Originally posted by EternalOptimist
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The papers I was reading were showing the difference in economic growth when over laid on a graph of just energy use and then comparing them to efficiency increases. If you look at just growth vs energy consumption - the graphs don't match - especially around times when there are high energy prices. But throw efficiency into the equation and you can see a good fit. The theory being something like - high energy prices cause a slow down in the economy, people then look to improve their efficiency, and this then allows growth to continue.
You'll find a lot of a stuff around whether the recent recession was caused by high oil prices leading up to 2007/2008. It's why I'm now more interested in the economics of energy saving vs that of carbon saving. Carbon saving is very hard to predict if we will actually gain any real benefits - other than avoiding taxes in the current model. But true efficiency savings can be seen appearing in balance sheets from the time the improvements are made. And this is where we should focus.
Likewise - there are investments opportunities available from renewables - whether you agree with climate change or not is irrelevant if you can get a guaranteed rate of return of 8%(or higher if you specify your own system) for 25 years tax free, from a Solar FiT.
I can see the FiT disappearing within 5 years - and Solar will still be a sensible investment - even here in the cloudy UK. Prices are dropping so fast that soon it will be cheaper to run a solar system than pay to buy electric units off the grid (for 25 years). Unfortunately it doesn't work so well in winter, so we still need the grid until someone invents a home based electric generation unit that works in the dark.
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