Made in China: Renewable Energy Equipment

The manufacture of wind turbines, solar pv panels, and other clean energy products is increasingly happening in China and other rapidly developing nations. From the Financial Times:

While investment in renewable energy suffered in some of the world’s wealthiest countries last year, it is thriving in the BRICs [ed: Brazil, Russia, India, China]. China is becoming a big consumer of renewable energy: last year it added more solar capacity than any other country bar the US, and it has overtaken Japan as the biggest manufacturer of PV components. It is also reportedly introducing a preferential tariff for utilities for power that comes from utilities. But it is also pursuing rapid growth in manufacturing capacity of solar panels and wind turbine components.

A subsidy for solar manufacturing was announced in March, aimed at jobs growth. And it’s this sort of effort that could be the problem for all those green stimulus measures in developed countries, with their attached hopes of green jobs.

Not that we need another reason to get these industries up and running in the States, but the fact that green jobs are already going overseas should be strong motivation.

Recycling’s Down Cycle

Demand for recycled materials has fallen off a cliff along with the rest of the economy, the New York Times reports:

The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals. Across the country, this junk is accumulating by the ton in the yards and warehouses of recycling contractors, which are unable to find buyers or are unwilling to sell at rock-bottom prices.

Ordinarily the material would be turned into products like car parts, book covers and boxes for electronics. But with the slump in the scrap market, a trickle is starting to head for landfills instead of a second life. [...]

There are no signs yet of a nationwide abandonment of recycling programs. But industry executives say that after years of growth, the whole system is facing an abrupt slowdown.

UN Calls for ‘Green New Deal’

Perhaps Al Gore could deliver a few fireside solar panel-side chats?

The United Nations today called for a refocusing of the world’s economy towards investments in clean technologies and natural infrastructures such as forests in a Green New Deal that could revive the stumbling global economy, combat climate change, and cut poverty.

The UN’s Environment Programme (UNEP) said the financial, fuel and food crises of 2008 highlighted the need for an innovative approach similar to the state-funded scheme used by US president Franklin D Roosevelt, in response to the Great Depression. [...]

“Transformative ideas need to be discussed and transformative decisions taken,” said Achim Steiner, the US undersecretary general and UNEP executive director.

“The alternative is more boom and bust cycles; a climate-stressed world and a collapse of fish stocks and fertile soils up to forest ecosystems,” he added.

VC’s Still Pouring Money Into Clean Tech

From Greentech Media:

Venture capitalists invested a record $2.8 billion in greentech in the third quarter, according to a Greentech Media report scheduled for release Wednesday.

It’s the largest quarterly total since the Venture Power Report began tracking renewable-energy deals in 2004, according to the report. The amount is more than double the $1.3 billion total for the second quarter, which was the previous record quarter, and brings total VC investments in greentech so far this year to a whopping $5.09 billion.

Clean Tech the “Next Global Mega-Trend”?

At least that’s what Ceres president Mindy Lubber argues, via Solve Climate:

Warning to U.S. companies: Just because national lawmakers are dawdling on global warming, don’t think your business can dawdle, too.

While U.S. policymakers are running in place on climate change, global investors are moving quickly to make money from its far-reaching risks and opportunities. One Wall Street firm is calling climate change the “next global mega-trend,” after the opening of the Iron Curtain and the Internet revolution. Despite losses from the subprime debacle, European and US investment firms are ramping up their global warming research, trading desks, investments strategies and capital.

Subsidies Skew Global Oil Market

A high price for crude oil leads to an increased price for gasoline, which means fewer miles driven. Right?

It depends. In the U.S., the data show the market working according to Econ. 101 supply-and-demand principles:

A report to be released Monday by the Transportation Department shows that over the past seven months, Americans have reduced their driving by more than 40 billion miles. Because of high gasoline prices, they drove 3.7% fewer miles in May than they did a year earlier, the report says, more than double the 1.8% drop-off seen in April.

But in countries whose governments make gasoline more affordable through subsidies, demand for oil is increasing, even as the price of crude oil hovers around $125 a barrel:

…[I]n countries with subsidies, demand is still rising steeply, threatening to outstrip the growth in global supplies.

Nations with these subsidies are largely responsible for driving up oil demand–and consequently, the cost of fuel for everyone else:

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels.

It’s hard to see how these governments, especially those with a loose grip on power, could eliminate these subsidies. For now, it looks like the subsidies and higher gas prices are here to stay.

$45 Trillion: That’s a LOT of Green

The International Energy Agency’s new report on the amount of investment needed ($45 trillion!!!) to combat climate change AND keep economic growth humming along has made quite the splash. IEA director Nobuo Tanaka doesn’t sugarcoat the difficulties we face:

Mr. Tanaka said the world would “essentially require a new global energy revolution which would completely transform the way we produce and use energy.”

