As my finance professor used to tell me — simply follow the money. A recent report from The Deutsch Bank Climate Change Advisors assessed that from 2000 to 2008 China had capital flows into clean energy in the amount of $41,196 M whereas the U.S. had 52,120M, India had 7,446M and Germany had 36,611M. From the numbers it is clear that the U.S. is still, so far, the most attractive environment for cleantech investment. But what is particularly notable for China is the large size of clean energy investment as a proportion of GDP in 2008. There is a political impetus for the development of green technology in China that is lacking in the U.S.

China already manufactures the cheapest solar panels in the world, and ranks in the top five for wind. According to this report, solar module prices are set to continue falling and the list of distressed solar companies needing to raise funds in the public market will only get longer. Indeed, competition has characterized the global solar PV market for some time now, and when supply catching up with demand the result is cheaper, more efficient solar panels. That can only be positive step towards the promotion of globally sustainable energy growth.

Perhaps there wasn’t much of a race to begin with. There are enough opportunities in the renewable energy value chain that it is possible for China to excel in manufacturing and the U.S. to excel in innovation (Apple?). To accelerate the uptake of renewable energy globally, we need both manufacturing expertise and cutting edge innovation. The U.S. should view China has a partner and not a threat in the development of greentech, given that each country features a different set of competitive advantages. It is time that the U.S., hopefully with appropriate incentives from the government, finds its niche in the industrialization of renewable energy; if not in manufacturing, then in the incubation of innovation and development of human capital.

The Jawaharlal Nehru National Solar Mission is a major initiative to “promote ecologically sustainable growth while addressing India’s energy security challenge.” The objective of the scheme is to enable the rapid scale-up of capacity and technological innovation so that the cost of solar energy by 2022 would be comparable to the cost of conventional energy like coal or oil for electricity. The Clinton Climate Initiative is even more optimistic, stating that “Solar power in India will cost less than coal energy in five years.” The use of solar power will also help India to curb carbon emissions and ease its frustrating power shortage.

Dubbed “the most ambitious plan to develop solar energy over the next three or four decades,” its target is the deployment of 20,000 MW of solar power by 2022. To see just how ambitious the plan is, consider that as of October 2009 there were only 6 MW¹ of installed solar power capacity in India. The plan also seeks to deliver 20 million solar lighting systems for rural areas by 2022, but as of October 2009 only 510,877 have been installed. Through this policy, the government has provided the market with a strong signal that is sure to attract many investors to reconsider the potential solar opportunities in India. Aided by generous incentives from the central government, that target might yet be met.

One of these incentives is concessional financing in the form of low interest loans and accelerated depreciation for up to 80% of the capital cost. Others include generation-based incentives which means that the central government will pay the power producer Rs 12 for every unit of electricity that is fed into the grid. Another part of the policy that is expected to be a key driver of solar generation is the fixed obligation of state utilities to purchase solar power from independent developers.

To be sure, the scaling-up of solar energy on such a massive scale is a risky undertaking. In this regard, India is arguably the global pioneer among developing countries. Critics argue that the money poured into this scheme could be better used to connect the rural poor to the existing grid infrastructure in order to connect them with a large-scale, conventional power source. But fossil fuel is quickly reaching its limits, both in terms of fuel availability and the environmental damage it causes. The Government of India has made the right move to place their bet on a cleaner, newer type of technology. Jeffrey Sachs argues in The End of Poverty that energy systems for remote rural areas are one of the essential elements for ending poverty. With the help of a forward-looking government and energy sector, Solar energy definitely has the potential to be such an element.

For more information on the JNNSM, visit: http://mnes.nic.in/pdf/mission-document-JNNSM.pdf

1. In addition to 2.4 MW of off-grid solar photovoltaic power plants and street lights

We are only in the first week of the climate change summit and every day something new and exciting happens, both in the U.S. and in Copenhagen. Of course, the conference is politicized; that is a given. It is astounding to see how politicians, financiers and opportunists with different interests can come forth at this juncture to make their voices heard. First there is Sarah Palin — in an op-ed in the Washington Post she strongly denounced President Obama’s attendance at the conference, calling it a “political move.” Instead, she suggested that Obama should have boycotted this conference that is based on “agenda-driven science.” How is her rhetoric any less political than Obama’s?

Then there is George Soros, the philanthropist who came up with a seemingly novel but quite complex idea of using Special Drawing Rights (SDRs) from the IMF to help developing countries deal with climate change. SDRs, he explained, are a “virtual currency with a value set by a basket of real currencies, backed by gold reserves at the IMF.” My interpretation of his idea is that since the SDRs are sitting idle, we might as well use it as a “financing tool” for the climate adaptation fund of $10 billion a year that rich countries have promised to pay. From my understanding, SDRs are reserves held at the IMF and they do not represent any “new” money — in fact, they are a claim on the currencies of IMF members, and they are only as good as the members’ (read: United States’) willingness to honor them. Given that the IMF’s funds were originally intended to help with the development of poor countries anyway, does this method represent the donation of any “new” funds? Note that this is technically not an original idea — the last time SDRs were freely allocated was August 2009, when the G20 decided that it would provide liquidity to countries suffering the most from the global financial crisis.

