WEF declares clean and green the way forward

Jacqueline Beach

EcoGeneration — March/April 2009

Climate change and the world’s energy future were key issues discussed at the 2009 World Economic Forum held in Davos-Kloisters, Switzerland. During the annual meeting, participants discussed the need for increased fiscal action on climate change — but it’s not all doom and gloom…

“We have to address all the issues simultaneously and not forget any of them, like climate change. We have to involve all the stakeholders of global society in this process so that they feel responsible. Above all we need to restore confidence in our systems,” said World Economic Forum (WEF) Founder and Executive Chairman Klaus Schwab.

The forum, which was held from 29 January to 2 February 2009, saw the release of a report focussing on green investment. The report, Green Investing: Towards a clean energy infrastructure, outlines the scale of the investments needed to develop a clean energy infrastructure and move towards a low-carbon economy.

The report’s authors, Max von Bismarck and Anuradha Gurung from the World Economic Forum, and Chris Greenwood and Michael Liebreich from New Energy Finance, argue that “enormous investment in energy infrastructure is required to address the twin threats of energy insecurity and climate change. In light of the global financial crisis, it is crucial that every dollar is made to ‘multitask’ to create a sustainable low carbon economy.”

Eight emerging, large scale clean energy sectors are expected to significantly contribute to the shift to clean energy infrastructure. The report identified these as onshore and offshore wind, solar photovoltaic, solar thermal, municipal solar waste-to-energy, sugar-based ethanol, cellulosic and next generation biofuels, and geothermal power. The report also recognised some key factors that will aid in a shift to clean energy, such as energy efficiency, smart grids, energy storage, and carbon capture and storage.

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In the same report, New Energy Finance warned that unless at least $790 billion per annum is invested in clean energy between now and 2030, carbon emissions will reach a level deemed unsustainable by scientists, causing temperatures to rise by two degrees globally.

Change we need

Meanwhile, Nobel Laureate Al Gore stressed the United States’ commitment to a greener future. “The new administration is very serious about this.

“Obama is the greenest person in the room. He is pushing hard for a dramatic and bold move in the right direction. If other governments do the same then we can make the change to a low carbon future,” said Mr Gore.

There are hopes that the new US administration will take a more active role in the negotiations to reach a new global agreement. To reflect the change of commitment, the US House of Representatives recently passed a $US820 billion ($1.23 trillion) stimulus package that includes spending on energy-efficient projects.

At the close of the five-day forum, Mr Schwab cautioned participants not to raise their expectations for the April G20 summit too high, reflecting that in London, leaders will focus on immediate, technical responses to the financial and economic crisis. The forum, he noted, is preparing to launch a new initiative to address the numerous longer term issues raised by the global financial crisis, particularly the need for a complete overhaul of the existing global governance institutions.

Mr Schwab concluded “We need to redesign our systems in a proactive, collaborative way. We all have to work together.”

GREEN MONEY
Clean energy is not beyond reach financially and has the potential to generate significant economic returns. The report shows that even after a tumultuous 2008, an index of the world’s 90 leading clean energy companies had a five-year compounded annualised return of almost 10 per cent – unmatched by the world’s major stock indices. Businesses, governments, experts and civil society groups were urged to come together to design ‘win-win’ projects and collaborations – projects that are good for the economy in the short term and that help to tackle climate change in the longer term.

Speaking at the forum, Royal Dutch Shell Netherlands Chief Executive and WEF Co-Chair Jeroen van der Veer stressed the importance of a long term international framework and co-ordinated international standards, which should include an effective emissions trading system.

Mr van der Veer said “You have to price CO2, and if you save CO2 there should be an award. At the end of day, I see CO2 as an opportunity and don’t see the financial crisis as a reason to slow down.”
Clean energy investments worldwide have increased from around $US30 billion ($46 billion) in 2004, to over $US140 billion in 2008. In 2008, these investments exceeded expectations by $US 13 billion ($19.5 billion).

According to research undertaken by the WEF, investment in clean energy has not only increased, but has also diversified geographically. Developing countries attracted 23 per cent of ($US 26 billion) of asset financing in 2007, compared to 13 per cent ($US 1.8 billion) in 2004.

Appeared in issue: EcoGeneration - March/April 2009 EcoGeneration — March/April 2009