Environomics E-Book

Dharshini David

• Herausgeber: Elliott & Thompson
• Kategorie: Ratgeber
• Sprache: Englisch

Seitenzahl: 367

Veröffentlichungsjahr: 2024

Beschreibung

'Opens our eyes to the everyday contributions all of us make to how the world is changing.' Tim Marshall, author of Prisoners of Geography 'A much needed blend of optimism and realism' Brett Christophers, author of The Price is Wrong: Why Capitalism Won't Save the Planet Why might an orangutan care which toothpaste you choose? What does your mobile phone have to do with wind turbines? And can your morning coffee really power a bus? Economics affects every aspect of our lives, from the clothes on our backs to the bread on our tables and the fuel in our cars. And there are huge changes afoot as the global green revolution sweeps across the globe. In this vibrant and eye-opening book, economist and broadcaster Dharshini David follows the course of an average day – from the moment we flick on the light in the morning – to reveal the green changes that are already taking place in every aspect of our world. Exploring industries such as energy, food, fashion, technology, manufacturing and finance, she asks what is happening, how quickly, who is driving it all – and what it means for us. Ranging from crucial issues such as sustainability and corporate greenwashing, to global flashpoints such as industrialisation and trade wars, she shows how even the smallest details in our day are part of a much bigger story about where our world is heading. If you've ever wondered what green issues really mean for your day-to-day life, this book is for you. 'An important yet accessible addition to the green debate.' Country & Town House

Leseprobe

Praise for The Almighty Dollar

‘Original and engaging . . . If you’ve ever wondered what globalisation is and why people get so passionate about it then I can think of no better guide. Economics can be fascinating and accessible. This book is proof.’Joel Hills, Business Editor, ITV News

‘Brilliantly revealing.’Ian King, business presenter, Sky News, and Times columnist

‘A brilliant book . . . everyone should buy it because it’s very, very readable.’Iain Dale, LBC

‘Readable and illuminating.’The Bookseller

Contents

Introduction

1 Switching on the Lights

The energy revolution taking place in our homes

2 Getting Dressed

Overcoming our addiction to fast fashion

3 Checking Your Phone

Protecting the rare resources consumed by technology

4 Receiving a Parcel

Untangling the complex web of the global shipping network

5 The Daily Commute

Swapping petrol for electricity

6 Buying a Coffee

Overhauling plastics and the disposable lifestyle

7 At Work

Investments, finance and how businesses are going green.h

8 Time for Lunch

Balancing one of life’s necessities – food – with its environmental impact

9 Making a Purchase

The hidden cost of how we pay

10 Heading Home

Living in a world of concrete and steel

11 Sushi for Dinner

Protecting the oceans from overfishing and more

12 The Weekly Shop

Ending our reliance on palm oil

Acknowledgements

A Note on Sources

Index

Introduction

Economics and climate change are more closely linked than you might realise – and they have a greater impact on your life too. When you order your morning coffee, for example, do you like sugar with that? Well, it will cost you.

In 2024, sugar prices rose to their highest for well over a decade, driven by droughts in some of the world’s biggest exporting countries. These droughts were one of the consequences of the extreme heat seen in 2023, the hottest year on record, where global temperatures are estimated to have been more than 1.5 per cent above pre-industrial averages. Other effects of this heat were more sobering: over 11,000 lives lost in a flood in Libya; a record area of forests devastated by fires in Europe and Canada. Such events are occurring with increasing frequency.

Industrialisation and globalisation have brought us choice, lower prices and more affordable lifestyles, and have pulled millions out of poverty. But these forces have expanded so rapidly, particularly over the second half of the twentieth century, that they have had undesirable consequences too, not least driving our seemingly unquenchable thirst for fossil fuels. The sprawling concrete megacities and belching coal power stations in China, the massive mining operations in the Democratic Republic of the Congo or Brazil, the ships built to traverse the Pacific in days to serve our growing appetites – all of these come at an environmental cost. So too do the SUVs, gadgets and meat-heavy diets we’ve come to rely on. All of these typical features of our modern twenty-first-century lives have contributed towards those increasingly worrying climate ‘events’.

With every disaster, we hear fresh cries for more to be done to curb climate change, along with howls of despair that sufficient efforts aren’t being made. In late 2023, even as world leaders met in Dubai for COP 28 (Conference of the Parties, the annual United Nations Climate Change Conference) researchers were warning that global emissions from fossil fuels had reached an unprecedented high (and that’s before considering the planes needed to jet in nearly 100,000 delegates to that conference).

