Whether it be from The Wall Street Journal, or YouTube, by now most of us have heard the arguments for and against development of “shale gas”, and as a member of the World Bank’s Oil, Gas and Mining Unit, hardly a day goes by that I do not receive a notice about an article, a presentation or a conference on this topic.
This entry is part of a series of posts written by members of the Environment and Energy team of the World Bank's Research Group on economic and policy issues involving energy and climate change mitigation.
Ongoing controversy has surrounded production of crop-based biofuels, ostensibly for the purposes of increase renewable energy use and reducing carbon dioxide (CO2) emissions that causes global warming. To illustrate, a recent report on price volatility in food and agricultural markets prepared by numerous international organizations, including the World Bank, at the request of G20 Governments recommended elimination of current national policies that subsidize or mandate biofuels production or consumption. Some international non-governmental organizations, such as Action Aid strongly supported the recommendation, while some other organizations, such as Renewable Fuel Association opposed it. The June meeting of G20 agriculture ministers did not make any decision in favor or against biofuels, deciding instead to have further analysis.
At a meeting of the Clean Investment Funds Partnership Forum in Cape Town there was a telling comment in a session I chaired on climate change science when a participant from the Ministry of Energy in Ethiopia got up and said, “I am glad we are talking about the tools that are available for community planning for low-carbon development, but everyone in the rural areas of East Africa sees that the climate is changing. My mother tells me every season the rains and temperatures are different then when she was young.”
So what to do?
Putting more energy in and money towards the manufacturing of innovative green technologies is key: exploiting the wind or sun without solar panels and turbines is like trying to catch fish without a net or rod. Africa is poised to manufacture the ‘nets’ for clean energy.
Opportunities exist at many scales of activity: from village-level programs to manufacturing improved efficiency woodstoves, to building the hardware and knowledge systems to construct local ‘mini-grids’, to national efforts and global partnerships for large-scale manufacturing. The multinational development community can help, and is ramping up activities like the Scaling Up Renewable Energy (SREP) program that was a focus of partnership meeting on the Climate Investment Forum. China is investing heavily in Africa at the moment, and local manufacturing and national capacity building can be part of that equation.
I chaired a session on Scaling up Manufacturing at which the panelists told remarkable stories about these opportunities. Stimulating the green energy industry creates jobs, said Dan Gizaw, a founder of Canton, Michigan-based Danotek, a company that manufactures permanent magnet generators for wind turbines. Gizaw is from Ethiopia, and the company established manufacturing facilities there. “Manufacturing wind turbines and turbine components locally, has a job creating advantage you don’t have when you import them. We have created 475 jobs with our factory.”
| Photo courtesy Willem V.
Strien/Flickr under Creative
It is all too easy to see environmental protection and economic development simply as competing philosophies, and nothing more. A range of studies attest to the fact that this is a false dichotomy. In my earlier blog, I described the alternative vision that became a reality in a small Nicaraguan coastal community that chose to invest in a diverse set of clean energy alternatives. Even with cases like this one described in the literature, there remains in some circles a sense that these must be concocted.
The headlines often reinforce this simple dichotomy of environment versus economic growth, where the choice presented is “preserve a forest and forego the lumber”, “save a river and deny a community hydropower”, or “find the financing for more expensive solar power or accept ill-health and global warming from coal.” I have been convinced that another path or paths exist, ever since reading a remarkable paper on the `valuation’ of a tropical rain forest (Peters, Gentry and Mendelsohn, `Valuation of an Amazonian Rainforest', Nature). This short paper got me thinking about how we ignore the longer-term economic wins of sustainability for short-term profit.
I recently had the wonderful fortune to get involved in a case that reinforced the fact that options always exist, if we work together to find them.
Early in 2010, a consortium of citizens from Sabah, Malaysia came to my laboratory at the University of California, Berkeley, convinced that unexplored options must exist to provide the energy needed for this Malaysian Province without placing a 300 MW coal fired power plant on the edge of the ‘coral triangle’ off the coast of North Borneo. This plant was planned at a site only 20 kilometers from the last remaining reserve for the critically endangered Sumatran Rhino of Borneo (of which there may be only 30 individuals or so remaining). This plan would have required the weekly import of coal from South Borneo (Kalimantan). Just a few years ago, the coal plant seemed inevitable.
Presidents Hu and Obama created buzz earlier this week in Washington when they met on pressing bilateral issues, including US-China business and investment regulation, trade, currency imbalances and security concerns. US-China clean energy cooperation is an important part of that bilateral dialogue (see transcript of my intervention at a January 18 US-China Strategic Forum hosted by Brookings).
Cooperation between the two countries can yield big economic benefits. The world is recovering from the worst economic crisis since the Great Depression. In this context, taking advantage of clean energy opportunities is crucial to fueling a sustained global recovery.
In less than 10 years, firms in China, India and South Korea progressed from no wind turbine manufacturing experience to state-of-the-art wind turbine systems. Consider this: Goldwind from China installed 2,727 MW in 2009, a 140% increase on 2008 that saw its international market share rise to 7.2%. The Indian company Suzlon owns 9% of the global market share. What policies led to such robust domestic wind power development?
Last month, the International Finance Corporation's (IFC's) Cleantech Investment Program hosted Dr. Joanna Lewis, a professor at Georgetown University’s School of Foreign Service, to share research on the strategies used by wind power technology companies in China, India and South Korea to develop wind turbine technology. Lewis is working on a paper that details case studies of the current industry leaders in these three countries, including Suzlon (India), Goldwind (China), and Hyundai, Doosan and Daewoo (South Korea).
Where does energy come from? Why are some people still skeptical about climate change? Why does our energy system absolutely have to change, and how will a price on carbon be the solution?
If you'd like a simple, humorous and to-the-point explanation to the above questions and others related to energy consumption and climate change, then be sure and watch this animation by Andy Lubershane, a Masters student at the University of Michigan.