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Business Seminar Final Paper

There is only one earth and it isn’t going to be around much longer and the human race

may cease to exist if we keep burning and going about the way of using fossil fuels as energy.

We need to switch to renewable energy because it is an alternative energy source that can give us

a few more years on earth. It won’t completely help save the earth, as global warming has

already started and is slowly progressing, but it will slow the process of global warming down a

bit. The IPCC Report, Ren 21 Report, SPM Discussion Report and KPMG Report allows us to

analyze the benefits of renewable energy and why we should make the switch to renewable

energy soon.

Global warming is the main driver to why we should make the switch to renewable

energy. According to the IPCC Synthesis Report1 as the years pass, global warming will become

an issue and it will keep getting worse as time passes. When burning fossil fuels we are releasing

CO2 into the atmosphere that is slowly building up and damaging the ozone layer. As we

continue burning fossil fuels, CO2 will continue increasing and it will cause drastic weather

changes, famine, loss of crops/food, increasing of the water level, and countries that aren’t

developed will face problems of survival. We need to start taking actions now, whether we stop

burning fossil fuels or use renewable energy, we have to make the change now before it’s too

late. Before we make the planet a place that no one can live or survive on anymore in the future.

One reason why we should switch from fossil fuels to renewable energy is according to

the IPCC Synthesis Report, there is an increase in CO2 that is caused by “greenhouse gas

emissions increasing since the pre-industrial era… that are unprecedented in at least the last

1 Pachauri, Rajendra K., Climate Change 2014 Synthesis Report, The Core Writing Team, Geneva, 2014. http://www.ren21.net/Portals/0/documents/Resources/GSR/2014/GSR2014_KeyFindings_low%20res.pdf

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800,000 years… the climate system are extremely likely to have been the dominant cause…(SPM

1.2 pg. 4) About half of the anthropogenic CO2 emissions between 1750-2011 have occurred in

the last 40 years. (Pg. 4)” Before humans existed, there was no such thing as greenhouse gases.

But since the industrialization of the world based on fossil fuels, we have slowly been burning

fossil fuels and as a result allowed greenhouse gases into the climate that have since accelerated

the amount of greenhouse gases in the climate. By burning fossil fuels and putting greenhouses

gases into the atmosphere, we’ve speed up the process of destroying the ozone layer and as a

result accelerated the speed of destroying the planet a little faster. According to Figure SPM.2

pg. 5, we have increased the use of greenhouse gases (GHG) from 1970 (about 27 Gt) to 2010

(49 Gt). With the increase in GHG, by 2050 the level of additional risk due to climate change

will be very high for unique & threatened systems and extreme weather events (Figure SPM.10).

To maintain the “GHG concentrations in 2100, we have to lower it to about 450 ppm CO2-eq or

lower to maintain warming below 2 degrees Celsius” (pg. 21). We need to start taking action

now to reduce the amount of greenhouse gases we emit or we will have a very unpredictable life

(in weather, sea level, and survival) ahead of us. We have to think about the survival of the

human race in the future and what the results will be if we keep continuing on this path of

burning fossil fuels and releasing greenhouse gases.

Another reason why we should switch from fossil fuels to renewable energy is the

increase of the sea level. “Over the period 1992 to 2011, the Greenland and Antarctic ice sheets

have been losing mass likely at a larger rate… Glaciers have continued to shrink almost

worldwide… (Pg. 2) Year-round reductions in Arctic sea ice are projected for all RCP

scenarios… (Pg. 12) ... Loss of the Greenland ice sheet… an associated sea-level rise of up to

7m… and irreversible ice loss from the Antarctic ice sheet is possible… (Pg. 16)” As the years

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go by, we will be facing a rise in sea level because of the deterioration of the ice sheet from

Antarctica, the Greenland and/or countries way up north. With the rise in water level there will

be less land to live on, and an extinction of animals, as well as countries that will cease to exist in

the water level rises high enough. The rise in water will cause people to move and movement

will overpopulate cities, which will lead to less food, and famine will ensue.

