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The Green Imperative: How Viable is the Indian Market?
The impact and cost of climate change on both the economy and the environment has understandably caused concern globally, and created a huge market for eco-friendly alternatives. From organic food, energy efficient lighting, and laundry detergents to household cleaners and hybrid cars, several ‘green products’ are available in the market. Typically, green products:
The Global Market
The global market for environmental products and services is predicted to double from $1.37 trillion a year at present to $2.74 trillion by 2020 (WRI and UNEP). The U.S. market for green building products alone is estimated to be in the range of $97 to $287 billion annually by 2015. One of the biggest imperatives in managing climate change risks is to find alternatives that not only reduce the primary energy demand but also use alternate and renewable energy sources such as solar, wind and biomass that do not emit CO2 and hence cause less pollution. Renewable energy is thus, a huge market across the globe. WWF research points out that between 2000 and 2008, the wind energy market grew 24% a year worldwide; biodiesel grew 31% and solar 53%. It predicts a total market volume of EUR 1600 billion a year in 2020 for energy efficiency products and renewable energy technologies, making it one of the largest industries in the world. Not surprisingly, investment in this market is growing. According to GBI research’s report on “Renewable Energy Investment Opportunities in Emerging Economies”, investments in renewable energy across the globe increased from $39.24 billion in 2001 to $336.78 billion in 2009 at a CAGR of 30.8% during the period 2001-09. It also forecasted an increase in investments and expects it to reach $653.35 billion by 2015. Investments in emerging nations increased from $1.76 billion in 2001 to $65.86 billion in 2009 at a CAGR of 57.63% for the period 2001-09, largely driven by government support. The Indian Context India is a growing economy with a projected annual economic growth rate of 8-9%. This means that the energy appetite of the country will only expand. Its primary energy demand is expected to be more than double by 2030. Then again, the country has an enormous rural population that is directly dependent on climate sensitive resources — the forests, agricultural land and grasslands. Owing to several initiatives taken by the government to attract investments, India is the most developed and diversified renewable energy market in South Asia. The country already has an investment of about $1 billion in wind, solar, and other sources of clean energy. However, this renewable energy accounts for less than 1% of all electricity produced in the country, leaving a huge untapped market. Apart from renewable energy, green building material and technologies is a huge market with a projected market potential of $40 billion by the year 2012. India is also the third largest market for low-carbon and ‘green’ goods. Recent estimates indicate that green spending in India could reach $150 billion by 2017. Indian consumers are particularly inclined to seek green products and favor companies they consider green. 78% of Indians surveyed in 2009 by WPP agencies, Cohn & Wolfe, Landor Associates and Penn, Schoen & Berland Associates (PSB) as well as independent strategy consulting firm Esty Environmental Partners said they would spend more on green products. India and Brazil were the only two of the seven countries surveyed in which consumers express more concern for the environment than for the economy. Substantiating this is the recent Accenture 2010 Consumer Electronics Products and Services Usage Report that states that emerging market consumers are significantly more willing than their developed-world counterparts to pay a premium for consumer electronics products touted as environmentally friendly. Nearly 84% of consumers in China, India, Malaysia, and Singapore say they would accept a higher price for green products, compared with only 50% in the U.S., Japan, France, and Germany. Climate Change: A Big Opportunity Climate change that once evoked perennial gloom has now turned into an investment boom with huge market potential, especially in developing countries such as India. With measures being taken and strengthened by the Indian government and consumers’ knowledge on green issues and desire to be ‘green’ growing, the opportunity for green leadership exists in every category in the country.
Editor's note: Most articles submitted to Chillibreeze go through a selection process. Only 30 percent of submitted articles are accepted for publication on the Chillibreeze.com featured article list. All accepted articles are edited and proofread for glaring errors of punctuation and grammar. Sentence structure is changed in certain cases and sometimes, entire sections are rewritten. If you notice any errors that have slipped through the cracks, do let us know! (Email us at info at chillibreeze dot com). Chillibreeze's disclaimer: This is a contributed article and was published on Chillibreeze in June, 2010. The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article. The relevance of the facts and figures cited (if any) could change after a period of time.
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