Unrest in the Middle East and North Africa, and its impact on oil prices, 44% of global businesses would now support increased government investment in renewable and alternative energy, according to the latest research from Grant Thornton’s International Business Report (IBR). In the U.S., 41% are more likely to support increased government investment.
With the economic situation becoming more uncertain as the year progresses, the price of oil has generally reflected global concerns. Brent Crude, oil which started the year at $85 a barrel, climbed to $125 a barrel in April and has generally remained above $100 a barrel since.
Many businesses would be willing to endure the short-term pain such investment might create: 51% of the global respondents said they would accept higher energy costs in the short-term to reduce their economy’s reliance on oil and have more stable prices in the longer-term. However, while this stance was supported by 60% of businesses in North America and the U.S. and 53% in the G7, just 35% of those in the Brazil, Russia, India, and China economies agreed.
“The Arab Spring is a key event in global energy security. The region holds substantial known global oil reserves, so a dramatic increase in the price of oil was to be expected,” says Cal Hackeman, global leader of Grant Thornton’s Cleantech industry group and the U.S. Technology industry managing partner.
“However, this seems to have sharpened the minds of businesses to the challenge of moving towards more sustainable sources of energy,” added Hackeman. “At a time when the global recovery remains fragile, it is encouraging to see that many businesses would support extra investment in renewables even if this caused energy costs to rise in the short-term. These results should serve as a reminder to governments and international organisations that reliance of economies on oil needs to be addressed.”
Grant Thornton International Ltd.
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