Hmmm, could it be the recent (and continuing) chaos on Wall Street and in world markets is in large part due to a growing realization that the end of the fossil fuels era is at hand?
There’s no simple or single explanation for what’s happening — even market bubbles will blow after a critical mass of events and actions converge and push them to the bursting point.
But something dramatic and potentially historic is happening: The Wall Street market has been mostly flat for a year, and then last week lost 18 months’ worth of gains. Can we just attribute it to a market “correction,” China’s economic struggles and gyrations, and (as usual from the right) President Obama — and then move on?
Maybe not. The point about the fossil fuel era has real and welcome resonance, especially after reading Paul Gilding’s July article in Australia’s REnewEconomy, saying: “It’s time to make the call – fossil fuels are finished. The rest is detail.”
Gilding is a former executive director of Greenpeace International and a fellow at the University of Cambridge’s Institute for Sustainability Leadership. He is the author of "The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World" (2011).
Gilding wrote: “Unless we recognize the central proposition: that the fossil fuel age is coming to an end, and within 15 to 30 years – not 50 to 100 – we risk making serious and damaging mistakes in climate and economic policy, in investment strategy and in geopolitics and defense.”
This is the year the “dam of denial” and inertia is breaking regarding climate change, along with the need for urgent transformational economic change, he wrote. It's clear "we’ve reached a tipping point," he continued, where fossil fuels will "enter terminal decline, independently of climate policy action." But policy action is ramping up and COP21 is approaching, which may spell even worse news for fossil fuels.
The key driver of the fossil energy industry’s “terminal decline” is not what many see as their greatest threat – future climate change policy. It's the improvement in renewable energy, battery storage and electric vehicle technology, coupled with rapid gains in efficiency and drops in price, that pose the biggest threat to the fossil fuel industry, Gilding wrote. Renewables are already on the on the verge of being price competitive with fossil fuels – and already are in many situations.
Factor in electric cars, which are on the same path to the conversion of a slow-moving industry (traditional auto companies like GM) into a disruptive technology-driven one (innovators like Tesla).
There is much food for thought in Gilding’s long article,especially for fans of renewable energy and opponents of the fossil fuel industry’s power (here's that link again). Gilding concluded:
“All businesses, like humans, fight death. And fight [the fossil fuel industry] will, with all the considerable power they have. So, it will be messy and chaotic, and not consistent around the world. But in the end, the fossil fuel giants have no strategy that involves fossil fuels which makes any business or economic sense.”
Perhaps that is why financial economic markets are so roiled these days; maybe there is an important realization, and major correction, occurring.
It will take a “messy and chaotic” ride to come out on the other side.
Image credit: fossil fuel>>>on the way out by Don Hankins via Flickr CC