Tony Abbott, Australia’s new opposition Liberal leader, a plain-spoken former student boxer nicknamed the “Mad Monk” following his flirtation with the Catholic priesthood, on Tuesday declared his intention of taking a wrecking ball to the Labor government’s emission trading scheme.

Copenhagen will be no more successful than was Kyoto. The reason: China. Last year China surpassed the U.S. in producing carbon dioxide, even though China’s overall economy is still about one-third the size of ours. By 2020 China’s emissions will be twice those of the U.S. Beijing is not about to stop its headlong economic growth in the name of fighting global warming.

…

This obsession with carbon dioxide is misplaced. There are a series of practical things we could do that are very climate-friendly and would not damage the economy. Among them are building more nuclear power plants; promoting coal sequestration technology, which is achieving more and more success in reducing emissions; encouraging greater use of natural gas, of which we have an abundance in offshore wells and in shale in the western states (natural gas releases about half the CO₂ that coal does and a quarter less than oil); changing the paving surface of streets and the material used on roofs (Houston is experimenting with this), a technology that would dramatically cut heat retention; modernizing the nation’s electricity grid, which would sharply reduce waste during the transmission process; and making it easier to run transmission lines to potential wind farms in Texas and elsewhere. And who knows what breakthroughs might occur in solar energy and other areas?

Read the rest of the column.

There is a real danger, of course, that if Copenhagen does not live up to the Bali billing, the world’s political leaders will gradually back away even from more modest measures to slow the warming of the Earth. Given the condition of their economies, many of them need only the flimsiest of excuses to avoid confronting their voters with higher energy prices.

Yet from talking to officials preparing for next month’s summit, I have the impression that things are not quite as bad as they might seem. While severely irritated at the US stance, European officials say it is more about timing than substance.

Read the rest here.

As mentioned, there are various pressing issues that shape our studies in global affairs, but I believe Global Climate Change is the most significant. Global Climate Change is not constrained by borders, class, culture or ethnicity (even though much of the damage is a result of abuses from developed nations); it is truly a global challenge that needs to be confronted before we as a global citizenry continue down the slippery slope to chaotic events. The Earth is continually sending us warning signals — we need to heed these calls and appeal for policies to attempt to stem further devastation. We cannot sit back idly and watch from the sidelines anymore. As witnessed through increasingly severe weather, droughts, heat waves, ocean acidification, desertification, soil-erosion, population displacement and a slew of other disastrous consequences, our time to act effectively is slowly trickling away.

Unfortunately, the burden to make substantial policy changes is in the hands of political leaders who too often succumb to cowardly practices and politically expedient approaches. Too many of our representatives are afraid to make the tough choices necessary to curtail global climate change and are stuck in the cycle of further embedding the status quo. It is a sad reality that positioning for the next electoral cycle plays an integral factor before casting a vote. Such petty thievery was on display once again in the Senate Environment and Public Works Committee, chaired by Senator Boxer, where Senate Republicans threatened to boycott the markup of the Clean Energy Jobs and American Power Act. If there was ever a time for bipartisanship, this is it. A tough, binding mark is necessary to prove to the global community that the United States is serious in regards to reducing greenhouse gas emissions. However, at the current pace — due mainly to the opposition — it remains an idealistic wish to have such actions completed before the UN Climate Conference in December.

Let us assume for a minute that the U.S. arrives in Copenhagen with a new domestic policy. This will signify being fully at the table, unlike Kyoto. However, negotiating in Copenhagen, it will also be vital for the U.S. and other developed nations to agree to monetary payments to the developing nations to help adoption of the new targets that are sought to be reached in the outcome document. The developed nations are morally obligated to fulfill such measures due to its disproportionate contribution of greenhouse gases over the years.

The international community is anxiously seeking the United States’ commitment and leadership in sculpting a binding international document, which needs to include an enforcement mechanism, to confront global climate change. Will our leaders answer the call?

What do YOU think is the most important issue in global affairs today? Send your responses to pgi.editorial@gmail.com.

In other news, last week, a five-week legal battle between oil trader Trafigura and the UK’s Guardian newspaper came to a close when Trafigura ended a secret injunction with the news organization. How did this all start?

In 2006, a scientific study eventually called the Minton Report began to collect evidence that Trafigura was dumping toxic waste in the waters of the Cote d’Ivoire. The report was commissioned when hundreds of people in the Cote d’Ivoire claimed to have been poisoned and flooded the hospitals. In more detail:

The Minton report – though it was preliminary in nature – made dismaying reading for Claude Dauphin, the Trafigura director in charge of oil preparations. It said the process had been so amateurish that it had probably left a high quantity of noxious sulphur compounds in the vast quantity of stinking black waste.

Minton went on to list half a dozen potentially unstable chemical compounds which could burn or poison people who came into contact with them. Some of them could also generate the killer gas hydrogen sulphide in certain conditions.

