Eddie

Creating a carbon free energy world

A call for leadership on carbon abatement at COP21

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We used to think that “Flaming June” was rose-tinted nostalgia for long-lost summer holidays, but this year the National Oceanic and Atmospheric Administration (NOAA) confirmed that in June 2014 the average global temperature was 16.2C (61.2F), 0.7C higher than the 20th-century average. May 2014 also broke the record.

The planet is warming, and we are responsible. Thankfully, the likelihood of action to combat it is rising as well. There was the recent call by Hank Paulson for a price to be put on carbon emissions; there was the speech by Angela Merkel and there was the report from the International Energy Agency (IEA) which pointed out that by 2035 USD 40 Trillion would be spent on securing our energy supplies and delivering an electricity service.

The speech by Chancellor Merkel (made at an informal meeting of 35 countries to discuss a new climate change treaty) stated that “the world must show its colours”, and that “every delay comes at a high cost”. She said, “In Germany we are accepting our responsibility”.

The most important thing that is happening on the climate change front is the experimentation that is going on in China in carbon trading. Since June 2013, 5 cities and 2 provinces are trialling carbon pricing. The goal is to find out how carbon markets work. The private and public sectors are working together in these 7 locations. There are many questions that need to be addressed before a nationwide carbon pricing scheme can be rolled out. How will different industrial sectors respond to carbon pricing? How much and what quality of legislation is appropriate? How are carbon emissions to be measured? How are carbon pollution fines to be collected and recycled? What is the right price to place on carbon so that human behaviour is changed, and does this price change as the quantity of emissions fall?

China has a unique planning system. It likes to experiment at city and provincial level with pilot schemes before it rolls them out nationally. The long and spectacular Chinese economic performance is grounded in the most profound and comprehensive planning system of any world economy.
Already we know that carbon exchanges have been set up; tonnages of carbon are traded and real prices are paid. Shenzhen, for instance, has 630 companies who participate in its learning scheme.

China is, as we know the oldest civilisation. It has the longest tradition of self-government, and its bureaucracy has been a meritocracy for thousands of years.
I have been proposing over the past two years that China and Europe should lead the world at COP21 and institute a price for carbon which will lead to a decarbonised energy society globally. Despite the failure of COP 19 at Copenhagen I am firmly of the belief that a new treaty can be agreed at COP 21 in Paris during December 2015.

I believe this will be the seminal event in the history of energy this century. Will the politicians who are assembled in Paris decide to put science at the centre of its policy making procedures or will they allow vested interests and conventional wisdom to dictate the agenda? This is a time for science and not ideology to triumph.

Simply what’s at stake for us a global society is the answer to the question “are we capable of planning a non-polluting and sustainable future?” That is a subset of this question, “are we going to allocate our scarce capital resources chasing deeper, more remote, more expensive and polluting hydrocarbons, or are going to allocate these resources to create renewable sources of energy?”

The IEA points out that we can either go on digging for expensive oil and gas and indeed opening up new coal mines and using existing channels of distribution, or use the same quantity of money ($40 trillion) to create sustainable energy. The IEA’s great contribution is to have done the calculations, and to counterpoise the alternatives. The fossil route to our new energy future will probably lead to rises in temperature of 4 to 6 degrees. If we act now to start creating the complete sustainable solution we can limit the rise in temperature to 2 degrees.

One of the lesser known advantages of renewable energies is that they are local. They exist in every country in the world to a greater or lesser extent. Renewable energy leads to a very much enhanced local employment. This can be contrasted with fossil fuel exploration which is taking us into the Arctic, and into the mid-Atlantic but also pouring trillions of dollars into the ground in the Middle East. There is very little economic multiplier effect from going the fossil fuel route, whereas by travelling the renewable route, we replace imports, and substitute local sources of energy.

For some the contemplation of a world without fossil fuels is simply an impossibility. To people of this viewpoint I would say: who could have imagined 10 years ago that Germany would have installed 40,000 megawatts of Solar PV by 2014 and that the impact has been so profound that the major utility companies face huge risks as to their very viability in a world dominated by renewable energies.

Who could have foreseen that wind energy would be 25% cheaper than new coal plant in South Africa? A government study showed how Medupi and Kusile,the two new planned coal fired power plants would cost 0.99 Rand per unit of electricity over their lifetimes, whereas Mainstream and others bid an average of 0.76 Rand per unit in the latest round of the competitive programme to build new renewable energy power plant.

Of equal importance to the low price of renewables is the fact that the wind and solar projects were built on time and to budget with no strikes and South Africa can look forward to many more rounds of renewable energy projects which literally hammer the cost of new coal.

China and the EU must come to COP21, with the USA, with worked out plans to put a price on carbon which will change all our behaviours, so as to gradually and systematically reduce our atmospheric carbon release to zero.

Then our children can look forward to the occasional flaming June and thank us for taking the action that we did.

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2 Responses to Creating a carbon free energy world

  1. Roger Faulkner August 10, 2014 at 9:21 pm #

    Your post did not mention the supergrid, though I know it is close to your heart, and close to the center of this puzzle. That is probably wise, because pricing carbon emissions leads to the need for a supergrid anyhow. Using market mechanisms makes sense, starting with putting a price on carbon. I would favor a worldwide tax on carbon dioxide emissions, with any country not charging the tax having import duties (equivalent to the tax which was not imposed when goods were made using non-compliant energy) charged when manufactured items are exported to treaty countries…but of course I’m no politician. I wish them well in figuring out how to do this and keep their jobs too.

  2. Maurice McCarthy August 26, 2014 at 6:22 pm #

    Hi Eddie,

    Nice to hear someone sum up the advantages of RE and the potential for real offtake enabled by carbon trading. Very insightful, and I couldn’t agree more.

    Maurice

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