23rd March 2007

At a recent conference on climate change Paul Hardaker and Chris Collier claimed the issue of global warming had become Hollywoodised and accused scientists and politicians of overplaying the climate change

message. This follows hot on the heels of the television program The Great Global Warming Swindle which was broadcast in the UK two weeks ago. The claims made by the climate change experts and the scientists who took part in the TV program are valid. Like everyone else today scientists are seeking their 15 minutes of fame and most understand that scaring politicians and creating exciting copy for the media is a good way to secure research grants. The climate change industry is fast turning into a Dot Com style boom - a period of hysteria that people seem to need as an excuse to develop new technologies. Recently, however, the media has become less interested in yet another scientist telling us that half the world will be under fifty metres of water in ten years than it is in a dissenter who incurs the wrath of the climate change theocracy.

If the climate change bubble bursts then funding for research will disappear faster than the polar ice cap. This will probably represent no great loss for most scientists - save those working on the last chapter of their book on how the world as we know it is about to end. In the main most scientists, along with the politicians who are also riding the wave, will move on to the next big thing. Even for most commercial organisations changing direction will cause little pain beyond finding a new opening gambit for their press releases. For others life will not be so easy. A shift in the governmentís stance on climate change, and a relaxation of emission reduction targets, could force some companies to write off large investments in plant and R&D. Some could, like those that thrived during the short period between the 1970ís oil crisis and the 1980ís energy glut, could be forced to hibernate or liquidate.

However by placing so much emphasis on climate change the business sector could be overlooking a very real and relatively immediate threat or, for some, an opportunity - the dwindling supply of easily exploited carbon-based fuels. While consumers may express concern over the impact modern living has on the environment only a minority are opting for sustainable lifestyles. Even with hysteria over global warming at its peak government initiatives to cut carbon emissions are seen by many as an either an infringement of personal liberty or an excuse to raise taxes. Today, the key driver within the low carbon technology sector should be the approach of peak oil rather than concerns over the impact of global warming. Even the most ardent environmentalist will throw their copy of the Stern report on the fire when the temperature in their living falls below 5 degrees. As well the motorist that sees the cost of fuel refined from tar sands put automobile use beyond their reach will be an eager convert to alternative energy.

Luckily, for investors in the alternative energy sector, many of the present generation of entrepreneurs see the technology they are developing for what it is - a disruptor in a market where the incumbent players still employ business models based on the exploitation of a fast disappearing resource. For every starry eyed enthusiast who wants to prevent the industry created by 19th century oil moguls wrecking the planet there are ten that just want to be the John D Rockefeller of the 21st century.

Posturing on issues such as global warming and climate change are all very well - after all even Rockefeller saw himself on a divine mission to deliver low cost light and heat to the working people. As well, oil did initially improve the environment within cities where previously coal smoke had filled the air and horse excrement carpeted the streets. However, within a consumer driven economy, good intentions are no substitute for producing an energy product that costs less and is easier to use than those offered by the incumbent providers and, just important, is sourced from a supply that is secure for the duration of a typical business investment cycle.