In the past fortnight, horror stories about the bleaching of the Great Barrier Reef and wildfires in Canada appear to have confirmed our worst fears. Climate change is happening and we are powerless to do anything about it. The first four months of 2016 have been the hottest ever recorded. Greenland’s massive ice sheet melted more this spring than researchers have ever seen. We're on a ship with 7 billion people, headed towards disaster, and we can't seem to turn it around.
In April though, 175 countries also signed a global agreement limiting the world to 1.5°C of warming this century. That story didn't get as much attention as the ones about the reef or the fires, but it's arguably one of the most profound political and economic events of our time. It's the largest , and quickest one-day signing of an international accord ever, and the mother of all market signals, because it commits us to zero emissions by 2050. When that many countries sign an international agreement of that scale, it means the end point is no longer up for debate. Now it’s about how we get there. Whatever happens, we are guaranteed a major break up with the industrial era within our own lifetimes.
We already know that with every barrel of oil or coal we burn now, humanity loses money. That’s why things are changing. People who can’t afford to be wrong on ideological grounds realise climate change is a threat. Fossil fuel companies are losing their social license. The logic is pretty simple - if it’s wrong to cause climate change, it’s wrong to profit from climate change. That’s why the world’s biggest PR company, Edelman, decided last year that it would no longer work with coal producers.
That’s the push.
The pull is that fossil fuel replacement is the biggest economic opportunity of all time. The $5.4 trillion global gas and oil industry is about to be disrupted by a golden age in energy innovation. The amount spent on renewables last year was double that invested into coal and gas power stations. Wind is now the cheapest electricity to produce in the US, Germany and the UK. Solar’s advance is even more spectacular - for the last 14 years, global installations have more than doubled every two years. In the last 16 months it’s price has fallen by more than 50% - A week ago, Dubai received a bid for $2.99 US cents per kWh meaning that solar power now costs less than a new coal plant anywhere in the world.
And we’re starting to see this stuff bite. In 2014 and 2015, for the first time ever, emissions flatlined while the global economy grew. It means that since 2013 we’ve added $9.5 trillion to the world economy, without an uptick in carbon emissions .That’s a huge blow against the propaganda efforts of lobbyists who say you need fossil fuels for economic growth
Part of that is because 11 out of 20 OECD countries recorded drops in carbon emissions. But mostly it’s because the Chinese government has decided that coal is a losing bet. Last year, they added 35GW of clean energy- that’s more than the entire existing capacity of the US, UK, and France combined. At the beginning of this year, their government announced they will be shutting down 1000 old coal plants, and has indefinitely suspended the building of new ones in 28 of its 34 provinces. It now looks like China may have reached peak coal in 2013.
We’re on the cusp of a future nobody imagined a few years ago. Just as with mobile payments, the developing world is leapfrogging us on renewables. They understand that building a low carbon economy is the only way a viable future is going to come. And that the people that get there first are going to make a lot of money. In India, renewables investments are up by 22% since last year. They added 7GW of renewables in the last year, and they’re planning for another $219 billion in investments by 2022, including the construction of the world’s largest solar PV plant, a 750MW monster in the Rewa district. That’s double the size of the current record holder, the Ivanpah Solar Power Facility in California. Morocco, meanwhile, just started work on the world’s largest solar concentrating plant, a 58OMW project in Ouarzazate, the place where they filmed Lawrence of Arabia and Game of Thrones. Their plans are to generate half of the country’s electricity from renewables by 2020. In South Africa, renewables investments are up by 329%. 105% in Mexico, and 157% in Chile.
Remember too, these technologies are getting better all the time. New wind turbines are marvels of human ingenuity and engineering savvy. They have double the capacity and generate four times as much as their equivalents from just 7 years ago. In solar, origami-inspired arrays allow us to better track the sun across the sky. We’re starting to use new materials like perovskite, which drastically improves efficiency. And we’re already installing solar in clear glass panels. Just think about it for a minute, where one day the windows in skyscrapers, car windshields and smartphone screens are electricity producing cells, then you start to realize that one day entire cities can become their own power plants.
Not to mention of course, battery technology. We’ve all heard of Tesla of course. But it’s not just them any more. They’re being joined by another US company, Enphase, German’s Soonnenbatterie, China’s GCL and local firms Redflow and Ecoult have quickly piled in. In fact, as of April 2016, there are 18 home battery products on the market. The reason they’re piling in is because half of all households in Australia are interested in installing solar panels with battery storage, with the market potential estimated to be $24bn. That’s probably because the cost of electricity is much higher here than anywhere else in the world, thanks to shortsighted investments into expensive poles and wires. Right now, the payback period for these systems is still 20-30 years. The holy grail for mass adoption is probably around a 10 year payback period - and a Deutsche Bank report says we’ll get there by 2020.
The fossil fuels industry is in big, big trouble. Citigroup says that if we stick to the Paris Agreement - and it looks like we will - then they are going to end up with $136 trillion in stranded assets. Big coal is already dying - down 70 percent in value in a few years. Since 2009, almost half of the United States’ coal plants have shut down, displaced mostly by natural-gas plants. Two months ago, Canada announced that they would be converting what was formerly North America’s largest coal plant to a 44MW solar farm. Peabody, the world's largest private coal company recently announced that it is $429 million in debt, and has filed for bankruptcy. The World Bank has said it will no longer support any new coal plants in developing countries.
These are some of the great, unsung environmental stories of our time. We really need to celebrate them. Yes, the challenges are vast. Bringing billions of people out of poverty, feeding a growing planet and stewarding water resources while reducing greenhouse gas emissions is the largest challenge that humanity has ever faced. Solving it won't be easy - it's difficult to turn a ship this big around, but if we work together, which we already are, and continue to create strong relationships between research, industry and government, these challenges are not insurmountable. And yes, the incumbents, and the lobbyists and politicians in their pay, will do everything in their power to perpetuate the fossil fuel era. In the process, they will cause immeasurable harm to us and to the planet. They will win some battles. They will also be committing some of the great crimes of history. But the war they are fighting is a losing one.
If you're feeling despair about the fate of the planet, reconsider. We are suddenly responding to the climate emergency with astonishing speed. The game is not over. And the good guys are starting to win.