Scottish and Southern Energy (SSE) and Mitsubishi have entered into an agreement to cooperate on low carbon energy projects. The Mitsubishi companies involved are Mitsubishi Heavy Industries Ltd and Mitsubishi Power Systems Europe Ltd. The arrangement will allow the companies to investigate a range of new technologies for offshore wind farms, smart electricity grids, low carbon vehicles, carbon capture and storage and power generation. The aim is to establish joint development projects, ventures, investments and supply arrangements through the agreement.

The initial focus of the partnership is the delivery of renewable energy from offshore sites and the development of low carbon vehicles. In May 2010, the Offshore Valuation Group, a collaboration of government and industry organisations, said that the development of the UK's offshore resource could generate the electricity equivalent of one billion barrels of oil per year, or the same as the average annual output of UK North Sea oil and gas over the past four decades.

The reduction of global carbon emissions is now widely regarded as paramount if the world is to avoid major negative consequences throughout the course of the next century. Current levels of c. 380 parts per million (ppm), represent both a record high and an unprecedentedly rapid rise (by 30 ppm in just 17 years). To avoid adverse consequences - and possible catastrophe - experts believe that urgent action must be taken now to limit peak CO2 to 450 ppm.

Projections, based on current and forecast future emission levels, suggest that such a target is unlikely to be achieved. The interaction between economic growth, consumer demand and new technology is complex, and prediction is uncertain. However, a strong consensus now exists that without more concerted action that target will be exceeded at some point between 2030 and 2050, with most pessimistic assumptions outlooking ranges in excess of 800ppm by the end of the century.

The potential for reducing emissions using state-of-the-art technology is immense. So, too, is the cost (some analysts put it as high as 20 years). Various political initiatives have foundered on unwillingness by nation states to be "first movers". Attempts to resolve the issue by economic means have included carbon pricing, offsetting and the creation of carbon markets.

Author: Paul Chapman, Analyst