Green revolution: still possible amid deep recession?
Economic retreat could hamper green investment – but it could also spur a drive to move economies away from fossil-fuel dependencies.
In 2008, oil prices spiked then collapsed, climate-change talks stuttered, and nuclear power reemerged. Europe banned incandescent light bulbs, Britain made cutting emissions legally binding, and US President-elect Barack Obama appointed the greenest US cabinet ever. But what does this augur for 2009? While nature and the economy can be wildly unpredictable, experts believe a warmer year is coming. At the same time, carbon-dioxide emissions are likely to drop as businesses slow. Some experts hope "green collar" jobs will help reverse the recession, but fossil fuels will probably continue to power much of the world for years. When and if the economy picks up steam, demand for oil will rise – as will prices.Skip to next paragraph
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Will the recession defeat efforts to combat climate change?
Leaders like Barack Obama are promising a "green new deal" through formidable investment in the green economy. Environmentalists say that green technology is far more labor intensive than traditional energy sources such as oil and nuclear. There will also be plenty of jobs in the energy efficiency segment, according to Lester Brown, founder of the Washington-based Earth Policy Institute, who sees benefits to both economy and environment from retrofitting buildings, for example.
"If you compare wind and solar technologies versus coal," he adds, "it's much more labor intensive by a factor of 2 or 3. So if you're interested in creating jobs, you have to look at efficiency and renewables."
But recession is the last thing expensive new technologies need. Investment has tapered off and will continue to do so while credit is tight in 2009, and consumers may be deflected from their newfound interest in (costly) green living. "It will have some negative influence in terms of raising capital for new investments," warns Brown.
Cheap oil won't last. Will we plan ahead?
Demand for crude, which neared $150 per barrel last year, fell in 2008 for the first time in 25 years, according to the International Energy Agency (IEA).
Few expect it to stay that way. Experts believe that current prices, just below $50 a barrel, will persist only as long as the downturn. The IEA has for the first time hinted that the era of "peak oil" may be upon us – the highwater mark of production, after which output will start to taper off. As soon as economic growth resumes, it will open a costly gap between supply and demand – unless the world radically transforms the energy model.