- The Washington Times - Friday, January 23, 2009

ABU DHABI, United Arab Emirates

A renewable energy revolution is taking place in the heart of the oil industry here on the Arabian Peninsula, where world leaders and experts attending a summit on the future of energy say it may not only save the climate, but also help revive today’s ailing global economy.

Matthias Machnig, a state secretary at the German Environment Ministry, said the world is “at the beginning of the third industrial revolution” that will have a positive influence on the climate as well as the global economy.

Speaking in Abu Dhabi, Mr. Machnig referred to a German government study on the global market for green technology, which consultant Roland Berger said was worth more than $1.3 trillion in 2005 and could more than double to $3 trillion by 2020.

That should help mitigate the effects of a recession that is bringing other industries to their knees.

“I am convinced that the next economic growth will come from innovation,” said Susan Hockfield, president of the Massachusetts Institute of Technology, “and the most powerful promise for innovation lies in the renewable energy sector.”

“This will become one the biggest markets in the world, bigger than the automotive sector,” Mr. Machnig said. “That shows the potential of the sector and possibilities for investment in the coming years.”

All over the world, governments are increasingly aware of the opportunities green technology offers.

In the United States, President Obama has pledged to invest $150 billion in renewable energy over the next decade, hoping to create millions of jobs and revive the ailing U.S. economy in the process.

In Europe, tax incentives have helped to create a strong renewable energy sector.

A favorable regulatory environment has helped Germany emerge as a world leader in wind energy and the solar photovoltaic market.

European governments are stepping up incentives to go greener, including increased support for energy-efficient technologies.

These incentives could help alleviate the toll the global financial crisis is taking on the renewable energy sector. Green projects have been delayed or scrapped altogether in Western Europe and the United States, and shares of green technology companies have lost value in the global market meltdown.

That doesn’t alter the long-term prospects for the sector, said Vivienne Cox, chief executive officer of BP Alternative Energy.

Provided the incentives are provided, “money will flow” into renewables and “green stocks will recover,” benefiting the overall economy, she said this week at the World Future Energy Forum.

And even as growth in the West slows down, other regions are stepping in to save the green sector’s momentum.

A downright growth explosion is originating from a region that seems unlikely to cultivate a green revolution. In the oil-rich Gulf states, where 24-hour air conditioning, massive building projects and a weakness for American sport utility vehicles consume frightening amounts of energy, governments are increasingly cultivating the potential of renewable energy.

The year-round sunshine in this arid region makes the Gulf a perfect place for clean technologies such as solar power.

Using tens of millions of their petrodollars, Saudi Arabia has been keeping green research projects on life support all over the world and handing out cash to U.S. scientists at Stanford and Berkeley.

Late last year, Qatar signed an agreement with Britain to inject some $220 million into a British green technology fund, dwarfing domestic investments.

But the most ambitious of all Gulf states is Abu Dhabi, the richest of the seven emirates that make up the United Arab Emirates.

On Monday, Abu Dhabi’s leaders pledged to boost the share of renewables to 7 percent of its total power generation by 2020 - a lofty goal for an emirate that is creating a sector practically from scratch.

The pledge is all the more astounding because it comes from an oil-drilling giant. Abu Dhabi owns about 90 percent of the UAE’s 100 billion barrels of proven oil reserves. The UAE also sits on the world’s fourth-largest natural gas reserves.

Yet Abu Dhabi realizes that its oil won’t last forever, and reducing its carbon footprint could help to combat global warming, which some scientists fear could render large parts of the Gulf uninhabitable.

While China and the United States emit far more carbon dioxide, the UAE tops the world when it comes to per-capita emissions.

That is why the crown prince of Abu Dhabi established a $15 billion investment fund last year that supplies cash to renewable energy companies and green research institutes around the world. The focus lies on solar power generation, but investments also go into research on carbon capture and sequestration, nuclear energy and sustainable building design.

Of course, the fund is also aimed at making money and securing the emirate’s position as a global energy powerhouse - be it for fossil fuels or renewable energy.

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