Not only will we have a rise in the sea level we will have unpredictable weather as a

result of global warming. “Changes in many extreme weather and climate events have been

observed since about 1950… decrease in cold temperature extremes, an increase in warm

temperature… It is very likely that the number of cold days and night has decreased and the

number of warm days and nights has increased on the global scale. It is likely that the frequency

of heat waves had increased in large parts of Europe, Asia and Australia. It is very likely that

human influence has contributed to the observed global scale changes… (Pg. 7)” Human

influence is the reason why the sea level is rising and why we have an increase/decrease in

weather around the world. Certain areas that are suppose to be cold year round and experiencing

slightly warmer temperature while areas that are hot are experiencing hotter weather. New York

is an example of unpredictable weather, we’ve had snow that seems to not stop during the winter

while this spring we have gone from days that are hot to days that are cold. We don’t know what

the weather is like the next day and we will even be more uncertain the future because of what

we have done. By burning fossil fuels we have damaged the ozone layer and as a result the sun is

more dangerous to us than ever.

With the ice sheets melting away slowly and unpredictable weather, global warming is a

serious issue and will get worse as time passes. As time passes with unpredictable weather as

well as a rise in the water level, food will become an issue. Countries that are have high income

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will be able to grow food and provide for the people, but countries that have low income and

can’t provide for their people will fall into a famine and die.

The third reason why we should switch from fossil fuels to renewable energy is according

to the IPCC Synthesis Report, it is human results that have caused global warming to happen and

humans will be affected by the result of what’s happening. “Climate change will amplify existing

risks and create new risks for human systems… generally greater for disadvantaged people…”

(SPM 2.3 pg. 13) New risks will arrive for the poor, they will keep getting poorer and will be in

a worse situation than they already are, while the rich have the power to pay for anything and the

ability to be in a (slightly) better situation (despite everything that is happening). “Climate

change is expected to lead to increases in ill-health in many regions and developing countries

with low income... (Pg. 15) Rural areas are expected to experience major impacts on water,

supply, and food security… (Pg. 16)” Not only will the poor be worse off, they will also face

famine, death, and a pandemic as a result of global warming. Without a way to grow food or

have proper supplies, they will suffer die. Humans will be affected by global warming in the way

that there will be a major disadvantage for the poor and without proper care/food they will die.

To prevent famine, death, and a pandemic we need to adapt our structure of food and ecosystem

that is in place right now. “Technological options are new crop and animal varieties, water

saving technologies, conservation agriculture, food storage and prevention facilities. Ecosystem-

based options include soil conservation, mangrove conservation and replanting, green

infrastructure, controlling overfishing, assisted species migration and dispersal, seed banks, and

community based natural resources management.” (Pg. 30) We need to be able to have a plan

and be able to adapt to the changes when they happen, such as being able to feed people when

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needed and have a place for the growth of food. Disadvantaged people shouldn’t be

disadvantaged; they should have an alternative option of getting food and a chance at survival.

One way to take action is for vulnerability and exposure reduction, adaption, and

transformation. According to the IPCC Synthesis Report pg. 30, we can use this to improve the

world slowly. We can improve all the categories of vulnerability and exposure reduction, by

improving access of information, having early warning signs for danger, maintaining ecosystem,

improving living conditions, poverty alleviation, security of livelihood, and have a good spatial

or land-use planning. If we can improve on the vulnerability and exposure of the disadvantaged

we can slowly improve to a better world. We adapt our structure of environment, technology,

ecosystem, and services, have more economic options, set up more laws and regulations or

improvement of national and government policies and programs. If we can adapt to these than

we can increase the lifestyle of the disadvantaged people. We transform education, informational

access, political and personal changes are needed. All these factors will help the disadvantaged

countries because if their life improves by a little and they are able to not burn fossil fuels they

can start using renewable energy. As the disadvantaged countries use fossil fuels, they may be

the changing point in containing global warming for a few more years. If they start to use

renewable energy, they are starting a small change that can work into the whole world using

renewable energy. We need to start small and work our way up to the big changes.

