The challenge: Finding $ to turn 'green shoots' into redwoods

The International Energy Agency (IEA) is seeing “green shoots” in the economy again, but one has to wonder whether there’s more wishful thinking than reality involved in that assessment.

Yes, global spending on renewable energy like wind and solar “remained broadly stable in 2009 despite the economic downturn,” as the IEA notes. But government stimulus spending has now peaked and austerity measures have emerged as the sequel. As Telegraph columnist Ambrose Evans-Prichard pointed out over the weekend, even at the height of the US stimulus, economic growth clocked in at a tepid 2.7 per cent. Under today’s circumstances, it’s difficult to envision where continued funding for clean energy and low-carbon technologies will come from.

The UK’s new coalition government says the answer lies with a host of non-traditional financing measures to be fast-tracked via a new Green Investment Bank. The scope of that challenge, though, can’t be overestimated: the Green Investment Bank Commission says the UK will need £550 billion by 2020 to meet its climate and clean-energy goals … and that kind of coin is, to put it charitably, hard to raise these days.

Meanwhile, even China — which still actually has cash and is spending like mad to build a green economy — is finding its ambitions hobbled by a growing consumer culture. The new Chinese middle class want to live more like Westerners, and that means more cars, more appliances and electronics and ever-more energy consumption.

“As a result, China is actually becoming even less energy efficient,” stated a New York Times article over the weekend. And because so much of the country’s energy still comes from fossil fuels, carbon emissions continue to rise, despite its best green efforts.

On a global level, said IEA executive director Nobuo Tanaka, “What we need is rapid, large-scale deployment of a portfolio of low-carbon technologies; we need a massive decarbonisation of the energy system, breaking the historical link between CO2 emissions and economic output, and leading to a new age of electrification.”

All very well and good. But who’s going to pay for it?