Growing the world economy through the new green industries
by Ray Block
To coincide with the International Scientific Congress on Climate Change, which recently took place in Copenhagen (March 10-12 2009), Peter Lund of the Helsinki University of Technology’s Advanced Energy Systems in Espoo, Finland presented findings om “Renewable Energies: How far can they take us?”
“Our findings demonstrate that with global political support and financial investment, previous notions that the potential for renewables was in some way limited to a negligible fraction of world demand were wrong. If we prioritize and recognize the value of renewable energy technologies, their potential to supply us with the energy we need is tremendous.”
Previous projections put renewables’ share of world energy at only 12 per cent by 2030. “But with adequate financical and political support , renewable energy rechnologies like wind and photovoltaics could supply 40 per cent of the world’s electricity by 2050.”
Environmental News Network (March 11 2009) reports that Erik Lundtang Petersen of Risoe DTU’s Wind Energy Department in Roskilde Denmark said that in order for the wind sector to deliver its full potential, it must focus on efficiently delivering, installing and connecting large amounts of wind power to the grid, with strong concern for reliability, availability and accesibility of the turbines.
“We have identified specific areas of priority for the wind sector to effectively deliver the overall objective of cost reductions. Research areas including turbine technology, wind energy integration and offshore deployment will be crucial to maximising future growth.”
Biofuels and biomass were similarly covered at the meeting.
With the opportunities in renewable energies and energy efficiencies as a background, it is disappointing to record that the latest estimates of new venture capital to these industries in the March quarter 2009 was only US$1 billion, down 41 per cent from the December quarter 2008, and down 48 per cent from the March quarter 2008. The survey by the Cleantech group covered 82 companies in North America, Europe, China and India.
“Cleantech financing is moving into a new phase, characterized by diversified funding sources, as the global recession and liquidity issues impact venture investors. Venture funds continue to invest significant sums, albeit at a slower pace and smaller scale than in the past two years,” said Brian Fan, senior director of research, Cleantech Group.
An attempt at weighing up the consequences of the large scale financings by the major countries in trying to restart the stalled world economy was commissioned by the consultancy E3G and WWF. The actual study “Economic/climate recovery scorecards” of how climate friendly are the economic recovery packages was prepared by ECOFYS and GermanWatch, and is dated April 2009.
The conclusion from examining $1.1 triillion of stimulus packages so far released by USA, European Union, Germany, France, Italy and United Kingdom, is that on an “effective adjusted climate friendly expenditure (basis) amounts to just $73 billion – a tiny share (6.6 per cent) of the total stimulus”
The comparison is to another E3G report “Delivering a Sustainahle Low Carbon Recovery” -which called for at least 50 per cent of stimulus packages should be focused on climate friendly investment. The bottom line is that the “economic recovery packages put forward by many countries amount to a large amount of money, some of which may have a beneficial impact on greening the global economy.
“But many packages are woefully small, few contain adequate detail for full assessment and some indeed are actually counterproductive, if the aim is to move rapidly to a low carbon economy in the face of the climate crisis.”
The overall conclusion from these studies is that a lot of money has been misdirected. There is a great similiarity between the 1880s boom and the1890s period of deep depression, which culminated with the growth of two major industries- electrical supply and the beginnings of motor vehicles, and the present time, where the renewables will be the growth engines of the future.
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