Since 2009, lower fuel and energy prices created some tough uphill conditions for renewable energy. Despite these powerful headwinds renewable energy installations have increased over the last few years.
In 2012, the wider economic and political conditions are likely to worsen for renewable energy. One of the most difficult obstacles will be the reduction of renewable energy subsidies in the US, Germany and the UK.
In the EU, the Eurozone crisis may result in a European recession. In China we are seeing evidence of a slowdown and many are calling for major economic reforms to help that nation to continue its meteoric growth. Finally, the hope and promise of the ‘Arab Spring’ has given way to a winter of discontent as regimes in the Arab world are in turmoil.
In 2012, talk of war with Iran and instability in oil rich regions are creating uncertainty and driving up the price of oil. While this may help to create price parity for renewables, it also creates even greater economic pressures on the fragile global economies of nations that are still struggling to emerge from recession.
Amidst all this political and economic uncertainty, global warming continues unabated. NOAA said all 11 years of the 21st century rank among the 13 warmest. And NASA noted 9 of the top 10 warmest years in its record have occurred since 2000.
The La Nina effect was the warmest on record in 2011 according to data from NOAA and NASA. The increasing probality of melting Greenland and Antarctic icecaps are creating real concerns about the future of the planet.
The string of warm years in the last decade is linked to rapidly increasing concentrations of greenhouse gases NASA said. “Higher temperatures today are largely sustained by increased atmospheric concentrations of greenhouse gases, especially carbon dioxide,” NASA wrote in a press release. As the world’s economies get stronger, energy demands will keep increasing and carbon emissions will keep rising.
The IEA’s chief economist has said that governments only have five years to avoid more than 2°C of global mean temperature rise.
These factors coalesce to create a troubling outlook. There is both an increased need for renewable energy and a decreased economic and political capacity to meet this need.