This post was originally featured on the Zayed Future Energy Prize blog and is re-printed with permission.
By: Jonathon Porritt, Co-Founder, Forum for the Future
The convergence of accelerating climate change, a weak world economy and an ever increasing world population should be seen as the ultimate challenge for humankind. Governments the world over have been baffled as they seek to address these challenges, not least because of their continuing dependency on hydrocarbon-based energy solutions. This is understandable; it’s hard to wean society off a source of energy that has helped humankind develop by leaps and bounds in the space of a century.
In my country, the UK, where energy prices are already some of the highest in Europe, the percentage of households living in ‘fuel poverty’ is as high as it’s ever been. Various Government-led initiatives to ease the burden of expensive energy and improve our use of energy – particularly in our domestic housing stock – have had some limited impact, but nothing like enough.
Energy efficiency should always come first in any policy hierarchy. But beyond that, there’s a massive opportunity for renewable energy to ease the burden on conventional sources of energy. The UK’s £860 million Feed-in-Tariff (FIT) scheme that allows homeowners to earn money from the power they generate from renewable energy sources (mostly solar), has proved to be very popular, with over 80,000 homes currently partaking in it. The scheme transformed the solar market into the fastest growing and most dynamic sector in the country.
The UK Government has now brought this initiative juddering to a halt – it was proving to be just too successful – and this will have a very negative impact on the uptake of solar energy by individuals, businesses and communities. I’m hopeful this is a temporary glitch, it simply doesn’t make sense (economically or environmentally) to backtrack on something like this.
But small-scale schemes like these only go so far in helping us collectively reduce our carbon footprint. The crux of the matter is that we must be more efficient in our use of the energy whether it is derived from conventional or renewable sources. This is just as true for a net energy importer like the UK as it is for an energy exporter like Abu Dhabi.
Energy efficiency is commonly seen as the unglamorous part of the climate change mitigation debate. For one thing, it’s not as flashy as an array of solar panels or swanky new wind turbines swishing away on top of some windswept exotic hillside. But the truth of it is that there is as much potential for wealth creation in pursuing energy efficiency as there is in developing renewable energy sources.
A 2008 report by McKinsey found that if we invest US$170 billion a year globally in energy efficiency initiatives, we could see an average internal rate of return (IRR) of 17%. What’s more, it would halve the world’s energy demand by 2020, and could help save just under a trillion dollars by this date with little or no impact on the consumer’s convenience.
Massive investments of this kind require very high levels of cooperation between the business community and governments. In a 2008 opinion piece in the Wall Street Journal[ii], just as the financial crisis was kicking off, Al Gore wrote about the need for what he termed sustainable capitalism where notions of longevity and sustainability should play a central role in business management and investment decision-making. This picked up on many of the themes that I covered back in 2005 in a book called Capitalism as if the World Matters.
In an ideal world, it shouldn’t take an economic crisis, let alone the countless warning signals from the natural world, to persuade us to change our ways. But this is a far from ideal world. With governments paralysed, we desperately need more business organisations to start taking the long view in terms of their future revenue streams instead of the current ludicrously short-term, profit-maximising model.
Nevertheless there’s a lot to be encouraged by. As a returning member of Abu Dhabi’s Zayed Future Energy Prize’s Selection Committee, tasked with the difficult job of shortlisting the last few candidates for the Prize ahead of the final jury selection, I can safely say that there’s certainly no shortage of businesses, individuals and non-governmental organisations with the long term health of our planet and society in mind. It was a hugely inspiring process.
I was especially impressed by the number of candidates with innovative ideas around efficient lighting solutions – the environmental impact of lighting is often underestimated, but inefficient lighting plays a significant part in increased energy consumption, energy which is still mostly produced by conventional power stations.
And judging overall by this year’s candidate selection, it was also very good to see that energy efficiency is finally being taken seriously. It’s worth repeating that no matter how green or sustainable your energy generation solution is, if it’s used inefficiently, you’re just wasting green electrons rather than wasting dirty grey ones!
Some environmentalists now claim that we might not make the move to renewable and sustainable energy solutions until there is a complete breakdown in the existing systems of wealth creation, energy generation and distribution. I profoundly hope that’s not the case because a breakdown in our existing system would be an utter disaster for all people, but particularly for the poorest people and those with least energy choices in their lives.
I personally hang on to the belief that we are an intelligent enough species to engineer our way out of what looks like an increasing grave crisis without it actually overwhelming us.
Jonathon Porritt is an environmentalist & writer and Co-Founder of Forum for the Future, a non-profit organisation working globally with business and government to create a sustainable future.