ECONOMY OF TOMORROW India and the global Green
Description: ECONOMY OF TOMORROW India and the global Green Energy Transformation Contact: Marc Saxer, marc.saxerfesindia.org With labour intensive industries moving out if China India hopes to attract manufacturing investment to create millions of
Related Topics
Download Presentation
"ECONOMY OF TOMORROW India and the global Green" is the property of its rightful owner. Permission is granted to download and print the materials on this website for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentation Transcript
slide1. ECONOMY OF TOMORROW India and the global Green Energy Transformation Contact: Marc Saxer, marc.saxer@fesindia.org<br>
slide2. With labour intensive industries moving out if China… … India hopes to attract manufacturing investment
to create millions of jobs Contact: marc.saxer@fesindia.org<br>
slide3. However, there is a second trend in
global investment flows… … manufacturing is moving back to the old industrial centers Contact: marc.saxer@fesindia.org North to South
2 trillion USD from 2009-2014 South to North
1 trillion USD since July 2014<br>
slide4. Digital automation reduces labor cost,
making old industrial centers competitive again… … while creating less jobs than hoped for in emerging economies. Contact: marc.saxer@fesindia.org<br>
slide5. Manufacturing cost in emerging countries reach the level of the United States… … undermining their comparative advantage. Contact: marc.saxer@fesindia.org<br>
slide6. The window for export driven industrialization is closing… …turning development into a gigantic race against time. Development Shrinking manufacturing cost undercut competitive advantage Higher labor productivity creates less employment Contact: marc.saxer@fesindia.org ECONOMY OF TOMORROW<br>
slide7. If labour cost advantages are levelled,
other factors become more important… …not at least the cost of ENERGY. Contact: marc.saxer@fesindia.org Long transport distances
Supply chains
Rule of Law
Political Stability
Skilled workforce
Quality<br>
slide8. In the old industrial centers,
the cost of energy starts to surpass the cost of labour … … as the biggest cost factor in manufacturing. Contact: marc.saxer@fesindia.org<br>
slide9. The energy transformation is driven by interests beyond climate change… … but is a strategic project to restore the competitiveness
of the old industrial centers Contact: marc.saxer@fesindia.org Industry: Competitiveness Capital:
Carbon Bubble Civil Society: Climate Change Security Sector: Geopolitical Risk<br>
slide10. TECHNOLOGY
The green energy revolution is made possible by technological breakthroughs… … reducing the cost of solar power as well as
new solutions for storage and distribution Contact: marc.saxer@fesindia.org<br>
slide11. MARKET
While in the short run, the energy transformation drives up energy cost… … in the long run, higher energy efficiency and lower cost for solar energy will significantly reduce the cost of energy Contact: marc.saxer@fesindia.org Source: Fraunhofer ISE Historical price development of photovoltaic modules<br>
slide12. GEOPOLITICS
Renewables are a way to improve energy security… … by reducing dependency on geopolitical hotspots Contact: marc.saxer@fesindia.org<br>
slide13. LEGISLATION
European governments have started to legislate the exit from the carbon economy… … calling into question trillions of subsidies for fossil fuels. Contact: marc.saxer@fesindia.org National Targets for Energy from Renewables,
as codified in national energy laws:
Germany
2025: 45 %
2035: 55-60%
Sweden
2020 - 50%
2050 – 100%
Finland
2020 – 38%
Italy
2020 – 17%<br>
slide14. CAPITAL
The Bank of England warned institutional investors against a USD 28 trillion “carbon bubble”… … if resources in the books of fossil assets cannot be produced due to climate change legislation. Contact: marc.saxer@fesindia.org Pension funds, required by Law to invest only in assets rated secure, need to hedge their exposure to “carbon risk”...
….Major utilities corporations (Eon, Enel) have started to sell off their entire conventional power plant fleet….
…. „Peak Oil“ may have already happened in financial terms.<br>
slide15. If India wants to win the race for development... … it must not miss the bus of green growth Contact: marc.saxer@fesindia.org With the comparative advantage of cheap labour eroding….
