A brief analysis of the development of China's environmental protection industry

Although various policies supporting the development of energy-saving and environmental protection industries have been issued, many companies engaged in this area still feel great resistance. It is obviously not enough to rely on policy support to have a place in the energy-saving and environmental protection industry. There are several problems here that are clear and need to be made by a large number of energy conservation and environmental protection companies. The development of any industry must be based on the existence of market demand. Then, where is the market demand for energy conservation and environmental protection? How strong is the driving force for this demand?

Who will pay for energy saving and environmental protection? The unbalanced development strategy implemented in our country has led to an imbalance in regional economic development. The industrialization of economically developed areas has brought about excessive energy consumption, pollution of the atmosphere and water, and over-relying resources in economically backward areas have led to depletion of resources and ecological destruction. Because of local protectionism that cannot be avoided in the short term, it is difficult for the supply side to compete with the local suppliers over the regional market. After the party’s 17th National Congress, it further clarified the concept of scientific development as the fundamental guide for China’s economic and social development. Companies that can directly provide these companies with energy-saving and environmentally friendly products and services often need strong integration and integration capabilities, and they can have a certain influence or control over the suppliers in the upstream of the industrial chain.

From the perspective of demand, we can find that there are three different types of markets in the energy-saving and environmental protection industry, and there are very large differences in the structure and characteristics of the market.

The first is caused by population growth and urbanization.


The first category is energy-saving and environmental protection industries that serve the public sector. Typical energy-saving measures include public measures, subsistence sewage treatment, atmospheric management, and disposal of living garbage. But for companies that actually provide products and services, the customers they face directly are governments, not the ultimate consumers.

Only by clarifying these issues, the practitioners and investors of energy conservation and environmental protection companies can have a bright future. This type of market is directly responsible for the ultimate needs of consumers. It is essentially not different from normal markets for products and services. The market structure tends to be completely competitive.

Second, it is driven by regional economic development. In this way, industries that can meet the sustainable development goals in two aspects can be synchronized. In either case, economic development is unsustainable. Under the constraints of resource conservation and environmental protection, economically developed areas and backward areas should all work hard to prevent new excessive consumption of resources and environmental pollution, and at the same time be positive. Compensation for the history of environmental management debt, whether it is the source of prevention, is still the end of management, will directly produce the objective needs of energy conservation and environmental protection. In order to deal with these situations, a series of measures need to be taken to deal with and manage, which will bring about great development in the energy saving and environmental protection market. Otherwise, it is only in response to the call of the party center, policy, follow the flow, did not want to be clear and hurry to enter the game, the ultimate inevitable will be met with bloodshed. In fact, the energy saving and environmental protection industry has a sector that is irrelevant to the market. It is an area with numerous mountains, numerous monopoly powers, and unmatched markets. The enterprises are generally facing the dilemma of “two highs and one low”, that is, high transaction costs. High risk and low efficiency. Most of the enterprises with high energy consumption and environmental pollution are relatively large-scale production-manufacturing enterprises. A large part of them are state-owned enterprises. In the past, China’s economic growth was mainly an extensive mode of growth. It relied on the high consumption of resources and the use of extractive methods to develop the economy, which caused a serious extravagance of energy and other resources, and also caused environmental pollution and ecological damage. . What kind of measures can both increase GDP and simultaneously reduce the value of resource consumption and environmental damage? Only one answer is to develop energy-saving and environmental protection industries.


The third is the promotion of economic restructuring. In the early days, "development" was concentrated in the growth of the total economy.

Back to our original title, the market for energy-saving and environmental protection industries needs to reduce development momentum.

The second category is energy-saving and environmental protection industries that serve individuals and families. Typical enterprises include energy-saving air-conditioning, energy-saving refrigerators, and other energy-saving household appliances that are produced and sold by enterprises. They provide service companies that purify drinking water, manage indoor air, and prevent radiation and noise. and many more. The increase in population and the rate of urbanization will increase the conflict between resources and the environment, increase the pressure on resource demand, further worsen the environmental pollution, increase the discharge of urban sewage, increase the amount of living and production waste, increase noise pollution, and cause automobile exhaust. The air pollution is even more severe. China’s population size, labor force size, and active population will continue to grow in the next 20 years. At the same time, more rural people will enter the city, and the urbanization rate in China will continue to improve.

Fourth, it is caused by the pressure of energy resources. From the “Ninth Five-Year Plan” period, China’s government began to promote economic growth from extensive to intensive, and gradually eliminated backward production capacities, processes, and products to improve the degree of intensive economic growth, bringing about corporate pollution management measures and cleaner production technologies. , energy saving equipment, etc. In a given area, this market reflects a typical buyer monopoly market.

The third category is energy-saving and environmental protection industries that are used as production services. Typical examples include energy-saving transformation for large enterprises and institutions, industrial wastewater treatment, desulfurization and denitrification, and waste disposal. The ultimate demand for this market comes from the public's quality requirements for the environment. Public votes and taxes are paid by the government to provide public goods and services.

