Other countries outspend the United States in clean energy....

Today's post: Wednesday, 3-31-2010

We need an 80% reduction in fossil fuel use by 2050 to avoid the worst global warming effects. And, practically speaking, we need to also double our electricity generation and double the useful work done per unit of electricity & other energy sources as well during that same time to have a decent economy.

At some point, the oil that we’ve been using to power much of our economy will begin to run low enough that our world economy will shrink due to lack of supply or excessive costs or both.

And, once the demand for oil picks up again with the apparent economic recovery or supply begins to plateau or drop, the prices will again go back up. That will cause more hard times economically unless we have enough alternative sources of energy to turn to.

Further, it’s extremely clear that the most supported and economically beneficial solution to add energy that does not use oil nor burn fossil fuels to release more CO2 into air that already has too much is to build massive amounts of new renewable energy production, particularly those that generate electricity & to dramatically increase energy efficiency and reduce the amount of energy that is now wasted.

And, of those, the more important long range solution is to build massive amounts of new renewable energy generation.

Today’s post:

This story appeared online on Thursday, 3-35-2010 nearly a week ago.

I’ll quote sections of it and then comment.

“China trouncing U.S. in clean energy investing NEW YORK (CNNMoney.com) -- By Steve Hargreaves, staff writer March 25, 2010

China overtook the United States in renewable energy investments for the first time ever in 2009, attracting nearly twice as many dollars and becoming the world's largest market for clean energy projects.

Renewable energy investments in China - mostly wind farms - totaled $34.6 billion in 2009, according to report released Thursday by the Pew Charitable Trusts and Bloomberg New Energy Finance. In the United States, $18.6 billion was spent.

The report's authors stressed it was the stable, long-term policies put forth by the Chinese government and easier access to credit that attracted the money, and said the numbers do not bode well for America.

"The United States' competitive position is at risk in the emerging clean energy economy," Phyllis Cuttino, director of the Pew Environment Group's Global Warming Campaign, said in a statement.”

My Comment:
In the United States, the credit markets imploded which slammed on the brakes on larger renewable energy projects that required credit financing. The cancelling of those large projects and of initiating similar projects sharply reduced the dollar totals we would otherwise have seen. My hope is that as our credit markets gradually become more normal and more feed-in tariff style incentive plans are launched that make many of these projects easier to finance our total renewable energy spending per year will become more competitive.

“The report noted that over 700,000 clean energy jobs have been created in the Untied States since 1998, and with so much money being invested in the alternative energy market, this was likely just the beginning.

But with the U.S. losing its dominance in renewable energy, future jobs could be on the line.”

My comment:
One of three ways this will improve is for the U.S. credit markets to return to financing large renewable energy projects as they were doing before the credit collapse.

The second way is to begin to place some kind of tax or disincentive on fossil fuels &/or to include the true environmental costs of using it in its cost to use for energy. The article’s next point talks about that very point.

“Cuttino urged U.S. lawmakers to put a price on carbon dioxide, the main greenhouse gas emitted from burning fossil fuels. A price on carbon would make fossil fuels more expensive and renewables more competitive. She also said the country needs to mandate that utilities buy a certain percent of their power from renewable sources, and create stable, long-term subsidies for renewable energy.

China uses huge amounts of coal to generate electricity and has famously resisted putting a price on carbon dioxide. But the country does have an aggressive mandate that its utilities use more renewable energy.

There are several bills in Congress that would do what Cuttino is seeking but they face considerable resistance from lawmakers and the general public. Opponents either fear the measures would be too costly to the economy, don't believe renewable energy is ready for prime time, or don't think global warming is a major problem.”

My comments:
First, the good news is that we may be getting close to a set of bills the different interests will accept. Since this article came out, President Obama began moving his policy towards increasing the energy independence of the United States by adding more domestic production of gas and oil from offshore drilling. The upcoming bills which support that and more nuclear plants in return for more support of renewable energy production, energy efficiency measures, and some kind of new price on carbon I think will eventually find enough support to pass.

Second, the reality is that dramatically increased costs for fossil fuels and possibly reduced access to supply may arrive within 4 to 10 years. If we ignore global warming that remains true and a fearsome and massive threat to the economy of the United States. Even if we slow the economy in the short run by 2 to 5 %, if we can cut or reliance on fossil fuels in half within 20 years, our economy will be in far better shape.

Every Republican and Conservative Democrat in the U.S. congress needs to understand that and take action accordingly. My hope is that by offering more of the domestic production and nuclear they want to help solve this, they will vote for the rest of the renewable energy and energy efficiency measures we need so badly.

“Worldwide the report said $162 billion was spent on renewable energy, down just 6.6% from the year before. That compares to a 19% drop in investment in the oil and gas industry, according to the report.

In 2010, Bloomberg New Energy Finance is expecting a 25% increase in renewable energy investments to $200 billion.

Asia, with economies that were less severely hit by the recession and easier access to money, saw a 37% increase in investments in 2009. In Europe and America's harder hit economies and tighter capital markets, investments dropped 16% and 33% respectively.”

My comment:
That does suggest that clean energy spending will get better soon and may do so more in the U.S. than in some other countries.

“In relation to the size of its economy, Spain saw the largest investment, 0.71% of its gross domestic product went into clean energy. Spain was followed by the United Kingdom, China and Brazil. The United States ranked 11th.”

My comment:
As credit markets in the U.S. return to normal, that may improve. But since the future economy of the countries involved will be largely determined by how the county ranks on this comparison, I think the United States must set a goal to move into the top 3 in this measure and stay there!

“Most of the money spent on renewable energy is in the form of power projects, wind farms, solar arrays or other things that actually produce electricity. Only a small part is spent on R&D or capitalizing start-up companies.

Yet when it comes to innovation, the United States is still the world's leader. The country attracted 60% of all venture capital money spent on renewable energy worldwide. Venture capital generally goes to start-up firms that hold the most promise for future technologies.

"We're very good at creating companies," John Woolard, chief executive at solar power firm BrightSource Energy, said on a conference call discussing the report. "We're not doing a very good job creating markets." “

My comment:
That does bode well for the future for two reasons. Once renewable energy costs less to produce than fossil fuel generated energy, our innovative companies and their technologies will enable us to dramatically pick up the pace on adding more renewably generated electricity. And, much of the money earned by those companies from sales outside the United States will remain here and grow our economy.