Low-carbon market to treble by 2020 - HSBC
06/09/2010 by REUTERS
The electric vehicle market would benefit most, growing more than 20 times by 2020 to reach $473 billion (307 billion pounds), said HSBC's "Sizing the climate economy" report.
Climate policy has faced headwinds including faltering U.N. climate talks to agree a post-2012 successor to the Kyoto Protocol and repeated Senate setbacks to a U.S. climate bill.
But mounting pressure on land, water and energy as a result of growth in emerging economies and world population will add momentum towards a more efficient "climate economy," the bank said.
"A new climate is starting to emerge, driven as much by resource scarcity and industrial innovation as by the raw realities of global warming," the HSBC report said.
A market in low-carbon energy and efficiency technologies will at least double to $1.5 trillion (976.5 billion pounds) from $740 billion (481 billion pounds) now, but HSBC analysts expected that it would more likely treble to $2.2 trillion (1.43 trillion pounds), implying global annual market growth of 7-11 percent from 2009-2020.
By region, the market will grow fastest in China, which will leap-frog the United States but still trail the European Union, which has set itself tough renewable energy, emissions and efficiency targets to 2020.
"In the EU we expect renewable but not energy efficiency targets to be met; in the United States we project limited growth in clean energy; and in China, we expect current targets for clean energy to be exceeded," the report said.
The dominant sector shift would be to efficiency technologies such as building insulation and electric cars, which would overtake low-carbon energy technologies such as wind, solar and nuclear power.
Renewable energy is the biggest low carbon sector now, and revenues would grow at 9.4 percent annually to a market size of more than $500 billion (325 billion pounds) by 2020 but still lag transport efficiency at nearly $700 billion (455 billion pounds) in 10 years' time after 18 percent annual growth.
A low-carbon energy economy requires higher upfront costs, for example in insulation or expensive wind turbines. That has led to doubts that targets will be met given spending constraints following the financial crisis.
But low-carbon technologies also cut operating costs by saving on energy or using free, renewable sources.
Under what it called the "conviction" scenario, which HSBC says is most likely, annual capital investment would grow from an annualised $460 billion (299 billion pounds) in 2010 to $1.5 trillion (976.5 billion pounds) in 2020.
New funding models would be required to meet this, especially where investment was from the household sector as for example to purchase electric vehicles or upgrade housing.
Copyright 2010 Thomson Reuters
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