We Are Transitioning from Fossil Fuels, but is the Transition Fast Enough?

Environment Policy Brief #170 | By: Todd J. Broadman | June 30, 2024

Featured Photo: www.rmi.org

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Data on global carbon emissions indicates a decline and that measurable decrease is reason for at least a glimmer of optimism. Both BloombergNEF and Climate Analytics agree that the rate and size of wind and solar electricity generation plants is the primary factor in the change. BloombergNEF goes as far as to say that it may be possible to achieve net zero emissions by 2050, resulting in an average global temperature rise of 1.75 degrees above preindustrial levels.

The downward carbon shift, though minor at this juncture, can be attributed to the deployment and investment in sustainable technologies when and where it makes economic sense. Economics is also the reason for slow adoption. It is more common than not that cost-parity with carbon-sourced power generation cannot be achieved. Further progress is hampered by production delays and the lack of replacement parts. In addition, the necessary capital is usually pushed along with subsidies, premiums, and tax incentives that make the projects pencil-out.

Grassroots level initiatives continue to have a multiplying effect. These local projects are often grant-funded. In Natick, Massachusetts, the Bennett-Hemenway Elementary School will be powered by a solar canopy atop their parking lot thanks to a $2 million dollar grant from the U.S. Dept. of Energy, a small yet impactful slice of the billions that the Biden administration championed for climate and infrastructure projects. At scale is the $2.5 billion dollar Topaz Solar Farm which generates 550 MW located in San Luis Obispo County, California. The station consists of 9 million photovoltaic modules all of which were made in the U.S.

Even with ambitious renewable energy plants like Topaz, fossil fuel-based energy still accounts for 60% of U.S. electricity. There are siting regulations to deal with; there remains strong opposition to wind farms with property owners claiming they reduce property values, resulting in bans or restrictions on large-scale renewable projects for 15 percent of U.S. counties. In light of the slow bureaucratic rollout in carbon-reducing technologies, big oil is getting bigger through consolidation: Exxon Mobil bought Pioneer Natural Resources, Chevron acquired Hess, and ConocoPhillips agreed to buy Marathon Oil.

Making matters more challenging are the contrasting views and communication gaps between activists and the corporate sector. While Tzeporah Berman of the Fossil Fuel Non-Proliferation Treaty Initiative sees industry as “doing everything they can to make sure that they are the last barrel sold,” former BP chief executive Lord John Browne is part of an effort among corporate executives to shift the bottom line towards pressing environmental concerns. “The hard truth is that we’ve done a poor job of reconciling corporate actions with the interests of society,” he underscores, “the urgent need to do so is undiminished.” Browne currently chairs the $3.5 billion-dollar General Atlantic BeyondNetZero fund.

We also see added policy complexity within China, the world’s biggest carbon emitter. 60 percent of the China’s energy supply comes from coal and they continue to build new coal plants. At the same time, China is also doing more than any other country to develop solar panels and electric vehicles. The International Energy Agency refers to this as policy uncertainty and says that the lurching global rollout of renewable energy capacity, investment gaps in grid infrastructure, and barriers to obtaining permits, all reflect this disjointed effort.

ANALYSIS

The decline in emissions will not be as swift as the biosphere requires. Best guesses put the rise in average global temperature between 1.75 and 2.6 degrees Celsius by the year 2100. Even if every government and large business in the world addressed climate change as a top priority, it would still take at least two decades, and an estimated $215 trillion, to make a full transition to an emissions-free world. Although more than two-thirds of annual multi-national corporate revenues ($31tn) are now aligned with net-zero according to the Energy & Climate Intelligence Unit, this “alignment” is not any more verifiable than China’s proposed commitments to lower carbon emissions. And the world’s second largest CO2 emitter, the U.S., while vocal about its commitments, is mired in red tape and is still largely dependent on imported renewable technologies to update its infrastructure – hardly the global leader espoused by the Biden administration. What is required is something along the lines of a carbon-transition Marshall Plan with the resources, schedule, and unified effort that rebuilt post-war Europe and Japan.

Communities and states are left to raise the sustainability torch. In New York state, there is a large-scale renewable energy transition to develop large-scale land-based renewable energy projects and incentivize sizable clean energy investments. The state’s goal is to obtain 70 percent of its electricity from renewable sources by 2030. This is in line with initiatives in other states and communities nationwide.

Meanwhile, the world relies upon China for the necessary hardware. China makes 80 percent of the world’s solar panel components, 86 percent of lithium-ion batteries, and 67 percent of wind turbine generator covers. In addition, nearly two-thirds of all electric vehicles are made there. At $546 billion dollars, its investments in clean energy and low-carbon manufacturing dwarf the U.S. and Europe. That would seem contrary coming from a country leading the world in CO2 emissions.

Add to this backdrop the pending U.S. election in which Donald Trump has pledged to scrap President Biden’s policies on electric vehicles and wind energy, as well as other initiatives opposed by the fossil fuel industry. As he boasted and cajoled the country’s top oil executives at his Mar-a-Lago Club last month: “You all are wealthy enough,” he said, “that you should raise $1 billion to return me to the White House.” His carrot was his promise to immediately reverse dozens of President Biden’s environmental rules and policies and stop new ones from being enacted. Regardless of the politics, the economics are tilting towards renewable energy – a slow, uneven tilt to be sure.

Engagement Resources: 

• https://climateanalytics.org/ connects science and policy to empower vulnerable countries in international climate negotiations and inform national planning with targeted research, analysis and support.
• https://about.bnef.com/ is a leading provider of primary research and analysis on the trends driving the transition to a lower-carbon economy.
• https://eciu.net/ The Energy and Climate Intelligence Unit is a non-profit organization that supports informed debate on energy and climate change issues in the UK.

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