Obama Striving to Put an End to Oil Subsidies

President Obama's proposed 2013 budget seeks to end "unfair' oil subsidies. As evidenced by his State of the Union addresses in 2009, 2010,, 2011, and 2012, the President has repeatedly tried to put an end to oil subsidies.

Investing in Green Economic Growth

A report by the UN Environment Program (UNEP), indicates that a relatively small investment by governments can go a long way towards helping the green economy to grow. According to Pavan Sukhdev, head of UNEP's Green Economy Initiative:

"Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible. By doing so, they can also unleash the trillions of dollars of private capital in favor of a green economy."

An investment of 2 percent of the global gross demestic product ($1.3 trillion), could generate momentum toward a low-carbon world. Investing in the greening of sectors such as construction, energy and fishing could jump start the new green economy.

"Investing 2 per cent of global GDP into 10 key sectors can kick-start a transition toward a low-carbon world," the Nairobi-based agency said in a statement.

Such investments would not slow the economy. The report indicates that this investment would grow the global economy at the same rate, or higher, then present economic policies. Greener policies would still grow economies while reducing the ecological footprint by nearly 50 percent in the next 40 years. Despite some job losses, investment in more sustainable jobs would offset losses.

"The sum, currently amounting to an average of around $1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast, under current economic models."

The report said that ten sectors (agriculture, buildings, energy supply, fisheries, forestry, industry, tourism, transport, waste management and water) could all benefit the environment if they were more green.

Left to purely market forces this transition would occur over time, however, the urgency of climate change demands immediate attention and these types of investments are the most productive way to spur the growth of the green economy.

© 2011, Richard Matthews. All rights reserved.

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Green Investment Opportunities in China

Investments by the Chinese government are creating a wealth of green sector opportunities. China's huge business and consumer base is creating demand for everything from renewable energy to green buildings.

A good illustration of the profit potential afforded by China's green market comes from Chan Han Meng, executive director of Nature Elements Capital. According to Chan, Green buildings offer a 30 - 50 percent price premium while additional construction costs are only five per cent.

China is investing $736-billion in sectors like wind and solar. Targeting the best entry points to invest in the Chinese green market involves paying close attention to the sectors that, with government support, can compete with traditional sources of power.

Chinese Government incentives in the wind power sector have reduced the cost to between 0.5 RMB and 0.7 RMB per kilo watt hour. Renewable sources of energy like wind power will skyrocket once the cost per kilo watt hour matches coal, currently about 0.4 RMB per kilo watt hour.

China's green energy economy hinges on making clean energy competitive with coal. The Chinese government is waiting for the Parliament to approve measures that will provide loans, grants and tax breaks that will help make renewable energy cost competitive with coal. To help with this goal, China may even impose tariffs on energy derived from coal.

Up to half a trillion US dollars in clean energy investment capital will be required to meet China's proposed green targets over the next five years. This affords opportunities for investors who want to earn significant returns while helping to green the earth.

© 2011, Richard Matthews. All rights reserved.

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China's Most Recent Five Year Plan

China’s most recent five year plan (FYP) covers the period 2011-2015, and China’s National People’s Congress (NPC) is expected to approve the final version in March 2011. This FYP is expected to shift China’s development agenda towards sustainable growth.

The FYP will strengthen China's energy efficiency in key sectors such as heavy industry, construction, and transportation. China will also support the development of energy efficiency technologies. In addition, management on supply and demand sides will be improved including national utility demand-side management (DSM) .

China may further boost prices of fossil fuels, as well as levy carbon, environmental and resource taxes.

China plans to implement a domestic carbon-trading market to reduce carbon emissions and promote clean-energy industries. A cap-and-trade market in China may be in place by 2020 and could begin targeted applications as early as 2013.

China will support the development of clean energy technologies and boost its domestic clean-tech market. China may invest up to US$1.5 trillion over the next five years in seven strategic industries, such as alternative energy, alternative-fuel vehicles, and environmentally friendly technologies. Approximately US$300 billion will be invested in the construction of smart grid in China in the same time.

