Action around the world on climate and air pollution continued to offer cautious grounds for hope this month. The IEA reported that carbon dioxide emissions have not increased for a third year in row, despite the global economy growing. Fighting climate change requires that they begin to fall soon of course, but growth of renewables has much to do with the current freezing of emissions, and that trend will surely continue globally. The imperative of facing up to air pollution should ensure this, never mind climate considerations. In early March China vowed a new round of steel and coal capacity cuts as part of its national drive to eradicate its “airpocalyse”. In the UK, where carbon emissions have fallen to late-19th century levels, London’s air nonetheless remains illegally toxic. Businesses are now pressuring a strangely pollution-tolerant government by acting alone.
Increasingly climate- and air-pollution battles are being fought, and won, in court. The latest setbacks for governments have come in South Africa and Austria. One climate lawsuit, brought by a group of American schoolchildren against their own government, is a first of its kind. If successful, it could force even a denialist Trump government to act. Chevron became the first oil major to warn its investors that it faces risks that its business may be curtailed by climate change lawsuits. Nobody should be surprised. BlackRock, the biggest asset manager in the world with $5 trillion under management, announced that it intends to put businesses under pressure to explain how they will manage climate risks. And the divestment from fossil fuels implied, should satisfactory risk mitigation explanations not be forthcoming, continues anyway. In the UK, a government pension scheme became the latest notable investor to begin ditching oil and gas investments. The IEA and IRENA joined forces in a report to warn how far this could go, should companies fail to adapt their portfolios to climate risk: $1.3 trillion of oil and gas assets left stranded by 2050
But Earth’s temperatures are continuing to rise, and with them the sorry catalogue of impacts. The worst-ever episode of coral bleaching continues into its fourth year. Massive permafrost thaw newly documented in Canada foreshadows huge carbon release, scientists say. Every month now the drip of horrible news like this continues to depress everyone with eyes to see and ears to hear.
Every reason, then, for the global energy transition to accelerate. Here too progress this month offers encouragement. Industry figures showed that solar power leapt by 50% worldwide last year, from 50 gigawatts to 76. Both China and the US almost doubled their capacity. There are now more than 300 gigawatts installed around the world, up from almost nothing in 2000. And this month an immense milestone was chronicled in an excellent report by Trusted Sources: solar has outstripped oil in terms of energy paid back for energy invested in production. The gap is widening all the time. It is only time before this inescapable fact begins to play in the marketplace.
Wind is doing quite as well. Offshore wind is now joining onshore wind on a plunging cost trajectory. Costs fell fully 22% last year. An offshore windfarm now averages $126 for each megawatt-hour of capacity, according to Bloomberg New Energy Finance: cheaper than new nuclear at $155 a megawatt-hour, and closing fast on the $88 average price tag of new coal plants.
It becomes easier by the week to see why the Saudis, in this new world order, would be kicking off a $50 billion renewable energy plan to cut oil use. Indeed, their move to join the global energy transition is widely seen as widening the appeal of Saudi Aramco’s upcoming initial public offering, which will be the largest ever. The solar component will open share sales up to a wider pool of investors, analysts say.
Shell felt the need to move this month too. CEO ben van Buerden confessed that the oil and gas industry risks losing public support if they lag behind in the transition. He announced plans for a boost in renewables spending in his company. Shell also sold off the majority of their tar sands assets – the most carbon-intensive of their reserves – this month. Environmentalists were unconvinced about this new greenery, pointing out that Shell’s clean energy budget would still be only $1bn out of $25bn total expenditure by the end of the decade, and that staying in the tar sands makes no business sense any more anyway, because it risks wasting capital and stranding assets.
Big energy, it seems, is increasingly fearing that peak oil demand is looming, so fast has been the growth of renewable competitors to oil and gas, and electric vehicles. Shell suggests the peak could arrive by the late 2020s. Statoil professes between the mid 2020s and the late 2030s. Carbon Tracker, let us remember, argues that even this is too conservative: that worldwide demand for oil and coal could peak by 2020.
Norway leads the way. 37% of the country’s new cars are now electric, and the transportation minister expects it to be 100% in just 8 years. In the USA, dozens of cities announced a plan to buy $10 billion worth of electric cars and trucks to demonstrate demand while making a statement about President Trump’s intended retreat from air pollution standards. Driverless cars will accelerate the switch to electric transport greatly, and California is on the verge of allowing fully autonomous vehicles on its roads, having proposed new regulations that free the way for vehicles with no steering wheels and no human backup, potentially to enter force this year. 27 companies await the green light, and analysts expect a revolution not just in transportation, but in the very way society organises.
Batteries are increasingly not just about EVs but utilities and buildings. Last year the US installed enough batteries to power a city the size of San Diego for an hour. Most of them came in response to the vast Aliso Canyon gas leak in California. But the surge in demand is global. “The Age of the Giant Battery Is Almost Upon Us”, Bloomberg enthused. Those who worry about grid balancing are having an increasingly hard time finding a sympathetic ear. For example, National Grid and Google are now considering using of the latter’s DeepMind AI to balance supply and demand on the UK grid.
Rarely are the modern political struggles far from the drama. Trump says he wants to put coal miners back to work, but he faces the small problem that more than 3 million Americans now work in clean energy, compared to the mere 53,000 now employed in US coal. California, the world’s fifth biggest economy, loses few opportunities to oppose Trumpist fossil-fuel advocacy. Governor Gerry Brown said this month that the state’s record boom, in which clean energy has been heavily involved, is sure to outlast Trump’s “noise”.
The oil industry is at present celebrating a rebound in shale drilling, given higher oil prices. That is true, they are feasting on yet more debt to frack yet more barrels. But jobs are not rebounding they way production is. Between a third and a half of the 160,000-plus workers who lost their jobs since 2014 are not returning, analysts say. As one redundant worker put it, “pretty soon every rig will have one worker and a robot.” One wonders who will monitor the thousands of spills of liquids reported this month at fracked oil-and-gas drill sites. Perhaps it will be the robots, for it certainly won’t be the US Environmental Protection Agency, under this eyes-tight-shut new US government and its reckless determination to ignore any downsides of fossil fuels.
Which is where I turn to tech used for good or ill, and truth: the subjects of the next blog covering this eventful second month.