carbon Economy and Environmental Protection”, Journal of Contemporary China
(forthcoming, acceptance date 19.07.2011).
Hardroves, K. and Smith, M. (eds) (2004), The Natural Advantage of Nations: Business
Opportunities, Innovation and Governance in the 21st Century, Earthscan, London.
Nisbet, M. (2011), Climate Shift: Clear Vision for the Next Decade of Public Debate,
American University School of Communication,
http://climateshiftproject.org/report/climate-shift-clear-vision-for-the-next-decade-ofpublic-debate/ (8.04.2012).
Organisation for Economic Co-operation and Development (OECD) (2002), Frascati Manual:
Proposed Standard Practice for Surveys on Research and Experimental Development,
Paris.
Organisation for Economic Co-operation and Development (OECD) (2005), Oslo Manual:
Guidelines for Collecting and Interpreting Innovation Data, Third edition, OECD and
Eurostat.
Organisation for Economic Co-operation and Development (OECD) (2011), Towards Green
Growth: A Summary for Policy Makers, May 2011,
www.oecd.org/dataoecd/32/49/48012345.pdf (8.04.2012).
Pemberton, M. (2010) Military vs. Climate Security: The 2011 Budgets Compared, Institute
for Policy Studies, US.
Pew Charitable Trusts (Pew) (2011), Who’s Winning The Clean Energy Race? 2010 Edition:
G-20 Investment Powering Forward,
http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/G-20ReportLOWRes-FINAL.pdf (16.02.2012).
Schiederig, T., Tietze, F. and Herstatt, C. (2011), “What is Green Innovation? – A
quantitative literature review”, XXII ISPIM Conference.
Scott-Kemmis, D. (2004), Innovation Systems in Australia. ISRN 6th Annual Conference
Working Paper, www.utoronto.ca/isrn/publications/WorkingPapers/Working04/ScottKemmis04_Australia.pdf (17.10. 2008).
Tzang, S. (2011), “Consultative Leninism: China's new political framework”, Journal of
Contemporary China, 18(62): 865-880.
United Nations Environment Programme (UNEP) (2009), Global Green New Deal: Policy
Brief, http://www.unep.org/pdf/A_Global_Green_New_Deal_Policy_Brief.pdf
(8.04.2012).
Wu, Y. (2010), “Indigenous Innovation for Sustainable Growth”, in Garnaut, R., J. Golley
and L. Song (eds) China: The Next 20 Years of Reform and Development, ANU E Press,
Brookings Institution Press & Social Sciences Academy Press, Chapter 16, 341-61.
Zhang, X. and Y. Zheng (2009), China's Information and Communications Technology
Revolution: Social Changes and State Responses, Routledge, Oxford.
Social impacts of mining at a local community level and the role of CSR for long-term sustainability