Goldman Sachs report recommends investors back renewables

Those crusty greenies at Goldman Sachs are bullish about renewables and efficiency.

Those leftie greenies at Goldman Sachs are bullish about renewables and efficiency.

Goldman Sachs divides opinion. There are those who say the financial behemoth may have engineered — and certainly profited from — the 2008/2009 Global Financial Crisis. However backers insist that the investment giant is an example of good old fashioned American “get up and go” and what’s a few billion between friends/taxpayers anyway.

But this week saw another side of the company. One where it encouraged investors to invest in renewables for the sake of the low carbon future and for the health of their bottom line.

The Goldman Sachs report — The Low Carbon Economy — has been released to coincide with the Paris Climate Talks. The investment bank’s study found that deployment of existing, tried and true renewables: solar PV, LEDs, wind energy and electric cars was preferable to committing funds to further research and development to mitigate the effects of climate change.

“We believe investors should focus on this set of front-runners with the potential to shift emission trajectories and reshape competitive dynamics on a five- to 10-year view,” the study authors said.

Calling 2015 a “watershed year for the low carbon economy”, the report describes how emerging technologies, solar PV, LEDs, onshore wind and electric vehicles, are reshaping industries around the world.

“We identify LEDs, solar PV, onshore wind, and hybrid & electric vehicles as clear front runners in the emerging low carbon economy, now a $600 bn+ pa revenue opportunity,” said the report released last week.

“As they benefit from growing regulatory pressure and cost reductions, these technologies are taking market share in lighting, power generation, and autos. In the process they are not only delivering emission reductions at the Gigatonne scale, but also changing competitive dynamics, with ripple effects across our coverage.”

Nothing new of course. Renewables supporters have been saying this for many years. However the fact that Goldman Sachs is touting renewable energy as an investment opportunity reinforces the viability of the sector for those at the big end of town.

What will the anti renewables brigade here in Australia are presented with this uncomfortable truth? How will they spin this? You can hardly call Goldman Sachs a left-wing think tank could you? That one of the major financial houses in the world is now advising that investment in renewables is not only desirable but viable?

Will they argue that the company has erred? Or under the influence of malign anti-fossil fuel forces?

The report also predicts solar PV to be the big mover and shaker with an expected compound annual growth rate of 8 percent. This will see solar overtake wind installations annually by 2018 for the first time.

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