The Green Economy Review: Volume 13. December, 2011

In this issue:
In the lead up to Durban
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.”
  • 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.
  • 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.
Green Growth equals Green Jobs
During November, there were also a number of projections for green jobs growth as a result of green economic development strategies. For example:
  • 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.
  • 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.
Investment in the Green Economy
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.
  • 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.
  • Philippines-based True Green Energy Group’s total capital investments rose to over 2.5 billion Euros
  • 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.
  • 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.
Policy Developments and Targets
A number of important policy announcements were made over the last month.
In Europe:
  • 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.
  • 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 Nigerian Government reiterated its commitment to shift from its current reliance on fossil fuels toward more renewable energy.
  • 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 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.
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.
  • 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.
Forbes Covers the Green Economy
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.
  • 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.
Other Developments
As always, there were a number of developments that are difficult to categorize: Among the notables:
In Canada:
  • 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.”
  • 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.