Why renewables and efficiency investment makes sense sooner rather than later
By Jason Anderson, Head of European Climate and Energy Policy at WWF European Policy Office
Europe has been the driving force behind the surge in renewable energy that has become a global phenomenon. Nevertheless, the financial and economic downturn that began in 2008 has had a marked effect on the commitment to keeping up the pace of clean energy development. Political attention has shifted to the short-term need to stabilise economies, and with capital more scarce, roll-backs in government support programmes make investment more challenging.
Powerful forces who have been losing out in the clean energy revolution are pushing back, relying on the economic situation as a ready stick to prop up their arguments. Some of them clothe their position as an alternative vision of decarbonisation – wait for renewable energy technologies to get cheaper, relying in the meanwhile on a sort of middle-ground of somewhat better use of fossil fuels.
Similar thinking is seen in the European Commission’s new 2030 white paper, which envisions halving the recent pace of renewable energy growth between 2020 and 2030, leaving much of the heavy lifting for subsequent decades. In their economic models, this all works out smoothly.
But fast-forward to 30 years from now. Fossil fuels have become steadily harder to access, sucking up significant capital to do so. A few countries, perhaps in Asia, have pushed forward in clean energy technology and now fully dominate the market, making renewables less attractive politically in Europe. Power plants running on coal and gas (notionally ‘carbon capture-ready’, but still unabated), are still serviceable and their owners are reluctant to decommission them prematurely, putting pressure on politicians to relax efforts to cut emissions.
Meanwhile, whether due to the impacts of climate change itself or the regular action of economic cycles, we continue to be buffeted by periodic crises that squeeze access to capital and put the brakes on enthusiasm to invest in clean technology. Then, while the economy is again resurgent we face the twin challenges of expanded consumption putting upward pressure on emissions, and governments and industry reluctant to ‘harm the fragile recovery.’
In other words, waiting is a losing game. Models like those underpinning the Commission’s analysis ignore the political influence of incumbents, fail to capture the importance of cycles and crises in real-world economics, and woefully underestimate the real impacts of climate change on those same crises. A future marked by costly ‘natural’ disasters and pressure from global food, water and health crises, is not one in with easy access to reliable project finance in support of an aggressive technology transition. It will be like the past five years, on steroids.
Believe it or not, we are still relatively well off and resilient right now – we are up the proverbial creek, but still have a paddle. But not for long. There’s no time to lose.