Earlier this July (2008), when the crude oil prices had started heading north and peaked around $147 per barrel, there was a wide hope in the clean energy lobby that, perhaps finally now, the world had a financial justification to vigorously pursue development of clean energy alternatives.
The energy shock has galvanized everyone into finding alternatives, more so from the renewable sources and perhaps at a cheaper price point.
However, the financial meltdown, according to International Science Panel, poses a grave threat to efforts to turn back greenhouse gas emissions -- but it doesn't have to be that way, says the head of the international science panel that has authoritatively outlined the challenge for government policymakers.
It's crucial that carbon dioxide emissions that are on the increase be sent in the other direction by 2015, so the way to go is to use the current economic troubles to launch a recharged effort to rein in climate change, led by the next U.S. president, said R.K. Pachauri, chairman of the Intergovernmental Panel on Climate Change. Read more about his comments here.
Ramesh Jaura – also talks about the same theme - Enter the global financial crisis - exit action on climate change? According to him, that lingering apprehension is not shared by Pamela Cox, the World Bank's vice-president for Latin America and the Caribbean.
Adam Stein – discusses the same issue. According to him – “Although it is very difficult to make predictions about the direction of the economy, it appears likely the current downturn will continue for some time. Which is bad for the climate, mainly because of the way that a weak economy interacts with the other items on the list. For example, slow growth saps the political will for dramatic action on climate change”.
A weak economy could at least temporarily bring fossil fuel prices down. We continue to believe that the long-term trend in fossil fuel prices is up, up, up, but, as mentioned, volatility will muddy the investment picture for clean energy.
Margaret Kriz – talks about how financial crisis is dimming the hope for U.S. Climate Legislation. “Environmentalists had been looking to a new president and a new Congress to pass legislation dealing with global warming next year. But with tough economic times looming, the passage of a sweeping climate change bill now appears far less likely”.
However, the jury is still out on this issue.
Clean and green technologies may end up a big winner in the current global financial crisis, say some investment professionals.
Billions of dollars in new investments have been made in clean/green tech such as renewable energy and energy efficiency in recent years. And, despite fears of a major recession in the U.S., nearly all investment professionals and institutions reported plans to introduce new investment opportunities before the end of 2009, according a new survey of the 500-member Social Investment Forum (SIF), an association for socially and environmentally responsible investment firms.
"In the last two years the growth in the green economy has been tremendous," said Jack Robinson, president of Winslow Management Company in Boston.
"But the huge win for the green economy is the U.S. bank bailout programme," Robinson, a green investment expert, told IPS.
It turns out the near collapse of the U.S. financial system has a silver lining for the long-cash-starved alternative energy sector.
Another reason for green investor optimism is the virtual certainty that the U.S. will have a carbon cap and trade system by 2010 at the latest.
"The new Congress will regulate carbon emissions. The costs of fossil fuel will finally begin to reflect the costs of climate change," said Adam Seitchik, lead portfolio manager of Green Century Balanced Fund, and chief investment officer of Trillium Asset Management, Boston.
"Despite the credit crisis, the fundamentals of clean energy are so strong, they will find financing," Steitchik said in an interview.
Companies producing solar products have seen their revenues grow 60 to 140 percent this year and expect to reach 45 to 200 percent in 2009. One company, SunPower Corp., will see 2 billion dollars in sales in 2009, he said.
Although solidly profitable, the stock prices for these companies have plummeted just like all the others on Wall St. However that means they are terrific investment opportunities even if their earnings decline due to slowing economies and the credit crisis, he said.
"As energy prices continue to fluctuate and the need to address climate change becomes ever more urgent, many investors want to blaze a trail for clean energy solutions that meet demand and respond to the impacts of climate change," said Lisa Woll, chief executive officer of the Washington, D.C.-based SIF.
But if every dark cloud has a silver lining there's one over here as well...albeit it looks like a green one.
Tighter purse strings could (and already is) forcing the world to save energy and look at alternative options to stretch the dollar. Bjorn Lomborg, Danish author of 'The Skeptical Environmentalist' echoes, "Hopefully the crisis will make us smarter in spending our money."
There could be a perceptible shift in investments towards energy efficiency. More low scale and down to earth projects may reap the benefits. Consultants McKinsey & Co. opine that emissions-cutting measures such as better building insulation, fuel efficiency in vehicles, more efficient lighting and air conditioning end up paying for themselves via lower energy bills. More optimistically, if a bad economy fuels a grassroots green movement then that itself would be a big shift towards greener attitudes.
Some are still on the path of continuous investments. Sven Teske, renewable energy director for environmental group Greenpeace, said investments still made sense. He said that the wind energy market totaled $37 billion in 2007 and added more than 19 gigawatts to the grid.
The U.N. Climate Panel has estimated the costs of slowing climate change at only 0.12 percent of world gross domestic product to 2030, with vast benefits in avoiding human suffering. That is small change but the world is feeling an instant economic pinch right now. Are we losing sight of the forest by looking at the trees? Hopefully not, otherwise the battle to save the planet could turn into a war...too late
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