Will the Fiscal Crisis Hobble the Clean-Energy Industry?

[GliderGuider]

Will the Fiscal Crisis Hobble the Clean-Energy Industry?

Concern is growing that the credit market crisis, and the role governments are playing to bail out banks, could have a devastating effect on markets for carbon and on government support for renewable energy.

But Mr. Karmali was sanguine about the impact of the current fiscal crisis, saying that the market for environmental finance was now too advanced, and too important, for banks to abandon.

He also said that the forecast by Merrill Lynch for total value of the global carbon market (including allowances issued by governments, credits generated by carbon-cutting projects, and futures and options trading) would reach $100 billion this year — the most valuable yet — after hitting $64 billion in 2007.

Even so, there appears to be some alarm among experts in environmental finance.

Michael Liebreich, the chairman of New Energy Finance, an influential research group, signaled this week in a briefing on the market dust-up that an end to the era of cheap credit and a downturn in the price of commodities — including fossil fuels — in the short to medium term were two important factors that could hurt investment in clean energy.

He also suggested that the clean energy industry may well be facing an end to favorable government policies that have done so much to drive markets for low-carbon finance and technology thus far.

“In country after country, this web of support mechanisms for clean energy is now under review,” Mr. Liebreich wrote.

Overall, it's an optimistic article. However, I feel like I've heard that "too big to fail" argument somewhere else recently...

[ixion]

1. it's going to hobble everything... a REAL bailout would have created jobs

in the alternative energy field. There is a boom there waiting to happen, but our government would rather continue to fondle Big Money and Big Oil rather than open up the field again.

I think the dot com boom scared the old money folks. They don't like the unwashed (albeit intelligent) masses showing up at the champagne and caviar brunches.

[Strelnikov_]

2. Yes n/t