….and energy cost slowly becoming a disadvantage ...
… India will find it increasingly difficult to attract manufacturing.
Will India become a world leader in renewable energy (PM Modi, February 2015)….
… or will the biggest infrastructure build-up in history lead into a technological dead end?<br>
slide2. With labour intensive industries moving out if China… … India hopes to attract manufacturing investment
to create millions of jobs Contact: marc.saxer@fesindia.org<br>
slide3. However, there is a second trend in
global investment flows… … manufacturing is moving back to the old industrial centers Contact: marc.saxer@fesindia.org North to South
2 trillion USD from 2009-2014 South to North
1 trillion USD since July 2014<br>
slide4. Digital automation reduces labor cost,
making old industrial centers competitive again… … while creating less jobs than hoped for in emerging economies. Contact: marc.saxer@fesindia.org<br>
slide5. Manufacturing cost in emerging countries reach the level of the United States… … undermining their comparative advantage. Contact: marc.saxer@fesindia.org<br>
slide6. The window for export driven industrialization is closing… …turning development into a gigantic race against time. Development Shrinking manufacturing cost undercut competitive advantage Higher labor productivity creates less employment Contact: marc.saxer@fesindia.org ECONOMY OF TOMORROW<br>
slide7. If labour cost advantages are levelled,
other factors become more important… …not at least the cost of ENERGY. Contact: marc.saxer@fesindia.org Long transport distances
Supply chains
Rule of Law
Political Stability
Skilled workforce
Quality<br>
slide8. In the old industrial centers,
the cost of energy starts to surpass the cost of labour … … as the biggest cost factor in manufacturing. Contact: marc.saxer@fesindia.org<br>
slide9. The energy transformation is driven by interests beyond climate change… … but is a strategic project to restore the competitiveness
of the old industrial centers Contact: marc.saxer@fesindia.org Industry: Competitiveness Capital:
Carbon Bubble Civil Society: Climate Change Security Sector: Geopolitical Risk<br>
slide10. TECHNOLOGY
The green energy revolution is made possible by technological breakthroughs… … reducing the cost of solar power as well as
new solutions for storage and distribution Contact: marc.saxer@fesindia.org<br>
slide11. MARKET
While in the short run, the energy transformation drives up energy cost… … in the long run, higher energy efficiency and lower cost for solar energy will significantly reduce the cost of energy Contact: marc.saxer@fesindia.org Source: Fraunhofer ISE Historical price development of photovoltaic modules<br>
slide12. GEOPOLITICS
Renewables are a way to improve energy security… … by reducing dependency on geopolitical hotspots Contact: marc.saxer@fesindia.org<br>
slide13. LEGISLATION
European governments have started to legislate the exit from the carbon economy… … calling into question trillions of subsidies for fossil fuels. Contact: marc.saxer@fesindia.org National Targets for Energy from Renewables,
as codified in national energy laws:
Germany
2025: 45 %
2035: 55-60%
Sweden
2020 - 50%
2050 – 100%
Finland
2020 – 38%
Italy
2020 – 17%<br>
slide14. CAPITAL
The Bank of England warned institutional investors against a USD 28 trillion “carbon bubble”… … if resources in the books of fossil assets cannot be produced due to climate change legislation. Contact: marc.saxer@fesindia.org Pension funds, required by Law to invest only in assets rated secure, need to hedge their exposure to “carbon risk”...
….Major utilities corporations (Eon, Enel) have started to sell off their entire conventional power plant fleet….
…. „Peak Oil“ may have already happened in financial terms.<br>
slide15. If India wants to win the race for development... … it must not miss the bus of green growth Contact: marc.saxer@fesindia.org With the comparative advantage of cheap labour eroding….
….and energy cost slowly becoming a disadvantage ...
… India will find it increasingly difficult to attract manufacturing.
Will India become a world leader in renewable energy (PM Modi, February 2015)….
… or will the biggest infrastructure build-up in history lead into a technological dead end?<br>