We are seeing unprecedented momentum towards a new kind of economy. Low-carbon, green, sustainable – call it what you like, the underlying principles are the same. Why the growing shift? There are a number of reasons, but here are a few recent developments:
- All in on low carbon: At the end of 2015, 195 countries coalesced around the Paris Agreement at the UN Climate Conference (COP21), coming to long-awaited consensus that carbon must be contained. Carbon pricing, which was already accelerating, will likely become even more prevalent as a result. In turn, this will increase the costs of fossil fuels and make renewables more competitive.
- To invest or divest, that is the question: The evolving policy environment and proliferation of carbon pricing mechanisms are forming a clear signal to the market about the future of fossil fuel investments. As we wrote in a previous blog, universities including Stanford and Georgetown, as well as organizations such as the Rockefeller Foundation and Norway’s Sovereign wealth fund, are divesting of their fossil fuel investments. Some investors and environmental advocates are pressuring other organizations (especially universities, pension funds, and community groups) to do the same.
- Renewable energy parity: According to this report by Deutsche Bank, electricity produced from solar photovoltaic (PV) is currently at 30-40% below the retail price of electricity in many markets globally, and it is expected to continue to drop, potentially on par with the price of coal by later this year. New business models are emerging that will contribute to drive down the cost of improving clean technologies, such as solar PV.
While it is obviously a very challenging time for conventional energy companies, the potential upside of the new ‘green’ economy is enormous:
- New markets: The global market for green economy goods and services was estimated to be more than CAD $6 trillion in 2014 and continues to grow. Domestic and global markets for clean technology, resilient infrastructure, environmental services, and sustainability solutions across many sectors – including energy, transportation, buildings, resource efficiency, water, and food systems – are poised to expand.
- New jobs: Delphi’s recent report, “West Coast Clean Economy: 2010-2014 Jobs Update,” demonstrated that climate and energy policies across North America’s West Coast have spurred job creation and economic growth. The clean economy growth rate in the Pacific Coast Collaborative region (BC, California, Oregon, and Washington) has been more than twice (2.2 times) as fast as that region’s overall job growth. This growth is likely to continue across the West Coast region and in other parts of North America.
- Economic diversification: For a new federal government that is eager to find ways of diversifying the Canadian economy in the wake of plunging oil prices, the green economy is rife with potential. Prime Minister Trudeau has already earmarked $300m for the cleantech sector, which is one of Canada’s fastest-growing sectors and which has huge export potential, especially with a low Canadian dollar. The federal government has also included green infrastructure as part of a $60 billion ten-year plan.In the private sector, progressive energy companies are looking to develop new platforms for growth and diversification – such as renewables and other clean technologies in order to reduce their environmental footprints – in response to the anticipated shift in the energy supply mix.
Look for more blogs in the future about the opportunities associated with the green economy, but in the meantime, check out our Green Economy Advisory Services. We can help your organization better understand and benefit from evolving industry trends and policies, shifts in technology, and the employment opportunities that are associated with the transition to a lower-carbon future. Regardless of where your organization fits within the green economy, The Delphi Group can equip you with the intelligence and advice you need to succeed.
For more information, contact Paul Shorthouse, Regional Director by email at email@example.com
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