China is also planning on paying more attention on its coastal waters. China's marine ecological restoration is focusing on measuring the amount of organic pollutants found in surface water by monitoring chemical oxygen demand. They are also limitating emissions of nitrogen and phosphorus which causes eutrophication. New coastal construction will be strictly examined to ensure they are not adversely impacting the environment.

© 2011, Richard Matthews. All rights reserved.


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China can School the US About Green Growth

America is often viewed as the preeminent world leader, but when it comes to growing the green economy, the US can learn a lot from China. Although China is often criticized as being the world's largest CO2 emitter, it has an average emissions per capita well below those of wealthy economies.

Both China and the US have set emissions goals for 2020. The US has proposed a 17% cut in emissions from 2005 levels while China has proposed a 40% to 45% reduction in carbon intensity (per person) from 2005 levels. The World Resources Institute has said those two efforts would have about the same outcome.

However there is a major difference, China's goal is official policy, America's goal, although announced by the White House, is not official policy, nor has any legislation been passed to attain that goal.

China is making real progress in developing renewable power. In 2008, China got 9% of its energy from renewable resources. It has committed to raise that number to 15% by 2020. But recent reports show that if the current expansion rate continues, solar power alone could reach five or ten times the 15% target.

In 2007, 7% of US energy came from renewable resources and with any hope of legislation crushed by Republican gains in the midterm elections, that number is not likely to significantly increase in the short term.

Three years ago, China met its 20 percent energy efficiency goal and in 2010 and they are creating more stringent goals for 2020. The US has set no firm targets.

When it comes to fuel economy, China is also leading the US. In 2010, America set new Corporate Average Fuel Economy (CAFE) standards at 35.5 miles per gallon, while China achieved an average fuel economy of 36.7 miles per gallon back in 2008.

The Chinese solar, wind and EV industries are leading the world. On the stock market, some of the best gains are coming from Chinese cleantech companies which are present in almost every sector.

As reported in YaleGlobal Online, a comparison of Chinese and US firms indicate that America has lost its competitive edge. In 1998, the US owned 25 percent of worldwide high-tech exports while China’s was less than 10 percent. By 2008, China’s share was 20 percent, with America’s below 15 percent.

The most revealing statistics come from a Bloomberg survey, created in collaboration with the UN Environment Program. This study indicates that China became the largest recipient of renewable energy financing in 2009, attracting more than 20 percent of the US$162 billion invested worldwide in wind, solar, biomass, small hydro, biofuel and marine energy. While such investment in China grew by 53 percent, in the US it shrank by 45 percent.

A study published by the Harvard Kennedy School’s Belfer Center found that, unlike the US, China coordinates and supports energy R&D through government owned enterprises.

By some estimates, investments in renewable-energy assets may total US$2.3 trillion by 2020. If America is to compete with China for the lucrative green market and all the jobs that come with it, the US will need to develop a much more coordinated approach.


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Government Incentives are Growing Renewable Energy

The evidence indicates that government investments have significantly helped the US renewable energy market. The American Recovery and Reinvestment Act (ARRA) of 2009 provided $94.8 billion for clean energy. The program was established under section 1603 of ARRA, and provided cash grants covering 10% or 30% of the total cost of developing new renewable energy facilities.

ARRA investments also funded research projects to develop next generation renewable energy technologies. These types of innovations create a cost competitive alternative to dirty sources of electricity while simultaneously creating long-term economic growth.

Due in large part to ARRA, the renewable energy industry survived the worst financial crisis in decades and is making significant progress toward attaining its goal of doubling renewable generation capacity over two years.

According to Gisela Kroess, a director at UniCredit SpA (UCG.MI), "[ARRA incentives have] spurred a lot of the growth we've seen," she said at a renewable-energy finance conference.

Despite Republican opposition, the US Department of the Treasury's 1603 cash grant program for the solar and wind industries was extended through 2011 as an add-on to the 2010 Tax Relief bill. The extension provides incentives so that developers of new solar and wind farms will continue investing in new projects beyond those already slated for construction.

ARRA Report Card: Two Years Later, is the latest industry study from market research publisher SBI Energy, it examines the ARRA clean energy investments and their impact on the various clean energy markets within the power, transportation, and building sectors.

