A GREENER 2010

Five reasons why 2010 will be greener
Pierre Briancon (w/Edward Hadas and Erica Billingham), 30 December 2009 (Reuters)

"Economics, rather than politics, will be the main driver of the fight against global warming in 2010…In 2009, the global recession had a greater impact than all the diplomatic efforts that ended in the Copenhagen flop: energy production hadn't declined on such a scale since 1981…[F]ive economic reasons for the world to become slightly greener in [2010]…

"…[1] high oil prices. Pricier crude encourages investments in alternative energy sources. Crude oil has been trading in…[the] reassuringly expensive - range of $64 to $80 a barrel since June…[and] is not likely to fall…Demand growth in big emerging nations like China and India…Downward pressure on the dollar [and]…OPEC [leveraging]…[are] likely to [keep oil prices] high enough to keep alternative energy resources profitable…[2] the low price of natural gas. Cheap gas encourages utilities to build more gas-fired power plants, which are cleaner than coal-powered ones. The current gas supply glut is not likely to go away soon…[A] Russia-Ukraine row, or a colder than usual winter, probably would not…boost world prices…Unconventional gas production is expected to rise in the United States…[forcing Middle East supplies] to Asia and Europe…[strengthening] the hand of European buyers…[against] Russia."

The economics favor New Energy (click to enlarge)

"…[3] more research on, and subsidies for, clean energy…[It might be] wishful thinking, or reasoned optimism…[but] the United Nations-style approach to global warming [might be] doomed to failure. A focus on domestic priorities would lead to more determined public efforts to encourage research in lower-carbon sources of energy, lowering their costs and making them more competitive…[4] a [potential] carbon tax on imports, which the European Union is currently debating, might help concentrate Chinese minds. The World Trade Organization has hinted such a levy would not necessarily run counter to its rules. To forestall this sort of virtuous tariff, China might come forward with serious proposals to curb its own carbon emissions.

"…[5] carbon prices should rise again…[T]hey took a hit after the failure of the Copenhagen conference…But steps being taken in several major countries [the U.S. cap&trade bill, the threat of EPA action on emissions, the UK energy efficiency program, the French carbon tax] will ultimately help make carbon more expensive on the exchanges where emission rights are traded…"

click to enlarge

"…[T]hese trends could make for a greener [2010, but] worrying signals are accumulating for the longer term…[T]he world is on path for a temperature rise of up to 6 degrees Celsius, far above the stated international goal of limiting the rise to 2 degrees Celsius. Growth will resume, pushing energy demand 40 percent higher in 2030 than in 2007, with non-industrialised counties accounting for 90 percent of that…Demand for coal - driven by emerging countries' growing needs - will rise faster than for other energy sources…

"…[And] the financial crisis has depressed energy investment…[B]y 2030 the world could face the absurd situation of having to cope both with global warming and energy shortages. Green will only prevail if the world's major powers take the Copenhagen dud as a call to arms."