This article presents a very analysis of a new driving force that will LEAD the world’s response to climate change. I mean lead. As in leadership.
Worth reading in its entirety, here’s my short version of its argument.
- Based on extensive evaluation by Chinese scientists at the behest of their government, the Chinese government (engineers, not lawyers, like ours) has concluded that warming is real–and a threat to China.
- They are going to do something about it.
- China had earlier determined that the future of energy is solar and nuclear. Despite burning tons of coal, the government had started making a huge, strategic investment in those technologies. Now with greater conviction they are likely to push even further and faster in that direction.
- They are NOT going to wait for the market to catch up. They are going to invest, hugely. They will probably make some bad investments. They will make probably some good ones.
- Solar energy costs continue to drop, and there is no reason this will not continue to happen.
Here’s my analysis of China’s market bet.
If the alarmists are wrong, and temperatures don’t change much, solar power will continue to drop in price. Eventually it will be cheaper than most fossil fuels. Maybe not in the Gulf region, where oil is cheap to pump, but most other places.
And that is why even the oil states, with all their oil, are investing in new solar generating capability. Because they are energy users, not just suppliers. And because they have a lot of sun as well as cheap oil. If they can use the sun, then they can sell their cheap oil at high prices.
So if the alarmists are wrong, China will own this growing market and make a good return on their investment.
If the alarmists are right, then the demand for clean energy will grow hugely, including areas that currently are energy starved–like the emerging African economies.
And China will so dominate the market that they will make a huge return on their investment.
Seems like a good bet to me.