Energy Crunch: changing the business model

NOTE: Images in this archived article have been removed.

Source: UNEP, BNEF

 

Reports this week provided yet more evidence of vitality in green energy. Investment in renewables surged 17% last year to $270 billion, according to a new publication for the United Nations Environment Programme (UNEP). China spent the most, up almost 40% to a record $83 billion, more than twice the amount invested by the US and Japan combined. Renewables accounted for almost half (48%) of all electricity generating capacity installed, exceeding 40% for the third year running. Excluding large-scale hydro, renewables provided an estimated 9.1% of the world’s electricity last year, saving 1.3 billion tonnes in CO2 emissions compared to fossil fuel generation. As costs continue to plunge both the UNEP and a new report by Citigroup predict a bright future for renewables.

 

Ambitions for this year’s Paris climate conference also grew with the US making a formal pledge to reduce its carbon emissions by 26%-28% by 2025. The White House said this was a substantial increase on its previous commitment, which expires in 2020, requiring it to roughly double its annual emissions reductions. Though a welcome move, analysts have warnedit’s still far from sufficient to hold global temperature rises below 2°C. US cuts are also judged against a 2005 baseline, compared to the EU’s more challenging promise of a 40% reduction from 1990 levels. China has pledged to peak its emissions by 2030.

 

To achieve the 2°C goal, not only do renewables need to grow, as they are doing, but the fossil fuel industry must also shrink. Former UK climate change diplomat John Ashton forcefully made this point in an open letter to Shell CEO Ben van Beurden:

 

"You speak, as it were, peering down, with authority and detachment, at a world that should self-evidently look the same to others as it does to you. And from that height, you seem to want us to believe that the issue is not how to deal with climate change but how to do so without touching your business model."