Minton said such waste could never have been dumped legally on a landfill in Europe and ought to have received specialist and expensive chemical treatment called “wet air oxidation” to make it safe. None of this had happened.

Among the effects of the sludge, Minton listed: severe burns to the skin and to the lungs; permanent ulceration; corneal damage; vomiting, diarrhoea, loss of consciousness and death. One of the chemicals was branded “very toxic to humans and dangerous to the environment”.

About a month ago, The Guardian got word of this report. Trafigura, claiming the report’s evidence was preliminary and inaccurate, went to lengths to file an injunction on The Guardian effectively prohibiting them from publishing the content and findings of the Minton Report. And not only that, but they also filed what has become known as a “super injunction” – a gag order banning The Guardian from even disclosing that they were under an injunction. News of the Minton Report still got out in cyberspace, particularly in Wikileaks, and was circulated madly on Twitter. (For a full story of how the news leaked all over the Internet, refer to the Online Journalism Blog).

But finally, largely under pressure by social media networks and blogging communities, Trafigura released The Guardian from the injunction, and the super injunction. They even admitted that the waste could have caused a “range of short term low level flu like symptoms and anxiety.”

The obvious takeaway – in a social media world, important news is becoming even tougher to suppress. But this is still food for thought about the current state of press freedom – even in the UK – and of course, about the role of companies like Trafigura and their environmental responsibility.

Related Links:

The Minton Report, in full

The Guardian’s clause-by-clause analysis of the super injunction

June started off with a plane crash of an Airbus flying from Rio de Janeiro to Paris. President Obama went to Cairo to make a speech about Muslims and the U.S — some people thought it was pretty good while others had more measured reactions. North Korean leader Kim Jong Il, widely reported to be sickly with cancer, tapped his youngest son Jong Un as successor, and his sushi chef said he’s just like his dad. Palau decided to accept a few of the Uighur Guantanamo detainees, and a few of them were also taken in by Bermuda. The Bermudans, however, weren’t so happy about how that happened. A little later, Iran had a Presidential election. Mahmoud Ahmadinejad won under most likely fraudulent circumstances because more people voted in some towns than existed there. People protested, and Twittered, and protested some more, with violent repercussions. New York Times reporter David Rohde escaped after 7 months of being held captive by the Taliban in Afghanistan. In a seemingly pro-feminist move (but actually to the chagrin of many feminists), Nicolas Sarkozy supported a ban of the burqa in France. In Honduras, President Manuel Zelaya was ousted in a coup, and the U.S. military finally withdrew troops from Iraq to focus more instead on efforts to curb Taliban influence in Afghanistan.

In Urumqi, China, riots broke out between the majority Han Chinese and the minority Uighurs, and ethnic tension has remained heightened since, including recent claims that Uighurs are attacking Han Chinese with HIV infected needles. Two hotels were bombed in Jakarta, Indonesia. Hillary Clinton went to the Congo and brought attention to the use of rape and sexual violence as a tool of war (against men, too). Bill Clinton flew to North Korea and saved journalists Laura Ling and Euna Lee, who had been captured in March and sentenced to 12 years of hard labor. It was a good week to be a Clinton.

Former President of the Philippines Corazon Aquino died. RIP, Cory. In Taiwan, there was a really big typhoon. Burmese democracy leader Aung San Suu Kyi’s trial was held over the question of whether or not she violated the terms of her house arrest when a crazy American guy swam through a lake to visit her on a supposedly divine mission. She was found guilty. The American was freed (but remained crazy). Everybody found out that private contractor organization Blackwater (now Xe) was hired by the CIA to assassinate targets. Scotland allowed the one convicted Lockerbie bomber to return to Libya because he is dying of cancer. Everybody was really, really mad, especially because it was probably because of oil. Colombian President Alvaro Uribe came down with the H1N1 virus. The Darfur conflict was reported as coming to an end. Afghanistan held Presidential elections which showed incumbent Hamid Karzai leading, but like Iran, this was probably also fraud. Unlike Iran, they’re actually recounting votes and throwing out bad ones.

Hopefully, that’s refreshed your mind with a whirlwind of memories from the past three months. But here are a couple of things that perhaps you might have missed:

China reversed its one child policy, but only in Shanghai.

Cambodia set out to host a “Miss Landmine” pageant to challenge traditional beauty standards by promoting a pageant for landmine victims. The pageant was quickly banned.

A Ukranian polka band came up with this cover of Katy Perry’s “Hot n Cold.”

Some of the lawsuits over harmful pesticide effects made by Nicaraguan farmers for Dole Food Co. turned out to be fraudulent (involving faked sterility tests, among other indicators), effectively casting doubt on all the other farmers who might have actually been harmed by the pesticides.

China tried to use electroshock therapy to cure teens of Internet addiction. The practice was quickly banned.

Canada granted refugee status to a white man from South Africa who claimed he was being persecuted in his native country on the basis of his race.

An IT company in South Africa ran a test to see what could send data faster: South African Internet service or a carrier pigeon. The pigeon won.

Anything missing? Of course. Drop a comment to add in any other summer global affairs news that slipped through the cracks!