Unearthed today: It was miserable, but it mattered
In last night’s presidential debate Donald Trump said “a lot of things” cause climate change and “to an extent” humans may be responsible. He also said he was going to plant a billion trees and claimed credit for falling emissions.
In reality the fall in US emissions has come from a mixture of the pandemic and the collapse of the economic viability of coal—more on that from Bloomberg here.
And that dynamic – in which economics take over from, and start to dictate the politics, is the topic of Justin Rowlett’s latest analysis for the BBC.
“Countries – and companies – may soon rush to decarbonise as they see opportunities to make profits in what will be an enormous new market,” whilst pulling investments from firm’s who’s will be – at best – niche players in years to come. Firms like Exxon, for example.
Looking at China’s recent pledge, Rowlett notes “So, it looks like Xi has judged that the economics of clean energy mean that decarbonising is now the most sensible choice for the Chinese economy as well as for the world’s climate.”
The cleantech race doesn’t just apply to China. The Times Red Box today hails the merits of hydrogen, suggesting it could replace gas boilers in homes around the country. Returning to the theme of a race it suggests the UK must join the EU in backing the tech or “risk being left behind”.
“As the economy is rebuilt post-Covid, the government must create high-skilled jobs in sectors that will be critical to the future, such as low-carbon transport. Left-behind areas in the north of England and the Midlands, such as Rother Valley, should be the centre of the green recovery.”
The snag here is that markets don’t work to scientific timetables. They are messy and often inconsistent in what they deliver. Take the oil price. If people stop using oil, it goes down, so more people use oil.
As Rowlett points out the ambition in China’s commitment only really kicks in after 2030. In the meantime, China’s coal-industry currently shows little sign of letting up – yet those investments should theoretically produce and burn coal for decades to come.
“The 2060 time-frame leaves the possibility of building more coal and fossil fuel plants in the next five years and peaking emissions by 2030,” said Alex Whitworth, a research director with Wood Mackenzie Ltd told Bloomberg.
Coal production capacity may rise to 5 billion tons a year by 2025, from 4.1 billion currently, according to Daiwa Capital Markets. Meanwhile, the country is set to expand coal electricity capacity by more than 10% to 1,200 gigawatts by 2025, according to Wood Mackenzie.
Over in Australia, a major exporter of fossil fuels to the rest of Asia, both the gas and coal industry is fighting against the tide – with increasing success. Bloomberg reports today that the firm Santos Ltd. won approval to proceed with a major natural gas project, securing a long-term role for fossil fuels. The huge project has a lifespan of up to 25 years.
That’s why – as Rowlett notes – politics still matters, however unedifying it may be to watch.