HSBC Predicts Low Carbon Energy Market to Triple

world’s low-carbon energy market is likely to treble by 2020, HSBC
analysts forecast on Monday, saying that rising concerns about
resource scarcity would support broad consensus on the threat of
climate change.  

The electric vehicle market would benefit most, growing more
than 20 times by 2020 to reach $473 billion, 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. 

“A new climate is starting to
emerge, driven as much byresource scarcity and industrial
innovation as by the raw realities of global warming” HSBC

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

“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 from $740 billion now, but HSBC
analysts expected that it would more likely treble to $2.2
trillion, implying global annual market growth of 7-11 percent from

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

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 by 2020 but still lag transport efficiency
at nearly $700 billion in 10 years’ time after 18 percent annual

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 in 2010 to $1.5 trillion 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.


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