There was much talk there, and everywhere else, of what action we need to take to reduce our carbon emissions, tackle the amount of waste and pollution we create, clean up the plastics in our seas and save the biodiversity of our planet, while, at the same time, agonising over when – or whether – we’ll get there.

Many countries and organisations have adopted the target of becoming carbon neutral, reducing the amount of carbon dioxide their processes add to the atmosphere to virtually zero, or somehow balancing – in effect cancelling – that amount through carbon offsetting or carbon capture (more on those later). The Paris Agreement, adopted in 2015 by 193 countries plus the EU bloc, goes further. It vowed to pursue efforts to limit global temperature rises to below 1.5ºC, to restrict all greenhouse gas emissions – not just carbon emissions – to the same amount that can be absorbed naturally (commonly known as net zero), to set country-based emission-reduction targets and to help out poorer countries. But the agreement didn’t address how to do this. That is where economics comes in.

It’s impossible to understand how this journey can progress without an economic perspective, because nearly every issue that affects the environment comes down, in some way, to what someone, somewhere, is doing to make (or save) money, to make a living. Changes to the way people do business are propelled by economic need and so are completely intertwined with the way we live our lives. There are costs to manage if benefits are to be delivered – and unintended consequences to consider if we are to nurture economies and livelihoods.

And so green issues are revolutionising our economy. In every major industry we are seeing changes driven by efforts to be greener. This is a truly global story involving vast, complex supply chains, technological innovations, commercial interests, foreign policy, corporate investment. But it doesn’t just affect businesses and governments, it impacts all of us in the simplest, most fundamental aspects of our lives. How we power our homes, how we move about, the food we eat – all of it is changing. Economics isn’t just a load of dull men (or even women) in suits talking about statistics on the radio – it’s the very fabric of our lives, the physical world that we touch, taste, smell every day.

I wanted to bring that global green revolution to life in a way that makes sense to us all, that we can all relate to. So I’ve explored, chapter by chapter, our typical daily routines, from groping for the light switch and getting dressed to the daily commute and the buildings we inhabit, and how these everyday habits and actions are affected by the economic changes taking place. And, in turn, how our actions can also affect what is happening in those industries.

As I noted in my first book,The Almighty Dollar, it’s easy for us as individuals to feel powerless and at the mercy of overwhelming economic forces, driven by global powers, governments and major corporates. The same may feel true of environmental action too – and sometimes it is true; certain decisions are out of our control. But we can all play a part in influencing outcomes. Even simple things such as the toothpaste or shampoo we choose to buy can make a difference, while other decisions we make can influence companies and governments, nudging them to do the right thing.

And so, as we’ll see, change is being driven by numerous players. It’s changing consumer habits that made Vinted, the web-based marketplace set up by a woman in Lithuania to clear out her wardrobe, into a billion-dollar resale platform with over a hundred million users in fifteen years. Investor pressure and concerns about obsolescence amid a fast-changing environment have nudged the oil and gas majors into investing in renewables, and manufacturers and retailers to focus on circularity. States have played a role too, stepping in where the market won’t or to chivvy things along – with his 2022 Inflation Reduction Act, President Biden boasted of the ‘largest investment in clean energy and climate action ever’.

Real progress is being made. At COP 28, negotiators from all nations agreed for the first time on the need to ‘transition away from fossil fuels in energy systems’ – a major breakthrough. Some were frustrated by the lack of an explicit target for phasing them out, and loopholes in the final text. Bad news sells: journalists are fully aware that our audiences tend to have a ‘negativity bias’ and are more likely to focus on what’s going awry rather than what’s working out, which is possibly why there was more emphasis on that aspect than the positive steps, but they were made nonetheless. Also in 2023, the Inflation Reduction Act swung into full force, prompting similar action from other governments. A treaty to protect the oceans, forty years in the making, was agreed. The rate of deforestation in the Amazon slowed, after the Brazilian government vowed to phase out the practice by 2030.

There is of course much further to go. Many say the targets on the table are not enough. If we carry on as we are, some estimates suggest that we would need the equivalent resources of three Earths by 2050 to maintain today’s living standards. It’s easy to feel disheartened when reading about climate change and the dangers to our planet, especially given some of the recent global challenges. The last decade has not been one of business as usual, but rather ‘polycrisis’: the Covid-19 pandemic followed by wars that have destabilised global energy and food supply markets, and so wreaked havoc with financial well-being. It can be difficult to fathom how action on climate change finds a place in all this. But change often begets change, and some of the various crises have also prompted positive developments.

