The Green Economy Review: Volume 13. December, 2011
In this issue:
The COP 17 climate talks, held in Durban South Africa triggered the release of numerous reports from across the globe. Among the more notable:
- The International Energy Agency released their flagship World Energy Outlook. Among other things, the report states: “We cannot afford to delay further action to tackle climate change…Delaying action is a false economy: for every $1 of investment avoided in the power sector before 2020 an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions.”
- According the Bloomberg New Energy Finance, 2011 will go down as the year renewables overtook fossil fuels in terms of new investment. According to BNEF, electricity from the wind, sun, waves and biomass attracted $187 billion last year compared with $157 billion for natural gas, oil and coal.
- Bloomberg New Energy Finance also released its Global Renewable Energy Market Outlook, which concluded that global investment in renewable energy will double by 2020. BNEF predicts that investments will slow in Europe, stay steady in North America and grow rapidly in China, the Middle East and Africa.
- The European Environment Agency (EEA) projects that renewable energy capacity will expand significantly in coming years. They predict offshore wind energy capacity will increase near 17-fold between 2010 and 2020, and solar, tidal and wave power capacity is expected to increase 11-fold.
- A recent report from the International Energy Agency titled Deploying Renewables 2011 found that renewable energy is fast approaching parity in many markets. The report also questioned claims that renewable energy is only viable through costly subsidies and not able to produce energy reliably to meet demand.
- World Wind Energy Association released its half-year report, which found that the markets for wind energy grew substantially during 2011. According to the report, global wind capacity grew by 22.9 percent over the past year.
- Siemens Energy reportedly captured a sizeable share of this market, with 293 orders for wind turbines, valued at over $900 million with a combined capacity of 673 megawatts.
- A piece from U.S. think tank, the Brookings Institution, argues that although a U.S. carbon tax faces numerous political barriers, there is a strong economic case for such a tax if the government wishes to deal with deficits while tackling climate change.
- Although Canadians may associate the recent APEC talks with the push to diversify markets for tar-sands oil, at the most recent session APEC's 21 member economies vowed to phase out inefficient fossil fuel subsidies and promote green growth across the region.
During November, there were also a number of projections for green jobs growth as a result of green economic development strategies. For example:
- South Africa’s Minster of Water and Environmental Affairs said that the pursuit of a green economy is expected to create 300,000 jobs over the next five years. A subsequent report sponsored by the Industrial Development Corporation, Development Bank of Southern Africa and Trade and Industrial Policy Strategies concluded that the opportunity is even greater, and green development in South Africa has the potential to create 462,000 direct jobs by 2025.
- A report released by the China Council of International Co-operation on Environment and Development found that China could net 9.5 million jobs in the next 5 years if it shifts away from fossil fuels and moves aggressively toward clean, renewable energy and other green businesses.
- A recent report from the World Economic Forum on the green building and retrofit market found that Australia has the most mature market to date. The report emphasizes the substantial energy savings potential in inefficient buildings and makes a strong call to action. It also quotes McKinsey & Company’s estimate that energy efficiency measures including retrofits could lead to the creation of 600,000-900,000 green jobs and $400 billion in investment the United States alone.
- Australia’s carbon tax will likely create green jobs according to a recent report from that country.
- A report from the U.S. concluded that increasing the national recycling rate to 75 per cent could create nearly 1.5 million jobs.
- However, the good news was tempered by reminders that governments must also invest in their workforce if they hope to realize the benefits of the green economy. In that vein, the International Labour Organization released a report last month, Skills for Green Jobs: A Global View, which after examining the experiences of 21 developed and developing countries, concluded that skills development is critical to unlocking the employment potential of green growth, yet skills shortages are becoming an obstacle in realizing this potential.
Renewable energy and other clean-tech continue to recruit impressive sums of money, both private and public. Some examples:
- Canadian renewable energy firm Morgan Solar closed a second tranche of funding, securing an additions $28.8 million.
- Enbridge made its first foray into the Quebec wind energy market with a $330-million, 50 per cent stake in a 300 megawatt wind farm.
- Green energy company, Ecotricity, is launching a new £10 million bond scheme to fund investment in renewable projects in the U.K. This is the second such offering, after the previous one was oversubscribed.
- General Electric’s Jeff Immelt expressed concern that the U.S. may lose ground to China in the renewable energy race if it doesn’t match their investments in solar, wind and other technologies. Bill Gates echoed Immelt’s comments, calling for US government to triple its investment in green technologies to $16bn annually.
- The European Investment Bank has agreed to provide £400 million to a U.K utility to better manage their water and wastewater systems and account for the expected effects of climate change.
- China unveiled a plan to spend over $1.5 trillion on green energy, transportation and advanced manufacturing.
- Philippines-based True Green Energy Group’s total capital investments rose to over 2.5 billion Euros.
- The U.S. Department of Transportation announced $112 million to help fleets purchase low-carbon vehicles such as hybrid buses and to upgrade facilities for energy efficiency and renewable energy.
- South Korea announced plans to invest $30 billion in green energy in a bid to boost exports and employment and capture a 10 per cent share of the global market by 2020.
- Scottish Chancellor George Osborne announced an additional £100 million to support green energy projects in Scotland
- The Bank of America agreed to finance SolarCity’s Corp $1 billion solar rooftop project for military housing.
