World Economic Forum 2009: a Biofuels Digest Special Report

By Biofuels Digest special correspondent Joelle Brink

An atmosphere of gloom hung over this year’s World Economic Forum as finance experts and industrialists gathered to ponder the imploding global economy,” writes Biofuels Digest correspondent Joelle Brink in “Special Report: World Economic Forum 2009″, a summary of activity at this year’s WEF meetings in Davos, Switzerland. “George Soros, who predicted the financial meltdown last year, summed it up when he deeclared that the financial structure we used to take for granted has collapsed and is now on artificial life support.”

However, behind the main action an interesting discussion was taking place. Was it possible to fix the global economy while moving towards a greener planet at the same time? For a change the U.S. led the environmental cause, with Al Gore, who described President Obama as “always the greenest man in the room”, pointing out that a significant part of the President’s massive economic package is a “green stimulus” focused on boosting growth and jobs in environmentally key sectors such as renewable energy.

Carlos Ghosn, CEO of Renault/Nissan and a key contributor to the development of the Tata Nano, said that such a stimulus in France would accelerate innovation and promote the successful launch of a new generation of electric cars. However he also pointed out that truck makers in the European Union are already proposing a moratorium on new environmental standards, arguing that at a time of extreme financial duress, it’s untenable to impose new rules that would create an additional cost to firms.

One thing is certain. There will be many difficult choices, such as whether to bail out Detroit on the condition that they make greener cars, or spend the money on start-ups that can fast-track renewable energy solutions. As always, a key factor will be the price of oil. The major oil companies have made it clear that they cannot fund exploration with oil prices at $50 a barrel or less. They say they need at least $65 and preferably $75 a barrel in order to fund new production.

However shrinking economies and global demand may work to keep world oil prices low, hastening the end of the petroleum-era and creating a powerful incentive for fast tracking renewable energy. Business Week has already warned that Exxon, with no renewable energy projects in development, may be the first major casualty of the decline in oil prices.

A key indicator will come in December, when governments convene in Copenhagen to work out a new environmental framework treaty to succeed the Kyoto Protocol. The US refused to ratify the Kyoto Protocol, but President Obama has already made it clear that US environmental policy has undergone a profound change.

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