Covid-19 may have created billions of pieces of plastic waste from all the face masks and other protective gear needed but it also normalised remote working, meaning fewer commuter journeys, and prompted companies to move their supply chains closer to the place of production. The energy crisis may have caused some to double down on fossil fuel extraction in the short term, to keep the lights on, but it also encouraged energy conservation, and a greater focus on renewables to secure future energy supply. A cost-of-living crisis may have pushed some environmental measures down the priority list for both households and politicians – the UK government, for example, has pushed back the phasing out of sales of new petrol cars – but it also inspired a thriftier, make-do-and-mend mindset.

This book doesn’t pretend to have definitive answers to our challenges, but it strives to be a guide to how things are working, what’s motivating the various players and why it should matter to you. Governments are acting. Technology is advancing. Our long-formed habits are changing. Looking at what exactly is happening can inject a little optimism, as well as identifying the areas that still need work and where the challenges are. It also reveals what we can do as individuals and where we need to rely on policy, the profit motive and corporate conscience. Getting there may not be easy – and it will depend on everyone knowing the part they must play – but we are heading in the right direction.

As I started researching this book, I realised, simply looking around the room, that my perspective on the world was shifting. Every single thing that we use, that we encounter in our daily lives, requires some kind of energy, produces some kind of waste, and involves a long, complex list of materials and processes to make. The new green imperatives are aiming to change much of that, and so even the simplest items and routines in our lives can tell a bigger story: a fast-moving global story of change – and resistance to change. This book is a guide to understanding those shifting tides.

1

Switching on the Lights

The energy revolution taking place in our homes

As the alarm goes off, you roll over and blearily switch on the light. And so begins your energy usage for the day. Early bird or late riser, for most of us the meter starts running the moment our eyes flicker open in the morning. There’s the heating clicking on, the hot water for the shower, the kettle for that much-needed cup of coffee. All those little morning rituals that get your day going depend on energy. And that energy was probably produced in a huge power station, belching out fumes, because, in most developed countries, the majority of our homes are currently powered by fossil fuels. But maybe not for much longer.

Fossil fuels – coal, oil, gas – account for about 80 per cent of the world’s energy use, from electricity generation and home heating to transportation and the manufacture of steel and plastic. They are carbon-rich non-renewable resources: essentially a stored form of solar energy, created through pressure and temperature over many millions of years. Carbon is one of the key drivers of climate change and one of the main pollutants clogging up our atmosphere.

How much of it is down to the energy use of the average person in the street? A government survey in the UK in 2022 found that one in three people thought that the actions of large polluters should be tackled before individuals, and a similar proportion reckoned that changing their own behaviour would make little difference.

And yet, the same study found that households are responsible for over a quarter of greenhouse gas emissions. Energy usage is calculated in kilowatt hours (kWh): one kilowatt hour is equivalent to powering a 100W light bulb for ten hours. The average household in Britain is estimated to use around 15,000 kWh of energy a year on powering their home, most of which is accounted for by heating and hot water. This isn’t to let major corporations and governments off the hook, but that figure suggests that as individuals we can still make a difference.

It’s tricky, though, to see exactly where we can make changes; our modern lifestyle is energy hungry, so while as individuals we can be mindful of turning off lights and unplugging appliances, ultimately we do still need to heat our homes, see where we’re going, wash our clothes. We don’t have all that much say in where our power comes from. That’s down to energy companies and government policy. And, for now, both are heavily reliant on the use of fossil fuels.

The story of fossil fuels actually isn’t as straightforward as it looks. Although at first sight they might seem to be the supervillains in the climate change drama, for many years they have enabled us to live richer, longer and better lives. We’ve become addicted to them because they have been the drivers of our prosperity – superheroes without which the modern world could not exist. Over the last 200 years, global GDP has tracked energy use, and the more energy we’ve used, the wealthier and healthier we’ve become. Even after the crisis in global energy prices in 2022, weaning ourselves off them can feel like an impossible dream; none of us is prepared to switch off the lights, give up our televisions and go back to washing all our clothes by hand.

Yet energy transitions have happened before. Our relationship with fossil fuels has been relatively brief, given the span of human history. As our needs have increased over time, we’ve seen several shifts in fuels and energy sources, usually driven by scarcity, price and availability. And we’re in the midst of another change right now.

Prior to the Industrial Revolution, which began in the mid-eighteenth century, lumber, animals, wind and water provided most of the energy people needed for heat and transport. As populations grew, lumber became scarce, wind and water insufficient, and living closely with so many animals created a huge amount of waste and they became a source of pollution and disease.

