Despite the encouraging lead-up to the Copenhagen summit in December, the meeting ended dismally with no formal agreements. Following the conference there was plenty of hand wringing with all eyes on America and China, the world’s two biggest greenhouse gas polluters, which combine to account for over 40% of global carbon-dioxide emissions. Their commitment and leadership will be critical for laying the framework and principles for establishing a successor to the Kyoto Protocol.

Is this a setback for investment in new energy sources? Luckily not. There are a growing number of companies and industries which do not depend on artificial government subsidies and where the business models are robust and offer a solution with both better economics and a lower environmental (not just carbon) footprint. These businesses will prosper because they can provide cheaper energy. Everything else is a bonus.

We also subscribe to the thesis that China’s reluctance to agree to any measurement of its emissions has as much to do with ‘face’ as anything else. China’s leaders are acutely aware of the economic and social issues that polluting and resource inefficient industry engender. They are likely to continue to legislate for a more sensible and green industrial landscape. They just don’t want to be seen to be being pushed about by the West, which is correctly perceived to occupy no moral high ground as far as energy usage goes. And there are other grounds for optimism. In November, the US suggested the reductions from the Waxman-Markey bill (17% reduction by 2020, 83% by 2050) while China outlined a national plan targeting the reduction of emissions per unit of GDP by 40-45% over the period 2005-2020.

Whether one believes in climate change or not, however, the world needs energy. It is the life blood of economic growth providing the fuel for economies to industrialise, modernise and continue to grow. One of the great challenges over the next several decades will be in supplying energy to feed this growing appetite. Hence comments such as those made by sceptics who claim that there is no climate change, or if there is, it is not man made, misses the fundamental point. The point is, regardless of whether one believes in climate change, the global economy continues to industrialise. It is unstoppable. This is driving the need for greater supply of energy and materials while the supply of fossil fuels and natural resources is finite, which in turn will drive prices higher over time. Therefore what we are really talking about is security of supply issues as well as environmental and geo-political issues. This inexorable need for energy requires that it is sourced from a more diversified base, which includes harnessing other forms of natural energy, including the sun and wind.

As the negative mood over the global economy continues to recede, the world will begin to re-focus on possibly the largest and most daunting task to face mankind – climate change and meeting the need for more energy. The implications of unchecked carbon emissions read like a disaster movie. Few industries will escape the effects of climate change – manufacturing, transport, construction, financial services, healthcare and energy will all be heavily impacted.