energy & climate change: sustainable is cheaper

of barriers and interests...

There is no technical or financial  reason why our planet should not be powered by renewable energy systems by 2040, and could be achieved significantly earlier than that.  
The economics of climate change is simple - taxing  emissions on the source, i.e. taxing energy according the respective emissions associated with extraction and burning. The same applies to the other greenhouse gases.
However, in reality both these scenarios seem rather unlikely. So what are the barriers?

  • Perceptions
    Renewable energy technology are still perceived as expensive. Unfortunately, this opinion is often shared in financial institutes that keep financing fossil infrastructure projects. It is astonishing how people in high position keep repeating this mantra although it could not be further from the truth. Fossil energy is expensive.

  • Ideology
    Some people think that renewable energy is a communist disease. Very often the same people are immune against science and believe climate change is a conspiracy invention

  • Particular interests
    The current system serves large organisations very well, both in the extractive industry and the utility sector - both industries characterised by insufficient competition. They normally dispose over large resources to influence decisions to their liking, which they use to ensure that wrong investment decisions from the past remain viable.

  • Market distortions
    More than U$ 500 billion are showered on fossil energy system each year in the form of direct and indirect subsidies. If these subsidis were directed to renewable energy systems...

  • Lack of system thinking
    Unfortunately, most oil companies consider themselves oil companies. They should consider themselves energy companies - i.e. a business that delivers energy, regardless of the fuel or form of the energy carrier. The same applies for utilities. They consider themselves as nuclear power plant or goal plant or gas plant owner, rather than electricity utilities.

  • Corporate short-termism
    CEOs have comparable short mandates. They do not have to take responsibility for the long-term impact and results of their decisions, and their bonuses are tied to yearly performance. Which doesn't make much sense, particularly in the extractive industry and the utility sector, where investment decisions have a life-span of up to 60 years.

  • National interests
    No politician would dare to sign a global agreement that he perceives would jeopardise the competitiveness of his country relative to other countries. Since climate change is a global phenomena, it would require globally co-ordinated action (e.g. a global climate tax on fossil fuel). This is highly unlikely to happen.

  • Democracy deficiency
    People are not asked what direction they want to go as a society, not even if they want to go to war. In most democracies, "democracy" means that we are allowed to choose every couple of years between 2 or 3 individuals to be our leader. And hope that they will stick with their promises, which we already know they won't. The same applies in the corporate world - CEOs are equipped with near absolute power over waste organisations, controlled only by Boards filled with CEO-type characters. Employees - who will still be doing their job when the CEO is long gone - have no means of influence.

  • Our  nature
    In the course of evolution, humankind never had to plan ahead more than a year. We developed by  surviving one winter at a time. Our natural time horizon has not yet adapted to the  current challenges, as can be seen at the yearly global climate conferences. It would be our political leaders job to extent that horizon in time - especially when everybody else seems to be pre-occupied mainly with consuming.

  • Politicians.
    Generally don't have any balls. Are more interested in being politicians than in the interest of their nation.

The development of our energy infrastructure depends on the relevant policies and efficiency. Eventually, we will have a renewable energy system anyway - simply because renewable energy is more efficient and  cheaper. Renewable energy systems only require upfront investment. Maintenance cost of renewable energy systems are marginal in comparison to fossil energy systems - simply because the fuel is free.

However, climate science suggests that we do not have the time to wait for the markets to work. There is no reason why we should not make the market.  Contrarely to popular belief, a Marshall plan for the global energy infrastructure would not ruin us. It would generate new technologies, a thriving industry, and jobs. And avert the worst impacts of climate change.

The different technologies are competing for capital and support. Depending on government decisions, the competitive balance between energy technologies  ( non-renewable vs. renewable energy sytems changes in favour of one or the other

Development of global energy prices under different policy scenarios. Investing in  a shift in the energy system now would lead to significantly lower energy cost in the future (Marshall scenario vs. business-as-usual scenario)

Source: SolAbility

A global energy system Marshall plan would lead to significant lower greenhouse gas emissions, reducing the impacts of climate change

Source: SolAbility

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