These problems were solved by coal. Coal mining really took off in the Elizabethan Age in the UK but it took a few hundred years more for coal to become the linchpin of industrial progress and transportation. It came into its own with the rise of the steam engine, which could run on wood or coal. However, being three times as energy intensive as wood, weight for weight, and cheaper to boot, coal had the upper hand. By 1900, it was the main industrial fuel. The Industrial Revolution lifted millions out of poverty and set them on the road to rising living standards. Coal had a valuable role in the transformation of our lives.

But it is also the filthiest member of the fossil fuel family. Coal mining causes toxic run-off into waterways. The sulphur and nitrogen emitted when it is burned causes acid rain.* Coal power stations also account for a fifth of global greenhouse gas emissions. That makes coal twenty times as toxic across its life cycle as solar energy and about seventy times as toxic as wind power.

But even before concerns about its environmental impact went mainstream, another even more transformative source of power was emerging. Despite being millions of years in the making, crude oil has been part of our lives on a mass scale for less than 200 years. The first commercial well resulted from Edwin Drake’s Pennsylvania explorations in 1859. A plentiful supply allowed for rapid industrialisation and the rise of the USA as a global economic powerhouse. By the early 1900s, the second major energy transition was under way, driven literally by the popularity of the passenger car (see Chapters 4 and 5). By the 1960s oil had superseded coal as the world’s leading energy source, being twice as energy intensive as its rival. The expansion of the oil industry also led to an increased supply of natural gas, which is often found and extracted alongside oil, and has become a mainstay of many a nation’s energy source.

Concurrently, a domestic revolution was starting from the smallest but most illuminating of household objects – the electric light bulb. From the 1870s onwards, that drove households into the light, and sealed the popularity of electricity, which was typically generated from . . . fossil fuels.

So our rising living standards and all the comforts and convenience that the twentieth century brought to developed countries were entirely thanks to the plentiful supply of coal, oil and gas. Our dependence on these superheroes was such that governments around the world have subsidised extraction and development as a way of boosting their economies. Affordable coal, oil and gas enabled economic development and a more prosperous way of life.

But even as life got better for many, there was a heavy price to pay. By the start of the twentieth century, the side effects of rapid industrialisation were hard to ignore: acrid clouds of smoke hovered menacingly over cities, and bronchitis was a major source of fatalities in the UK. Across the USA, women who were yet to get the vote formed various smoke-abatement associations, in protest at the blighted air.

Muttered about in scientific circles for as long as a century before, the darker side of fossil fuels went prime time in 1988, when climate scientist James Hansen warned US Congress that global warming was primarily due to greenhouse gases built up in the atmosphere due to the burning of those sources of energy.

You’d think that might have spurred widespread change – but public awareness grew very slowly. In the early twentieth century, the discovery, exploration and distribution of oil and gas in the Middle East gave rise to the Seven Sisters: mega companies that controlled the market and the industry. They were the forebears of America’s Exxon and Chevron, Europe’s BP and Royal Dutch Shell. Today, the power has shifted to largely state-owned enterprises that represent the biggest oil producers: Saudi Aramco, Gazprom of Russia, Brazil’s Petrobras, for example. As the evidence on climate change has mounted, many of the biggest energy firms have adopted a business-as-usual strategy: keep on churning for as long as the wheels keep on turning.

And their efforts have gone further than that, initially denying their role in climate change and later lobbying heavily for continued government support on the basis that they are crucial to sustaining Western economies, world economic growth and jobs. In 2018, the big five – Shell, BP, Exxon, Chevron and ConocoPhillips – stood accused by activists of spending close to $200 million trying to influence or block climate change legislation, or just change the narrative. Some of those companies, including Exxon, contested the claim, saying that there were different ways of dealing with the risks of climate change, and that there was also a danger of equating policy debate and disagreement with climate disinformation. Behind the scenes, energy bosses have been known to argue that without the replacement infrastructure – the electric vehicles, the replacement of boilers with heat pumps – realistically customers will be reliant on fossil fuels for some time. And they, of course, are perfectly placed to serve that need. Moreover, some of their shareholders are likely to be unforgiving if companies miss a chance to beef up profits.

As our economies thunder on and our global population grows, appetite for energy is not diminishing, and some of the companies that supply it may be inclined to resist change. But while fossil fuels are still the primary source of our energy, thanks to the usual factors of price and availability – and thirst for profit – that’s no longer the only driving force for change. Increasingly there’s a growing desire to do better by the planet and its people. Which means that those natural market forces might need a helping hand.

