China's green shift a boon to global economy

Danfoss is now represented in more than 20 Chinese cities with around 5,000 employees after deciding seven years ago to develop China as its second home market.

The company's revenues in China rose 28 percent last year to $469 million from a year earlier. Danfoss expects China to become its largest market by 2015.

"The estimate is that we are developing with the market and that we are maintaining or even gaining market shares in certain areas. It is obvious that while we are growing nicely in China, the general market in China is growing very nicely," said Christiansen, the Danfoss CEO.

Nordic model of green development

Environmental protection and sustainable development drive China's efforts to shift to a green economy - defined by the UN as one where "growth in income and employment should be driven by public and private investment that reduce carbon emissions and pollution, enhance energy and resource efficiency and prevent the loss of bio-diversity and ecosystem services."

Premier Wen Jiabao promised at the 2009 UN climate conference in Copenhagen that China would lower the intensity of carbon emissions per GDP unit by 40 to 45 percent by 2020 from 2005 levels.

Beijing also has pledged to increase the share of non-fossil fuels in China's total energy consumption to 11.4 percent in 2015 and 15 percent in 2020, up from 8.3 percent in 2010.

In fact, China managed to meet its stated goals on energy conservation and emission cuts under the 2006-10 11th Five-Year Plan. It was during that effort that energy consumption per GDP unit dropped 19.1 percent while energy-saving efforts helped reduce carbon emissions by 1.46 billion tons.

China has also shut down small coal-fired power plants with a combined capacity of 76.8 million kilowatts. It also reduced 120 million tons of outdated iron production capacity, 72 million tons of outdated steel production capacity and 370 million tons of cement production capacity.

"For the economy to grow, energy consumption must grow accordingly. But energy consumption cannot grow indefinitely due to limited resources," said Andrei Ostrovsky, deputy director of the Far East Studies Institute at the Russian Academy of Science.

Ostrovsky said the only way out of the vicious cycle was to increase labor productivity and introduce energy saving technologies so that the same or larger volume of production could be achieved with relatively lower energy consumption.

In that regard, the Danish or Nordic model of green development could be adopted in China, as long as it is scaled-up and adapted to fit local needs.

The Danish economy, according to the CDI, has grown 78 percent since 1980 while keeping energy consumption almost unchanged. Carbon emissions also were cut during the period largely due to technological developments and conservation.

During a visit to Denmark in June, President Hu Jintao toured the Copenhagen harbor, one of a number of sustainable development and green living initiatives in the Danish capital.

Hu said China should learn from Denmark in protecting the environment and adopting clean energy for sustainable development.