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Resource scarcity and climate change

"GOING GREEN" has rapidly become the new norm for the industries of tomorrow.

This mindset -- coupled with initiatives and policies that focus on climate change, resource scarcity, and increased consumer, industry and political interests -- is putting pressure on businesses to evolve from traditional technologies to more innovative ones. In this environment, it is inevitable that clean technologies for efficient resource consumption, renewable energy, biofuels, information technology, and waste reduction and management, among others, will lead to a paradigm shift in business practices.

Much of these and other activities are premised on the expectation that demand for food, water, and energy will grow by approximately 35%, 40%, and 50%, respectively, while climate change will worsen the outlook for the availability of these critical resources. These were the figures reported in the Global Trends 2030: Alternative Worlds report published by the National Intelligence Council in 2012. It mainly attributes the increase in demand to the increase in global population and the consumption patterns of an expanding middle class.

In the Philippines, many of us were thrilled to see our country enter the demographic and mid-income "sweet spot" window, as announced by government economic experts. They anticipate that our country will hit the "sweet spot" within the next six years, and in 2019, per capita gross domestic product will reach $6,000. However, this newfound purchasing power may have unfavorable effects on the demand for goods and commodities, and its prices.

Regarding demand for energy, for instance, many industry groups are concerned that the increasing household and industry electricity consumption, driven by the growth in the economy, could eventually lead to a power crisis. The recent widespread power failure in Mindanao is quite ominous. The energy supply could be eroded further by delays and oppositions to several power infrastructure projects. The Philippine Independent Power Producers Association believes that Luzon, which accounts for about three-quarters of the country’s total capacity, will require additional 3,280 megawatts (MW) by 2017 -- double the government’s estimate. This is a potential risk that could disrupt the power supply and otherwise cause prices to shoot up, affecting businesses, industries and consumers and eventually undermining our fast growing economy.

Around the world, almost every government has included addressing resource scarcity and climate change in their agenda. Some noteworthy achievements in the energy sector are China’s clean energy and efficiency initiatives, Saudi Arabia’s solar development plan, and Brazil’s efforts to promote wind and biofuels.

For its part, the Philippines has enacted several laws and policies and established a clean technology fund investment plan focusing on energy and transport, to tackle resource efficiency issues. Our government -- focusing primarily on energy -- spearheads most of the clean tech initiatives and projects which the business sector has already begun to embrace. Backed with fiscal and non-fiscal incentives under the Renewable Energy (RE) Act of 2008 and the subsidies under the feed-in-tariff program established in 2012, we have seen the spur of investments in the RE business. As of December 31, 2013, the Department of Energy (DoE) has already awarded 479 projects under the RE Law. In addition, the National Renewable Energy Program set a target of reaching 15,304 MW of installed renewables capacity by 2030. Clearly, our government is embarking on clean tech as a viable alternative to address the growing demand for energy, with the private sector playing a key role in providing investments and expertise to aid its success.

Resource scarcity and climate change bring in new risks for businesses. According to Cleantech Matters, a global clean tech insights and trends report by Ernst & Young (E&Y), businesses are exposed to the following key business risks:

For the complete article, please see Business World.