While each country has a different ‘energy mix’ – Japan, for example, has been heavily reliant on fossil fuels, while France’s main power source is nuclear – the push towards renewables has been visible across the globe. Taking the UK as an example, in 1960, 90 per cent of the nation’s power was generated by coal. By 1990 it had fallen to 67 per cent. Renewables didn’t really get a look in until this point but then things started to change drastically. By 2022 coal accounted for just 1.5 per cent of the UK’s energy mix, while renewables had risen to 40 per cent.

That change was driven by price competition and the growing availability of alternatives, but also by the government helping the transition to less filthy alternatives. Of course, we didn’t jump straight from coal to renewables. What first allowed the country to move away from its coal dependence was gas, and that’s a common transition story around the world.

As far back as the mid-twentieth century, coal was being targeted in the UK by Clean Air Acts of 1956 and 1968 after smog became as much of a feature of London as the iconic doubledecker red bus. After the Second World War, a new variety of pipelines had made the delivery of natural gas to cities more viable – and therefore an accessible source for domestic heating.

While the UK is a gas producer, about half of its gas comes from abroad, in part due to a lack of storage and refining capacity. The key source of imports is from Norway, via pipeline, with some of the rest coming in a liquid form, for example from Qatar. One of the downsides of gas, though, is that supply is vulnerable and the price can skyrocket, as happened following the invasion of Ukraine, with Russia threatening to withhold its gas supplies. Russia is one of the world’s biggest producers, second only to the USA. Only 3 per cent of the UK’s gas came from there in 2021, but as the country has to compete for gas supplies from abroad, it’s subject to variations in global gas prices. With the likes of the EU trying to wean itself off Russian gas (which made up a third of its imports in 2021), those prices spiked in 2022.

The other downside to gas is that it is still a fossil fuel and, while cleaner than coal, it does still produce harmful emissions. So, even while the UK was transitioning to gas, the hunt was on for an alternative.

Cue nuclear energy. Uranium atoms are split to create heat; the resulting steam is used to power generators and so produce electricity. The world’s first major electricity-generating nuclear power station opened in the UK in 1956. By 1996, nuclear powered around a quarter of the country’s electricity, and more than one-sixth globally.

Unlike fossil fuels, it produced no greenhouse gases. Efficient, cheap, clean – or so it was thought. But its flaws soon became apparent. Nuclear power is not a renewable energy source; it relies on uranium, of which there’s likely to be enough for another couple of centuries, but it will eventually run out.

What’s more, nuclear plants have a finite working life of perhaps forty years, but some don’t make it that far. The USA has retired five plants early because they were no longer economically viable. It isn’t simply the case of replacing clapped-out, overpaid assets with cheaper, younger models. Over-budget and over time has increasingly become the signature of the twenty-first-century nuclear plant. That’s particularly true of the new generation of safer and more efficient plants. In fairness, that is true of most public-investment projects; getting the green light seems habitually to mean presenting an enticingly low estimate that rarely ends up being realistic.

There was also the issue of nuclear waste and how to dispose of it safely. In the event of an accident the resulting radioactive material could cause widespread and lasting havoc. Chernobyl and Fukushima have become shorthand for the devastation, mutation, illness and death caused by nuclear disasters. In the case of the latter, an earthquake and tsunami prompted nuclear meltdown and thousands of deaths. As a result, there was a pause in the use of many nuclear reactors in Japan and a rethink in many nations around the globe.

But it was relatively short-lived. In 2022, the spike in fossil fuel prices caused by Russia’s invasion of Ukraine and the resulting focus on energy security proved to be a game changer. The British government announced the great nuclear revival, with a target to triple the amount of energy generation by nuclear by 2050. Legislation in the USA prompted up to $40 billion of estimated subsidies for the industry, to prop up existing reactors and support new ones. That sort of incentive might be needed, given how expensive they are; the first US reactor built from scratch in three decades, in Georgia, cost far more than initially budgeted and took far longer to build than expected.

In 2022, the International Energy Agency increased its projection for global nuclear power, expecting capacity to double by 2050, meaning that it would account for around 14 per cent of electricity generation. With the problem of how to dispose of nuclear waste still unresolved, nuclear remains a far more risky and pricey way of powering the planet than renewables. It costs five times as much to generate nuclear power than wind or solar. But with a lack of large-scale alternatives as yet, nuclear remains an option for now for governments hoping to bridge the energy transition.

The most dramatic change to our energy sources, however, has been a result of a revolution that started quietly in the 1970s. The oil-price crisis that created waves of unrest around the world also fuelled interest and investment in wind and solar technology.

