Credit crunch: a disaster for the environment too?
Investments in sustainable energy are under threat now that the major market players are shifting their focus to the short term.
The plan by German energy producer E.ON to build a second coal-fired power plant near Rotterdam has everything to do with the low price of coal. If the credit crunch and relatively cheap fossil fuels lead to the construction of traditional power plants, it's the environment that will pay the price.
Clean technology and sustainable energy production are matters for the long term. Businesses and organisations active in the field of sustainability know this all too well. It is hardly surprising, therefore, that environmentally aware Dutch banks such
as Triodos and ASN barely seem to have been affected by the credit crunch at all.
Nor should it raise any eyebrows that German wind-energy company RWE unveiled its plans for two giant offshore wind parks in the North Sea on 6 October, the very day that the Belgian-Dutch rescue of the Fortis banking and insurance group confirmed that the global economic storm had made landfall in the Netherlands.
An investment of billions
"A company like RWE wasn't born yesterday," says Peter van Vliet, who in his capacity as editor-in-chief of sustainability website duurzaamnieuws.nl "keeps his finger on the green pulse". The billions invested in those wind parks at sea aren't about to blow away either, they're for the long term:
"This producer is paying less attention to the short-term price of oil. The world of ‘renewables' works on the basis of the long-term view; it sees the bigger picture. They are clearly looking to a future in which the structural shortages of fossil fuels will make themselves felt, and once again exert pressure on the price."
Billions for the banks, not the environment
But on the other hand, the credit crisis does pose a threat to the government subsidies which help make the sustainable production of energy possible, warns energy expert Coby van der Linde. The thousands of billions that governments across the world are now pumping into saving the economy can no longer be channelled into green energy.
Last week businesses were still very much interested in the idea of a stock market which would focus was on sustainable energy. Yet the foundation behind that initiative, DE Koepel, is now taking account of likely caution among potential investors. If for no other reason than the fact that economic prospects are now a
universal cause for concern.
Clean now means expensive
Sustainability expert Peter van Vliet sees yet another danger: the major producers such as E.ON, Essent and NUON always try to capitalise on the energy prices at any given moment and there is no denying that the current fall in oil prices has produced a far rosier economic picture for fossil-based energy. Solar power, wind power and geo-thermal power have become more expensive by comparison. Mr Van Vliet can already see the clouds on the horizon:
"The risk involved here is that any energy decisions taken in this period will favour traditional investments, resulting in a decision that we will be stuck with for the next 40 or 50 years."
After all, a power plant - whether fired by coal, oil or gas - can easily continue to operate for 50 years, with all that this entails in terms of CO2 emissions.
Energy specialist Coby van der Linde also warns of the consequences of short-term thinking, since there is no denying that the price of oil - fossil fuel number 1 - will rise again:
"The long-term forecast is that it will rise even more because the production costs are much more expensive than they were for the oil we used to produce in the past."
Do it yourself?
And what about the well-meaning citizen? The private individual who is wondering whether to fit a couple of solar panels to the roof, invest in a windmill or turn to geo-thermal heating? Is he also suffering from a case of investment jitters?
Sustainability expert Peter van Vliet thinks not. He believes that recent developments give the small-scale investor yet another good reason to take care of his or her own energy needs. By installing your own energy sources, you create an independent position for yourself which can also end up saving you money.
All things considered, it would seem that the entire sustainable energy sector is gearing up for a modest economic dip but that the long-term forecasts remain favourable. However, it remains to be seen whether the rest of the world is prepared to set its sights that far ahead.
Thijs Westerbeek van Eerten
Editor's note: For an inside take of our production and consumption patterns, view The Story of Stuff
, a provocative film on the sustainable economy which exposes the connections between a huge number of environmental and social issues.