mental business activity in the Middle East also grew by 21.9 %, albeit from a very low base, but the region still lags behind other regions of the world except Africa, accounting for only 2.8 % of the global market value for environmental business in 2011, up from 1.3 % in 2000. Even so, the major markets for environmental technol- ogy and services in the Middle East are concentrated in a handful of countries, prin- cipally Turkey, Egypt, and the UAE (EBI, 2011). Turkey, in particular, has made tremendous progress in overhauling its environmental laws, which have helped to build a sizeable environmental market with an estimated value of US$ 580 million in 2004, and Turkish firms are now taking corrective steps to improve their environ- mental management systems, in accordance with ISO 14001 standards.
5.3 Global Environmental Business Segments
As stated earlier, environment technology business can be classified into three broad segments: services, equipment, and resources. The services business is con- cerned with rendering services that generate revenues in the form of fees while the equipment business deals with supply or sales of specific hardware. On the other hand, the environmental resources business primarily revolves around clean energy and water utilities. Together, these three broad environmental technology categories have a total of 14 business investment opportunities, fashioned along the lines of the Standard Industry Classification (SIC) or harmonized code systems (EBI, 2011).
The global market of environmental technologies has, for long, been dominated by the services business, followed by resources. For example, in 2010, the global market value of environmental services stood at US$ 370 billion, while those for resources and equipment stood at US$ 284 billion and US$ 150 billion, respectively (Fig. 5.2). All three broad environmental business categories have experienced pe- riods of strong growth during the past decade or so, with the resources business experiencing the fastest growth record. For example, during the decade 2000–2010, the global business in environmental resources grew by 98 % (8.9 % per annum), while services expanded by 40 % (3.7 % per annum) during the same period. En-
118 120 123 130 137 143 148 154 159 147 150
276 285 293 302 318 329 339 349 363 362 370
144 145 153 162 171 190 217 247 261 267 284
0 200 400 600 800 1000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
US$ Billion
Equipment Services Resources
Fig. 5.2 Global market value of environmental technologies by business segments. (Source: EBI (2011))
122 5 Environmental Business Channels
vironmental technology equipment business, however, grew at the slowest pace of 28 % between 2000 and 2010 or 2.55 % per annum.
The increasing importance of environmental resources is reflected in its growing market share, from 27 % of the global market of environmental business in 2000 to 35 % in 2010. In contrast, business activities relating to environmental services experienced a slump in market share, from 51 % in 2000 to 47 % in 2010, while that for environmental equipment also fell by a smaller margin, from 22 % in 2000 to 19 % in 2010 (Fig. 5.3).
Based on current trends, the global business for environmental resources is likely to overtake that for environmental services by 2020 as the most dominant envi- ronmental technology market (Fig. 5.4). And, by the year 2030, the environmental resources market (clean energy, water utilities, and material recovery) will account for 46 % of the forecasted US$ 1.3 trillion global market value of environmental goods and services, while environmental services and equipment technologies will account for 39 % and 15 %, respectively.
There is paucity of data on the 14 environmental business segments by countries/
regions, except the USA, which has an extensive set of historical data on these seg-
538 549 569 594 626 662 704 750 782 776 803
400 450 500 550 600 650 700 750 800 850 900
10 15 20 25 30 35 40 45 50 55 60
1 2 3 4 5 6 7 8 9 10 11
$ Billion
% of Total
Total, $Bn(RHS) Equip (%) Services (%) Resources (%) Fig. 5.3 Global market for environmental technologies. (Source: EBI (2011))
1000 200300 400500 600700
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
US$ Billion
Equipments Services Resources Fig. 5.4 Market size of global environmental technologies. (Actual and forecasted values)
123 5.3 Global Environmental Business Segments
ments. Table 5.2 provides detailed information on the market value and growth rates of environmental technology business in the USA. All business segments across the three broad sectors (equipment, services, and resources) have exhibited tremendous growth over the past four decades, albeit with considerable variation across sectors.
During the decades of the 1970s and the 1980s, the fastest growing environmen- tal technology businesses were in the services segment. These include remediation/
industrial services, hazardous waste management, and consulting and engineering.
Both remediation services and hazardous waste management services grew by a whopping 550 % each during the 1970s, but in the 1980s the market value of re- mediation services in the USA increased by 19-fold while that for hazardous waste management grew by ninefold.
Since the 1990s, however, the focus shifted dramatically to business activities in environmental resources technology, as the fastest growing businesses were found in that segment. Clean technology business, in particular, witnessed significant up- surge during this period. For example, the market value of the US environmental resources technology grew by a massive 733 % during the 1990s and by 155 % between 2000 and 2010 (Table 5.2). It is, therefore, not surprising that, up till now, the environmental resources segment continues to attract investors’ attention due to America’s frantic effort to wean itself from reliance on fossil fuel, imported largely from the Middle East.