In 1974, Saudi Arabia, the leading light in OPEC – the organisation of oil-producing nations – attempted to influence the price of oil by turning the production taps on and off. At that time OPEC was so powerful that the threat of an embargo towards any country suspected of supporting Israel in the Yom Kippur War saw the price of a barrel quadruple from $3 to $12. That caused a seismic shock throughout the oil-consuming world. By then oil was an intrinsic part of the manufacturing and transportation process. The cost of living spiralled, unions demanded higher wages in response and economies were driven backwards into recession.

It did, however, push nations to rethink their power supplies and reduce their dependence on oil imports. Denmark, for example, switched power plants from oil to coal. That might not sound like progress in terms of cleaner energy but, after all, energy security is as important as food security. That was not the only change taking place. Response from business was dynamic too: energy efficiency, which had already been making gains since the end of the Second World War, took on a new lease of life. Investment in technology that improved energy efficiency or made use of alternative fuels, which had previously been considered too expensive, suddenly became relatively affordable in comparison to the high oil price. The result was that production processes became more resilient and economies were better insulated when it came to swings in the price of energy, such as the spike that followed Russia’s invasion of Ukraine in 2022.

The oil-price shock of the 1970s shook the world and left a lasting legacy. Back then, wind and solar power on a mass scale was a pipe dream, but the more money that went into the technology, the more realistic it became. The first wind farm in the USA was installed in 1980; the UK followed just over a decade later. Unlike in previous transitions, however, the new sources produced less energy and couldn’t fulfil the demand, meaning the market needed a helping hand. From Brussels to Beijing, the state has played an increasing role in driving the transition, filling the gaps the market has (sometimes) been reluctant to. In China’s case, that meant direct state spending. In more market-driven economies, governments have often subsidised the development of greener energies, while at the same time – and as a way of funding that injection – penalising the generation of fossil fuels, for example through schemes such as Europe’s Emissions Trading System (whereby power generators face a cap on emissions and have to pay for carbon ‘permits’ – see page 169).

Despite government help, the growth of the wind and solar industries has faced obstacles along the way. In the UK, national planning policy means that since 2015 fewer than one in eight local authorities have allocated space for onshore wind farms. And the ones that do get built may prove controversial. Take Viking, one of the UK’s largest wind farms, with over a hundred turbines, each 155 metres tall. It was built by energy giant SSE on the Shetland Islands, one of the windiest parts of the country. The area has benefited hugely from the North Sea oil industry, but when the oil starts running dry, becoming a hub for wind power could help offset some of those potential losses. However, construction meant digging deep concrete foundations into previously untouched peatland and building access roads that disrupted the landscape, much to the resentment of some residents. Reaping the rewards of decarbonisation comes with its own costs.

Even the plants that are built and raring to go can have problems offloading their energy. The UK’s transmission mechanism network is privately owned by the National Grid. But that network has a limited capacity, and applications to join have more than quadrupled since 2018. Under the first-come-first-served planning rules slated by many as archaic, some applicants who are ready and able to supply renewable energy now aren’t able to hook up because they’re still waiting for a permit, stuck in the queue behind a project that has stalled. Some have been told they will have to wait a decade or more before they can connect. The National Grid blames the planning system as well as regulations that have prevented it from scaling up capacity fast enough. In 2023 the operators promised an overhaul, whereby projects with little chance of success would be pushed further back in the queue.

The cost of constructing a wind farm is another major hurdle. For those costs are front-loaded, even if the running costs are relatively marginal. How to entice operators, then, to invest and build given that prices paid for energy can vary?

In the UK, when the government allocates licences for offshore wind farms, it sets an electricity price. Energy suppliers can bid for the licence to supply electricity at that price, which is then guaranteed for fifteen years. In September 2023, the auction was set with a guarantee of £44 per megawatt hour but it failed to attract a single bid, with even offshore giants such as SSE and Sweden’s Vattenfall declaring early on that it wasn’t an attractive bet. Industry representatives said that spiralling steel prices, a key component in wind farms, and higher wages meant that costs had risen by around a third since an earlier successful auction with a similar target was held.

And there are other ways in which changing tack isn’t plain sailing. For example, supply of the technology for wind and solar can be problematic. In China’s drive to become the world’s leading industrial nation, it’s become the global leader in the production of solar panels, wind turbines and grid technology. Nine out of ten solar cells hail from China and it’s a major producer of polycrystalline silicon – or polysilicon – which is an integral part of most solar cells. The problem? Over 40 per cent of the world’s current supply of comes from the Xinjiang regime of China, where, following studies from the UK’s University of Sheffield Hallam and others, the USA’s Bureau of International Labor Affairs declared that forced labour is rife. Manufacturing polysilicon itself is fairly energy intensive; a cheap and plentiful supply of coal-powered electricity was what established Xinjiang as a major source of supply. Green, it seems, isn’t always clean.

