Biases and misconceptions often surround the energy transition. In this series of articles, I’ll take a closer look at some of the conclusions reached and underrepresented facts pertaining to the energy transition to address the tension often accompanied by these conversations, making room for more balanced and constructive dialogue.
In Part 1 of this series, “The energy transition and the path to a healthy environment,” I highlighted the health benefits of increasing renewable generation that are often overlooked.
In Part 2, “The energy transition and the need for fossil fuel support,” I advocate for a cooperative and collaborative relationship between the renewables sector and fossil fuels stakeholders with an “all fuels on deck” approach.
In Part3, “Opportunities within the complexity and simplicity of the energy transition,” I contemplated the complexity and simplicity catalyzed by the energy transition and the resulting opportunities as we transform our industry away from fossil fuels toward renewables.
Part 4: Slowing down is not an option
Since the Paris Agreement entered into force in November 2016, more than 190 parties worldwide (192 countries + the EU) have joined the international treaty to date. The Agreement outlines a commitment to achieve a 45% reduction in emissions by 2030, with the ultimate goal of reaching net zero by no later than 2050. Critics of the push for rapid action on the Paris Agreement mandates note that, with 2050 so far in the distance, why do we need to rush to act when doing so may cause economic distress in the interim?
It can be tempting to assume we have plenty of time to solve the issues in front of us on the path to net zero. The fact of the matter is that even with three decades, we have our work cut out for us.
As far as economics are concerned, some overestimate costs due to underestimating renewable energy cost improvements and deployment rates. In fact, a new study shows that even without accounting for climate damages or climate policy co-benefits, transitioning to a net-zero energy system by 2050 is like to be economically beneficial.
That said, we need to accelerate our efforts to build the infrastructure, policies and momentum necessary to achieve our ambitious goals for ourselves and future generations.
Are we on track?
Electricity generation is headed in the right direction. With the prices of renewable energy technologies (wind turbines, solar panels, batteries, etc.) plummeting, the global economy is getting cleaner, faster. We are making progress with 29% of our global electricity in 2020 coming from renewable sources. However, to have a good chance of hitting the targets that have been set, by 2025, half of the electricity globally must come from zero-emissions sources, rising to 90% by 2035. The pace of deployment of low- and zero-emission sources has to pick up significantly from where we are today in order to meet this milestone.
The good news is that we’ve discovered many technologies and techniques that have allowed us to transition to levels previously considered impossible, and there are many others that we can still tap into to. This is why the first decade of the thirty-year target period for net zero has a significant focus on electricity generation transition.
According to current climate models, we’ve made progress in that the estimated range of warming in 2050 has come down. The models are built on the assumption that the energy transition will accelerate. So we can’t slow down. We can’t even stay at our current speed. We need to accelerate.
There are many hurdles in any transition of this magnitude. Some of the most significant for the energy transition – that impact our need to accelerate – are related to cost, technology and policies.
According to McKinsey, reaching net zero by 2050 will require a significant increase in spending: Globally, there would need to be $9.2 trillion in annual average expenditure on physical assets for energy and land-use systems—that’s $3.5 trillion more than we spend today.
Adding to the economic hurdle is the fact that in hard-to-decarbonize sectors (shipping, aviation, and industrial processes), technologies that will enable us to decarbonize these sectors simply aren’t fully developed yet.
However, the costs often overlooked are the ones that could be avoided by transitioning to renewables more quickly. Consider the economic cost of Superstorm Sandy which cost New York upwards of $70 billion responding to the damages. Hurricane Katrina’s damages cost an estimated $125 billion. And then there is the cost to human lives. Heatwaves are killing tens of thousands of people worldwide.
As stated previously, the cost of renewables is going down in line with the development of other technologies. So, the faster we transition, the faster the cost will go down. Researchers from Oxford University study recently found that a rapid energy transition will likely result in trillions of net savings.
Limited Adoption of CCS
At this time, Carbon Capture and Storage (CCS) is only being used by a handful of places and hasn’t been proven on a commercial scale. In fact, we currently have no indication that CCS can (or will ever) be commercially viable. Assuming CCS is going to address the carbon issue in this case probably isn’t realistic. However, existing models for achieving net zero by 2050 assume that CCS is a big part of the story – an assumption that should be questioned.
Some believe that adding CCS to coal-fired electricity generation would allow these plants to continue running; unfortunately, it actually serves to increase the cost of a process that is already hard to argue is economically viable. CCS also requires a significant percentage of the electricity generated, which is a considerable part of the increased costs and widens the differential between primary and final energy.
There’s reluctance by many politicians to support or invest in long-term climate strategies that may not actively benefit the constituents they represent today. According to The Global Governance Forum, decision-makers evaluating public policies around climate change often make two mistakes around decarbonization legislation. One is that they erroneously assume their constituents will become responsible for footing the bill for policies that will deliver benefits in the future. The other is that they underestimate the value to be gained from these public policies. These errors often come about due to an unwillingness to apply technology adoption trends that have been proven over and over again to the adoption of climate technologies.
The only option is to accelerate
The energy transition needed to get to net zero is a massive undertaking—it’s difficult for everyone to get their heads around. We do have many technologies available today that will allow us to decarbonize some sectors now and in the near term, and by adopting these methods now, we’ll have more time to continue developing solutions to address hard-to-decarbonize sectors.
According to IPCC Working Group III Co-Chair Priyadarshi Shukla, there is a lot of opportunity to do better, with some work. “Having the right policies, infrastructure, and technology in place to enable changes to our lifestyles and behavior can result in a 40-70 percent reduction in greenhouse gas emissions by 2050, he says. “The evidence also shows that these lifestyle changes can improve our health and wellbeing.”
We need to work hard and fast in order to build the infrastructure, policies and momentum we need for 2050 because slowing down is simply not an option.
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