Stalled clean energy investment due to the current recession makes severe climate change more likely, according to a new report by analysts with New Energy Finance (NEF).
Presenting their findings today at the second NEF summit, the analysts suggest that investment in clean energy would need to reach $500 billion by 2020 in order for CO2 emissions to peak in 2020 and decline therefafter. The scenario under which emissions peak by 2020 is what scientific experts have suggested is necessary to avoid the risk of “irreversible” climate change.
Graph represents CO2 emissions from fuel combustion (Gtonnes CO2). Credit: New Energy Finance Global Futures 2009, IEA.
However due to the current recession, NEF believes such an investment to be highly unlikely. Currently, investment in clean energy stands about $150 billion for the past two years. NEF predicts that investment will hold steady during the recession and only grow once the crisis has passed. That may prove too late for investment to reach the required figure without substantial action.
NEF admits that the current recession will lessen CO2 emissions globally because several industries are pulling back on projects or shelving them entirely. But they expect the drop in CO2 emissions to be small, around 3 percent, and not enough to off-set slackening investment in clean energy.
If current models hold steady, investment in clean energy should reach $270 billion by 2015, $350 billion by 2020, and $461 billion by 2030, which is far below the investment NEF and climatologists would like to see.
Despite a gloomy prognosis, NEF says that it is possible to reach the $500 billion target figure by 2020 but only through significant acceleration in investment in the midst of what may be the worst economic recession since the 1930s.
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