Solar Energy

The report card indicates that according to forecasts from the Council of Economic Advisors (CEA), ARRA investments will help the domestic manufacturing capacity for solar photovoltaic (PV) modules to grow from less than 1 GW per year in 2008 to nearly 4 GW per year in 2012. Solar EnergyARRA investments are also accelerating the rate of innovation in solar photovoltaics and will drive down the costs of solar panels over the next five years by as much as 50 percent. According to the Solar Energy Industries Association, ARRA has supported more than 1,100 solar projects in 42 states, creating enough new solar capacity to power 200,000 homes. ARRA has resulted in nearly 40 percent growth in the solar power market in 2009 and nearly double in 2010.

Wind Energy

Despite weak economic and investment conditions, US wind power capacity grew 40 percent in 2009 compared to 2008. In July 2010, the CEA reported that ARRA was responsible for approximately 6 GW of wind capacity installation that might not otherwise have occurred in 2009.

Geothermal Energy

An April 2010 U.S. Geothermal Energy Association (GEA) survey indicated a 26% increase in new projects under development in 2009 and concludes that the stimulus funding played an important role in propelling geothermal growth amidst recessionary economic conditions.

Combined Renewable Energy

The Energy Information Administration (EIA) estimates that US renewable generation capacity will increase 32 percent more than without ARRA, reaching 155 GW in 2015.

The results of this report card clearly indicate that government investment has significantly increased America's renewable generation capacity.


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Video of White House Policy Briefing on Green

A January 18, 2011, White House Policy Briefing on the greening of America's cities. This video covers a wide range of government ideas and initiatives, including renewable energy, energy efficiency and retrofits.

Highlights of Obama's 2011 State of the Union Address: Clean Energy, Electric Vehicles and Eliminating Oil Subsidies

President Barack Obama's State of the Union address focused on innovation, education and infrastructure. He also mentioned eliminating oil subsidies, as well as government investment in clean energy and electric vehicles (EVs).

Here are the environmental highlights of the speech:

“The future is ours to win but we cant get there by standing still....We need to out-innovate, out-educate, and out-build the rest of the world, we need to make America the best place for doing business....that is how we win the future."

Infrastructure was a priority in the address, the President proposed “redoubling" infrastructure investments including high speed rail and high speed internet.

From an environmental point of view, the defining moment of the speech came when he said with emphasis, we will invest “especially in clean energy technology." He then showcased a solar start-up that reinvented itself. He continued saying, “Already, we're seeing the promise of renewable energy."

“Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they're selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America's electricity will come from clean energy sources," the President said.

He also indicated that he wants to see US leadership in EVs, so that America can be, “the first country to have one million electric vehicles on the road by 2015."

Perhaps most importantly, to help find ways of paying for the governments green investments, he wants to eliminate oil subsidies.

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Korea's Green Growth and the New Expanison Paradigm

At the recent G20 meetings in Seoul, Korea put green on the the business summit agenda. The world wide recession propelled the global economy in a new direction, forcing many countries around the world to follow a new green expansion paradigm.

For sustainable and balanced development, governments are increasingly aware of the fact that green growth is the future of economic development.

In an interview with The Korea Times, Young Soo-gil, chairman of the Presidential Committee on Green Growth said, “The agenda for the summit will be crowded with other issues of pressing priorities to allow much discussion on green growth. The Korean G20 Summit Preparatory Committee is aiming for mainstream advancement on the agenda for the summit, and so ‘development’ will be a prominent theme.”

“This will hopefully allow President Lee Myung-bak to bring the attention of the G20 Leaders to the value of the theme of green growth as a catalyst for global cooperation in many development dimensions,” he added.

Young said that Korea is seeking to take a lead in the global green growth drive by sharing its knowledge and experience.

“Korea would like to help those developing countries harmonize their growth aspirations with the environmental ones by sharing its green growth tool kits and experiences, as well as by working together to undertake specific mitigation and adaptation projects in cost-effective and growth-friendly ways in individual countries,” he said.

“Korea is also willing to take leadership in the international efforts to help build physical infrastructures in the developing countries in climate-change resilient ways. For these purposes, Korea is to make green growth partnership a leading component of its increased ODA (Official Development Assistance) commitment as a new member of the OECD Development Assistance Committee (DAC),” he added.

