One Trillionth Dollar Invested in Clean Energy in 2011: Will American Business Capture the Second Trillion?
"One Trillionth Dollar Invested in Clean Energy in 2011: Will American Business Capture the Second Trillion?"
Today, two opposing visions are being crafted for the future of American jobs, international competitiveness and environmental stewardship.
This morning in Washington, DC, Tom Donohue, president of the Chamber of Commerce, spoke about his organization’s vision for job creation. Focusing heavily on tearing down environmental regulations building up the Keystone XL pipeline in their place, the Chamber of Commerce is putting all its chips in fossil fuels — pushing a backward vision for the energy future of America that pushes us further away from addressing climate change.
“Our nation is on the cusp of an energy boom that is already creating hundreds of thousands of jobs, revitalizing entire communities, and reinvigorating American manufacturing,” said Donohue. But what did he mean?
“Unconventional oil and natural gas development,” which he called “the next big thing.”
Of course, nothing about renewable energy and nothing about climate change — quickly becoming two of the most important drivers for business decisions in the 21st century.
Meanwhile, in New York City, hundreds of global investors representing a cumulative portfolio worth tens of trillions of dollars are meeting at the United Nations to discuss ongoing trends in sustainable investing and highlight why strong government support of clean energy technologies is so important for driving activity in the private sector.
So which vision is America going to choose? The vision from the Chamber of Commerce — which has seen some of the most forward-thinking companies like Apple and Yahoo quit the organization due to its aggressive prevention of action on climate change?
Or the vision of hundreds of investors who say embracing renewable energy, efficiency and conservation “will yield substantial economic benefits including creating new jobs and businesses, stimulating technological innovation, and providing a robust foundation for economic recovery and sustainable long-term economic growth”?
The roads are starting to diverge. In 2011, global investment in renewable energy surpassed fossil fuels for the first time.
With record low natural gas prices, financial distress hitting countries across the world, and a very mature, incumbent fossil fuel infrastructure to compete with, it’s still an incredibly difficult uphill battle for renewable energy. But new investment figures released by Bloomberg New Energy Finance at today’s UN investor summit show continued progress in spite of the continued head winds.
According to BNEF, global investments in renewables reached a new record of $260 billion in 2011, a modest 5% increase over 2010. However, those investment figures are roughly five times what they were in 2004. Last year also saw the one trillionth dollar invested in the sector since tracking began seven years ago:
The record investment figures for 2011 are particularly striking because they were achieved during a turbulent year for the world economy in general and for the clean energy sector in particular. The industry has suffered severe pressure on the profit margins of manufacturers, a sharp fall in share prices, some notable bankruptcies, cuts in European government subsidy support, and a reduction in the availability of bank finance.
Perhaps most stunning was the U.S. surge in investment (driven largely by looming expiration of tax credits) that put America ahead of China in 2011. After falling behind China in 2009, the U.S. was back on top at the end of last year, with about $8 billion more invested in clean energy.
But Michael Liebreich, the CEO of Bloomberg New Energy Finance, cautioned against any gloating by the Americans:
“The news that the US jumped back into the lead in clean energy investment last year will reassure those who worried that it was falling behind other countries. However before anyone in Washington celebrates too much, the US figure was achieved thanks in large part to support initiatives such as the federal loan guarantee programme and a Treasury grant programme which have now expired. The country’s principal remaining support measure for renewable energy, the Production Tax Credit, is currently also scheduled to fall away at the end of 2012 unless it is extended. There may be a rush to get projects completed in 2012, followed by a slump in investment in 2013 if it expires.”
In other words: We still need a vision if we want to capture the economic and environmental value of the next trillion dollars invested in clean energy and climate solutions.
Isn’t it time that the Chamber of Commerce, an organization that supposedly has America’s business interests at heart, start crafting that vision? If not, there certainly thousands of business leaders around the world who may be able to help them out.