Current investment in renewable energy according to REN 21 Report2 shows that the

evolution of renewable energy over the past decade has surpassed all expectations. The evolution

of renewable energy is slow and may have declined (Investment Flows chart pg. 20) from 2011,

2 REN 21 Steering Committee, Renewables 2014 Global Status Report Key Findings, UNEP, France, Milani, 2014 http://www.ren21.net/Portals/0/documents/Resources/GSR/2014/GSR2014_KeyFindings_low%20res.pdf

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where it was at its peak at $279 Billion USD, to 2012 at $250 Billion USD and 2013 at $214

Billion USD, but we can’t deny the development and expansion of renewable energy investment.

“Numerous scenarios projected levels of renewable energy for 2020 that were already surpassed

by 2010… renewable energy’s potential role in advancing national development… several co-

benefits including: reducing the health and environmental impacts… improving educational

opportunities, creating jobs, reducing poverty and increasing gender equality.” (Key findings

Pg. 5) Even though renewable energy is slow in development or in the market, we can’t deny

that it will surpass all expectations. “Renewables also contribute to climate mitigation efforts.

The IPCC clearly states in its 2014 report that climate change is already having a sweeping effect

on all continents and in every ocean… Renewable, coupled with energy efficiency measures, can

help reduce emissions by providing low-carbon energy services.” (Pg. 3) The REN 21 report is

using IPCC to prove it’s point, that fossil fuels is damaging the environment and that we need to

make the change to renewable energy before it’s too late. Climate change is affecting everything

around the world and we need to invest in renewable energy. Whether renewable energy is the

alternative solution to burning fossil fuels and endangering the environment or not, as long as we

invest in the research and in the development of renewable energy we don’t have to meet

expectations as we hoped. But if we keep working on the technology and investing in the

research of renewable energy we can have access to clean and sustainable energy for everyone in

the future.

Renewable energy is an evolving policy landscape. As renewable energy develops, there

is a need for policies and rules. “By early 2014, at least 144 countries had renewable energy

targets and 138 countries had renewable energy support policies in place… New policies are

emerging to advance or manage the integration of high shares of renewable electricity into

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existing power systems…” (An Evolving Landscape pg. 6) As shown on the Policy Maps pg. 7,

the numbers of countries with renewable energy policies by type from 2010-early 2014 have

slowly increased. Power Policies from 2010 have increased slowly from about 38 countries to

about 53 countries having FIT polices. “To accomplish the goals of reducing emissions… city

and local governments have increasingly made use of their authority to regulate… facilitate and

ease the financing of renewable energy projects, and influence advocacy and information

sharing.” (Pg. 9) As renewable energy evolves, policies are needed and they will help manage

the growing market for renewable energy. As we can see from pg. 6 the top 5 countries that have

investment in renewable energy power and fuels or production, China is first followed by United

States, Japan, United Kingdom and Germany. These countries are moving forward in renewable

energy and are working on using renewable energy. With these countries looking into renewable

energy there is no denial that jobs are created in these areas of concentration.

With the renewable energy market growing, jobs are created for different sectors of

renewable energy. “The far-reaching impact of these technologies adds several co-benefits…

creating jobs, reducing poverty, and increasing gender equality.” (Key Findings pg. 5) State, city

and local government have come together and harnessed local action to ensure global renewable

energy uptake, to create jobs, reduce energy costs, address pollution issues and advance their

sustainability goals by setting up targets or fostering the idea of renewables. As seen in Jobs in

Renewable Energy (pg. 22) there are about 6.5 Million jobs in total around the world that are

provided from renewable energy market. Whether it’s from the Bioenergy, Geothermal,

Hydropower, Solar Energy or Wind Power energy, there are jobs created and areas of interest for

people. With renewable energy making it’s way into the market, jobs are being created because

countries are investing in the research of renewable energy.

