WIF Highlights Green FDI

Anchor: Over the past two years, green industries have achieved impressive growth, despite a sluggish recovery of the global economy from the recent downturn.

As part of the ongoing World Investment Forum, a panel of government officials, and representatives from non-governmental organizations as well as the private sector tackled the issue of sustaining this growth.

Damin reports from Xiamen,

James Zhan explains at the UN Conference on Trade and Development that there has been an unexpected hike in foreign direct investment (FDI) into environmentally sustainable industries.

"In 2009, FDI into renewable energies, recycling and low-carbon technology manufacturing reached 90 billion US dollars."

This figure is especially impressive considering an approximate 50% drop in global FDI inflows the previous year, which hit around 1 trillion US dollars.

Revenue growth seen in green sectors is also impressive, according to Mahmood Razee, the Minister of Economic Development and Trade of Maldives.

"Research shows that global revenues generated by environmentally sustainable operations grew by 75% to 530 billion US dollars in 2008, and is expected to exceed 2 trillion US dollars by 2020. So the business incentives are quite clear."

However, the so-called "green industry" comes with some controversy.

Lucy Carmody is the executive director of Responsible Research.

"Not all green FDI truly constitutes as sustainable development. All these new technologies come with their own long-term environmental, social and governance issues that probably haven't even been addressed yet."

Proper regulatory mechanisms must be in place in order to provide standards and incentives so as to ensure sector growth.

Suzlon is a leading wind power company that has helped China to become the world's largest wind power market.

The company's managing director, Lawrence Albert, attributes a big part of the success to an effective official regulation system.

"The Chinese government played a very strong role in creating a foundation for how the market will develop and grow. It has not been a perfect trajectory, but we've seen the government act quickly in making adjustments to those rules as they haven't played out in the way that was originally anticipated."

Albert says that governing bodies around the world are recognizing the potential of wind power and encouraging development by offering growth incentives.

Even amid dismal economic conditions, global installed wind capacity grew more than 40 percent worldwide last year.

The industry's success story is proof that some solutions may actually mutually benefit both the economy and the environment.

From Xiamen, this is Damin.