By Jeremy Leggett
For the last 25 years, I have fought hard against defenders of finite carbon fuels, careless of the impact they have on our world by clinging to coal, oil and gas. And I have lost battle after battle against the dark side. But in 2013, something changed and the tide began to turn. Now, as we build up to the Paris climate talks in December, an event described by many observers as something of a ‘last chance saloon,' I’m genuinely hopeful the light side can win the war.
The world has witnessed an extraordinary series of events that have combined to develop a ‘tipping point’ in the decline of fossil fuel industries, driven by three emerging mega-trends.
First, the cost of deploying renewable energy systems is generally falling. In fact, 2013 saw new renewable energy generation overtake conventional fossil fuel and nuclear installations globally. According to UBS, a combination of a solar roof, an electric car and a domestic battery tank will offer a 7 percent return on investment every year -- with a six- to eight-year capital payback, without subsidy support -- by 2020. It’s no wonder tech-giant Apple has announced plans to jump into the mass-production of electric cars, complementing its already impressive adoption of solar energy.
Secondly, the cost of delivering hydrocarbons is rising. Drilling for shale is losing its appeal, with U.S. shale companies going bankrupt, drillers losing money and assets being written off by the billions. Meanwhile, last year saw peak capital expenditures (capex) spending by the oil and gas industry, and the lowest rate of discovery of new reserves in 20 years.
The situation is compounded by the Bank of England investigating whether or not fossil-fuel industries pose a threat to the stability of the capital markets. September 2014 saw the heirs to the Rockefeller oil fortune, who control around $860 million in assets, withdraw their funds from fossil fuel investments. The decision came as part of a wider divestment movement involving 800 global investors promising to remove $50 billion worth of support over the next five years.
Thirdly, the politics of climate abatement are showing signs of aligning. More than 100 countries now have a 2050 target to reach zero net greenhouse gas emissions. So have the likes of Virgin and Unilever. In the U.K., all three main political parties agree that a strong treaty is required in Paris, with the prime minister, deputy prime minister and opposition leader co-signing a letter of intention.
Meanwhile, the deal struck between the U.S. and China in Beijing, in November, is huge. China has for the first time committed to cap its carbon output by 2030 while generating at least 20 percent of its energy needs using clean energy sources, such as solar and wind. And with President Barack Obama agreeing to double the pace of the cuts in U.S. emissions, reducing them to between 26 and 28 percent below 2005 levels by 2025, the future looks bright. Even political parties are aligning in the U.S., with most Republicans claiming to favor a candidate that possesses strong climate policies.
I explore these three mega-trends in my latest book, ‘The Winning of the Carbon War," which will be published in a serial format between now and December, spanning what I fancy may prove to be the turnaround phase in the global energy-and-climate drama. I’m hoping it will be a useful monthly read for busy people without the time I am fortunate enough to have in watching the action unfold on the front lines.
For big energy, costs are soaring, investors are becoming increasingly dissatisfied, the clean-energy competitors are finding it easier to grow thanks to plunging costs, and analysts are more bullish about the need and potential for a low-carbon future to be realized. There’s also a clear shift in direction by policymakers, and society is refusing to continue to accept the activities of fossil fuel industries.
Any one of these challenges would be bad enough to confront on their own. Facing them all at once is going to be tough and could trigger the long-delayed managed retreat of the industry to clean energy alternatives.
Of course, governments may fail to codify their intentions in international law in Paris. But it is clear that the carbon war can now be won, and I am very excited to witness how things play out in the next 10 crucial months.
‘The Winning of the Carbon War’ will be downloadable for free and released in a ten-part series month by month through to the last day of the Paris climate summit in December 2015. Follow the blog and download the book www.jeremyleggett.net/latestbook.