"The energy industry has high capital costs and long time horizons, whereas near-term job programmes are the antithesis of this, coming and going with economic events and political whim."
RON NORMAN, ENERGY CONSULTING, PA CONSULTING GROUP
PA energy capital markets expert, Ron Norman, is quoted in the Financial Times Green Innovation and Design report. Ron gives his views on whether the environment for entrepreneurs with innovative green ideas is tougher than the environment experienced by their counterparts in other new sectors, because green projects take longer to become commercial and cost more money.
Ron points out that, while in the US start-up funding of $50m is not unusual, the regulatory climate is unhelpful. Ron comments that green innovation in the US is largely driven by non-commercial priorities such as reducing unemployment. This twists and distorts the market, he says: "The energy industry has high capital costs and long time horizons, whereas near-term job programmes are the antithesis of this, coming and going with economic events and political whim."
Commenting on US government policy which dictates percentages for different forms of renewable energy, Ron advocates a regulatory environment similar to the acid rain "cap and trade" programme of the 1990s.
This created a set of long-standing rules enabling industry to invest efficiently and the market to respond, he says. "Unfortunately, that's not what we're seeing today with lots of issues round green technology."
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