The global race to develop clean technology is not just about who can build the best solar parks or wind farms. It is also shaping up as a contest between Chinese-style capitalism and the more market-oriented approach fancied by the United States and Europe.
The question comes down to this: will China’s highly capitalized command-and-control economy trump laissez-faire in a low-carbon shift that is widely portrayed as the next industrial revolution?
The failure in Copenhagen to agree to replace the Kyoto Protocol with a new global climate treaty when it expires in 2012 has thrown the focus on national measures. And by almost all accounts, the Chinese are coming on strong.
Beijing’s top leaders have made clear their intention to have their nation dominate this new industry, up and down the value ladder.
And in their quest for the prize, they are not burdened by concerns facing their Western counterparts — such as the impact of wind turbines on landscapes, higher energy prices for consumers, or investor returns.
“Developed markets need to be aware that China is gaining in this space,” said David Russell, co-head of responsible investment at the 28 billion pound ($45 billion) British universities pension fund, the Universities Superannuation Scheme (USS).
The recession has made it tougher for Europe and America to effect meaningful climate policy change. And with most major nations piling on debt to stimulate flagging economies, politicians likely will find it harder to earmark additional voter money for clean technology.
Instead, recession-hit Western economies are hoping the private sector can plug an estimated worldwide $150 billion annual funding gap to avoid more extreme droughts and floods.
But investors almost always follow the returns, and if the performance is not there, they are not likely to risk their capital. For example, Britain’s USS allocates about half a percent of its assets to low-carbon and renewable energy funds, not including its investment in conventional energy companies, which themselves will have some green tinges.
It’s hard to imagine the West filling the clean tech funding gap if pension funds — which are as influential as they are big — don’t pony up more.
Russell says he would like to do more, but like other fund managers he has an obligation to pension holders. He and other fund managers say they won’t allocate more to green because their first duty is to guarantee payouts for their members, and while clean tech stocks can yield decent returns, they are often small and risky.
Since a trough in global equities last March, energy efficiency stocks have risen 126 percent and clean energy and technology by 88 percent, compared with wider global stocks’ 70 percent, a Deutsche report found this month.
But there are limited opportunities for investors. Oil majors, for example, dwarf the asset value of green companies, and cleantech funds can’t move the dial for the big funds whose participation is necessary to close the funding gap.
A Spanish company plans to invest $1 billion to build a large solar energy production plant in New Mexico.
Gov. Bill Richardson joined Wednesday with executives of GA-Solar and its parent company, Gestamp Corp., to announce the photovoltaic solar plant. It will cover 2,500 acres near Santa Rosa in eastern New Mexico.
The plant will take four years to complete and will produce 300 megawatts of electricity, enough to supply power to 50,000 households a year.
The project will employ 300 construction workers and provide 75 permanent jobs.
Power produced by the plant will qualify for state tax breaks for renewable energy.
Madrid-based Gestamp is a multinational company producing automotive and steel components and has renewable energy projects.
Climate change caused by mankind will release extra heat-trapping gases stored in nature into the atmosphere in a small spur to global warming, a study showed.
But the knock-on effect of the additional carbon dioxide — stored in soils, plants and the oceans — on top of industrial emissions building up in the atmosphere will be less severe than suggested by some recent studies, they said.
“We are confirming that the feedback exists and is positive. That’s bad news,” lead author David Frank of the Swiss Federal Research Institute WSL said of the study in Thursday’s edition of the journal Nature.
“But if we compare our results with some recent estimates (showing a bigger feedback effect) then it’s good news,” Frank, an American citizen, told Reuters of the report with other experts in Switzerland and Germany.
The data, based on natural swings in temperatures from 1050–1800, indicated that a rise of one degree Celsius (1.6 degree Fahrenheit) would increase carbon dioxide concentrations by about 7.7 parts per million in the atmosphere.
That is far below recent estimates of 40 ppm that would be a much stronger boost to feared climate changes such as floods, desertification, wildfires, rising sea levels and more powerful storm, they said.
Carbon dioxide levels in the atmosphere have already risen to about 390 ppm from about 280 ppm before the Industrial Revolution. Only some models in the last major U.N. climate report, in 2007, included assessments of carbon cycle feedbacks.
Frank said the new study marks an advance by quantifying feedback over the past 1,000 years and will help refine computer models for predicting future temperatures.
This winter’s extreme weather — with heavy snowfall in some places and unusually low temperatures — is in fact a sign of how climate change disrupts long-standing patterns, according to a new report by the National Wildlife Federation.
It comes at a time when, despite a wealth of scientific evidence, the American public is increasingly skeptical that climate change is happening at all. That disconnect is particularly important this year as the Obama administration and its allies in Congress seek to enact legislation to curb greenhouse gas emissions and revamp the nation’s energy supply.
“It’s very hard for any of us to grasp how this larger warming trend is happening when we’re still having wintry weather,” said National Wildlife Federation climate scientist Amanda Staudt, the new report’s lead writer.
The study charts how climate change is linked to more heavy precipitation, including intense snowstorms like the one that blanketed the D.C. area last month. The Great Lakes region is also experiencing more snow, the report says, because during warmer winters, “the lakes are less likely to freeze over or are freezing later [and] surface water evaporation is recharging the atmosphere with moisture.”
Richard Somerville, who was a lead writer of the Intergovernmental Panel on Climate Change’s 2007 report, said the public needs to grasp that it is important to reduce carbon dioxide quickly because it stays in the atmosphere for centuries.
“That’s where the scientific urgency comes from, not a particular weather event,” Somerville said. “There’s a scientific case for rapidly reducing emissions.”
While the National Oceanic and Atmospheric Administration reported last week that 2009 tied as the second-warmest year on record, this week two new public opinion polls have confirmed a trend reported last fall: As Washington has focused more on climate change, the American public has come to believe in it less.
On Wednesday, Yale and George Mason universities released a survey showing that just 57 percent of people said global warming “is happening.” That was down 14 percentage points, from 71 percent, in October 2008. Fifty percent of people said they were “very” or “somewhat” worried about global warming, down 13 points from 2008.
Edward Maibach, a George Mason professor, said two outside events may have played a role in the change: First came the recession; then Congress took up legislation to limit greenhouse gases, spurring industry groups and politicians to warn that tackling climate change would kick the economy while it was down.
“Global warming is not necessarily a conversation that most Americans want to actively participate in,” Maibach said.
A poll released Monday by the Pew Research Center for the People and the Press made a similar point: Respondents were asked to rank 21 issues in terms of their priority. Global warming came in last.
That was not a surprise, as it has been last before.
But this time it was worse than usual: Just 28 percent of respondents listed global warming as a top priority, down from 35 percent in 2008.