Neil Hirst, Senior Policy Fellow at the Grantham Institute and author of The Energy Conundrum, Climate Change, Global Prosperity, and the Tough Decisions We Have to Make, considers the outlook for global energy and how to bring rising carbon emissions under control.
Twenty-five years ago, the 1992 United Nations Framework Convention on Climate Change (UNFCCC) treaty was set up to tackle the causes of global warming and prepare for its effects.
Since then, greenhouse gas emissions from energy generation have increased by more than 50% – and are still rising. In 2040, the International Energy Agency predicts that emissions could be double the levels required by the 2015 Paris Agreement to limit warming to 2°C or 1.5°C.
Just looking at these figures, it would be easy to be pessimistic about the outlook for tackling climate change.
However, three powerful, positive trends can help us bring carbon emissions under control:
- There has been a spectacular drop in the cost of renewables. In 2016, renewable energy accounted for two thirds of world investment in new electricity generation – a remarkable increase. Wind and solar energy still make up a rather small share of global energy but even so, it is a staggering development – the UK broke 13 different renewable energy records last year, making 2017 the greenest year ever. It’s fair to say, renewables are rising to the challenge.
- There has been significant improvement in energy efficiency. This is partly the result of regulation and technological progress, but also due to the fact that, as economies mature, they become less focused on the most energy-intensive industries. For example, China has a powerful national programme to enhance industrial energy efficiency and is on track to reduce its carbon intensity (emissions per unit of GDP) by more than 50% between 2005 and 2020.
- The rise of air pollution in cities has catapulted local pollution onto the political agenda of governments around the world – and most of the solutions to air pollution go hand-in-hand with reducing carbon emissions. For instance, to tackle urban air pollution, China is switching from coal to gas, promoting electric cars, and investing in urban public transport – steps that will also reduce greenhouse emissions.
Some of the biggest challenges to reaching global climate goals lie in the developing world. Countries such as China and India, with huge populations, are achieving rapid improvements in living standards – accompanied by rising demand for energy, so far largely fueled by coal. Developing nations need to find ways to continue to progress while switching to low-carbon energy sources, such as wind and solar.
However, while there is great potential for emissions cuts in the developing world, rich nations already have the resources and technology to overcome the financial hurdles – a legacy of our industrialised past, which also obliges us to take action.
Four vital steps that rich nations should take to save the planet
- Put a price on greenhouse gas emissions through taxation or cap and trade schemes. This will put pressure on energy suppliers to cut their emissions. Similarly, credits may be allowed for carbon savings made overseas. The United Kingdom and European Union are going down this track through the EU’s Emissions Trading Scheme and the UK’s minimum carbon price, but, they must increase the cost of carbon in order to be effective. The Chinese carbon trading scheme is an excellent new development.
- Create a genuinely global organisation for international cooperation on energy policy and technology. The International Energy Agency can become such a body and has made good progress in doing so, but still formally excludes the developing nations.
- Clarify the financial support that wealthy countries are offering to the developing world. Richer nations are obliged to give support, but there is confusion over exactly how – exacerbated by the actions signaled by the United States President Donald Trump to leave or renegotiate the Paris Agreement. Wealthy nations needs to make a specific and credible offer to support low-carbon development in poorer nations.
- Invest in the next generation of low-carbon technologies – particularly energy storage and smart grids. Early support for wind and solar power technologies led to them developing into world-wide industries. By investing in new early-stage technologies, rich nations can ensure the options are available and affordable to help greenhouse gas emissions balance out to a ‘net-zero’ level in the long term.
Neil Hirst’s book, “The Energy Conundrum, Climate Change, Global Prosperity, and the Tough Decisions We Have to Make”, gives a comprehensive account of global energy policy in our rapidly changing world, drawing out the important factors that could make significant change possible. It is available to buy now.
Neil will be taking part in a live Ask Me Anything on Reddit on 19 June from 4pm. Keep an eye on @Grantham_IC on Twitter for more details.