Environmental protection input curve refers to the changing curve of the proportion of environmental protection input in GDP of a country along with economic development. Then, how about the development trend of China’s environmental protection industry?
1.There are still 3-5 times of improvement space for environmental protection investment in the future.
Compared with USA in terms of environmental protection statistical data, China is of “Large-scaled environmental protection + Energy conservation”, with pure environmental protection investment accounting for about 50% of data of the National Bureau of Statistics after removing exaggeration and accounting for 0.72%-0.88% of GDP. According to environmental Kuznets curve theory, environmental protection is divided into three phases, accounting for 0.8%, 3.0% and 1.5% of GDP respectively. Since environmental protection investment data accounts for about 0.8% of GDP after modification, which still remains in initial period of environmental protection investment, it is expected to increase 1.9-3.9 times of the current data in future market at most, accounting for 1.5% and 3.0% of GDP respectively. In consideration of 7% yearly GDP increase speed of China and calculated by assuming that the highest GDP ratio will be achieved after 5 years and get stable after 10 years, total environmental protection investment market will reach 3.7-5.3 times of the current data.
2.Policy implementation and supervision strength will be leading indicators for investment
Environmental protection standards of China are similar with those in Europe and America, so are policy release. However, supervision strength and implementation are not satisfying. Therefore, development of China’s environmental protection industry is greatly influenced by “policy implementation + supervision strength” and government finance strength will be an important leading indicator of environmental protection investment.
3.Environmental protection may not be that prosperous, while it can be expected in 2015
As is shown by data released by National Development and Reform Commission, financial expenditure on water treatment in China this year may be greatly reduced, and it is planned to be only RMB 28.24 billion in 21 provinces, reduced by 41%, 35% and 34% respectively in invested projects, sewage treatment capacity and total investment amount compared with total investment amount of RMB 42.588 billion in the same 21 provinces. Considering that domestic economic situation this year is relatively severe with less financial expenditure and that not many policies for environmental protection may be expected this year, the Ten Policies for Water Treatment and other environmental protection policies may fail to reach the expectation. However, environmental protection governance is pressing and not so many policies in 2014 just embody delayed implementation of policy bonus, which can be re-expected in 2015.
Next up:RMB 300 million of Market Size for Denitration Catalyst Regeneration is Expected.