As part of this effort, Korea has launched the East Asia Climate Partnership (EACP). Most significantly, on July 16 of this year, the Korean government launched a Global Green Growth Institute (GGGI) based in Seoul.

“Korea hopes to develop GGGI into an international treaty-based institution by 2012 with support from other countries which share belief in the value of green growth as well as of sharing insights, know-how and experiences on it,” he said.

“The Green Growth Committee also hopes that Korea’s green growth inspirations will play a facilitating role in making a breakthrough over the issue of how to reconcile economic, social and environmental development objectives at the Rio plus 20 Conference on Sustainable Development to be held in 2012,” he added.

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Video on Green Growth - Korea's Key to a Better Future

With the recent G20 summit held in Seoul, Korea is taking the opportunity to show its leadership in the development of the green economy. This 6 minute video reviews green growth generally and then zeros in on Korea's efforts. The video contains a great introduction on green growth and the need for transnational wisdom.

The Presidential Committee on Green Growth of Korea announced on May 13 that the Korean government will invest about 12 trillion won (roughly US $9.5 billion) by 2013 in the development of green technology as part of the "Green New Deal" announced earlier this year.

Since his inauguration, President Lee Myung-bak has put green growth on top of the country's agenda. He has stressed the importance of the development of environment-friendly technologies that will boost Korea's economic competitiveness.

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UN Hopeful about G20 Climate Finance

The Seoul G20 summit ended on 12 November, 2010. On November 9, Achim Steiner, the UN Undersecretary General and Executive Director of UNEP, wrote about the important role the G20 can play 'embedding a fundamental transition to a more sustainable global economy that looks beyond the current, narrow definition of wealth and GDP.'

The G20 has acted to stabilize banks and to counter the financial and economic crisis. Steiner hoped that the G20 meeting in Seoul could have been 'a watershed in international financial and economic affairs, where the pledge, made at the G20 in London, toward a green and more sustainable recovery moves from communique to concrete commitment.'

The G20 must deal with the important issues of averting economic crises similar to the recent recession and 'the even bigger and more complex ones emerging as a result of climate change, environmental degradation and unsustainable overexploitation of the planet’s natural assets.'

As Steiner pointed out, there are some very promising signs that more and more countries are understanding the urgency of the climate change crisis. Korea has earmarked close to 90 percent of its funds to a short- and long-term vision of green growth. The country’s leaders have also made the indivisible link between the leadership role of public policy making in terms of unleashing private sector investment into clean tech and other green sectors.

The costs associated with climate change are being factored into the thinking of an increasing number of banks and pension funds who are beginning to see rising risks to their investments from the loss of ecosystems. Increasingly people understand that the disruption to food supplies, supply chains and other challenges linked with natural resource losses are a much bigger threat than international terrorism.


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CEIL: Standard Compliance Knowledge Center for Green Government

Compliance with presidentially mandated green government can be a daunting challenge, thankfully there is a resource bank and online community that can help.

The Center for Environmental Innovation and Leadership (CEIL), has launched a new online community. CEIL is an independent organization connecting government and military professionals with providers of green goods and services to help them comply with Executive Order 13514 – President Obama's commitment to creating a "Green Government."

Executive Order 13514 on Federal Sustainability was signed on October 5, 2009, it required each Federal Agency to submit a 2020 greenhouse gas (GHG) pollution reduction target from its estimated 2008 baseline. President Obama has pledged to reduce the Federal government's GHG emissions by 28 percent over the next decade.

According to a press release from Whitehouse.gov, "Actions taken under this Executive Order will spur clean energy investments that create new private-sector jobs, drive long-term savings, build local market capacity, and foster innovation and entrepreneurship in clean energy industries."

To assist with the implementation of EO13514, CEILeadership.org has created a knowledge center for sustainability in the public sector, it includes news, expert advice, discussion groups, and podcasts. For more information or to join go to CEIL.

CEIL is also producing GovGreen Conference & Expo in Washington, DC on November 9-10, 2010. See GovGreen for more information and registration details.
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