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Countries should look into incentives for companies to research renewable energy. The

North Carolina 2015 RTI International Report3 provides a good example of how we can use

incentives to exit fossil fuels and move into renewable energy. North Carolina’s state program of

REPS and tax credits produced economic benefit by exceeding its initial incentive and helping

the economy grow in terms of environmentally and economically. “Clean energy development

contributed $4,197.9 million in GSP and supported 44,549 annual FTEs statewide.” (Pg. 2-1)

According to table 2-1 you can see that the state incentives were low for renewable energy, the

state didn’t think that clean energy was worth the investment, but the income that clean energy

bought in has exceeded their predictions and gone far above the incentive. For example, the state

incentive for 2014 for clean energy investment in North Carolina was $80 Million, but in reality

it made a profit of $900.7 Million, a larger profit that the state didn’t think it would have yielded.

The investment has produced economic benefit and growth. The economic impact that clean

energy has done for the economy of North Carolina has made a huge difference. “Investment in

clean energy development increased substantially over the 8-year analysis period… Contributing

$4,197.9 million in GSP…” (Pg. 2-1) The expectation that the government had for the clean

energy project was probably low, but it’s surpassed their incentive by 18 times more and has

brought investment from both urban and rural countries. "This increased employment and

associated increased income, which will result in increased purchases of consumer goods and

services within the state.” (Pg. 2-9) Investment in clean energy may be slow at first, but after a

few years it will gain momentum and become better. There should be a shift to renewable energy

because it means the environment can be saved slowly from greenhouse gases. We should follow

North Carolina’s model of slowly getting to clean energy and have an incentive for clean energy.

3 RTI International, Economic and Rate Impact Analysis of Clean Energy Development in North Carolina—2015 Update, Research Triangle Park, North Carolina, 2015 http://c.ymcdn.com/sites/www.energync.org/resource/resmgr/Resources_Page/RTI_2015.pdf

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We shouldn’t think about the money that renewable energy could save, we should think about

how it will better the environment and start getting into clean energy investments. Not only does

North Carolina’s model work by having incentives to switching to renewable energy, it also

creates employment, income, and a better environment for everyone.

The “Taxes and incentives for renewable energy,” KPMG International Report4 gives us

a report of countries that have started to look into renewable energy and how they are able to

implement it into their economy. Stopping the use of fossil fuels is going to be a hard process to

break because we’ve relied on it for a long time, but if we can start small and make the changes

at a small pace we will eventually make it to renewable energy in the future. “On the long term,

the energy industry in general and renewables in particular will see steady growth. Between now

and 2035, research and analysis suggests that: Global electricity demand will increase by over 70

percent. Overall energy demand will rise by over 30 percent. Generation from renewables will

increase to almost three times its 2010 level. The share of renewables in the generation mix will

increase to 31 percent.” (Pg. 5) This is what may happen and renewable energy will slowly adapt

into the economy and we’ll all be using renewable energy. We have to keep investing and

researching into all the alternative options of renewable energy so that we can have options for

energy and to slow the progress of damage we’ve done to the atmosphere. There has to be some

incentives for research to begin on renewable energy other than saving the planet.

To make the switch from fossil fuels to renewable energy we need to have tax incentives

or other incentives for countries to make the switch. If there are tax incentives, the governments

can give companies incentives for the investment, the research and the switch from fossil fuels to

4 Head of Global Energy and Natural Resources Tax Practice, Taxes and Incentives for Renewable Energy, KPMG International, Swiss, 2014http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/taxes-incentives-renewable-energy-v1.pdf

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renewable energy. I think tax incentives by itself would be an effective way to exit from fossil

fuels, but we need the right incentive for each country to make the switch to renewable energy.

Every country is different; we can’t have a developed countries method of tax incentives used for

an undeveloped country because the criteria would be different. For example: South Korea’s plan

for renewable energy is “the intent to build one million homes by 2020 that use one of the

following renewable energy technologies: solar thermal, solar photovoltaic, geothermal, biomass

and wind energy. Each year, the government will set a new budget for the coming year.” (KPMG

International Report Pg. 63) South Korea’s plan probably wouldn’t work in undeveloped

countries, but it can be used as a model for almost every country.

