Analysis & Synthesis

The last year has seen the emergence of several new brands, including: Trumpchi (传琪) from GAIC(Guangzhou Automobile Industry Group); Oley(欧朗) from FAW; Venucia(启辰) from Dongfeng-Nissia; Shouwang(首望) from Beijing Hyundai; Kaili(开利) from FAW-VolksWagen; as well as the Lotus(路特斯) and Qoros(观致) from Chery. Rumors about the development of new brands surround other joint ventures as well, such as: CBA(BMW-Brilliance); Chang’an-Ford; Chang’an-Suzuki; Chang’an-PSA. Furthermore, BAIC is also expected to announce a new brand in the near future.

The owners of these new brands fall into three main groups: joint ventures; major Chinese automakers; and multinational companies new to Chinese markets. Each group has its reasons to promote the birth of new brands. The big Chinese automakers are under pressure from the government to develop independent brands as they already receive ample resources to support such development. New comers, such as Lotus, are fascinated by the growth of the Chinese automotive market and are eager to push their new brands forward.

As for the joint ventures, debate has continued for years surrounding government funding or support for the development of these joint ventures’ independent brands. One side contends that the independent brands of these joint ventures are the most fundamental threat facing Chinese domestic brands. While the other side argues that they represent the only opportunity for the Chinese partners in these joint ventures to gain the essential technical support of foreign partners.

Recent developments suggest that the government has now made a clear indication as to which side it falls on. The market has interpreted the conditions for the approval of new joint ventures as favoring the development of independent brands and new energy vehicles. The auto industry has welcomed the clear position adopted by the government. Previously, joint ventures have often been limited to the sale of foreign companies’ existing models in Chinese markets, rather than developing its own technology. However, with the development of an independent brand, a set of independent R&D systems are established accordingly and the domestic partners will be able to truly accumulate necessary technology. Furthermore, these independent brands are expected to serve to further align the interests of foreign and Chinese partners with each other.

Another interpretation is based on the 12th five-year plan. The goal outlined in the plan is for independent brands’ share of the passenger car market to, eventually, exceed 50%, with independent brands achieving a 40% market share by 2015. To reach the target, joint venture independent brands are considered important contributors.

Altogether, these recent developments hint at a significantly increased role for independent brands in the Chinese auto market with this first batch being merely the beginning of a growing trend.

The recently concluded international United Nations Framework Convention on Climate Change did little to resolve the increasingly divisive and factional landscape of international climate policy. In the months leading up to the talks in Durban countries had grown increasingly divided on their approaches to climate policy, with several groups being formed. European nations, among others, supported instituting a comprehensive, legally-binding agreement limiting countries’ greenhouse gas emissions; while rapidly developing economies such as China and India continued to oppose a strict binding agreement as it would impose severe restrictions on their continued economic growth; and those nations, such as the United States, that support a series of common restrictions and limits, in theory, but are skeptical as to its applicability.

As a result, the Durban talks resulted in a vaguely worded and non-binding promise to work toward a new global treaty in the near future and the establishment of a new climate fund. Despite the vague nature of the current pledge, the debate surrounding the decision to proceed towards a new treaty, to replace the Kyoto Protocol of 1997, has been characterized as highly contentious and the progress as hard-won.

None the less, this did not yet yield a transition away from the existing two-tier system which gives “developing” countries, such as China, the advantage of less rigid restrictions, a system which many, with the United States being among  the most vocal, have criticized. This system has been criticized for, firstly, giving an unfair economic advantage to those countries classified as “developing” countries. Secondly, and ultimately more significantly, this system has been criticized for being inherently ill-suited to the challenge of reducing global emissions, as the dilemma lies in the overall quantities of greenhouse gases emitted into the earth’s atmosphere and not in the geographical source of these emissions.

Agreement on the details surrounding the newly established climate fund, while slightly less opaque, were also left for another day. What is clear, for now, is that the fund, called the Green Climate Fund, would help to mobilize $100 billion annually, through a combination of both public and private funds, by 2020 to facilitate developing nations’ transitions to clean energy sources and sustainable, climate change combating technologies, practices and policies.

At the conclusion of this greatly anticipated and influential conference, we are left with desperately few signs of practical progress in solving the grand challenge of climate change. These talks failed to produce a firm agreement on a new treaty nor did they even result in a desired road-map towards such a legally-binding global treaty. As a result, many analysts have suggested that the Durban conference has amounted to little more than a direly needed face-saver for global governments, serving as a temporary defense against the strident outcries of climate-change activists and environmental experts.

Source: NY Times article reporting the results

Read more

Report in the Guardian
Further analysis in the NY Times
Analysis in Business Day 
The Framework Convention’s website

In an effort to bridge the gap between the present era of gas-guzzling, emissions-heavy cars and a sustainable future where electric vehicles have taken the place of these environmentally damaging cars, many innovative car-sharing startups are springing up in the major cities of the world. With progress towards a fully electrified transportation network bound to be long and arduous, many residents of major urban centers are beginning to consider alternatives to private vehicle ownership. While many cities, particularly in Europe, already have expansive, well-established public transportation networks which serve the basic commuting needs of most urban residents, there remain situations, such as weekly visits to the supermarket, in which a car is simply the most logical solution.

