The world is at a crossroads; the cumulative effects of most of the environmental effects of pollutant economic activities have started to take a toll on the fragile balance of the ecology of the planet; for example, the increase of global temperature otherwise known as Global warming. Many of these effects are being seen as an increasingly erratic climate that swings from one disaster to the other; including a more frequent occurrence of severe typhoons, hurricanes, drought, and floods.
Scientists had long warned that the pollution of our planet was not without consequence; now that the hens have come home to roost, there is a renewed sense of urgency to reverse some of the effects caused by our activities. A worst-case scenario would be such a severe climatic change that it would alter the course of civilization; and not for the better.
Human activities encompass both economic activities and domestic activities; these two are linked by one factor, the usage of energy. the link between global warming and energy generation is the release of Greenhouse gasses (most importantly Carbon dioxide) into the atmosphere through the combustion of (especially) fossil fuels; other activities, for example, those involving the destruction of natural forests, reduce the capacity of the globe to absorb these gasses thus hastening the greenhouse effect. In my view, addressing the issue of energy generation and global warming is the most urgent and deserves greater attention by business players on a global scale.
For a long time, global climatology was a reserve of scientists; many political and economic leaders did not believe that the various activities contributed to the, albeit subtle, changes in how the climate of the globe is. Today, however, every aspect of business products can be measured in terms of how much units of carbon have been released into the atmosphere for the finished product to reach the consumer (Ladislaw et al., 2009).
The issue has also been widely recognized as a global issue requiring the cooperation and attention of world political and economic leaders. These are great strides for the fight to stop global warming considering the difficulties of bringing the issue to the world stage in the first place; however, in the face of a global economic recession, observers are worried that to execute economic recovery plans, various countries may compromise on their pledges on the reduction of carbon emissions thus reversing all the gains made from past efforts to reduce such.
Global Warming, World Economy, And The Energy Market
The global climate is very closely linked to the world economy; the unifying factor between these two is the utilization of fossil fuels for powering various economic and domestic activities. Some of the world’s economies depend on a large part on the sale of these fuels in form of crude oil, natural gas, and coal. Additionally, some utilize some of these fuels to power their industrial activities; for example, Canada and China are countries that utilize their natural deposits of coal to generate power for various uses [Houser et al, 2009]. Policy changes that would alter the volume and manner of usage of these fuels would no doubt reflect on the respective economies of these countries and by extension of the world. The importance of the fuel market to the world economy is seen as the ripple effect seen when the prices of this commodity fluctuate; the effects are felt on the prices of food, power, cost of agriculture et cetera.
Some of the economies are also linked in regards to energy utilization and carbon emission; for example, the two important economies China and the USA are major sources of greenhouse gases (GHGs). The emission from the US are attributed mainly to consumer-related activities such as the purchase and operation of large horsepower poor-efficiency vehicles, which accounts for 70% of all GHG emissions; this activity is funded by cheap credit from China (Bergsten et al, 2008). On the other hand, the Chinese are investing heavily in industrial activities such as steel and aluminum; which account for 70% of the country’s GHG emissions, buoyed by confidence from their American investments (Bergsten et al, 2008).
Green Energy; A New Industry
The need to reduce carbon emissions has led to the rise of a whole new industry geared at developing more efficient ways of producing renewable energy [Andersen, 2009]. This has been through the support of the respective governments by creating enabling business environments.
One of the frontiers that have blossomed from the increasing demand for renewable energy is the wind power sub-sector. Companies such as Vestas and Siemens, both originally from Denmark; and GE Energy, an American company and Enercon, a German company, have been the leading lights in the development of increasingly efficient wind turbines that can produce much more electricity than their predecessors. The European Union has put in place mechanisms of reducing carbon emissions by encouraging the development of wind energy installation and guaranteeing the investors access to the market; consequently, Europe commands more than half of the total wind capacity in the world which stood at 57,000 and 97,0000 megawatts respectively by the end of 2007 [Hassan, 2008]. The reduction of dependency on fuel energy has a profound effect on the environment; for example, for every megawatt of wind energy generated, approximately 496 tons of carbons are reduced from the expected emission. Therefore, 1,466 megawatts that would result from the investment of $1billion would result in a reduction in emission by 727,000 tons of carbon.
