Diving into an energy change
Our business future relies on energy transition.
Over the next three decades we humans have to achieve the greatest shift in the energy sources we use in our history.
If we don’t, we will cook the planet. Some people, such as clean tech pioneers, embrace this transformation as one of the best business opportunities ever. Others, such as fossil fuel companies, are fighting to keep as much of their business as they can, regardless of the damage they cause.
A third group is more insidious. These people express concern. But their inability to grasp the magnitude of the opportunity and the gravity of inaction is thwarting change.
One of the worst examples here is Business New Zealand’s Energy Council. It released this week an update on its 2015 report on our energy roadmap out to 2050.
Once again, as in 2015, it concluded that the energy and transport sectors would fail to meet their proportional share of New Zealand’s climate change commitments. Even though the breadth and depth of our renewable energy sources are among the best in the world.
We committed at Paris to a 30 per cent reduction in our greenhouse gas emissions by 2030 from 2005 levels.
However, we need the energy and transport sectors to achieve disproportionately larger cuts, because the government is making no demands on agriculture, which accounts for half our emissions.
Yet, the Council’s report shows that energy and transport, where our best opportunities for carbon reductions lie, fall far short.
The problems begin with its two scenarios. ‘Kayak’ envisages a world in which countries are weakly committed to carbon reduction, carbon markets are fragmented and ad hoc, carbon prices low, and our government offers no direct support for change, leaving the job to weak market forces.
Consequently, emissions from our energy and transport sectors are only 0.5m tonnes of CO2 lower in 2030 than their 34.5m tonnes in 2010. This would be a vastly damaging.
Rather than investing in our low carbon economy, we would spend heavily buying carbon credits from other countries to meet our commitment.
This would leave us with old technology and great financial exposure. ‘Waka’ begins more hopefully. A strong global consensus that ‘‘climate change is the defining issue of our time’’ results in many countries achieving large carbon reductions.
But despite a high carbon price and strong policy from government, our emissions from energy and transport would fall only 25 per cent. Worse, a good chunk of the cut comes from lower economic and population growth compared with the ‘Kayak’ scenario.
This view that investment in clean energy stunts economic growth contradicts a wealth of reputable research overseas. Clean technology is already a strong generator of R&D, manufacturing, jobs and other economic benefits in places as diverse as China,
Climate change is the defining issue of our time.
Denmark and California.
The Energy Council says its work is a ‘‘deep dive’’ into the issues. It’s not. It’s embarrassingly superficial and starkly wrong. It reflects very poorly on the corporates and government agencies involved.
For example, it trots out the old line about supply worries with biomass, such as waste from forest harvests. But if London Heathrow’s new Terminal 2 runs on biomass, why is Fonterra still using coal to dry one-third of its milk?
Read here about the real biomass opportunity for us www.bioenergy.org.nz/ - It claims the aviation sector has limited scope for fuel efficiency or fuel substitutes.
Yet, new fuselages and engines are delivering big fuel savings, biofuel blends are already in use, Airbus and Boeing have technology roadmaps for hybrid and electric planes by 2030, and 191 countries have committed to offsetting all their growth in airline emissions after 2020.
It ignores the rapidly improving technology and economics of electric vehicles. Yet, the OECD’s International Energy Agency projects there will be 30 million EVs worldwide by 2025. nz2050.com/ 2016IEA
The Energy Council is unconscionably passive. We urgently need its members to accept their grave responsibility and their great business opportunity - to lead our energy transition.