Needed: More Money For Clean Energy
Is the world spending enough on clean energy? A report by the World Economic Forum indicates the answer is no.
According to New Energy Finance, a financial research firm specializing in renewable energy, global spending needs to reach at least $515 billion US per year from now until 2030, or carbon emissions will reach unsustainable levels, leading to significant environmental damage.
The report’s authors state that, “enormous investment in energy infrastructure is required to address the twin threats of energy insecurity and climate change. In light of the global financial crisis, it is crucial that every dollar is made to ‘multi-task’ to create a sustainable low-carbon economy.”
While clean energy investment increased from 2004 to 2008 by more than $100 billion, up to $155 billion last year, this year’s investment will likely peak much lower, between a paltry $95 billion and $115 billion.
As the report noted, this decline is likely due primarily to the generally dismal economic climate. Banks under pressure from bad debt in other areas are typically unwilling to take risks on what may still be viewed as unproven technology, that is, technology that has yet to be proven to be economically viable, regardless of how well it produces energy.
Countering this reluctance is the multi-billion dollar stimulus packages many governments have announced, designed to pull their respective economies out of the recession. Unfortunately, much of this money won’t actually reach the intended recipients for several months or even years.
In this regard, New Energy Finance predicts that more than two-thirds of the $184 billion promised for clean energy and energy efficiency projects will not be spent until 2010 and 2011. Only 15% or less, about $28 billion, will be spent in 2009.
Even with the stimulus spending fully deployed, we’re still a long way from the half-trillion dollars the World Economic Forum says we need to invest every year in order to avoid environmental disaster.
The World Economic Forum report echos another recent communication, this one from the Global Humanitarian Forum. Entitled “Human Impact Report: Climate Change — The Anatomy of a Silent Crisis,” the report says that 300 million people are already seriously affected by global warming, and that that number will double by 2030. It further states that climate change is already killing 300,000 people a year.
The Forum’s President, former U.N. Secretary-General Kofi Annan, stated, “For the first time we are trying to get the world’s attention to the fact that climate change is not something waiting to happen. It is impacting seriously the lives of many people around the world.”
The Kyoto Protocol, meant to set limits on greenhouse gas emissions, expires in 2012. This December, the United Nations Framework Convention on Climate Change summit will be held in Copenhagen, Denmark and will hopefully arrive at a workable replacement. Judging by the findings of the World Economic Forum, we can expect the topic of clean energy funding and investment will be a major point of discussion.