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13 green business predictions for 2013

<p>Forecasts and predictions come along with the new year. Here&#39;s a take on how green policy and markets may perform in the next 12 months. &nbsp;</p>

Editor's note: As BusinessGreen is based in the U.K., many of the predictions are centered in this region.

It is that time of year again, the time of New Year's resolutions and predictions for the next 12 months. So, without further ado, here are the 13 predictions that BusinessGreen is making for 2013. They are in no particular order and we make no guarantees as to their accuracy, but these are the key developments we expect to see over the coming year.

The Green Deal will get off to a steady start

Before the end of the month the government will launch its Green Deal energy efficiency scheme. Backed by a multi-million dollar communications campaign and over $407 million of incentives worth up to $1,630 per household it should make quite a splash. However, with concerns mounting over the effectiveness of the scheme compared to the phased-out Warm Front initiative and a relatively limited number of companies offering Green Deal services, it is likely to get off to a steady rather than a stellar start. The Green Deal has the potential to be transformative for businesses and households alike, but it will take time.

The electric car revolution will be deferred again

Evidence that electric cars represent a cost-effective and reliable alternative to the internal combustion engine grows ever more compelling. As such, 2013 will see plenty more fleet and taxi operators following the example set by the likes of General Electric and GreenTomatoCars by placing orders for electric vehicles (EV). But despite high fuel prices and clear environmental benefits, it is going to take longer than manufacturers hoped for EVs to make it into the mainstream.

The battle for a power sector decarbonization target will reach fever pitch

The year in Westminster is going to kick off with a fearsome row over whether to impose a decarbonization target on the power sector. With an amendment for such a target tabled, Lib Dem backbenchers and green Tories are going to come under immense pressure to rebel against the government. Meanwhile, Labor is sounding more bullish on environmental issues than they have in years, paving the way for 12 months of potentially vote-winning attacks on the fracking-infatuated chancellor and the climate-skeptic dinosaurs on his backbenches.

Work will start on the U.K.'s first nuclear power plant in a generation

The government has repeatedly said it will not be held to ransom and will demand value for money from any new nuclear reactors. But, in reality, if EDF and Hitachi walk away from their plans for new nuclear power plants, the government's entire energy strategy will be left in tatters. It would be little short of a miracle if a deal is not brokered that allows new projects to move forward, much to the chagrin of many environmentalists.

Renewable energy investment will start to accelerate

With the U.K.’s Energy Bill promising policy stability for larger projects, the feed-in tariff continuing to offer good returns for most technologies and the renewable heat incentive due to launch soon, concerns over an investment hiatus should start to evaporate. We'll see regular announcements on the world's largest offshore wind farms, biomass plants, anaerobic digestion sites and marine energy projects. Add in the fact that the cost of key technologies such as wind turbines and solar panels is continuing to fall and 2013 should be a good year for the renewables industry (although policy U-turns could undermine this prediction in the blink of an eye).

U.K. Carbon Capture and Storage (CCS) will drink at the last chance saloon

It is arguably the biggest scandal of the U.K.'s energy strategy. The chancellor's gas strategy is simply incompatible with the country's carbon targets without working CCS technology, and yet the government has repeatedly fumbled the ball when it comes to making CCS happen. This year should finally see the award of $1.6 billion to a large-scale CCS demonstration project and the successful dishing out of similar funding from Brussels. But after repeated delays to previous funding awards, the industry will be holding its breath. If progress is not made soon, the U.K.'s chances of becoming a CCS hub will go up in smoke.

Several unlucky countries will face dire climate impacts

Sadly, it is the safest of predictions. The latest wave of scientific and security projections for the coming decades are the most worrying yet, with talk of a fast-closing window to avoid temperature rises of between four and six degrees in the later part of the century. Extreme weather will continue to wreak havoc with increased frequency, and the corporate and political focus on climate adaptation and risk management will continue to intensify.

Carbon reporting will be pushed up the agenda, making energy efficiency an ever more attractive investment

This year, the U.K. will become the first country in the world to require listed firms to report on their greenhouse gas emissions, while investors and exchanges around the world will seek ever more information on corporate sustainability performance. The combination of reporting rules and rising energy prices will force companies to take carbon and energy management more seriously – and when they do they will quickly realize energy efficiency investment makes sense.

U.K. shale gas drilling will resume, with protestors in tow

The U.K. will continue its tentative experiment with fracking after earth tremors last year led to a suspension of drilling. Environmentalists and energy industry insiders alike will be fascinated to see whether relatively clean gas can indeed be extracted from Northern England and the home counties at reasonable cost. But with local communities likely to be a bit more concerned about the prospect of earthquakes and pollution leaks than the government -- and green groups arguing that increasing fossil fuel production isn't exactly the safest route to a low-carbon future, the political battle over fracking will continue to escalate.

Next page:  Testing the vision 

The EU's resolve on aviation (and shipping) emissions will be sorely tested

Late last year the EU called a truce in the global battle over its plans to introduce an emissions levy on flights in and out of the bloc, suspending its proposals for one year to give time for the international community to come up with a better mechanism for tackling airlines' emissions. Talks are now ongoing, but with a breakthrough a long way off, the EU will face the prospect of a vicious trade war if a deal cannot be brokered and it reintroduces its carbon pricing plans. A similar row is already brewing over plans for shipping emissions pricing, meaning the future of global efforts to tackle escalating transport emissions rest on the diplomatic skills of the EU.

Corporate sustainability budgets will increase modestly as green ambitions grow

Analyst firm Verdantix recently released the results of a poll suggesting the majority of corporate sustainability budgets will increase next year. The results looked about right with around half of respondents predicting increases of one to nine per cent and one in 10 looking forward to larger increases. Large businesses with flagship green strategies, such as Unilever, O2, Sainsbury's, IBM and M&S, to name but a few, will continue to invest heavily in clean technologies and business models. Others will face more constrained budgets as nervous managers sit on considerable quantities of capital waiting for the economy to recover. But with green regulations becoming more demanding, energy prices rising and clean tech markets prospering, it will be a rare company that cuts back on its sustainability spending.

Any recovery in the carbon market will be anemic at best

The carbon market will continue to prosper as a concept with more jurisdictions introducing schemes, and struggle in practice as carbon prices hover at record low levels. There may be some sort of recovery this year if the EU makes good on its plans to tackle the surplus of credits in the market. But even the most ambitious proposals coming out of Brussels fall short of what is required, meaning any recovery in carbon prices is unlikely to have the transformational impact green businesses hope for.

Obama will have to decide whether to join the climate battle

Following his victory in November, President Obama has a few months to decide whether to make action on climate change a central part of his second term. The outlook does not look that great. True, the President has offered some encouraging comments on his desire to address the issue, but with so much else on his plate and the Republican-dominated House of Representatives as resistant to climate policy as ever, Obama would have to display uncharacteristic boldness to deliver really meaningful action. Sadly, without a drastic change in the U.S. position, 2013 will provide another year of painfully slow progress towards an international climate change treaty.

This article is reprinted with permission from BusinessGreen.

Photo of crystal ball consulted by businessman provided by ollyy via Shutterstock.   

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