Despite these obstacles, rapid development at scale and technological advances meant that a tipping point for renewable energy was reached in the twenty-first century.

Globally, renewable energy costs have fallen rapidly, which means that renewables have become a more attractive alternative to fossil fuels. In the USA in 2019, wind and solar generation costs dipped to new lows, falling by 70 per cent and almost 90 per cent respectively over a decade, undercutting the cost of coal (using a measure that considers the total cost of building and operating capacity over its lifetime). That trend seems set to continue. In 2022, over a fifth of the USA’s electricity was generated from renewable sources, overtaking coal as a source for the first time. A quarter of its wind power comes from Texas alone; a future reboot of the soap Dallas may feature turbines in the place of those oil barons and their Stetsons.

It is not just in the USA. In 2018 wind powered 17.1 per cent of UK electricity; by 2022 it was nearly 27 per cent. In that year, renewables made up a record 40 per cent of electricity generation – but fossil fuels still had the edge. There still isn’t enough of a renewable supply to meet demand.

However, there’s nothing like an energy security scare to focus minds. Governments scrabbling to compensate for Russian supplies haven’t just pushed for more fossil fuel energy. At the end of 2022 the International Energy Agency concluded:

The global energy crisis is driving a sharp acceleration in installations of renewable power, with total capacity growth worldwide set to almost double in the next five years, overtaking coal as the largest source of electricity generation along the way and helping keep alive the possibility of limiting global warming.

That’s as much renewable capacity as had been added in the previous twenty years – or as much as needed to power China.

Wind and solar form a central part of policies such as President Biden’s $369 billion Inflation Reduction Act, which contains the most significant climate legislation in US history. By investing in domestic energy production and manufacturing, incorporating tax breaks for electric vehicles, heat pumps, batteries, nuclear power, clean hydrogen generation, and wind and solar energy, the policy aims to reduce carbon emissions by roughly 40 per cent by 2030. But it brought cries of foul play from Europe and beyond, as nations were afraid their industries would be disadvantaged as US players enjoyed state subsidies. Concerns arose that, in the race to build green infrastructure, sky-high commodities prices would result, causing more bumps in the journey to develop wind and solar power further.

Ultimately, however, wind and solar power do have limitations – for example, when it comes to energy density.* Refined oil is one billion times more energy dense than wind power and the figure is even higher when it is compared to solar. That means vastly more space is required to harness those sources of energy than for fossil fuels. While wind and solar generation on a massive scale is firmly under way, using them to replace fossil fuels in their entirety is not yet viable.

But if fossil fuels are on their way out, there needs to be a mass-scale alternative we can turn to. What are our options? There’s nuclear, of course, but it has its drawbacks, as we’ve seen. Is there a magical elixir out there that can provide plentiful, effective, cheap and environmentally friendly energy?

Hydropower, effectively harnessing the energy emitted by water as it moves, has been around since the third century bce and remains globally a key source of renewable energy. But it too is limited in its capacity as dams are expensive to build. Moreover, damming a river comes with considerable environmental impacts – from disturbing the biodiversity of waterways to creating carbon emissions from the decomposing plant and animal material diverting waterways creates.

Biomass – fuel from an organic source such as plants – is another alternative, but it too is relatively expensive and comes with environmental side effects. Plants are space intensive; large-scale farming can cause deforestation; and ultimately the fuel is still nowhere near as efficient as fossil fuels.

One option that has become the holy grail for many is hydrogen. It is seen as having huge potential. Bankers at Goldman Sachs think it could supply a quarter of the world’s energy by 2050. We’ll delve into the technology in Chapter 4, where we’ll see it has the potential to power industry, ships and planes, reaching the parts of our economies that electrification can’t. When it comes to the way we heat and power our homes, it also has the potential to replace gas; the infrastructure could be integrated into existing gas pipelines. For now, it remains expensive and inefficient compared with more conventional fossil fuels. But with countries from Japan to Germany to South Korea publishing hydrogen strategies, and the UK’s energy infrastructure body developing plans to update the country’s gas network, that could change rapidly.

More investment is needed to develop this potential new superhero – and once more the market needs help to get there. Because while there’s still plentiful demand for fossil fuels, companies will still invest in them.

