Impact of the economic crisis on renewable energy and other environmental issues.

A question was asked in April on one of the leadership forums about the impacts of the economic crisis on Renewable Energy suppliers and other environmental concerns. At that point, most answers were speculative. Now we have a little more insight and these are my answers to the questions that were posted: 

  1. How will this crisis affect the renewable energy industry?
  2. Will the possibility of creating green jobs surpass the additional cost that a customer would be able to afford to have clean energy?
  3. Should environmental consciousness prevail?
  4. Would governments change their commitments by reducing incentives to renewable energy in a moment that tax payer money has more important uses?
  5. How would a renewable energy company adapt to this market of lower capital and possibly much lower revenues?

1) How will this crisis affect the renewable energy industry?
Orders for PV (solar) panels have dropped or been delay for some suppliers and dipping oil prices have destroyed the growing demand for alternative energy sources. However, we  have a much bigger problem in climate issues and some of the more responsible Governments have kept firmly focused on this issue through education and policy change. The Ontario Green Energy Act  and some of the recent changes in US policy are examples.

Still more work and funding is needed. More of the infrastructure incentives need to be directed at renewable energy and more education for business leaders is needed.

2) Will the possibility of creating green jobs surpass the additional cost that a customer would be able to afford to have clean energy?
In the long run, creating renewable energy and other green jobs is an imperitave and it will happen. The question is, how much environmental damage are we willing to tolerate first, and how much are companies and government willing to invest to making the necessary transitions in their respective businesses and countries. If they don’t make the investments now, many of the opportunites will continue to go to companies and countries that are willing to spend now. And opportunities will aslo go to countries who are willing to do the work at a lower price point. Countries like China and India will gain the expertise, manufacturing capability and market share and this is already happening.

The question is not whether the green jobs will be created, they are being created. Rather where will they be created?

3) Should environmental consciousness prevail?
With CO2 levels at 389ppm and rising, and most climate scientists now having revised their estimates of safe levels down to 350ppm from 450ppm, I think we need to take every available opportunity to focus on environmental concerns. CO2 production is just one issue. There needs to be much more research and action taken on water issues as well. We don’t think about it now too much but both of these issues are impacting the world already and it’s going to affect everyone much sooner than most anticipate.

The good news for business is that being environmentally conscious is actually good for business. Energy reduction methods actually do work and some companies I’ve talked to have saved millions in energy bills, not to mention having positive environmental impact. 

The other good new is that business owners and executives I’ve met are just like everyone else when it comes down to it. They want a better world for themselves and a better life for their children. When they start realizing that their company’s actions are having a negative impact on the future, they do start becoming more conscious. As they become more conscious, they start to get more educated. As they become more educated, they become more active in making changes.

But much more awareness building is necessary for business leaders. Businesses hold a tremendous power to create positive change through their own actions and through their supply chain. When executives learn a little more and they figure out how they can actually save money, save the environment, and please investors all at the same time, most are happy to make an investments in  changing their business culture.

And for the record, I haven’t met any of them who really want to wreck future possibilities for their children. (Still, ignorance or abnegation of responsibility is no excuse for inaction.)

4) Would governments change their commitments by reducing incentives to renewable energy in a moment that tax payer money has more important uses?
It’s good to see that at least some haven’t. Some governments are beginning to recognize climate change as one of the most important issues and, from that persepctive, there aren’t a lot of better uses for their money.

The concept of sustainability is about “meeting current needs without comprimising the ability of future generations to meet there needs”. Clearly if a nation is seriously suffering (e.g. food shortages, HIV, war), then there are some “current needs” that need to be met first or there won’t be future generations. But if we don’t deal with climate issues, there will be some serious issues for future generations in meeting their needs and more govenments are becoming conscious of this fact.

Obviously there is always a balance between current and future needs but the concept of social and environmental justice for future generations is starting to be understood.

5) How would a renewable energy company adapt to this market of lower capital and possibly much lower revenues?
They need to do a number of  things:

First, they need to keep expenses in line to help them preserve cash for as long as they can. Re-negotiating supplier contracts, salaries, etc.

Second, creative marketing especially in areas where Government incentives make sales of renewable energy more likely.

Third, they need to be creative with partnerships, e.g. Design firms, home builders and construction firms, banks. Retrofitting a home or building with solar panels or wind mills isn’t impossible, but incorporating them into every new home or building, is something I think most home or building owners will appreciate because, even though there is a higher capital outlay, there are lower monthly energy costs which make up the difference and there is a higher building value. They need to help the designers and builders do the math for buyers.

Fourth, they need to look for funding sources just to keep going. In the long term, it is highly likely that conventional energy prices will rise again because, no matter how fast we convert, oil consumption can’t go on forever without impacting supplies. Demand for oil will rise and so will prices.

Fifth, they need to keep lobbying Government for support through policy change and funding.

Sixth, they need to support non-profits who are willing to reach out to the business community on issues of carbon reduction.

Summary

There has been an impact. Thankfully, some have been positive. And we can all do more to help. Encourage business owners to purchase from environmentally friendly suppliers, reduce their carbon output, reduce water usage and packaging. Vote for govenment leaders that support sound environmental policies, buy green products where one is available, taking advantage of incentives for environmental changes like purchasing cars with high fuel efficiency (hybrid or other), installation of solar and wind power, installing high efficiency furnaces or geothermal units. If  you’re going to stimulate the economy anyway, spending money on the environment is a good purchase.

If you know anyone who might benefit from these tips and ideas, please share them by e-mailing the content (with links to our page), pressing the Share button or telling someone you know about this site. Please comment or fee free to contact me.

All the best,

Garth Schmalenberg
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
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Phone: 1-416-919-6598

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