Another sector that is rapidly becoming significant is the development of fuel-efficient and hybrid vehicles. The latter can operate entirely on electricity when running at low speeds. Encouraged by government incentives for example the Energy Policy Act of 2005, automobile companies such as Toyota, Lexus, and Honda have come up with a hybrid vehicle ready for consumer utilization (Houser et al, 2009).
Many other companies have committed themselves to develop technologies that reduce carbon emissions; even the industries traditionally blamed for causing most atmospheric pollution are undergoing metamorphose into more environment-friendly ventures. For example, more fuel-efficient furnaces for the combustion of fossil fuels have been developed; some of these can even capture and store the carbon emitted in the course of the combustion.
Some of the government interventions have also helped to spur industries into a greener direction; for a long time, the industries have not been incurring any cost for environmentally destructive activities; however, by the imposition of penalties, the cost of pollution is factored into the cost of production thus making the end product less competitive in the market. In the same breath, green energy breaks given to companies that meet carbon emission restrictions make green energy more competitive.
Investment in renewable energy has obvious benefits to the environment; however, the creation of a new industry will also affect the economy. For example, in the US alone, the green energy industry is estimated to generate $1.05billion in earnings and resulted in 9million new employments. The figure is expected to rise to 37million ‘green jobs’ in the next two decades; this is approximately 17% of the projected employment up to the year 2030 (Andersen, 2009; Kammen et al, 2004). Therefore, green energy will not only save us a lot of trouble in the future in terms of global climate change, but it may be the perfect vehicle for reviving economies around the world languishing in a state of recession.
The respective governments should reiterate to reduce the carbon emissions in the countries; on the other hand, all the industries that have been blamed for the release of GHGs should strive to develop more efficient technologies that will curb this. Better ways of measuring the ‘carbon footprint’ of a product would improve the pricing of these goods to accurately reflect the cost of environmental pollution of producing the product.
The need to reduce carbon emission is urgent; obviously, the effort to achieve such reduction cannot be left to one government or private agency. It has to be a concerted effort with co-operation between government, the private sector operators and the consumers.
Additionally, the effort should have a global outlook; for example, what would be the use of reducing emissions in all countries other than the United States and China? The effects would not be as significant since these two are major culprits of emission. To effectively reduce the impact of human activities on our planet, everyone has to be involved and participate.
Andersen Glen. ‘Renewables can promote economic recovery, increase energy security, and protect the environment. NCSL Magazine: National Councils of State legislatures 2009: Web.
Bergsten, C. Fred, Charles Freeman, Nicholas R. Lardy, and Derek J. Mitchell ‘China’s Rise: Challenges and Opportunities, Washington: Peterson Institute for International Economics, 2008.
Hassan Garrad ‘Overview of Canada’s large wind turbine supply chain opportunities’ Canada Inc. For CanWEA 2008.
Houser T, Shashank M, and Heilmayr R: ‘A Green Global Recovery? Assessing US Economic Stimulus and the Prospects for International Coordination Peter G. Peterson Institute for International Economics and World Resources Institute Policy Brief Number PB0 2009: Web.
Kammen D. Kamal Kapadia, and Matthias F. ‘Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate?’ Berkeley, CA: University of California. 2004.
Ladislaw S, Kathryn Zyla, Jonathan Pershing, Frank Verrastro, Jenna Godward, David Pumphrey, and Britt Staley: ‘A Roadmap for a Secure, Low-Carbon Energy Economy: Balancing Energy Security and Climate Change. World Resources Institute and the Center for Strategic and International Studies. 2009. Web.