Green Stimulus by Nation

Here is a look at what % of the fiscal stimulus packages of various nations has been devoted to "Green Projects":

(From the Economist): " How green is your stimulus package?

THIS week HSBC, a big bank, published a report ranking 17 countries by the green elements of their economic-stimulus packages. South Korea is apparently allocating a whopping 81% of its fiscal stimulus to greenery and China is setting aside 34% for eco-friendly projects. By contrast, India is investing nothing of its $13.7 billion stimulus plan for green ventures. Italy and Japan are the least green of the rich G7 countries, allocating just 1.3% and 2.6% respectively."

Graphic courtesy of Economist.com

One of my long-term concerns about the current financial crisis, is that the temporarily "lower" price of oil will cause the world to lose focus on the need to develop alternative sources of energy. This potential loss of focus will not only contribute to a future energy crisis, but remove needed investment from a future growth engine. Better yet the time to invest in alternative energy is right here and now while we still have fossil fuels to depend on, as opposed to just making small casual investments in the present and letting things slip until we have a full blown crisis on our hands.

While this is not the case with all nations, several of the world's economic powers missed a rare opportunity to kick start the development of alternative energy sources.

Sources:

The Economist: "Green Shoots" -- April 3, 2009.

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn't be viewed as financial or investment advice.

Comments

[Amouna:]

This shows you the predictability and stupidity of humanity today. They only deal with situations as last minute emergencies. I don't expect them to deal with energy related issues anytime soon. The Green revolution is only a political sweet campaign talk not to be implemented until peak oil hits.

Apr 07 06:59 AM

[riversedge:]

Japan and Italy are two of the most efficient in the world...they can 'afford' to spend less...others need to spend big simply to catch up to them...

Apr 07 09:23 AM

[ECONOMICS 101:]

As long as oil is below $70/barrel there is no GREEN alternative that makes economic sense. It's a cat and mouse game of when do you begin to invest in alternatives.

Apr 07 09:26 AM

[Road Runner:]

You’re preaching to the choir Markham.

They could have done a much better job in the stimulus package to promote alternate energy by covering part of a homeowner’s cost for putting solar on a house. It could be like 50% of cost for installing a system in 2009, and 30% of cost for 2010. This would be relatively simple for the federal government to implement, and it would create the kind of “I need it now” demand that a stimulus package needs to create.

But, no! We get $8 billion for high speed rail that will takes years to spend, do little to create a high speed rail system ($8 billion is a drop in the bucket for these projects), not improve overall productivity (high speed rail is only an economic benefit on the East coast between Boston and Washington, and this stretch already has a decent train), and do little to promote long term change to an alternative energy future.

Apr 07 10:26 AM

[Road Runner:]

Don't despair. The emerging countries are still increasing their use of oil. This economic crisis is temporary. I'll go out on a limb here and make a prediction. Oil at $70 at the end of 2009, and oil at $100 at the end of 2010.

Apr 07 10:29 AM

[Road Runner:]

$200 billion for China and $94 billion for the US. Does China scare everyone like they scare me? They are only 25% the GDP of the US, but they have that "flashing brights in my rear view mirror" effect for me. Like a hot-shot kid with a new muscle car. I guess the best recourse is to make sure a person owns some stocks in China.

Apr 07 11:05 AM

[WayneS:]

According to the chart below only 1.6% of petroleum goes toward electrical energy, of which almost all "alternative energies" provide. So, why would the price of a bbl of crude affect viability of "alternative energy?" This is also why the CEO of XOM a while back said that they were not investing in "alternative energies." To me, it is like asking the plumber and electrician to spend their money on finding better paint or construction material. Are we muddling the water so no one knows what anyone is talking about?

upload.wikimedia.org/w...

Apr 07 01:35 PM

[ldker:]

What would hyperinflation do for the solar industry?

Apr 07 02:08 PM

[Hazel Hende...:]

Thanks for this useful chart, Markham ! May we post it at EthicalMarkets.com on our GreenTech page ?

Apr 07 02:44 PM

[Markham Lee_:]

Hi Hazel -

The chart comes from the Economist.com so feel free to post it, just credit them when you do. The original link is here: www.economist.com/rese...

-M

Apr 07 03:13 PM

[58robbo:]

here come the white elephants. i have a much simpler and cheaper solution to our energy challenges. stop subsidizing energy, all of it! i also don't think that any reasonable person can deny that the majority of our overseas military budget is used to protect our energy interests. it is high time that this cost be added to the price we pay for energy!

Apr 07 08:03 PM

[Tony Petroski:]

The people and the economy are stumbling. Productive people find it hard to keep going under ordinary circumstances. Then along come the "greens" forcing higher costs for all energy inputs as a way to "save the planet." A green stimulus is like asking someone to lose weight and then forcing them to wear a weight vest for his own health. "Green" is just another way of saying "subsidy." People don't have to be forced to do what is in their own interest. They have to be bribed to go "green" in order to serve the needs of the eco-theists. "Green stimulus" is an oxymoron.

Apr 07 10:30 PM

[fireofenergy:]

Without green thinking, the peak oil awareness would not have come to (my) mind. Therefore, without renewables, what will we do when oil goes back up to 100 or 200 a barrel? Suffer even more than we would now for the cost of green, most probably. Now is the time to build billions of mirrors for concentrated solar thermal plants with heat storage. It seems that would create a jobs frenzy, then oil will go up (due to better economy) even though with massive renewable energy influx, it seems it would go down!

Bty, I heard that the polar ice caps are melting. Mirrors not only are able to generate unlimited clean energy (keep them post driven without bulldozing the desert), if enough are mass produced (yep, we need more oil for that too!), along with seawater greenhouses, ALL of humanity's problems would be solved (except for who gets to make what, where)!

Apr 08 12:05 AM

[WayneS:]

Billions of mirrors for concentrated solar thermal plants with heat storage was done in the 1960's. They developed their own weather and soon clouds formed over the area above and around the mirrors, The project was scrapped. Every idea that we come up with today, has been done before. Maybe several times.
Conservation is the only thing that will work right now. We waste 80% of what we use. ExxonMobil has put their waste energy (heat) at their refineries to work producing electricity and have reduced the green house gases produced equal to all of the vehicles in the US, If other companies would spend money to reduce green house gases, instead of just talking about it, we could get somewhere. We, the consumers, could be conserving energy, but it took $4/gal gasoline to get us to do it and now at $2/gal, we are right back to where we were. We, you and I, are polluting the earth.

Apr 08 03:39 PM