The report said carbon capture and sequestration (CCS) technology will have to be part of the solution:

To reach the goal of halving emissions, it said, among the most important measures would be equipping more than 50 gas and coal power plants each year with equipment to capture and sequester carbon dioxide.

Trouble is, the amount of investment into bringing the CCS process to market is “lagging badly.” Daniel Kammen, director of the Renewable and Appropriate Energy Laboratory at Berkeley, said about CCS development: “It’s a total mess.”

And no doubt it will be an expensive mess. From the Wall Street Journal:

If clean-energy technologies – like “clean-coal” power plants that would bury CO2 emissions underground – don’t develop as smoothly as optimists hope, the cost of cutting emissions could be a lot higher: think $500 per ton, according to the IEA.

Club for Growth Goes on the Attack

The Club for Growth, a conservative a group that isn’t afraid to attack anyone who stray from radical free-market ideology, is running $250,000 worth of negative ads against the Lieberman-Warner Climate Security Act.

The group’s president, Pat Toomey, claims Lieberman-Warner would be “extremely destructive to economic growth.” (He must not have read the recent EPA study that found the bill “could be implemented without significantly harming the nation’s economic growth over the next two decades.”)

The Hill recently reported that conservative climate deniers have concluded the “argument against climate controls is easier when focused on the economic costs instead of science.” And it’s no surprise that the Club for Growth would take this line of argument—denying humanity’s impact on our atmosphere is so 1990s.

Don’t expect the fight to simmer down anytime soon. The economic “modeling wars” will continue as the Senate inches toward a vote on Lieberman-Warner.

But here’s what’s not up for debate–the catastrophic costs of doing nothing.

A new study from Tufts University only confirms this:

Doing nothing about global warming would cost the United States dearly for the rest of this century because of stronger hurricanes, higher energy and water costs, and rising seas that would swamp coastal areas…

The Tufts study found that by 2100, annual costs would be $422 billion in hurricane damage, $360 billion in real estate losses (with the biggest risk on the Atlantic and gulf coasts, particularly Florida), $141 billion in increased energy costs and $950 billion in water costs, especially in the West. …

That adds up to an annual loss by 2100 of 1.8% of gross domestic product, the sum of the nation’s output of goods and services.

And these calculations aren’t all-inclusive:

Frank Ackerman, an economist at Tufts and one of the study’s main authors, said the impact of climate change actually would be worse than what his numbers showed “because of the human lives and ecosystems that will be lost and species that will be driven into extinction — all these things transcend monetary values.”

The SUV Era ‘Is Over’

The sustained high price of gas has meant Americans are consuming less gas for the first time since 1991. “Gas consumption so far this year is down about 0.2 percent compared to last year,” McClatchy reports.

Gas prices are also changing the behavior of new car buyers. It looks like the Hummer is giving way to the Honda Fit (a car which would be a tight squeeze for former Hummer lover Arnold Schwarzenegger.)

From the New York Times:

Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede.

In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car.

In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.

“It’s easily the most dramatic segment shift I have witnessed in the market in my 31 years here,” said George Pipas, chief sales analyst for the Ford Motor Company.

Could this be the tipping point where American drivers fall out of love with huge SUVs? It’s becoming more likely each day the price of gas remains high:

“The era of the truck-based large S.U.V.’s is over,” said Michael Jackson, chief executive of AutoNation, the nation’s largest auto retailer.

Sales of traditional S.U.V.’s are down more than 25 percent this year. In April, for example, sales of G.M.’s Chevrolet Tahoe fell 35 percent.

Full-size pickup sales have fallen more than 15 percent this year, with Ford’s industry-leading F-Series pickup dropping 27 percent in April alone.

Getting a Tax Rebate? Home Depot Can Help

Starting this week, the federal government is sending out tax rebate checks to around 130 million households. Not surprisingly, big retailers want you to spend your check at their store, and they’re offering big discounts to do it.

But Home Depot has a novel idea:

Home Depot is urging customers to use rebates to invest in the environment and cut energy bills. It’ll offer discounts through July on compact fluorescent light bulbs and Energy Star appliances. That helps “take a short-term stimulus and turn it into a long-term investment,” spokeswoman Jean Niemi says.

The company is pushing it’s Eco Options line of products, which it launched in April 2007. Their Eco Options include:

…all-natural insect repellents, cellulose insulation, front-load washing machines, organic plant food and vegetables in biodegradable pots. The wide array of Eco Options also includes compact fluorescent light (CFL) bulbs, programmable thermostats and certified wood.

Sure beats just dumping your rebate into your gas tank.