In an effort to provide a solution to such situations, a number of companies have, over the past few years, begun offering short-term car rental services in urban centers. These car-sharing services provide residents with a suitable alternative to actually purchasing a car of their own when faced with gaps in the public transport network or the need for a more flexible transport solution. Such services generally operate on a registration basis, after which members have access to the service’s entire vehicle fleet for a flat hourly rate, charged upon actual usage. The available cars are often listed in an on online or mobile database which allows members to find the nearest available car whenever they need it. Following this, members need simply to get in, drive and leave the vehicle at their destination.

The number of car-sharing services has experienced a rapid expansion over the last four years, the market has kept pace with this expansion and the number of members is predicted to continue to increase. A 2010 study by market research firm Frost & Sullivan found that the car-sharing market is poised to continue its recent growth, reaching nearly 10 million members worldwide by the year 2016. The somewhat surprising popularity of these services has been attributed by analysts to a variety of factors including the introduction of new congestion and gas taxes, increasing urban congestion, making driving and parking in large cities a costly and unpractical option, as well as growing concern over the environmental sustainability of private transport. Regardless of the individual reasons which people may have for opting to register for car-sharing services, the shift away from private-vehicle ownership is beginning to build serious momentum.

While the growing popularity of car-sharing services is certainly a positive step in the global effort to reduce carbon emissions this does not mean that electromobility should take a backseat. In fact, some car-sharing services, such as the Daimler owned car2go service, are already combining the two goals, providing a truly viable solution for society’s future transportation needs. As these EV-sharing services continue to expand to new cities and grow increasingly popular over the coming years, the number of vehicles on the streets of the world’s cities will see a marked reduction and with this shift away from private ownership a truly notable step in reducing greenhouse gas emissions.

Read More:

An article on the Wall Street Journal's Driver's Seat blog
An article at bostinnovation.com on car-sharing service RelayRides
An article on hybridcars.com about GM's support for car-sharing
A newswire report on Hertz's car-sharing service
A post on the NY Times' Green Wheels blog about a Norweigan car-sharing service
An article in the NY Daily News about Volkswagen's car-sharing service
Report on autobloggreen about London's plans to introduce EV-sharing program 
A 2010 Frost & Sullivan study

A list of some of the car-sharing services:

http://www.connectbyhertz.com/
http://www.car2go.com/
http://www.getaround.com/
http://www.higear.com/
http://www.buzzcar.com/
https://fr.cityzencar.com/
http://www.livop.fr/
http://www.rentmycar.com/
http://www.spride.com/
http://www.tamyca.de/
http://www.voiturelib.com/
http://wheelz.com/
http://www.whipcar.com/

At the core of solving the Grand Societal Challenge of climate change lays the need to replace traditional coal and fossil-fuel sources of energy with renewable sources. Among the most promising of these energy sources, including; wind, hydro and biomass sources, is energy derived from the sun. Harnessing the power and promise of these renewable energy sources entails a great deal of technological research and innovation. This process of technological development is one requiring a significant funding and support with very little certainty regarding its successful monetization. Following the bankruptcy of California-based solar-panel technology manufacturer Solyndra’s, at the end of August, the renewable energy industry was beset by uncertainty, leaving some in doubt as to the future of the solar industry.

The industry was plagued by widespread speculation and doubt in the press as well as from industry insiders and analysts due not only to the great promise which Solyndra showed at its outset, the MIT Technology Review named it one of the 50 most innovative companies in the world, but also due to the significant role which U.S. government funding played in its rise. Solyndra’s decline is reported to have been largely due to its inability to keep up with the rapid pace of technological innovation in the solar industry, having built an expensive new manufacturing plant which was priced out by cheaper alternatives soon after its completion. This inability to compete technologically was further compounded by the effective over-pricing of the company’s out-dated technology when compared with the aggressively priced offerings of its foreign competitors.

At the heart of concerns regarding the impact that Solyndra’s collapse would have on the future of the renewable energy and clean tech industries as whole was the U.S. government’s central role in the funding of Solyndra. Solyndra had received, throughout its lifetime, a total of $535 million in federal loan guarantees from the U.S. government, helping it to secure its over $700 million in venture capital funding. Many feared that the, not insignificant, losses facing the U.S. government would spur debate over the future of government subsidization and funding of the industry. These fears were based in the, very real, uncertain nature of investments in the renewable energy and cleantech industries due to the unpredictability caused by their constant evolution and development, increasing the difficulty of predicting which companies will remain successful. These concerns were additionally compounded by the accusations of cronyism leveled at the Obama administration as a result of evidence suggesting an early awareness of Solyndra’s doubtful prospects.