Big energy companies might seem to be moving incredibly slowly when it comes to making the shift, reluctant to give up their focus on fossil fuels, but in 2014 it transpired that one energy giant had been factoring potential climate-changemitigation measures into its commercial decisions for some time. In 1981, a chemical engineer employed by ExxonMobil to look into the viability of developing a massive gas field off the coast of Indonesia warned that the reserve was ‘mainly CO2, the main driver of climate change’. The engineer went on to ponder the impact possible regulatory action to curb carbon emissions could have on the bottom line.

However, it wasn’t the link between its products and global warming that was behind the company’s hesitation. In fact, it continued to play down that link for many years after that. For Exxon, the problem with the gas field was that it might one day become a ‘stranded asset’. Put simply, the huge investments in their core business that energy companies have made over the years will become useless, devalued, as regulation and availability of alternatives make them less economically viable.

Stranded assets fast became a reality in the first couple of decades of this century. European and US energy giants wrote down close to $150 billion of them in the first nine months of 2020, according to the Wall Street Journal. And, to comply with the Paris Agreement goals of restricting global temperature increase, far more may have to be shelved. Analysts struggle to estimate exactly how much but the total could exceed $1 trillion. It’s coal rather than oil that would make up the majority of those assets because, primarily, it’s the dirtiest, which means it’s an easy target as many governments up their climate goals. But it would also be about a third of the value of the oil majors.

Exxon is dragging its feet over replacing its money-spinners; its investment in renewables is minimal, focusing instead primarily on reducing emissions from its own operations. It claims there are ‘tremendous opportunities’ to use its ‘technology and expertise’ in carbon capture and storage. It is the world leader in carbon capture, a market analysts reckon is set to be worth trillions of dollars.

But many rivals, particularly European ones, are realising that survival means becoming ‘integrated’ companies. BP, Shell and Total, for example, have boosted investment in low-carbon alternatives on a major scale. BP has said it will increase the amount it invests in renewables tenfold to $5 billion by 2030. That would be the equivalent of 14 per cent of its total capital expenditure, although, as of 2022, it was lagging behind Shell and Total. Is it enough? Should it be making a greater commitment? Is it too little too late? In 2019, BP paid out $8 billion to shareholders, sixteen times as much as it invested in renew-ables that year – and still more than it intends to invest in 2030. However, BP is the only oil major that has a target to cut output of fossil fuels, set at a quarter of its 2019 levels by 2030.

Environmental groups too have queried the investment figures of some of the oil majors; low carbon, after all, simply means lower emissions than fossil fuels typically produce. One claimed, for example, that some of Shell’s ‘renewable’ investments are actually geared towards gas. Shell claimed in response that it met regulatory requirements.

The transition for these companies might be painful, but it’s not impossible. In 2018, Norway’s largest company changed its name from Statoil to Equinor, to reflect its rapidly changing strategy. It followed a decision to earmark 15–20 per cent of its capital investment for renewables, placing it far ahead of most rivals. Companies often change names to shake off a reputational problem. In Equinor’s case, it was trying to pre-empt what it saw as the inevitable negative connotations of the word ‘oil’ in the future. Two-thirds owned by the Norwegian government, it perhaps had less reason than most large energy companies to tease investors with a green makeover.

But it had another motive. Behind every energy success story, behind every transition, lies highly skilled personnel; the energy industry is nothing without human capital. But students have been increasingly unwilling to train for careers in the oil and gas industry. Surveys showed Statoil was dropping down the ranks of students’ favoured places to work; the indications were that Equinor might have a better chance of wooing them.

Of course, looks aren’t everything. Equinor’s primary activities remain in the field of fossil fuels. For all the talk of supercharging investment in renewables, particularly wind, such sources will account for only about 10 per cent of its energy provision by 2030. But it’s a move in the right direction.

It’s a direction in which Denmark has already outrun most competitors. For decades, the company DONG (Danish Oil and Natural Gas) was the country’s dirty secret, accounting for a third of the nation’s carbon emissions. Denmark’s electricity generation was one of the most carbon intensive in Europe; in 2009, 85 per cent of its energy came from fossil fuels. By the time DONG changed its name to Ørsted in 2017, it had embarked on a huge turnaround, instigated by fear of carbon pricing and a wish to do the right thing.

The CEO of Ørsted’s offshore-wind business, Martin Neubert, has recounted how it was public opposition to a new coal-fired power station, along with the realisation that the project couldn’t be completed sustainably, that made the company realise that change was needed. It was a bumpy ride, battered along the way by internal resistance, political pressures and headwinds from the financial crisis. But having sold its fossil fuel assets and invested heavily, by 2020 it was the king of offshore wind, providing 30 per cent of global supply.