South Korea’s incentive is passing The Act with the goal of becoming one of the five

largest producers of renewable energy, by setting a quota for how much they should reach within

a certain period, supporting facilities in renewable energy and their One Million Green Home

Project where they hope to build one million homes by 2020 that use renewable energy

technology is a model that we can/should use to exit from fossil fuels to renewable energy. The

US should also set a goal of reaching a specific level for renewable energy and either reach it or

surpass that goal. If we set a low goal and we surpass that goal, we are able to see that renewable

energy may be the future of energy. It just needs to have the right incentives for companies to

invest, research and provide renewable energy we can reach the goal we have set and maybe

even surpass the expectations. We should also do the One Million Green Home Project, by

building one million homes or less that is renewable energy friendly and uses renewable energy

we are starting by building these homes that are helping the economy and not burning fossil fuels

as energy. If we start by building apartments and homes that are renewable energy friendly we

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can start working our way into a city then a state then the country. Although every state/country

is different we should start small everywhere and work our way up to a global scale. 

Apart from having tax incentives we should also have other incentives for companies to

go into renewable energy such as awards, recognition, government support…etc. that would

motivate them to want to do good for themselves as well as the economy. We should have tax

incentives that exempt them from government taxes, property taxes...etc. If we lessen some taxes

that they have to pay then they may be more motivated to want to research, invest, and provide

renewable energy. Job opportunities will open because companies are putting money into

research of renewable energy and people will work to find the alternative solution to fossil fuels.

They will research and find a way for renewable energy to be profitable and to be used by

everyone globally to save/slow the emission of greenhouses gases into the planet. We will have

to combine tax incentives with other incentives and with Renewable Energy Portfolio Standards

(REPS) and feed-in-tariffs because REPS will be the regulator that monitors companies in the

renewable energy field to meet standards of production of energy and monitors that they are

providing renewable energy to a certain source. We have to make sure that companies that we

are investing in and have supported the research of renewable energy are meeting standards and

are looking into renewable energy as the alternative source to burning fossil fuels. We can’t have

companies using the money and funding to spend it on nothing when we have provided funding

for the company to do research on renewable energy. We also need feed-in-tariffs because we

don’t need to have companies providing us with renewable energy, we can provide it ourselves

and it would motive us to want to think about the economy and try to save it. If we are helping

the economy by providing renewable energy we are doing something good, and it can cause a

chain reaction that would spread to others wanting to do this feed-in-tariff. Companies don’t

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have to have all the burden of providing the energy to us, if we are helping, then we are

participating in the goal of being a state/country that is going for renewable energy.

Starting from an apartment of renewable energy to homes to a town then a city then the

state and lastly the country would be the ideal route of reaching the goal of stopping fossil fuels

from burning and using renewable energy. If we start small we will get to the big picture at a

pace that we won’t even expect. We need to have an international agreement/plan for moving to

renewable energy. We need to consider every state/country that there is and the best way to go

about this plan. Starting from the undeveloped countries/poor countries to get them to stop

burning fossil fuels and into renewable energy would be ideal because they may be the changing

point. If they are able to stop burning fossil fuels and use renewable energy, we have started

somewhere and can work our way up. Everyone needs to work together to help the

undeveloped/poor countries have renewable energy so we can reach the goal of everyone using

renewable energy. We can’t start from the top and move down because we either see that it isn’t

working and give up or we will see that it is working and not stop to think about the

undeveloped/poor countries.

In conclusion, global warming is a problem and we need to realize it. We need to make

the change from burning fossil fuels to using renewable energy soon or else we won’t have much

of a planet to live on. To make the switch to renewable energy, we need to start small and move

our way into the big picture. We need to provide for the undeveloped/poor countries first with

renewable energy so they stop burning fossil fuels then we can work into the nation using

renewable energy. We also need to have the right tax incentive and plan of moving into

renewable energy. We can have one plan work for every country, but we must consider the

challenges and revision that we need to put in because not every country is the same; we’re all

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different and will need different plans to reaching the goal of renewable energy. We need to

come to an international solution that will work for everyone and will satisfy them, as well as

starting from the bottom and working towards the top. We need to make the switch to renewable

energy now before it’s too late.