Winds of change sweep world

West Australian
11/01/2008 Page: 19

Climate change is rewriting dramatically the rules for business, investors and consumers worldwide, affecting more than $100 billion in annual capital flows, a new report says. Global spending on renewable energy sources such as solar, wind, hydro and geothermal leapt 27 per cent to an estimated $66 billion last year, after a 33 per cent jump in 2006, according to the annual Worldwatch Institute State of the World report.

It says that investment in carbon trading is growing even faster, nearly tripling in 2006 to an estimated $30 billion. In Australia, a surge in corporate spending on energy technology is expected as the Labor Government promotes its target of 20 per cent of the nation's electricity coming from renewable sources by 2020. It has pledged a national carbon trading system from 2010, possibly requiring businesses to pay for emission permits.

Launching the report, which is in its 25th year, the president of Worldwatch, Chris Flavin, said that the world had woken up to the environmental challenges facing it and was moving towards a vibrant, sustainable economy. Yale University environmental law professor Daniel Esty said there was a sea change in business attitudes towards the environment. Global corporations such as General Electric, Toyota and Dow were embracing clean technology, not because they were "do-gooders" but because the bottom line was right, he said.

According to World Bank data, 39 countries experienced a drop in wealth of at least 5 per cent when taking environmental damage - unsustainable forestry, carbon emissions, depletion of non-renewable resources - into account. It coincided with clean technology growing rapidly, by 78 per cent to nearly $3 billion in 2006, to be the third-biggest area of venture capital investment behind the internet and biotechnology.

The report says more needs to be done, calling for a government policy overhaul to steer investment away from fossil fuels and towards sustainable practices. It was revealed this week that Victoria's annual energy-related greenhouse emissions had surged nearly 30 per cent since 1990 because of its reliance on brown-coal power stations.

"We have the tools today to steer the global economy on to a sustainable path," the report says. "The task now is to bring them together and scale them up so that they become the norm across today's economies." The report praises Australia for the Howard government policy of replacing incandescent light bulbs with compact fluorescent bulbs, which are four times as efficient.

Japan is expected to pledge $11.35 billion over the next five years to help developing countries such as China and India combat the effects of global warming. The move, reported in the Nikkei business daily, comes after Japan was criticised by environmentalists for arguing against compulsory greenhouse emission reduction targets at the climate change summit in Bali.