According to this post on Mashable (Google Buys 20 Years’ Worth of Wind Farm Energy), Google has just signed a contract with an Iowa wind farm to purchase clean energy at a set rate for the next 20 years. While this sets a strong example, certainly, I raise the economic question of how this affects prices for wind energy and renewable energy as a whole.

If the early adopters of renewable energies are largely wealthy companies and individuals, does this drive price (and the cost of adoption) up? And how does this affect access to these clean energies? Are the do-gooders actually creating an exclusive market and preventing wider adoption to take place? I have no idea — I’m certainly no expert in the field!

What are your thoughts?

This article from GreenBiz.com cites that in Copenhagen the “Clean Development Mechanism Executive Board (CDM EB) which oversees, among other things, renewable energy projects in the developing world under the Kyoto Protocol, made a recent decision that metaphorically chopped the top off a number of Chinese windmills.” The article reads:

As with the story of ‘The Little Mermaid,’ it had previously been assumed that renewable energy projects were popular. The issue at stake is tariffs. The EB suspects, but admits it has no evidence either way, that wind tariffs may have been set at a level that relied on the CDM to make them profitable. The Global Wind Energy Council, which are highly regarded as experts in this area, has submitted a report to the EB outlining why the EBs suspicions are, in their opinion, without foundation but this report seems to have had no apparent effect. The CDM EB rejected the applications from the Chinese wind farms so they won’t receive carbon credits. It seems like quite an odd decision as one of the points of the CDM is to make unprofitable projects profitable. Indeed it’s a requirement, otherwise projects can’t be registered. (Emphasis Added)

Without any clarification of the decision, it appears the CDM EB has created a disincentive for investment in renewable energy projects in the developing world.

This video takes a look at the emerging wind-energy sector in China, as the country sets itself up to be a global leader in the development and use of this emerging technology.

I strongly believe that the green energy sector will drive the economies of tomorrow. Every time an election comes around here in the US, we hear bitter remarks of how globalization has driven away our jobs. Factories have moved overseas. Yet the promises made by politicians involve quasi-isolationist policies to “bring back our factories and jobs”. I wrote yesterday about the digital media market, and how we continually look backwards with nostalgia for what we once had. This is the absolute wrong type of thinking, and its harmful when our politicians stoke these backwards sentiments. President Obama has promised to invest in the green energy sector, but we have little to show for this enthusiasm. The problem is that even with the political will-power, our country has entrenched itself in a position adverse to innovation and moving forward.

The book I just finished reading, Capitalism at the Crossroads, talks very clearly about this issue. Because the US economy is already built around an oil-centric infrastructure, the expense of developing and introducing disruptive new technologies outside of that framework is extremely difficult and costly. For instance, the introduction of a hydrogen-powered car requires special fueling stations. The innovation of the car is offset by the complexity and cost of building a supportive infrastructure around it.

The book suggests that developing countries provide a better environment for developing and incubating these new technologies (like the hydrogen-powered car or the windmill) because you can build the supporting infrastructure without needing to disrupt a deeply entrenched system.

This is one of many reasons I believe the developing world will serve as a bastion for innovation in the future.