The world’s low-carbon energy market is likely to triple by 2020, HSBC analysts forecast on Monday, saying that rising concerns about resource scarcity would support broad consensus on the threat of climate change Reuters reports.
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.
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 said.
“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 triple to $2.2 trillion, implying global annual market growth of 7-11 percent from 2009-2020.
“We recognize significant upside and downside risks to our forecasts, but even in our most bearish scenario, we expect the market to double by 2020,” Nick Robins, head of climate change at HSBC, told Bloomberg News in an email.
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 power.
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 growth.
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.
The HSBC report says it is most likely, annual capital investment in the green economy would grow from an annualized $460 billion in 2010 to $1.5 trillion in 2020 Guardian UK reports.