The third clean air investor salon was held in Beijing on March 23th, 2015. More than 40 representatives from relevant organizations interested about clean air investment gathered in Hongzhi Café. The relaxed, warm and well-ordered salon was a “mind feast” for every member participated.
Clean air investor salons, initiated by Clear Air Alliance of China (CAAC), aimed to explore the challenges and opportunities faced in air quality improvement. The first clean air investor salon was held in Shanghai on May 27th, 2014. More than 50 representatives attended the salon and witnessed the launch of “Clear Air Investment Initiative”.Following the first salon, the second salon was held on September 14th,2014. Nearly 60 representatives were attracted to attend this salon, and deeply discussed around the green financial system.
In third clean air investor salon, lectures and in-depth discussions were presented on two topics: the influence of the New Environmental Protection Law, and the investment opportunities in China’s VOCs control market. Ni Huan, who is CAAC’s senior adviser, hosted the salon and many experts attended, including Yang Chaofei(former chief engineer of MEP), Shen Xiaoyue (director of Environmental Policy Division, Policy Research Center for Environment and Economy, MEP), Xie Hongxing(director of CAAC Secretariat), Zhao Lijian (director of Environmental Management Project of Energy Foundation), Xiao Guangrui (Senior Program Officer of Asian Development Bank), and Jim Drago (principal application engineer of Garlock Sealing Technologies).
MEP Previous Chief Engineer Yang Chaofei delivered an excellent presentation on the first topic:the influence of the New Environmental Protection Law on investment. He pointed out that the New Environmental Law, as the most stringent environmental law in China, was a policy and institution innovation under the current severe pollution situation. This new law would significantly increase the cost of environmental violations, and meanwhile provide unprecedented opportunities for the development of environmental protection industry. It is believed that the market demand will be sure to totally release, with the perfection of regulations, the balance between economic and environmental policies, the stringent enforcement of laws, and the elimination of local protections.
In terms of investment risk, Director Shen Xiaoyue mentioned the important role played by the America Superfund Act in the management of brownfield. This Act emphasized the joint liability of investment institutions and empowered EPA an indefinitely retrospective right. Although there is no similar law in China, the environmental risks should be considered as an important element for investment analysis.
For the second topic, the investment opportunities in China’s VOCs control market,Director Xie Hongxing officially released the report Over A Hundred Billion-Investment Market for VOCs Control. Given the intensive releases of national and local policies on VOCs control, the VOCs market will face huge growth opportunities during the 13th five-year period.According to the preliminary estimates, enormous investment opportunities(nearly 1800 billion) will be created in the VOCs control industry by 2020.
In the following discussion, Mr. Jim introduced both the technology and experience of VOCs leakage management in Garlock Company. He also shared the opportunities created for investment institutions during USA’s VOCs control process, plus additional economic and social benefits for enterprises during the VOCs control work.
Regarding the question that whether the Public Private Partnership (PPP) mode could promote VOCs market or the air pollution prevention market, Mr. Xiao Guangrui mentioned that with the release of No. 43 documents, Opinions of the State Council on Strengthening Local Government Debt Management, the PPP mode has been increasingly adopted by local governments in public fields, e.g.environmental management. However, he also pointed out that the popularity ofPPP mode did not imply that PPP mode were suitable for all fields. To infuse social capital, it is necessary to establish a reasonable transaction mode (profitable mode), which includes the user pay principle, government subsidies and bundled profitable projects etc. To better promote the PPP mode, financial innovation is also required for investment institutions, such as asset securitization, internet finance and so on.
Finally,with director Xie Hongxing’s summary, the third clean air investor salon ended successfully. Attendees also appreciated the salon, which acted as a great platform and provided great investment opportunities for institutions.
This salon was hosted by CAAC, co-organized by China Association of Private Equity and supported by the Energy Foundation.
