Monday, June 9th, 2008
IEA Demands $45 Trillion Investment in Clean Technology
By Jennifer Yousfi
Managing Editor
The world must spend $45 trillion to cut its dependence on oil and reduce greenhouse gasses, the International Energy Agency (IEA) said Friday.
According to the IEA countries must commit 1.1% of projected total global gross domestic product (GDP) to develop sufficient clean energy technology by 2030.
“Carbon emissions must be cut. Costs of about 1% of [global] GDP are not outrageous, so this target is realistic,” Go Hibino, a senior manager at Mizuho Information & Research Institute, told Reuters.
Without a change in current governmental policies, carbon-dioxide emissions will rise by 130% and oil demand will climb 70% by 2050, Nobuo Tanaka, IEA’s executive director, said in a statement.
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“There should be no doubt - meeting the target of a 50% cut in emissions represents a formidable target. We would require immediate policy action and technological transition on an unprecedented scale,” Tanaka said. “It will essentially require a new global energy revolution which would completely transform the way we produce and use energy… We need to act now.”
No Longer Just an “Alternative”
In order to achieve the ambitious reduction targets, countries will need to build 32 new nuclear power plants and 17,500 wind-power turbines each year. If that happens, so-called “alternative” energy will no longer be just an alternative.
“The private sector has already been increasing its investment in clean energy at a very fast pace over the past few years,” Michael Liebreich, chairman and chief executive officer of New Energy Finance, said in a press release. “We believe that if policies create the right incentives, our own expectation of $450 billion of annual investment in clean energy by 2012 can - and will - be met.”
Here are some ways to get in on the trillions of dollars the IEA expects to see pouring into these sectors over the next several years:
- Two of the largest producers of wind-powered turbines include General Electric Co. (GE) and Siemens AG (ADR: SI). GE just received a $2 billion order from investment guru T. Boone Pickens and expects another $6 billion in orders from Pickens’ planned 4,000 MW Pampa project alone. And Siemens will supply the turbines for a 500 MW wind farm planned in the United Kingdom.
- All of those new nuclear power plants are going to need uranium to keep them running. Cameco Corp. (CCJ) is the largest producer of uranium in North America. Diversified mining companies Rio Tinto PLC (RTP) and BHP Billiton Ltd. (BHP) also have significant uranium holdings.
- If you prefer the built-in diversification that mutual-fund-type investments offer, consider an exchange-traded fund (ETFs) that focuses on such “clean” technologies as solar and wind power. One of the top ETF names in this category is PowerShares WilderHill Clean Energy Fund (PBW).
[Editor's Note: For a related story in today's issue on conventional oil plays, please click here.]
News and Related Story Links:
- Money Morning:
Cashing in on Commodities: The Short- and Long-Term Solutions to the Growing Global Energy Crisis