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G8 Summit support for clean energy economies
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G8 Summit leaders in L'Aquila, Italy (news.sky.com).
The U.S. is ranked seventh in the G8 Climate Scorecard, for governments of eight nations of the northern hemisphere including: Canada, France, Germany, Italy, Japan, Russia, and the United Kingdom, in a recently released study by the World Wildlife Fund (WWF) and global insurance company Allianz SE. This rating for the U.S. was a slight improvement from previous years when it ranked dead last. The countries were rated for the output of greenhouse gas emissions since 1990, the percentage of their energy portfolio from renewable sources, and investment in clean energy technology. Numerous past presidential administrations failed to act on climate change, and even former Vice President Al Gore amidst all of his activism on the issue was unable to influence key lawmakers in Washington until only the last couple years.
As a result of this week’s G-8 Summit in L'Aquila, Italy, the G8 leaders agreed in principle to reduce to limit global warming to two degrees Celsius in the future and reduce their greenhouse gas emissions by 80 percent by 2050. However, high greenhouse emitting countries such as China and India have not supported the measure, which will be discussed further at the UN climate conference in Copenhagen in December.
According to a report released by New Energy Finance (NEF) last month, renewable energy brought in more investment than fossil energy technologies in 2008 and represented 40% of global power capacity additions, as more countries develop a clean energy industry. However, venture capital investments in clean energy tech or cleantech have dropped 44 percent since their high in the second quarter of 2008.
A strong emphasis of the American Recovery and Reinvestment Act was to aggressively fund this sector to develop a clean energy economy and Green jobs to jumpstart the recessionary economy. However, the stimulus funding for renewables has not had a visible impact on companies and jobs as of yet. If funds are spent too quickly or too slowly, it could further damage the health of the clean energy industry, so a fine balance must be struck between swift allocation of monies and effectiveness of spending. Guidelines for the grant and loan guarantee programs have only just been released and are listed at the end of the article. Since Obama became president, the U.S. renewable energy industry has been in limbo in wait-and-see mode, as Congress deliberated a renewable energy standard (RES), the American Clean Energy and Security Act, and stimulus grant guidelines. The general consensus of investors close to program administrators is that only few of the stimulus funds will be deployed in 2009; that it will not have a significant impact for companies until 2010 and 2011. Thus, as Warren Buffet calls for another stimulus package, which would be the third including the one under the Bush administration, the key issue is increasing the efficiency of the current stimulus being implemented.
Most investors have been sitting on the fence regarding clean or alternative energy financing, as noted based on recent statistics, similar to consumers with their pocketbooks. Genuine momentum for a Green Revolution requires a price on carbon emission and a clear-cut RES, among other related elements. Many renewable energy advocates have criticized U.S. lawmakers for significantly minimizing the originally proposed RES in legislative negotiations and offering an excessive number of permits to companies for emitting carbon dioxide. In addition, U.S. senators will likely be hesitant of voting for any bill that opponents successfully characterize as anti-business and bad for the economy, which is part of the opposition to the recent G8 agreements and the 1997 Kyoto Protocol. What many opponents do not realize is the simulative benefits of developing a clean energy infrastructure that generates more net jobs.
People need to ask themselves if they mind facing a maximum $365 increase in their annual expenses, according to U.S. Energy Secretary Chu’s latest assessment, due to the cap and trade or carbon tax- in exchange for having beneficial industrial growth in their community with positive spill-over effects or landing a high-paying Green job themselves.
Amidst the slow allocation of stimulus funding, other measures are being taken to pave the way for the increased solar presence as the U.S. aims to enhance its renewable energy portfolio to reduce carbon emissions. Under initiatives announced by Secretary of the Interior Ken Salazar and U.S. Senator Harry Reid (D-NV), federal agencies will work with western leaders to designate tracts of U.S. public lands in the West as prime zones for utility-scale solar energy development, fund environmental studies, open new solar energy permitting offices and speed reviews of industry proposals.
Under one plan, 24 tracts of Bureau of Land Management (BLM)-administered land located in six western states, known as Solar Energy Study Areas, would be evaluated for their environmental and resource suitability for large-scale solar energy production. The objective is to enable landscape-scale planning and zoning for solar projects on BLM lands in the West in order to generate a more efficient process for permitting responsible solar development according to environmental regulations incorporated into the proposed American Clean Energy and Security Act and similar current standards.
The areas selected for development would be available for projects with capacities of 10 megawatts (MW) or more, and companies that submit proposals of that nature in areas already approved for this type of development would be eligible for streamlined processing. Secretary Salazar and Senator Reid also announced the opening of a new Interior renewable energy coordination office in Nevada, the first of four, with the others located in Arizona, California, and Wyoming. The offices will help to accelerate processing of the increased number of applications for renewable energy projects on U.S. lands. This is a chance for Arizona to capitalize on the emerging Green Revolution, since it improved its competitiveness regarding tax incentives for corporations, including ones directed towards solar energy. However, major upgrades to the U.S. power grid are necessary in order to channel these emerging plants to populated areas, especially for power distributed from remote western locations, and stimulus funding has been designated for this purpose as well.
Even though, the bulk of the American renewable energy portfolio is based on hydroelectric power, this source is not as flexible geographically in general and especially in states with depleted water resources as in much of the western United States. Furthermore, the majority of geothermal power is based in California which has numerous natural resources in this respect. Moreover, solar power plants are already verifiably competitive with other alternatives in both densely populated east coast states such as New Jersey with relatively high power demands as well as sparsely populated, dry, desert states such as Arizona and New Mexico. Thus, the fact solar constitutes less than ~0.5% of all current U.S. utility-scale power is due to historical facts, which are becoming non-factors with ensuing legislation that is breathing new life into this industry with enormous growth potential here and abroad.
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For more info: American Recovery and Reinvestment Act reference and grant application sites:
http://www.treas.gov/recovery/
http://www.treas.gov/recovery/docs/guidance.pdf
http://www.treas.gov/recovery/docs/energy-terms-and-conditions.pdf
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