It is "fundamental to everything we do," U.K. Prime Minister Gordon Brown wrote this Friday in The Times of London.

Brown says we now confront a "global problem," requiring a "global solution." Remember a few months back, when such words would seem to refer to energy supplies?

Instead, oil is down below $90 a barrel, the Dow is in the dirt, and the British premier is talking about the very basics of capitalism. The cascade of credit problems from housing to spending is causing some to doubt predictions for global renewable energy markets.

OPEC is set to cut output, since oil producers are worried that top consuming nations will be so financially strained we won't drive as much. That concern is bolstered by official numbers—the International Energy Agency just cut its 2009 oil demand forecast by 440,000 barrels per day.

So even as we are at a critical point in terms of credit markets and maintaining the global flow of money to buy new things and pay employees, we are also faced with a fork in the road when it comes to future energy supplies.

Do we continue the rip-roaring development of renewable energy sources that many investors and market observers attributed to triple-digit oil prices? Or should rich countries turn away from solar, wind, and electric cars like we did in the early 80s, chanting, "Drill, baby, drill!"

Well, as baseball great and transcendental philosopher Yogi Berra once said, "When you come to a fork in the road, take it."

Global Energy and Economic Forecasts

Finance ministers of the top seven industrialized nations in the world (G7) are meeting this week, and so is the International Monetary Fund. Where sentiment means so much these days and volatility is at all-time highs, the G7 and IMF should insist that renewable energy initiatives be preserved.

The IMF said on Wednesday that the most tumultuous markets in two generations will lead to 2009 global economic growth of barely 3%.

That's down almost a full percentage point from the IMF estimate made in July, when oil had just peaked near $145.

"Demand destruction" came into political play this summer as a term and as a reality. John McCain and Hillary Clinton both proposed a gas tax holiday, which in the McCain-Obama race has taken a backseat to mortgage meltdown relief.

Though we must expect some priorities to shift, it's troubling to remember Reagan's reversal of renewable energy progress at the end of the 1970s oil crisis. We also know that whatever negative impacts the sub-prime crisis, the Iraq War, and other recent events have had on world public opinion of the United States, government and financial institutions over here set the international tone.

That's why I'm glad that nearly $18 billion in renewable energy tax credits were included in the financial system rescue package that Congress passed on October 3. Those incentives had a hard time getting through in their own right, which was ridiculous since alternative fuel sources provide employment to Americans that generate higher returns on investment than fossil fuel jobs. I detailed the advantages and growth of green jobs in Wealth Daily this week.

And even though I'm not thrilled that credits for solar and wind got lumped in with a slew of politicians' pet projects, we see plenty of room for policy overlap between the U.S. and other countries in using renewable energy to help us get out of the economic doldrums.

Consider the Treasury's bailout plan, which is now being mimicked to varying degrees in Germany, the U.K., and Iceland. All of these countries have gotten hit hard, and they've arrived separately at the conclusion that partial nationalizations of problem banks and other institutions are necessary.

French Finance Minister Christine Lagarde cautions not to imagine that the G7 will "have a harmonized response that will be the same for everyone, because you can't apply the same method to different market situations."

"Solutions may be different from country to country," Lagarde added on Friday afternoon.

But we saw an around-the-world interest rate cut in major economies, and we know that "20% by 2020" renewable energy production targets are in place across the European Union and several emerging markets like China.

So even though plenty of what has happened over the past few weeks is without historical precedent, it's hard to believe that in renewable energy, where the international community has played it smart, everyone's going to jump ship and scuttle their own clean growth goals.

In fact, renewable energy initiatives in places like Germany and Japan have set the standard for U.S. action, proving that foreign economic powers are ready to take the lead when necessary.

However this shakes out over the coming months, renewable energy should be at the top of every government's priority list.

Regards,

Sam Hopkins

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