Goldman Speculates that the Commodity Crash and Increasing Interest Rates Could Slow Clean Energy Projects

Goldman Sachs Group Inc.’s (NYSE:GS) chief strategy officer believes that the global decline of commodity prices and threat of increasing U.S. interest rates could slow the rise of clean energy in the developing world.
According to an article on Bloomberg Business:

Nations dependent on metals and mining for income rode China’s demand for commodities in recent years to build up their economies and envision big investments in wind and solar power. Now, with growth slowing in China and elsewhere, the same countries face declining revenue that may make environmental measures a tougher sell, Goldman’s Stephen Scherr said during a forum on green finance the company hosted in New York.
“Where they were inclined for a host of different reasons to be more aggressive regulators of coal, they are probably less inclined to do that, in part because it has negative consequences” for the local economy, Scherr said. “Those countries are hell-bent on maintaining that middle-class and not losing it.”

 An interest-rate increase by the U.S. Federal Reserve also may make it harder to finance environmental work in emerging economies, where “investors are going to demand more of a risk premium,” Scherr said.