Here’s a post that might equally well be entitled ‘better late than never’; I’ve finally got around to looking at this year’s data from Bloomberg New Energy Finance contained within the UNEP-SEFI global trends report. It’s fascinating and puts in context the last post on this blog which focused on the demise of emissions target-setting.
New investment in sustainable energy globally fell by 7 per cent in 2009, compared to 2008, to a total of $162 billion. This should not cause major concern since levels of investment are highly likely to fluctuate considerably from year-to-year. It’s the average over time that matters and the UNEP report points out that this was still the second highest annual investment in sustainable energy on record.
But it’s the detail rather than the aggregate data that’s of interest. China is now the number one destination for sustainable energy finance and has knocked the US off the top slot. In 2009, China installed almost 14 gigawatts of wind power, into which investors put $27.2 billion of mostly asset finance. China’s current target for installing wind power in 2020 is 30GW but since 25.8GW has already been installed, this target now looks more than attainable and there is already talk in Beijing of hiking the target to 150GW. Remember ‘feeling the stones‘?
Not to labour the point, but China also now manufactures nearly one-third of the world’s solar panels; its Longyuan Power Group floated its solar business on the Hong Kong stock exchange in 2009, raising $2.6 billion in the process. In fact, while the raising of sustainable energy finance on public markets is still small beer, the story beneath the headline $14.1 billion total is the staggering 2984 per cent increase in activity in Hong Kong (clearly heavily influenced by Longyuan, but still significant at a time when the equities are pretty unfashionable).
For those struggling with leaden-footed UN negotiations, herein lies hope of real, tangible progress. Last year, Professor Jihua Pan and team at the Chinese Academy of Social Sciences, in a study for the Global Climate Network, modeled the job creation potential of clean energy technologies. They found a possible one million job opportunities in China as a result of installing 150GW of wind power by 2020. Might that help with the politics?
Ultimately, success in tackling climate change will be measured in parts per million of carbon in the atmosphere and degrees of average global temperature increase. But at this point in time, never mind the grand targets; feel the stones.
(The first commentator to argue that the problem is not China but the US wins a guest post).
2 responses to “Never Mind The Targets, Feel The Stones”
I agree with the “feeling the stones” idea that most important thing is for domestic policies to go in the right direction. The centrepiece of US domestic policy is the Waxman-Markey Bill. There are a lot of many good things about this bill: the extra funding for REDD; the price floor; the allowance reserve instead of a price ceiling. It is a good model for what cap-and-trade legislation could look like. But the problem is that it hasn’t passed the Senate and probably won’t in the near future. The Senate is even considering legislation to postpone action by the EPA.
China’s Copenhagen Accord communication is likely to amount to a reduction of 20-30 percent compared to business as usual and there are reasons to think that it is likely to be achieved.
As part of its 5-year plan, China plans to reduce its energy intensity by 20 percent between 2006 and 2010. In March 2010, Premier Wen Jiabao stated that energy intensity had fallen by 14.38 percent between 2005 and 2009. However, published statistical data does not appear to be consistent with this figure, and suggests that the actual reduction in energy intensity is more like 8.2 percent. China has since been engaging in more drastic approaches to reduce the energy intensity of its economy. Large amounts of steel mills and coke producers have been instructed to reduce production by between one-third and two-thirds for the rest of the year. Energy and carbon targets in the aluminium industry are likely to be met through increases in electricity prices. Chinese advisors state that achieving the energy target is seen as crucial for maintaining the credibility of the 2020 pledge to reduce the intensity of China’s emissions.
Furthermore, support for clean energy industries in China has significantly reduced global costs of solar panels and wind turbines.
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