One of the principal justifications for inaction on climate change and the go-slow on the transformation to low-emission technologies in developed nations such as the US, Canada and Australia, is that the major Asian economies are not doing their fair share.

If that is true, someone forget to tell Asia’s leading industrialists.

Over the past few weeks there have been numerous examples of the sort of transformation that has been taking place across north Asia – from Honda’s massive commitment to electric vehicles (now that the previous CEO who “didn’t like batteries” is gone), to Panasonic’s $10 billion buyout of Sanyo Electronics to consolidate its green technology investments. The heads of both Honda and Panasonic have said the transformation of their companies was a matter of survival – they would be soon out of business if they didn’t keep up with their rivals.

Last week, the South Korean shipping giant Daewoo Shipping announced that it aimed to source one third of its revenue from the wind energy industry by 2020 – just like that. That equates to $US7.5 billion from next to nothing ($US25 million) right now. It’s the equivalent of building an industrial giant nearly twice the size of Foster’s from scratch, and in just 10 years.
 
“It’s a very ambitious target and it won’t be easy,” chief strategy officer Koh Young Youl told Bloomberg. “Still, the market potential for wind power is very big, partly because there’s a lot of interest in going offshore as the space on land runs out.”

Daewoo plans to leverage its knowledge of the shipping industry to build, operate and service offshore wind installations, and is targeting Europe and the US too.  The world’s largest ship-builder, Hyundai Heavy Industries, is also making major investments in wind and solar technologies.

But perhaps the trend towards clean energy and low-emission technologies is best summed up by the listed Chinese energy company China Longyuan Power Group, one of the “big five” energy producers in China that was the first to push into renewable energy in a major way.

The company still produces some 60 per cent of its energy from coal trading and coal-fired energy production, but that will quickly diminish as China Longyuan adds a further 2GW of wind power a year over the next three years, part of a staggering pipeline of 50GW (more than the nameplate capacity of Australia’s grid) of wind resources, including offshore installations.
 
Earlier this month it released its annual earnings, showing that wind accounts for 76 per cent of EBITDA, as wind energy attracts a 34 per cent higher tariff to coal-fired energy in China’s grid, and capital expenditure for its wind business outstrips that of coal by a factor of 50:1. The total capex budget for 2010 is $US2.9 billion (financing isn’t a problem in China and China Longyuan has borrowing costs in the range of 3.7-5.4 per cent).

The company also noted that the costs of wind turbines had fallen 10 per cent in the last year alone. China Longyuan is also pursuing developments in solar, geothermal and biomass energy solutions.

Unlike others, China Longyuan has seen no slowdown in policies as a result of Copenhagen. Quite the reverse in fact. “Wind power and other renewable energy have become the world’s investment highlights after the Copenhagen Climate Change Conference,” the company said in its results announcement, noting China’s 15 per cent non-fossil energy target by 2020 and the targeted 40-45 per cent cut in emissions intensity.

“In order to reduce the proportion of fossil energy, China needs splendid efforts to develop its alternative energy industry. Going forward, wind power and other renewable energy will make up a much more significant proportion in China’s primary energy portfolio, and low-carbon economy and energy-saving and emission reduction policies will be crucial to future economic development.”

Little wonder, with all the above as just a taster of what is happening in north Asia, that France, Germany and the UK have been pushing their EU counterparts to lift their emissions reduction targets to 30 per cent, to try and give their industries the same incentive to move to low-emissions technologies.

One wonders, though, where this leaves Australian industry. Although there are numerous examples of smaller companies investing heavily in new technologies – think geothermals, some wind developers and solar start-ups – there is little evidence of a shift among larger groups, although BHP Billiton’s proposed purchase of Potash Corp may be a taste of things to come.

As we’ve seen in the last week, two of the companies that stand most ready to invest in lower-emission technologies, Origin and AGL, have sacrificed three or four years of low-carbon investment because they have been able to satisfy their obligations by buying cheap certificates on market instead. And in the absence of a carbon price there is no price signal for them to push ahead with gas-fired installations.