Outside the USA, countries in the European Union (EU) are the most active participants in the global environmental technology market. However, disaggre- gated data on the 14 environmental market segments are not available for the 27 EU member countries despite the fact that they are well ahead of the USA in terms of the deployment of government incentives to clean technologies. Data limitations are also visible in the rest of the world although patchy and dated information on the environmental business channels can be found for China, Japan, Australia, Africa, and the Middle East (Table 5.3).
In the Asia and the Pacific region, China is the most dominant and vibrant market for environmental business. The biggest environmental market in China is that for water equipment and chemicals, followed by water utilities and solid waste man- agement services (Table 5.3). This is not surprising given that China’s daunting environmental challenges emanate from poor water quality and water supply con- straints coupled with the choking air pollution in its major cities. It is reported that the Chinese government spends around US$ 2.3 billion (equivalent to 0.7 % of its GDP) annually on environmental protection. This may, however, be grossly inad- equate to tackle environmental degradation in China, as the costs of pollution and ecosystem damage amount to about 9 % of GDP (EBI 2011).
Another major environmental technology market in Asia is Japan. Even though it lags behind China by a considerable margin, Japan’s environmental technology business activity is largely concentrated in the services and resources segments, led by solid waste management, water utilities, and resource recovery. However, at the top of Japan’s environmental needs is air pollution control arising from manufactur- ing facilities. In essence, ‘air pollution control represents a significant component of
124 5 Environmental Business Channels
19701980
1970– 1980 Growth
1990
1980– 1990 Growth
2000
1990– 2000 Growth
2010e
2000– 2010e Growth
ServicesUS$ MnUS$ Mn%US$ Mn%US$ Mn%US$ Mn% Analytical services0.10.43001.53141.671.920 Wastewater treatment works4.39.211619.811630.05244.548 Solid waste management3.28.516426.120842.06158.840 Hazardous waste management0.10.65506.39218.0279.721 Remediation/industrial services0.10.45508.51,81310.01813.737 Consulting and engineering0.31.536712.576118.04428.860 Equipment Water equipment and chemicals3.26.911713.59520.04832.663 Instruments and information systems0.10.21002.08204.01006.050 Air pollution control equipment1.03.019610.725818.06819.16 Waste management services2.04.010510.71599.6(8)11.519 Process and prevention technology0.00.12590.44181.22002.070 Resources Water utilities5.711.910919.86733.06742.328 Resource recovery (recycling)1.24.428313.119718.03725.542 Environmental energy sources0.31.54201.81515.073338.3155 USA total:US$ 21US$ 53145US$ 146178US$ 22856US$ 33546
Table 5.2 Market values and growth rates of environmental technologies in the USA (1970–2010). (Source: http://www.docstoc.com/docs/54032745/ Environmental-Market-Outlook-to-2010-Market-Development)
125 5.3 Global Environmental Business Segments
ChinaJapanAustralia and NZAfricaMENA Market segment1997200020042008200420082004200820042008 Equipment9701,4405.25n.a.1.20.81.30.81.4 Water equipment and chemicals39058032.8n.a.0.50.10.20.61.2 Air pollution control1402100.90.9n.a.0.10.10.10.20.3 Instruments and monitoring systems1001507.56.8n.a.0.70.30.50.30.6 Waste management equipment50700.50.5n.a.0.10000.1 Process and prevention technology Services60089029.827.1n.a.2.30.71.21.42.6 Solid waste management1201803.83.4n.a.0.40.10.10.40.7 Hazardous waste management1502201.21.1n.a.0.90.30.40.40.7 Consulting and engineering30400.783.4n.a.1.10.30.52.44.5 Remediation40600.50.5n.a.0.10.10.10.10.1 Analytical services5408009.99.1n.a.20.40.70.61.1 Water treatment works Resources61090012.711.7n.a.2.21.85323.9 Water utilities101010.210.5n.a.0.60.30.50.20.4 Resource recovery0.50.30.60.20.4 Clean energy systems and power3,7505,55085.9882.85n.a.12.75.59.19.418 Total (US$ millions) MENA Middle East and North Africa, n.a. not applicable, NZ New Zealand
Table 5.3 Market value of environmental technology in rest of the world (US$ million). (Source: EBI (2011))
126 5 Environmental Business Channels Japan’s environmental investment, which is the largest in Asia and the third largest in the world, approaching US$ 100 billion annually’ (EBI 2011).
The environmental markets in other regions of the world are miniscule but are growing rapidly albeit from a low base. For instance, in the Middle East and Africa regions, the size of the environmental market has nearly doubled between 2004 and 2008 (Table 5.3). Within the Middle East region, however, the market is largely dominated by Turkey, Egypt, UAE, and Saudi Arabia. The bulk of business activity in the Middle East is concentrated in water utilities and remediation, reflecting the overriding significance of water in the region.