The search for cleaner technology is in limbo as failing markets and oil dependency have businesses scrambling
Competing financial and environmental interests threaten the pursuit of green technology, said Aalborg University Professor Frede Hvelplund at the ‘Beyond Kyoto’ conference on Friday.
With government and business shifting their focus on nursing failing financial health, commitment to aggressive climate policies has begun to wane, he said.
“We have guaranteed billions and billions and billions of dollars for the bank system,” he said. “Couldn’t we guarantee just 10 percent of this for green solutions?”
A Deutsche Bank study estimates the worldwide governmental financial commitment to green technology at around $200 billion. Right now, the United States proposes spending $500 billion alone on bailing out failing banks.
“This is just the vicious circle of the present climate, energy and financial policy,” said Hvelplund. “This is hampering green tech innovation.”
‘A systemic failure’
Hvelplund also pointed to rich countries’ dependency on fossil fuels as a threat to environmental progress.
Falling gas prices spike consumption, increasing reliance on oil-producing countries for their goods. The effects on both the financial market and the environment are devastating.
“You could say you have a drug problem,” he said. It’s like trying to cure a person who’s hooked on heroin by making it cheaper.
“This is a systemic failure,” he added.
“You cannot function as soon as there are small changes in the economic growth,” explained Hvelplund. “This is really bad when the problem is linked to carbon dioxide initiatives.”
Unpredictable markets weaken the effectiveness of current carbon quota because they’re tied to supply and demand, which fluctuate in an unstable economy, he said. While these programs help cap emissions, if the prices of carbon dioxide fluctuate, there is reduced incentive to commit to technology innovation.
The road to efficiency
To fix this problem, Hvelplund proposed a new “efficiency quota” system based on kilowatt hour usage of carbon dioxide and would set lower emission benchmarks annually to promote cleaner energy.
For example, a benchmark in 2010 could be 535 grams of carbon dioxide emitted per kilowatt hour. In 2011, that number would dip to 520 grams, and by 2030 it would reach 490.
If an entity such as a power plant or large firm performs more efficiently than the benchmark, they can trade their quota, like in the current system. The advantage of efficiency quotas, however, is that they can be applied to households and small companies since they’re linked to something easily measurable like kilowatt hours.
With the aid of a stable carbon market and a renewed emphasis on new energy initiatives, the world could start to shake off the ill effects of an addiction to oil. While the detox won’t come easily, Hvelplund takes a pragmatic approach to the situation.
“If you lack a sustainable energy policy,” he said, “then establish a worldwide system that tries to motivate people with stable consumer prices.”
By Tabitha Russell