Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University


PESD News



December 2, 2008 - Op-ed

David Victor comments on the current flattening of investment in green technology due to market forces. What is emerging, he says, is a shift towards a green economy of scale that is based on government intervention such as regulation, mandates, and subsidies. Such mechanisms are more reliable in the long run because a large part of green's success will need to be based on larger scale industrial complexes such as off-shore wind parks and electrical grids capable of storing and delivering intermittent power.

The New Greens Like It Big

The green view based on small sources and market power will give way to one based on scale and subsidies

Appeared in Newsweek, December 8, 2008

By David G. Victor

Serious greenery is about efficiency--not only in the use of energy but also labor and capital.

(Excerpt) The winds of economic destruction are flattening not just retirement accounts but also naive visions for a green economy. Public support for costly new green mandates is weakening, and government budgets to fund them are bleeding red ink. Plummeting prices of oil and other fossil fuels have made it harder for green to compete in the marketplace. IPOs of firms working on "clean tech" green energy that have fueled fantasies of the coming energy revolution have crashed to a halt. In all the bad economic news, a new face of green is coming into focus. Whereas the old view of green tech was based on many small, decentralized sources of power and a green economy that harnessed the power of the marketplace, the new version will rely more heavily on regulation and subsidies. It will also embrace the wisdom, true in most of the energy business, that bigger is better for weathering economic storms.




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