Wind Energy and Economic Development
Forward-looking nations understand that in an era of global warming and growing oil scarcity, the key to future economic growth lies with the development of “green collar” jobs. Indeed, in rapidly-growing sectors such as eco-sensitive architecture, renewable energy, and sustainable transportation, entrepreneurs, scientists and large corporations are working together to create solutions to the impacts of climate change.
Governments can play a role as well, especially with the development of renewable energy sources such as wind and solar power. In previous periods, substantial government subsidies directly supported the establishment of nuclear energy, while tax incentives flowed into fossil fuel sectors such as coal and oil exploration.
Progressive governments are increasingly encouraging the growth of wind energy with a range of policies, including direct grants and renewable energy production targets. One of the most successful approaches was invented in Germany in the late 1990s, when state regulators decided to offer wind producers a guaranteed fixed rate – known as a “feed-in tariff” -- over a long period. The rate, pegged at a higher level than those charged by conventional energy producers, essentially gave wind companies a financial leg up, making wind energy attractive for investors. The cost of the higher rate is distributed to all electricity consumers, and amounts to a small fraction of the typical energy bill. The feed-in-tariff has turned Germany into one of the world’s leaders for wind energy. Ontario is moving to adopt this approach on a large scale and other jurisdictions are also following suit.
Countries that pioneered wind energy have experienced both environmental and economic benefits. Denmark, for example, is home to some of the world’s largest wind energy corporations – e.g., turbine maker Vestas and blade manufacturer LM Glasfiber, both of which have extensive international operations. The German wind turbine sector, in turn, controls more than a third of the world’s market share and employs over 100,000 people. These firms generated export sales of six billion euros in 2007 -- a vivid illustration of how one country has learned to capitalize from green energy.