Race for clean energy may determine victory in ‘dragon-elephant’ competition

By Hu Weijia Source:Global Times Published: 2017/12/26 21:23:39

With a growing middle class and a booming economy, India is widely considered as the world's next center of oil demand growth. However, Indian Prime Minister Narendra Modi said recently that the country aims to reduce crude oil imports by 2022.

As India and China emerge as major powers in Asia, strategic competition between them unavoidably intensifies. The GDP growth race is capturing all the headlines, but which of them can achieve green development and reduce its dependence on energy imports may decide the outcome of the competition.

India imports more than 80 percent of its crude oil requirement, while the figure for China exceeds 60 percent.

Excessive dependence on imported oil could pose a serious threat to both countries' energy security and economic stability.

With populations of more than 1 billion people each, China and India must pursue development paths different from those adopted by the West. The green economy is the only way out.

Only the country that appropriately handles the inevitable conflict between economic growth and energy constraints can maintain sustainable GDP growth and emerge as the victor.

India has made strides in shifting toward renewable energy. For instance, the country has set an ambitious target for all new cars sold in India to be electric by 2030. A draft of the third National Electricity Plan showed that non-fossil fuels will account for 56.5 percent of India's installed power capacity by 2027. If those figures aren't just empty talk, OPEC's forecast for India's oil demand (increasing more than 150 percent by 2040 from its current base) may be overestimated. The green economy concept has been gaining ground in India, putting pressure on China.

China is also turning to renewable energy to reduce its dependency on traditional power supply. China's 13th Five-Year Plan (2016-20) for oil and gas shows that total demand for oil will post an average annual increase of only 1.52 percent, down from 4.83 percent in the 2011-15 period.

It seems China is leading India in some aspects of the renewable energy race, but it is hard to make long-term forecasts, given India's fierce push for cleaner fuels.

Energy shortages have serious economic and political consequences. For China and India, the one that succeeds in its approach to green development is likely to gain the upper hand in the "dragon-elephant" contention.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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