January 28, 2009 / 7:07 PM / 10 years ago

"Green" energy sought as fix for economy and planet

DAVOS, Switzerland (Reuters) - Investments and policies to combat climate change will put the world economy on the road to recovery and help cool the planet in the process, delegates at the World Economic Forum said on Wednesday.

Solar panels fill the roof of mausoleums at the cemetery in Santa Caloma de Gramenet, near Barcelona, December 2, 2008 REUTERS/Gustau Nacarino

Although the meeting is dominated by the global recession, climate change is a central issue for policymakers and business leaders who want to reduce reliance on dirty and imported fossil fuels and support growing industries capable of creating jobs.

“Climate change in some ways is more in the center,” said Frances Beinecke, president of U.S. environmental group the Natural Resources Defense Council. “Designing a new energy future is much more central to the conversation than it was in the past, where it was considered sort of an add-on.”

If there is any optimism around the potential for aggressive new environmental policies and big investments in renewables to create “green collar jobs,” U.S. President Barack Obama could be given much of the credit.

Money for solar and wind power projects, which flowed at a booming rate for most of the last two years, dried up at the end of last year because of the credit crunch and a fall in the price of oil that dampened investor interest in green energy.

Obama, however, has committed to making clean energy and efficiency part of his $825 billion economic stimulus package.

“The bad news for us is the very low oil prices that we see right now, but... we are very encouraged by what we hear Obama say,” said Steen Riisgaard, chief executive of Denmark’s Novozymes, a maker of enzymes for ethanol production.

The International Energy Agency said all governments should also seek to green their stimulus plans.

“If governments are spending money for a stimulus package, why not spend it on renewables?” IEA Executive Director Nobuo Tanaka said. “It stimulates the economy short term and in the long term it’s sustainable. You kill two birds with one stone.”

But many energy projects are unlikely to be finished quickly. Analysts have said Obama’s plan to upgrade the nation’s power grid, for example, faces lengthy approval processes.


Some delegates cautioned against believing that emissions are declining because of recession-invoked cutbacks at factories.

“That shouldn’t give us a cause for celebration,” Steve Howard, CEO of environmental organization The Climate Group, said. “When the economy gets going, emissions will start to rise. All growth needs to be low-carbon.”

In addition to his stimulus plan, Obama pledged earlier this week to start reversing former President George W. Bush’s environmental policies with steps to allow states to limit greenhouse gas emissions from cars.

Environmentalists described the move as a sea change in U.S. policy. Under Bush, Europeans viewed the United States as a roadblock to global action on climate change.

Even so, some environmentalists said Obama’s plans do not go far enough.

Obama wants to cut U.S. emissions back to 1990 levels by 2020, but South African environment minister Marthinus van Schalkwyk said this fell far short of the cuts needed.

“It’s still way off 25-40 percent but at least the signs are encouraging,” he said.

Many d3legates said they expected the momentum to continue.

Jim Rogers, chief executive of U.S. power company Duke Energy Corp, said he expected legislators and the new U.S. government to push forward with plans for mandatory cuts in emissions through a cap-and-trade scheme.

“If legislation gets passed in 2009, then the ‘ready’ period could be two to four or three to five years,” he said. “That squares up well with the end of Kyoto.”

The first period of the Kyoto protocol, which set targets for cutting carbon emissions, expires in 2012. Governments from around the world will meet in Copenhagen at the end of this year to try an agree a deal to replace it.

For full coverage, blogs and TV from Davos go to www.reuters.com/davos

Additional reporting by Barbara Lewis; Editing by Timothy Heritage

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