GELLERMAN: It's Living on Earth, I'm Bruce Gellerman. While China's economy is booming, its environment is paying the price. The nation's air and waterways are choking with pollution ? industrial waste is poisoning the population, and coal, which provides 70 percent of China's energy, has helped turn it into the world's largest emitter of greenhouse gases.
But now, China's leadership is trying to clean things up, hoping to increase industrial energy efficiency by 20 percent, with a healthy dose of clean technology. The effort has caught the eye of some savvy investors as Elise Potaka reports from Beijing.
[SPRINKLER SOUNDS, AIR CONDITIONER POWERING UP]
POTAKA: As the days turn warmer in Beijing, air conditioners, which now line the sides of most buildings, come to life.
On this summer's hottest days, many Chinese cities, will struggle to cope with the rising energy demands of the country's increasingly affluent citizens.
The International Energy Agency predicts that China's electricity production will double in the next ten years.
[CROWD SOUNDS, VOICES SPEAKING MANDARIN]
POTAKA: But for China's 1.3 billion people, this demand also offers opportunity, one which could give them a cleaner, greener future.
Across the world, investors and entrepreneurs are starting to see dollar signs attached to China's struggle to reduce energy consumption and clean up its environment.
[HOTEL LOBBY SOUNDS]
POTAKA: David Wu checks his emails and sips a cool drink in the lobby of one of Beijing's upmarket hotels.
Since he returned from studying abroad, David's rarely had time to sit still.
In the last 12 months, his new company, Netpower, has closed ten million dollars in deals for affordable batteries he says can be used in both residential and industrial situations.
WU: By using electricity storage, we can use the electricity in off-peak hours, and store it, and make it to be released into the grid in the peak hours.
POTAKA: David Wu's company has developed a zinc battery, which he says costs him less to produce than other batteries on the market.
He hopes the affordability will also appeal to electrical utilities and allow them to buy more power from renewable sources.
WU: For the wind, for solar, they're essentially not a stable source. Uh, so the utility company has a lot problem by handling those unstable electricity inputs. By using storage solutions we can essentially stabilize the output for wind farms and for the solar farms.
POTAKA: David Wu is just one of China's new cleantech entrepreneurs.
Behind these entrepreneurs is a growing pool of money, much of it supplied by overseas venture capitalists.
Between 2005 and 2006, cleantech investment increased by 147 percent reaching around 420 million dollars and analysts predict this trend will continue.
MAHONEY: We're developing the community of investors, companies, entrepreneurs that are interested in clean tech, and we're bringing them together.
Jim Mahoney is the managing director of Cleantech Group China, a company, which links those with money to those with green technology ideas.
MAHONEY: We are accelerating the purchase and adoption of these clean technologies by industries at large, which, as you increase that scale, you can lower costs, you can speed up the return to investors and the whole cycle speeds up and grows from that.
POTAKA: Currently, the global Cleantech Group claims over 8,000 investors and 6,000 companies across a wide range of projects.
MAHONEY: Water applications for conservation, for treatment for reuse and recycling are, is a very, very important area. Biodegradable plastics was another one, I thought, wow!
POTAKA: An office block is under construction in Beijing's rapidly expanding Central Business District.
With labor and construction costs low, China is also turning out to be a major player in the market for carbon offsets.
That's where companies in the developed world get credits for reducing greenhouse gas emissions in the developing world.
China is already the top supplier of credits, and foreign investors and companies are keen to get in.
On the northern edge of the Central Business District are the offices for Camco China, a joint venture, which is responsible for offering about 30 percent of China's carbon credits.
Managing director, Alan Ho.
HO: There are two major areas that we help in this sector. One is energy efficiency, where we help the enterprise to save using energy. Another one is to find alternate energy sources, renewable and new energy.
POTAKA: But while carbon credit projects are generally well monitored here to ensure their environmental benefit, there are some concerns about other clean technology investments.
Investors are backing environmental technologies, which are cleaner than what's currently in place, but some environmental groups want the standard to be higher.
[VOICES, SOUND OF DISHES IN OFFICE KITCHEN]
POTAKA: At the Greenpeace Beijing office, employees have a coffee break and take in the 19th floor view across the city. On a good day, the view's spectacular. On a not so good day, the heavy brown haze of pollution is clearly visible.
Greenpeace has just started a green investment campaign.
TAM: Our financial leg to support this work is to ask investors to channel their money from nuclear, from coal fired power plants that create more emissions than we can afford, ah to renewables, like wind and solar.
POTAKA: Campaigner Man Kei Tam says Greenpeace would like to see investors backing renewable and new energy over, for example, reducing emissions in a new coal-fired power plant.
By making direct contact with potential investors, Greenpeace wants to convince them to back the most environmentally friendly options.
They'll also target investors here in China who've been much slower than their international counterparts to invest in clean tech and green projects.
Man Kei Tam says it's about convincing people that protecting the environment will save them money.
TAM: It's like, the environment can be a risk to them, that effects their financial bottom lines. Say, for example, a factory if it pollutes a river, they will be asked to close, their license can be suspended, they will be fined billions of dollars and all these are related to financial performances, this is economic, it's not just some moral concerns.
POTAKA: For Living on Earth, I'm Elise Potaka in Beijing.