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Reactions to climate uncertainty

By Dave Elliott

Renewable energy has benefited from concerns about climate change. But in some countries there are doubts about whether climate impacts will be severe and in some there are no significant climate policies. Contrarian views may be in a minority in most places, but much has been made of the apparent slowdown in average global temperature rises in recent years. Indeed some sceptics claim that this refutes all the climate models, with some pointing to a 17-year or more period when the running average did not indicate a rise. So it’s claimed we don’t need to rush ahead with renewables.

Explanations for the so-called ‘pause’ have been offered, for example suggesting that the heat has been absorbed in the depths of the oceans, but there is much debate about causes and effects, with some saying that the temperature pause may last for 10-20 years. and

When and if this pause ends, we could be faced with a massive catch-up, and a rapid return to even faster temperature rises. But for its duration, a pause could mean that it will be harder to win public and political support for investing in potentially expensive and disruptive climate change amelioration, adaptation and mitigation measures. Some renewable enthusiasts have therefore even argued that less use should be made of climate change as a justification for focusing on renewables, since there are other arguably better and more immediately attractive and relevant arguments. This is very much a minority position, but it does indicate how uncertainty about climate change can impact on energy policies and plans.

For example, at the World Renewable Energy Congress (WREC) in Abu Dhabi in 2012, in a paper entitled ‘the Case for Renewables apart from Global Warming’ long-time wind power supporter Prof Donald Swift-Hook claimed that climate change was not always the main driver for wind power use: he argued that wind economics might be its best suit – it was getting increasingly cheap and saved using increasingly expensive fossil fuels.

At the 2014 WREC in London, he expanded on this argument: ‘Conveniently, renewables save emissions and the 20% minority of countries who are committed to limiting their emissions say they are subsidising renewables for that reason, although they do not have carbon taxes or much support for carbon capture and sequestration. The majority of countries, led by China, USA and India on both fronts, burn increasing amounts of coal and install wind power and other renewables to save the coal they need to burn and stretch it further. That is why wind and solar and other renewables are surging ahead.’

More generally, it is now common for lobbying groups and analysts to stress the health implications of continuing to burn fossil fuels, since they are immediate and obvious (and in the case of air pollution in China and India, very visible), rather than just the climate impacts, which are longer-term and possibly uncertain in some peoples’ view. For example, the International Renewable Energy Agency REMap 2030 report, says not only will ‘fossil-fuel subsidies fall when the share of renewable energy rises’, but in addition ‘average health benefits due to the mitigation of air pollution from fossil-fuel use are in the range of USD 1.9-4.6 per GJ, while carbon dioxide (CO2) mitigation benefits are in the range of USD 3-12 per GJ. The total of cost and benefits results in net savings of at least USD 123 billion, and as high as USD 738 billion by 2030.’ For an EU version of this type of analysis see:

Similarly, a detailed US study of energy costs compared raw generation costs with the cost when health impacts were included, using a US government ‘social cost of carbon’ measure. It found that this helped wind and PV solar to compete with fossil fuels under most conditions, depending on assumptions about carbon cost and discount rates. ‘The social cost of carbon: implications for modernizing our electricity system’, Laurie T. Johnson, Starla Yeh & Chris Hope, J. Environ. Stud. Sci.

Methodologically it is somewhat easier to produce estimates of health impacts from past experiences, as opposed to social and environmental impact costs from climate change in the future, as was found in the European Commission’s long-running EXTERNE study. That had to exclude long-term climate costs, since they were uncertain at that point. That’s not to say that the use of health costs is uncontentious. An early draft of an EC report on state aid rules said that fossil fuels were receiving €26bn and also faced governments with €40bn in healthcare costs, passed on to taxpayers. That was dropped from the final version.

The fact that renewables are getting cheaper may mean that they can be promoted as attractive even without taking external social and environmental costs into account, but it is obviously easier and fairer if they can be included. Why should clean, safe, sustainable options have to compete with dangerous, dirty and unsustainable options? The current state of play is that, in some locations, some renewables are just about competitive, in raw generation cost terms, with fossil and nuclear power. Although that may ignore the cost of providing grid-balancing services for variable renewables, it may also ignore the back-end costs of nuclear waste management. But most renewables seem likely to continue to get cheaper, whereas, apart from short-term up and downs as markets are adjusted (as we are seeing now in the case of oil) or new reserves found (as with shale gas), longer term, the inevitably finite fossil and fissile fuels are bound to get more expensive.

Will that be enough to propel renewables forward at the pace necessary to be able to deal with climate change when and if it accelerates as many expect? Don’t we need vision to see beyond what short-term market competition promotes? The risk is that a delay will make it much harder to respond later when (and if) it becomes urgent. After reviewing a large number of new studies, UNEP warned it might not be possible to tackle climate if the world waits until 2020, since it will be ‘locked in’ to fossil fuel-based infrastructure, and energy saving opportunities will have been lost. It called on governments to step up action to push ahead now:

That seems very sensible, if only on the basis of the precautionary principle. Certainly rowing back on renewables because of uncertainties about the timing of climate impacts makes no sense. We will need them come whatever. Though, as I will be exploring in my next three posts, there are debates about how much we should support their development and by what means, with, for example, the UK currently pulling support for onshore wind, arguing that it is now mature. That’s a key immediate issue. But first I will look at the new much wider GAP proposal – which says we should go all out for a massive 10 year Apollo-style R&D programme.


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