Three ways the global business elite is underestimating clean energy

Comment: A Financial Times reader survey found most see climate change as important, but are conservative on how fast the global energy mix can shift

Renewable energy projects are increasingly viable without subsidies (Pic: Flickr/Frans de Wit)

By

The Financial Times recently published a survey of 565 readers, mostly from the UK (40%), the United States and Europe (almost 25% each), on their views about the world’s energy predicament in the light of climate change.

Questions ranged from the general role of climate policy in transforming the global energy system and hence geopolitics, to specific policy tools.

First, the good news: climate change is taken to be one of the major drivers of world affairs by about 90% of respondents, while almost all of them think that no solution can be achieved without political collective action at the collective level.

Other results, however, show that even the FT’s educated and informed readership are missing the huge potential of clean energy. Here are three examples.

  1. Almost 60% of respondents think renewables without subsidies aren’t viable

In Europe especially, major renewable energy projects are underway with no government support whatsoever.

The French electric utility Engie announced in May the development of nine subsidy-free wind farms across Spain totalling 300 megawatts of capacity, backed by €300 million ($350m).

Earlier this year, Vattenfall announced plans to continue developing an offshore wind farm in the Netherlands of 700-750MW which could produce renewable electricity for 1 to 1.5 million homes – also with unsubsidized investment.

And in the United States, Lazard has demonstrated the lower cost of unsubsidized energy across the board, too.

  1. Almost 50% of respondents think fossil fuels will remain dominant in the energy mix for the next 50 years

First of all, countries are setting ambitious goals for their energy generation and consumption that steer us away from fossil fuels much fast than in the next fifty years – more like two decades: France, Ireland, Costa Rica, and the Netherlands are leading the way here.

Secondly, natural gas is rapidly losing its edge as a “bridge fuel” –  meaning that will not remain an attractive option to reduce our emissions relative to coal while we work on scaling up renewables for as long as projected.

Finally, the rise of renewable energy is unprecedented as it becomes the largest source of new power installation globally: renewables were responsible for almost 165 GW of new global power capacity in 2016 – nearly two-thirds of the global total.

At this pace, renewables will help the shift from fossil fuels in less than 5 decades.

  1. Almost 80% believe governments and consumers are the top two stakeholder groups in driving the energy transition

While this certainly rings true – indeed 195 countries signed the historic Paris Agreement – it leaves out key elements of the picture. Namely, companies in the private sector and investors.

To date, 140 companies have made the commitment to go 100% renewable under the “RE100” initiative. These companies are now creating demand of up to 170 TWh of renewable electricity annually – more than Poland or Malaysia.

Investors are also a significant driver in accelerating the uptake of renewable energy and of less polluting alternatives: private sources provide the bulk of renewable energy investment globally – over 90% in 2016 and what is more, investors representing $26 trillion in assets under management, are exerting pressure on the world’s largest emitters to curb emissions via the “Climate Action 100+” platform for the first time in a very public way.

There is much progress on the ground, driven by action at all domains of society – and these successes should be shared and celebrated.

The future is advancing more rapidly than many people think, and in a direction that is beneficial to the climate and the planet. Greater awareness of this will help us all harness the effort and ambition necessary to outpace even current progress.

Emilie Prattico is director of development at We Mean Business and a philosophy professor at the Paris School of Art, writing in a personal capacity

Read more on: Comment | Comment | Energy | Fossil Fuels | Renewables