- Panasonic announced plans to spend $582 million to build a solar manufacturing plant in Malaysia. When complete, that plant will have an annual production capacity of 300 megawatts and employ 1,500 people.
A number of important policy announcements were made over the last month.
- European politicians may revisit raising the EU’s target to cut carbon emission up to 30 percent from current levels of 20 percent.
- In order to achieve its target of 14 percent renewable energy by 2020, the Dutch government announced plans to increase the amount of money available for green energy to 1.7 billion euros in 2012, from 1.5 billion euros in 2011.
- Denmark is reportedly looking at offshore wind turbines as a key component of their plan to wean the nation from fossil fuels, and derive 100 per cent of their electricity from renewable sources by 2050.
- The Renewable Heat Incentive, which offers subsidies to support the use of renewable energy for heating, was officially launched in the U.K, following a two month delay.
- Myanmar called on developed nations to share their green technologies and expedite the progress of developing nations in pursuit of a green economy.
- The small African nation of Lesotho is investing $ 15 billion in hydro-electric power stations and wind farms to provide an example of how investing in renewable energy can boost a country's economic outlook.
- The Nigerian Government reiterated its commitment to shift from its current reliance on fossil fuels toward more renewable energy.
- Ethiopia officially launched their green economic strategy. Estimated at $150 billion over 20 years, the program aims to grow Ethiopia’s economy without increasing greenhouse gas emissions.
- South African President, Jacob Zuma, committed to install a million solar heaters by the end of the 2014 as part of their strategy to develop a green economy.
- The UN and China jointly launched the The International Ecosystem Management Partnership, a programme to promote ecosystem management in developing countries.
- The South African government lauded labour, business and civil society representatives for signing onto the Green Economy Accord, which they said strengthened the countries position at COP17 in Durban.
- Governments and civil society representatives in the Mekong Region of South East Asia gathered to discuss ways to move toward a more prosperous and equitable green economy.
Not surprisingly, clean-tech companies continue to innovate. Of interest:
- Companies are working to develop a floating solar plant, which would float behind hydro-electric dams and mitigate concerns about land shortages or inappropriate use of agricultural lands.
- Recycled plastics are increasingly being used to mount solar panels.
- Wind turbines are also benefitting from innovation, with plans both to commercialize smaller windmills and “gargantuan” 7 megawatt turbines.
- A German company is looking into converting abandoned coal mines into pumped hydro plants capable of storing renewable electricity.
- Air travel is another area where innovation is coming to bear in the interests of smaller carbon footprints. Last month, an “Eco Skies” test flight, powered by a blend of petroleum and 40 per cent biofuel, flew from Houston to Chicago.
- Innovation is also touching renewable energy finance, most recently with The Royalty Exchange’s inclusion of $2.5 million in solar royalties on their royalty auction site.
2011 may go down as the year the green economy went mainstream, if the coverage in Forbes is any indication. Last month alone:
- Forbes reported that the debate as to whether anthropogenic climate change is occurring is largely over after a study commissioned by climate skeptics, including the Koch Brothers, confirmed the findings of reports from the IPCC and others.
- Another article in Forbes made the case that U.S. Secretary of Energy Steven Chu’s bid to transform the nation’s energy system from a carbon intensive and inefficient one to a low-carbon and efficient system is likely to succeed.
- Nobel Prize-winning economist and New York Times columnist Paul Krugman argued that solar energy is poised to transform our energy system, prompting a response from a columnist at Forbes who added to Krugman’s argument and made the case that solar is crucial, but only one piece of a sustainable economy needed in the future.
- Still another piece in Forbes suggested that people laid off from Wall Street should join the green economy and pursue a less lucrative but more rewarding life as ecosystem financiers.
- Finally, a Forbes contributor argued that although solar stocks have been volatile of late, in the long run there’s a big upside and the industry will grow and likely accelerate.
As always, there were a number of developments that are difficult to categorize: Among the notables:
- Bill Clinton, keynote speaker for the eighth annual Ontario Economic Summit, praised Ontario and advised the province continue to subsidize renewable energy and welcome its “next great era.”
- TD Bank Group announced the opening of the first net-zero energy bank branch in Canada.
- B.C. introduced rebate for alternative vehicles powered by electricity, hydrogen or natural gas, worth between $2,500 and $5,000.
- Quebec-based Fabrication Delta is reportedly contemplating building a wind tower manufacturing plant in Thunder Bay.
- Tech giants seem to be in race to out-green each other. Both Google and Intel were among the winners for the EPA’s "Green Power Partner of the Year" award, and IBM, Facebook and Apple are each developing solar power projects.
- The Green Economies Dialogue was officially launched in New York, and in London the Ecosystem Markets Task Force was launched. Both aim to convene industry leaders and experts to discuss ways in which businesses can improve both environmentally and financially.
- Locked out NBA players are promoting solar energy.
- The U.S. is reportedly looking to double auto fuel economy by 2025.
- A recent report from the European Environment Agency (EEA) puts the costs of air pollution from the 10,000 largest emitters at € 102 and 169 billion in 2009. Half of the total cost can be attributed to just 191 facilities.
- The McKinsey Global Institute issued a report called Resource Revolution: Meeting the world’s energy, materials, food and water needs, which argues that the next twenty years will be different from the past, opening up a number of threats and opportunities.