Antinuclear

Australian floods show business need for renewable energy

expect to see considerably more naturally-induced disturbances to supply chains as in Australia earlier this month………..Ultimately, as the climate becomes more volatile, renewables will become more valuable not only as a deterrent but also as a means of mitigating the supply chain impacts of increasingly frequent natural disasters.

A Lesson from the Great Australian Floods, Americans for Energy Leadership, Michael Craig 26 Jan 2011, Renewable energy has been put forth as the solution to a myriad of problems, some of which have received more attention than others…… One such neglected benefit, though, now merits much greater significance than has been previously accorded it given the tremendous floods that ravaged eastern Australia earlier this year: a hedge against marketplace volatility.

Marketplace Volatility…………….in the 21st century, historic drivers of market volatility may be dwarfed by a growing player on the world stage, natural disasters.

Certainly, natural disasters have always caused market fluctuations, but as climate change escalates and increases the frequency of extreme weather events and shifts global weather patterns, these events will have an even greater effect on the world’s economy. The effect of the recent floods in Australia provide a perfect illustration of this claim.

First and foremost, while true that climate change has not been (and perhaps cannot be) linked to the floods, the Intergovernmental Panel on Climate Change (IPCC) nevertheless found that the likelihood of heavy precipitation events becoming more frequent over most areas is “very likely”.

Thus, although climate change may be entirely unrelated to this instance of flooding, it almost certainly will drive other instances in the future. Furthermore, floods are not the only severe weather event that will be impacted by climate change; tropical cyclones, droughts, heat waves, and fires will most likely all be exacerbated as well. In other words, expect to see considerably more naturally-induced disturbances to supply chains as in Australia earlier this month………………
As climate change progresses, similar scenarios – wherein unforeseen natural disasters cripple crucial supplies of energy feedstocks and set off global price escalations – will only become all the more common.

Renewables as a Hedge Against Price Volatility

In such a world, renewable energies can provide much-needed succor to governments and businesses alike. Most obviously, widespread adoption of renewable energies would curtail climate change via reduced CO2 emissions, preempting any need to adapt to a world of treacherous weather. In addition, though, renewables could serve as a hedge against market volatility by providing a local source of energy that does not depend on a supply of feedstock prone to disruption at any point in its journey………..

At least in the short term, all indications are that global greenhouse gas emissions will increase and, as a result, so too will climate change. With climate change comes increasingly frequent and severe weather events that could very well make the once in a lifetime floods that ravaged Australia a relatively-quotidian event. Thus, as said floods recently illustrated, volatility in global energy feedstock markets will greatly increase as supply chains become more unstable, making energy independence a more pressing issue. For progressive businesses, hedging against this shift by preemptively installing renewable energies represents an excellent opportunity to boost their bottom-line, certainty in future success, and competitiveness. Ultimately, as the climate becomes more volatile, renewables will become more valuable not only as a deterrent but also as a means of mitigating the supply chain impacts of increasingly frequent natural disasters. Michael Craig is a Policy Fellow in AEL’s New Energy Leaders Project

A Lesson from the Great Australian Floods

January 27, 2011 - Posted by Christina Macpherson | Uncategorized