Greens under the beds

August 12, 2010

Martin Cohen seems determined to reveal some dark hidden truth about the potential for profit in climate change, but this is to miss the point ("Profits of doom", 29 July).

Energy supply is a multibillion-pound business in the UK alone; the sector requires continual massive investment to ensure the security and reliability of supply, and those who invest need to see the potential for a return. Much of the policy to address climate change is about changing investor behaviour, so that solutions that were unprofitable but offer substantial additional benefits (for example, not contributing to massive ecological change) become more attractive. By incentivising increased uptake of less harmful technologies, they become cheaper, hopefully becoming the default investment option. Such changes will reduce damage to the environment, stimulate new employment and potentially mean cheaper energy in the long term (especially as fossil fuels become scarce and thus rise in cost). It would be a victory if we can get to the stage where money goes to renewable sources.

The article reads as if Cohen is trying to pull back the curtain to reveal some dark inner workings to climate change. But since all the evidence suggests that climate change is happening, there is a clear need to better understand its impact (including economically) and address it as best we can. This means starting from the economic framework we have, which is based on the profit motive.

It is not clear whether Cohen is claiming that climate change is not a problem, that it is a problem but one we should not attempt to address, or whether he thinks all the proposed solutions should be rejected for being rooted in profitability. Whichever it is, it is difficult to gel any of these positions with the reality of current science or our existing society.

To address some errors in the text: Denmark's energy is expensive, but is this to cover the costs of renewable energy? Partially, but since the 1990s the country has had a policy of shifting to carbon and environmental taxation, so the differential reflects a society trying to stimulate internal change to address a recognised problem.

Why are photovoltaic cells made in poor countries? That's an odd way to describe Germany, Japan and the US, three nations that have battled to be at the forefront of solar-cell manufacture for the past two to three decades. China is rapidly building its manufacturing capacity in this area, largely for the same reasons as the pioneers: it is a high-tech industry offering high-tech jobs and the potential for significant export income. Why? There's an obvious perception that there is money to be made as global demand increases. By investing now, China, along with its Western competitors, sees huge potential for the future.

Peter Connor, Senior lecturer in renewable energy policy, University of Exeter.

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