Although the output value of the energy saving and environmental protection industry announced by the government is very large, it has reached 2 trillion at present, but this does not mean that the scale of the energy saving and environmental protection market has a corresponding order of magnitude.

Fifth, pressure from environmental deterioration has spawned. The monopoly buyer's market structure determines that the government is in a completely dominant position in the negotiation process with the company, and will largely influence the company's resolution plan and business behavior. Slightly using a bit of mathematics knowledge, the denominator can significantly reduce the energy and resource consumption, the cost of environmental damage, and at the same time, it can bring about a 10% increase in GDP on the molecule. The obviousness of this effect is not known. The enforcement of environmental protection objectives has objectively forced the formation of a realistic demand for environmental protection. The large-scale development for the development of the economy over the past period has caused the severe destruction and impact on the natural environment on which we depend, and the rapid development of industrialization has exacerbated the contradiction between social development and environmental constraints. The protection of the environment has become a widespread resonance of society. And it has risen to the will of the country. As a mandatory goal to ensure implementation, China's environmental legal system has been continuously improved. The first important concept of the scientific outlook on development is development, which is different from previous pure development thinking. It requires comprehensive economic and social coordination and sustainable development. To save resources and protect the environment is an important way to achieve sustainable development. For enterprises, their main task is to produce products or provide services for other parts. Energy conservation and environmental protection are usually not the active demands of the enterprises themselves, but they are caused by excessive energy consumption or damage to the environment in the flow of production and operations. This has a negative externality to the society as a whole. Through legislation or government enforcement measures, companies need to eliminate this effect, and thus generate the need for energy conservation and environmental protection. It is essentially a demand or intermediate demand. At present, China has entered the middle and late stage of industrialization and has a high proportion of heavy chemical industries. These are often areas where high energy consumption and high polluting enterprises are concentrated. Following the country’s control over the total amount of energy, improvement of energy efficiency standards, and strengthening of environmental protection, these Heavy chemical industry enterprises will certainly take measures to carry out energy conservation and emission reductions, and a large number of energy conservation and emission reduction tasks require professional market-oriented enterprises to bear.

In spite of all kinds of difficulties, the country still has to develop energy-saving and environmental-protection industries and even mention it as the first place in strategic emerging industries. The importance of energy-saving and environmental protection industries is evident. The question that needs to be answered first is why is it important to develop energy-saving and environmentally friendly industries?

We know that in the increasingly resource-constrained environment and the deteriorating environment, it is necessary to carry out energy conservation and environmental protection work in the entire society. However, there are many means to achieve energy conservation and environmental protection goals, and we must vigorously develop the service industry and promote industrial upgrading. Departments of high-energy-consuming, high-pollution enterprises implement customs clearance, shutdown, parallelization, and transfer, and when necessary, power cuts and the like are restricted. Of course, the development of energy-saving and environmentally friendly industries is also one of the measures, but compared with other means, the development of energy-saving and environmentally friendly industries is a More effective measures?

Since reform and opening up have been commensurate for a long period of time, China’s economic society has always been adhering to the guiding thinking of “development is the absolute principle” and has always placed development first. Judging from the perspective of the interest chain, there is a problem of consignment agency and game relationship between the government and the public, which will cause the shortage of public goods. However, from the perspective of actual suppliers of energy-saving environmental protection products and services, it does not require Faced with the ultimate consumer bargaining, they negotiate directly with the government. Affected by this thinking, the government governance part has gradually shifted from the past to the multiple goals of sustainable economic and social development, reflected in energy conservation and environmental protection, that is, determining the total energy consumption per unit of production during the “Twelfth Five-Year Plan” period. The emissions of environmentally friendly carbon dioxide decreased by 16% and 17% respectively, and the total discharge of major pollutants decreased by 8% to 10%.

The rapid growth of China’s economy has caused the conflict between the supply and demand of energy resources to become increasingly prominent. At the same time, due to the constraints of natural conditions, China’s energy resources are severely insufficient. Because the market is distorted with low resource prices and technological backwardness, China’s energy efficiency is low. Compared with the developed countries, the gap is very large. All of these urgently require that we need to use the energy and other resources as much as possible for their economical use and comprehensive utilization.

Sixth, it is the transformation of the economic growth mode. Under the concept of GDPism, the indicator of economic development is an absolute amount. Under the concept of sustainable development, the indicator of economic development is a relative amount, that is, the cost of GDP ratio on resource consumption and environmental damage. For a long time, China’s relatively large economy has been driven by exports, followed by increasingly fierce international competition. On the one hand, the international market has increased its demand for green environmental protection. On the other hand, the green barrier has imposed restrictions on some high-energy-consuming and highly-polluting industries, forcing domestic Enterprises in the production process pay more attention to resource conservation and environmental protection, which also objectively promote the demand for energy-saving environmental protection products and services.

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