The green lobby claims that fossil fuels are on borrowed time and that wind power and solar panels will transform the energy landscape. But they are mistaken.
Great efforts are under way to decarbonise the global economy. It’s not just that Western political leaders pledge commitments to net-zero emissions by 2050 or shortly thereafter. Corporations are also investing in a green-energy future as if a carbon-free world is a fait accompli.
The trends are clear. Oil and gas companies lose shareholder battles to climate activists. Automakers plan to go electric in the next decade. And financial institutions divest their managed funds from corporations invested in fossil fuels.
However, reports of carbon’s death are greatly exaggerated. Although it seems sensible to wean the world off oil, coal and natural gas, the transition to 100 per cent renewable energy is almost certainly unrealistic. Indeed, notwithstanding the construction of new wind turbines and solar farms, the world will need fossil fuels for many more decades.
As one of the world’s most distinguished energy analysts, Daniel Yergin, argues, the shift to a net carbon-zero world “is likely to take longer, to be more expensive and to require more technical innovation than many now anticipate”.
The world depends on fossil fuels for about 80 per cent of its energy. And in the 2020s, government budgets promoting the energy transition will be constrained by the heavy debt burden accumulated in the wake of the coronavirus crisis and the world’s worst recession in seven decades.
According to the International Energy Agency, carbon emissions will increase by 5 per cent in 2021, with huge investment in coal-fired power stations across the non-OECD world.
Simply put, the policy to eliminate coal and especially oil and natural gas within three decades is not a cost-free-exercise: it would hurt nations in terms of higher costs up and down the energy chain and countless lost jobs in carbon-intensive industries.
The green lobby claims that fossil fuels are on borrowed time and that wind power and solar panels will transform the energy landscape.
But they are mistaken.
Writing in The New Map: Energy, Climate and the Clash of Nations (Penguin, 2020), Professor Yergin argues that “oil will maintain a pre-eminent position as a global commodity, still the primary fuel that makes the world go round”.
Solar and wind power still provide just a tiny share of the world’s total energy. They also struggle to replicate the reliability of oil and gas: today’s best rechargeable batteries for renewables have only a fraction of the energy density of hydrocarbons from gas and oil; so until this problem is rectified, there will always be a place for gas and oil…..
In any case, the declining emissions of the developed world are likely to be dwarfed by the increasing emissions of the non-OECD world. These nations account for about 65 per cent of annual global emissions, as they try to grow their economies, reduce poverty and raise living standards.