A flurry of recent reports on the renewable energy sector suggest that, while global investments are down from 2011 records, most of the major economies continue to support a low-carbon economy. China last year attracted more than $60 billion to its renewable energy sector, passing a U.S. market that saw a 37 percent decline during the same period. At the same time, carbon dioxide emissions have reached new highs, according to the International Energy Agency. Nevertheless, the renewable energy sector was able to weather the global economic storm by showing some resiliency. In terms of the impact, however, there's been little change in carbon intensity during the last 20 years.
A report from the Pew Charitable Trusts found that more than 80 gigawatts of renewable energy were installed globally last year. That's an 11 percent increase compared to the total from 2011, which Pew said was an indication of price reductions in renewable energy technology. For the 19 major industrialized economies, plus the European Union, China added 23 GW of renewable energy to its sector, making it a world leader with 152 GW of clean energy generating capacity. In 2012, China attracted $65.1 billion in investments in wind, solar and other renewables, a 20 percent increase from 2011. That put it far above the United States, the former No. 1. Despite tax incentives for renewable resources like wind, the United States managed to attract only $35.6 billion in 2012, a 37 percent decline from the previous year.
The International Energy Agency reported, meanwhile, that sales for hybrid-electric vehicles last year passed the 1 million mark as the lower cost of clean energy technology makes them more accessible to consumers. The IEA said it saw particular growth in the solar energy sector, a sentiment backed by the Pew report, which said the installed global solar capacity of 104 GW reported last year was more than four times that of 2009. For the IEA, investment in renewable energy remained strong despite what it said was a climate of "economic, policy and industry turbulence."
On the downside, however, are the reports that China's economy has slowed down, an indication of a slower-than-expected global economic recovery. In the United States, energy consumption has declined in some markets, a movement the oil industry said was indicative of "tepid growth and high unemployment." The IEA, meanwhile, notes that progress on reducing carbon dioxide emissions is "alarmingly slow" despite the gains in technology and investments in countries like China. Part of that is because coal-fired generation increased 6 percent year-on-year and continues to outpace the renewable energy despite major low-carbon investments. The IEA said an increase in coal power is the major reason why there's been only a 1 percent decline in the amount of carbon dioxide emitted per unit of energy supplied since 1990. Though it made gains in attracting investors to its renewable energy sector, coal consumption in China in 2011 represented almost half of the global coal demand in 2011.
Environmental advocacy group Greenpeace said energy efficiency, not renewable investments, is what's needed to ensure a low-carbon future. The IEA notes that global energy demand is expected to grow by 25 percent during the next decade so something in the way of growth needs to give. While Pew and the IEA both found resiliency in renewable energy sector investments, it's money wasted if there's no net benefit. For all the incentives, political rhetoric and interest generated for a greener future, the IEA said the global energy sector "is basically as dirty as it was 20 years ago."
By. Daniel J. Graeber of Oilprice.com