The re­new­able en­ergy revo­lu­tion

Financial Mirror (Cyprus) - - FRONT PAGE -

In the United States and Europe, the ben­e­fits of re­new­able en­ergy are pre­dom­i­nantly seen as en­vi­ron­men­tal. En­ergy from the wind and sun can off­set the need to burn fos­sil fu­els, help­ing to mit­i­gate cli­mate change. In China and In­dia, how­ever, re­new­able en­ergy is viewed in a re­mark­ably dif­fer­ent fash­ion. The rel­a­tively rapid tran­si­tion away from fos­sil fu­els in both coun­tries is driven not so much by con­cerns about cli­mate change as by the eco­nomic ben­e­fits re­new­able en­ergy sources are per­ceived as con­vey­ing.

In­deed, while the eco­nomic ben­e­fits of renewables can be at­trac­tive to ad­vanced economies such as Ger­many or Ja­pan (both of which are rapidly mov­ing away from fos­sil fu­els), the ad­van­tages for emerg­ing in­dus­trial gi­ants are over­whelm­ing. For In­dia and China, an eco­nomic tra­jec­tory based on fos­sil fu­els could spell catas­tro­phe, as ef­forts to se­cure enough for their im­mense pop­u­la­tions ratchet up geopo­lit­i­cal ten­sions. Aside from in­creased en­ergy se­cu­rity, a low­car­bon econ­omy would pro­mote do­mes­tic man­u­fac­tur­ing and im­prove lo­cal en­vi­ron­men­tal qual­ity by, for ex­am­ple, re­duc­ing ur­ban smog. To be sure, fos­sil fu­els con­ferred enor­mous ben­e­fits on the Western world as it in­dus­tri­alised over the past 200 years. The tran­si­tion to a car­bon-based econ­omy lib­er­ated economies from age-old Malthu­sian con­straints. For a group of se­lect coun­tries rep­re­sent­ing a small slice of the global pop­u­la­tion, burn­ing fos­sil fu­els en­abled an era of ex­plo­sive growth, ush­er­ing in dra­matic im­prove­ments in pro­duc­tiv­ity, in­come, wealth, and stan­dards of liv­ing.

For much of the past 20 years, China and In­dia led the charge in claim­ing the ben­e­fits of fos­sil fu­els for the rest of the world. Re­cently, how­ever, they have be­gun to mod­er­ate their ap­proach. As their use of fos­sil fu­els brushes up against geopo­lit­i­cal and en­vi­ron­men­tal lim­its, they have been forced to in­vest se­ri­ously in al­ter­na­tives – most no­tably, renewables. In do­ing so, they have put them­selves in the van­guard of a plan­e­tary tran­si­tion that in a few short decades could elim­i­nate the use of fos­sil fu­els al­to­gether. The eco­nomic ar­gu­ments ad­vanced against re­new­able sources of en­ergy – that they can be ex­pen­sive, in­ter­mit­tent, or not suf­fi­ciently con­cen­trated – are eas­ily re­but­ted. And while renewables’ op­po­nents are le­gion, they are mo­ti­vated more by in­ter­est in pre­serv­ing the sta­tus quo of fos­sil fu­els and nu­clear en­ergy than by wor­ries that wind tur­bines or so­lar farms will blot the land­scape.

In any case, those wish­ing to halt the ex­pan­sion of renewables are un­likely to tri­umph over sim­ple eco­nomics. The re­new­able en­ergy revo­lu­tion is not be­ing driven by a tax on car­bon emis­sions or sub­si­dies for clean en­ergy; it is the re­sult of re­duc­tions in the cost of man­u­fac­tur­ing that will soon make it more cost-ef­fec­tive to gen­er­ate power from wa­ter, wind, and the sun than from burn­ing coal. Coun­tries can build their way to en­ergy se­cu­rity by in­vest­ing in the in­dus­trial ca­pac­ity needed to pro­duce wind tur­bines, so­lar cells, and other sources of re­new­able en­ergy at scale. As China and In­dia throw their eco­nomic weight into the renewables revo­lu­tion, they are trig­ger­ing a global chain re­ac­tion known as “cir­cu­lar and cu­mu­la­tive cau­sa­tion.”

Un­like, min­ing, drilling, or ex­trac­tion, man­u­fac­tur­ers ben­e­fit from learn­ing curves that make pro­duc­tion in­creas­ingly ef­fi­cient – and cheaper. In­vest­ments in re­new­able en­ergy drive down the cost of their pro­duc­tion, ex­pand­ing the mar­ket for their adop­tion and making fur­ther in­vest­ment more at­trac­tive. From 2009 to 2014, th­ese mech­a­nisms drove down the cost of so­lar pho­to­voltaic en­ergy by 80% and re­duced the cost of land-based wind power by 60%, ac­cord­ing to Lazard’s Power, En­ergy & In­fra­struc­ture Group.

The im­pact of the rapid up­take in re­new­able en­ergy could have con­se­quences as pro­found as those un­leashed by the In­dus­trial Revo­lu­tion. In the eigh­teenth cen­tury, the economies of Europe and the United States ini­ti­ated the tran­si­tion to an en­ergy sys­tem based on fos­sil fu­els with­out fully un­der­stand­ing what was hap­pen­ing. This time, we can see the way things are chang­ing and pre­pare for the im­pli­ca­tions.

For the mo­ment, the out­look ap­pears promis­ing. Ef­forts to re­duce car­bon diox­ide emis­sions may not be the prime driver of the re­new­able en­ergy revo­lu­tion; but it is very pos­si­ble that with­out the revo­lu­tion, ef­forts to min­imise the im­pact of cli­mate change would never suc­ceed. If we are able to avoid the worst dan­gers of a warm­ing planet, we may have In­dia and China to thank for it.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.