While the ultimate outcome of the Congressional hearings presently being conducted into the events leading up to Solyndra’s bankruptcy have yet to emerge, fears of the collapse of the U.S. or international solar industries have been allayed. While early reactions to the bankruptcy announcement were indeed marked by a considerably gloomy tone, the overall strength and rapid rise of the industry, the U.S. solar market alone doubled last year and is expected to do so again this year, proved to quell fears of its downfall. Concerns regarding the industry’s instability are, however, not easily dispelled as the very nature of emerging industries makes it very difficult to reliably predict which technology will ultimately prevail as winners emerge through constant competition and development. While investment in emerging industries requires a great deal of caution and foreknowledge, this does not mean that governments cannot afford to become averse to funding these industries, as without broad support and incentives private investors will hardly be able to provide sufficient support the large-scale implementing of these technologies.

More than anything, Solyndra’s failure is a sign of the overall strength of the international solar energy industry, as Solyndra’s bankruptcy was largely a result of the increased competitiveness of the industry. This increased competitiveness drove prices for solar energy equipment down far below Solyndra’s cost structure, which led to Solyndra’s steep decline. While this decrease in price led to the fall of one of the industry’s early leaders, it has also ensured that solar energy will continue to become a more accessible option to replace existing, CO2 heavy energy sources. In light of recent signs of European and American governments’ reluctance to support solar energy, such as German Chancellor Angela Merkel’s recent statements suggesting that the country will cease providing funding and subsidies to the solar industry, the source of this future technological innovation seems increasingly likely to be outside of the U.S. or Europe. China’s overwhelmingly robust state support of the clean-tech and, in particular, renewable energy industries ensures that Chinese companies will be able to continue to direct unparalleled resources towards research and development activities with a significantly reduced impact on the eventual price of their products. The future of renewable energy, while in a persistent state of flux, remains full of promise and with the continued support of governments across Asia, Europe and the Americas the industry will continue to make invaluable contributions to society’s efforts to reduce the effects of climate change.

Read More:

Reuters article on the bankruptcy
Bloomberg on the initial bankruptcy announcement
The wider impacts of Solyndra’s failure at Time’s Swmapland blog
Bloomberg on renewable energy research funding in the wake of Solyndra’s bankruptcy
NY Times on the volatility of new markets 
Think Progress article on China’s rise in the solar industry 
Press release from the Solar Energy Industries Association (SEIA) 
A snapshot of the state of the US solar energy industry at Climate Central 
Accusations of complicity and cronyism weighed against Obama administration 
NY Times article on the White House’s concerns regarding Solyndra’s stability 
NY Times article on a second loan for Solyndra
Gigaom article on the future of renewable energy investment in China
Article on Germany’s stance on solar energy funding
In-depth analysis  regarding the future of the US government's support of the solar industry

A delegation of representative from the city of Ordos, located in Inner-Mongolia, China, attended the Fifth Sino-Finnish Innovativeness Forum on the 27th of September, 2011. The delegation’s visit to Finland was motivated by the city’s strong commitment to low-carbon development. As such, the Forum provided these representatives with an opportunity to engage with a community of likeminded individuals from the worlds of academia, commerce and government. The City of Ordos was represented at the Forum by Ms. NA Renhua, the Director of the International Economics Collaboration Bureau.

The region of Ordos, in which the city is located, is an incredibly rich source of several natural resources, such as; coal, wool and natural gases. While the region’s ample supply of coal continues to provide Ordos’ economy with a reliable foundation, the City has chosen to direct future development in a more sustainable direction. This commitment to low-carbon development is reflected in the naming of the city as the National Energy and Chemical Engineering Base. This distinction complements the city’s plans to provide significant support to the emerging solar and wind energy as well as cloud computing industries while also striving to upgrade production practices in its coal industry.

The City’s 12th Five-Year Plan serves as a detailed roadmap of its low-carbon and sustainability themed future goals. The plan sets reduction targets for energy consumption and CO2 emissions, which are in line with provincial targets, as well as specific targets for the future development of the city’s energy structure, expanding natural gas and methane consumption to 15% as well as increasing the percentage of energy derived from renewable sources by 10%. The Five-Year Plan also addresses the structure of the city’s economy, aiming to increase the proportion of tertiary industries to 42% of GDP as well as increasing the proportion of added value derived from non-coal and non-gas industries. These practical energy and industrial targets are supported by the City’s commitment to increasing low-carbon technology investment to 0.2% of GDP by the year 2015.

This increased investment in low-carbon technologies will serve to support the City’s goal of strengthening its low-carbon industry while also ensuring that the City’s administrative departments implement low-carbon solutions in: building, transportation and social education. During their visit to Finland, members of the Ordos delegation also took the opportunity to visit Valmet Automotive’s production facilities, home to industry leading electric vehicle technologies and experts. The reduction targets set out in the City of Ordos’ Five-Year Plan together with the practical steps being undertaken provide an interesting glimpse of a very promising, low-carbon city of the future. The strong commitment to low-carbon development and great ambition of cities such as Ordos serve as promising signs for future generations that together we can yet reverse the tide of environmental collapse.

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