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For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only. BNY Mellon Investments Switzerland GmbH is a financial services provider in Switzerland and is required to categorise clients, excluding financial intermediaries, in accordance with the Financial Services Act (FinSA). For the purposes of this communication, we have categorised you as a professional client. Professional clients are entitled to provide notification in writing if they wish to be re-categorised.
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IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
31 March 2022

Mapping China’s future energy footprint

The developing world offers the largest opportunity for environment-oriented solutions. These are the most populous regions of the world, where relatively faster rates of economic growth will increasingly draw on the world’s finite resources. Only around 25% of carbon emissions in 2020 were produced by MSCI World Index countries, compared to roughly 60% in the equivalent Emerging Markets Index countries, with most of the remainder coming from Frontier Markets Index countries (economies which are less established than emerging markets).1

 

China and India are currently the first and third-largest carbon emitters globally, and their CO2 per unit of nominal GDP in 2019 was substantially larger than that of the US.2 Clearly, it is in the developing world where the biggest opportunity is for renewable energy and other clean technology solutions. It is also in the developing world where positive change is most urgently needed if we are to meet Paris Accord global-warming targets. China consumes roughly 1.7 times more electricity than the next largest consumer, the US.3 Hence, it is hardly surprising to see more renewable-energy installations in China than anywhere else.

 

Ian Smith, portfolio manager, Newton Investment Management.

 

Doc ID: 912300

 

1 Newton Investment Management. 2021 research.
2 Our world in data. China: C02 Country Profile. As at end 2020.
3 International Energy Agency, 2021.

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