In 2008 when oil prices were at record levels, the conditions looked right for greater uptake of renewable energy technologies. Now the world is in recession and oil is at US$40 a barrel. Despite Obama's promises to invest in green technologies, what really are the prospects. At Freakonomics, three economists say what they think the prospects for green energy use in 2009 and beyond.
John Whitehead laments how close the US was in 2008 to what economists call the Hotelling switch point where high fossil fuel prices and falling renewable prices would cross paths and lead the economy to a switch to renewable energy sources. With the recession the gap between renewable and fossil fuel prices is now widening and as a result "most all large, private renewable-energy investments will be put on hold in 2009".
George Tolley also sees the recession as dampening demand for renewable energy with high oil prices key to bringing about its adoption, "this is a more powerful influence on clean technology adoption than any U.S. policy".
Ethan Zindler is more optimistic pointing out the clean-energy boom took off when crude traded at $50 per barrel or below, not $140 per barrel.
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