But the IPCC was wrong to stray beyond its brief and to infer that “limiting global warming to 1.5C would require rapid, far-reaching and unprecedented changes in all aspects of society”. This quote has become the rallying cry of the Rebels. Curbing CO2 emissions requires no such thing.
The net-zero switch is already happening very fast. The most elegant way to bring it forward even faster is to give markets the signal of a Pigou carbon price that ratchets up systematically, as proposed by the International Monetary Fund.
Better yet, the proceeds should be recycled back to the people as a dividend to avoid the Gilets Jaunes problem of social consent. Such is the thrust of House bill HR 763 gaining support in the US Congress from both parties and a roster of Nobel economists of all stripes.
The drastic remedy of the Rebels would be a moral scandal. […] It is the combined power of finance and technology that will save us.
Free enterprise will work its magic once this structure is in place. We do not need to shut down the modern developed economy, causing mass unemployment, pauperisation and – let us be clear – starvation.
The drastic remedy of the Rebels would be a moral scandal. It would shatter consent and more or less guarantee the very nightmare that they most fear. It is the combined power of finance and technology that will save us. That requires economic growth.
Even today we have the means to abate over 85 per cent of man-made emissions, and tomorrow will be yet better. Thanks to our engineers, inventors, capitalists and bankers – yes, even them – costs are plummeting along a discernible chain that runs through the 2020s and accelerates with scale.
Data from Bloomberg New Energy Finance shows that new solar and wind already undercut new coal on pure cost without subsidy in areas holding two thirds of the global population. By the middle of the decade they will start to undercut the marginal running costs of existing coal plants, at which point they will no longer be viable.
The economics of energy storage is tracking the gains of solar with a lag. Cryogenic compressed air already competes toe to toe with shale gas in Texas, the cheapest natural gas in the world, and will drive more costly liquefied natural gas out of the global market as a back-up for renewables.
Once global carbon taxes rise to $US50 ($68.80) a ton, gas will struggle to compete at all unless carbon capture (CCS) comes to the rescue at viable cost, but that too is a solution.
The Holy Grail is green hydrogen from electrolysis. Goldman Sachs argues that it could abate 45 per cent of all greenhouse emissions and become the backbone of global decarbonisation once critical scale is reached. We are not there yet but the riches of Croesus are being harnessed in what is now a global arms race to dominate the coming hydrogen economy.
Blue and then pure green variants will start eating into market share by mid-decade, first mingled with natural gas in existing pipelines for heating (up to 20 per cent) before progressing towards a full hydrogen based system – unless something else comes along, such as Eavor’s closed-loop geothermal technology: cheap, clean and beautifully simple like an underground heat pump.
Hydrogen, electric cars, batteries
We can argue about the timeline but the picture is clear enough: hydrogen fuel cells for new ships, trains and long-haul trucks are coming this decade, with clean synthetic fuel for jets taking a little longer.
Hydrogen will be used as a feedstock for steel, cement, glass, chemicals and fertilisers. We reach nearly every sector. Agriculture is the last nut to crack, but it is not uncrackable, and CCS can do the rest. Bingo.
The crossover point for the purchase cost of electric cars will arrive between 2022 and 2024, and will then become a cascade since operating costs are far lower. The switch is largely thanks to a free market entrepreneur named Elon Musk, not thanks to the chattering green classes.
It is irrelevant whether or not Tesla itself survives to reap the reward. Volkswagen and Daimler have turned their backs on the combustion engine forever.
Tesla has already unveiled its million-mile battery. Later this month it will unveil a 500 mile-range battery on a single charge, now becoming de rigueur for premium models. Range angst is so passé. We flip instead in mounting angst over the nearest petrol stations, already becoming scarcer in Norway, the EV laboratory.
Personally I share the emotional leanings of Extinction Rebels. I don’t like to see the planet trashed either. We used to call this sentiment conservationism.
The Rebels have an inflated sense of themselves and they are late to the party. It is five years since the catalytic shift of the Paris Agreement, with its in-built ratchet effects on emissions. A $US90 trillion alliance (PRI) of global investors and wealth funds is already operating on the assumption that the fossil economy is in terminal run-off.
Sixth months into the pandemic, we can now see that the economic shock has accelerated the green switch rather than slowing it. […] The fossil industry is the greatest casualty of COVID-19.
Big Money switched its primary allegiance to the environmental cause long before the Rebels began their Ghandiesque offensive, not to save polar bears but because green energy is where future profit lies. The Alpine gathering of the world financial elites in Davos has been a sanctum of climate correctness for a decade.
Battered oil and gas executives huddle on the margins, complaining at the exorbitant cost of capital for drilling, lamenting that Big Wind can now raise equity and debt more cheaply than Big Oil. Opec leaders buttonhole one at the blueberry, celery and beet juice bar, plaintively explaining that an accelerated path to net-zero will leave a string of failed states across the Middle East and Africa, with northward migration to match. But nobody listens to them anymore.
Not all states are acting on known climate science, of course. China has again let rip on new coal plants, with 94 gigawatts in development this year, and it already emits more CO2 than Europe and America combined. So Rebels might more usefully focus their efforts on Xi Jinping (if they dare) rather than on the sins of coal-free Britain, the first major state to set a net-zero target for 2050 in law.
China will soon be forced to the net-zero table in any case. The EU is launching its green deal with a carbon border adjustment tax. The Biden campaign in the US has pledged its own variant, explicitly to “hold China accountable”. Chinese exporters will be squeezed out of the world’s two biggest markets unless Mr Xi puts a stop to gratuitous eco-vandalism.
Joe Biden’s $US2 trillion blitz on clean energy over four years is above all a “Buy America” trade offensive aimed at China, the latest twist in the battle for superpower supremacy and control over 21st-century green technology. If the polls hold true and we see a Democrat clean sweep, the world energy order is going to look very different, very soon. There will be nowhere left to hide for global free-riders.
Sixth months into the pandemic, we can now see that the economic shock has accelerated the green switch rather than slowing it. “Build Back Better” is the near united refrain of the OECD bloc. The fossil industry is the greatest casualty of COVID-19.
So all I can say to Extinction Rebellion is thanks for your pious intentions, but our elected leaders and our creative capitalists already have the matter in hand.
The Daily Telegraph, London