Canada’s Erie Shores Wind Farm includes 66 turbines with a total capacity of 99 MW. Credit: Denise Morazé/IPS

By Kitty Stapp
NEW YORK, Apr 21 2015 (IPS)

Climate change may be one of the most divisive issues in the U.S. Congress today, but despite the staunch denialism of Republicans, experts say the global transition from fossil fuels to renewables is already well underway.

A new book published by the Washington-based Earth Policy Institute finds that a steep decline in the price of solar photovoltaic (PV) panels (by three-fourths between 2009 and 2014, to less than 70 cents a watt) has helped the industry grow 50 percent per year."If they truly want to keep their own jobs, our elected leaders will soon see ties with coal, oil and gas as a serious political liability.” -- Kyle Ash of Greenpeace USA

Wind power capacity grew more than 20 percent a year for the last decade, now totalling 369,000 megawatts, enough to power more than 90 million U.S. homes.

In China, electricity generation from wind farms now exceeds that from nuclear plants, while coal use appears to be peaking.

“Wind farms and solar PV systems will likely continue to anchor the growth of renewables,” Matthew Roney, a co-author of “The Great Transition”, told IPS. “They’re already well established, with costs continuing to drop, and their ‘fuels’ are widespread and abundant.”

With international initiatives like the U.N. Secretary-General’s Sustainable Energy for All and new development goals in the offing, donors and policy-makers are looking to massively scale up these tried-and-true clean technologies.

“One of solar’s advantages is that not only is it increasingly competitive with the average cost of grid electricity around the world, it can make economic sense for many of the 1.3 billion people who do not yet have access to electricity,” Roney said.

The book also notes that 70 countries now have feed-in tariffs, a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. Another two dozen have renewable portfolio standards (RPS), 37 countries offer production or investment tax credits for renewables, and 40 countries are implementing or planning carbon pricing.

In the U.S., reliance on coal is dwindling – it fell 21 percent between 2007 and 2014 – and more than one-third of the nation’s coal plants have already closed or announced plans for future closure.

But according to Greenpeace and other civil society watchdog groups, the industry is trying to get a new lease on life by pushing so-called carbon capture and sequestration (CCS) – where waste carbon dioxide (CO2) is captured from large point sources, such as power plants, and transported to a storage site — what Greenpeace has dubbed a “Carbon Capture Scam.”

The Barack Obama administration advocates CCS as part of its “all of the above” energy strategy, the group says in a recent analysis, even though the government’s own projections show that it would cost almost 40 percent more per kilogramme of avoided carbon dioxide than solar photovoltaic, 125 percent more than wind and 260 percent more than geothermal.

“The most fair-weather politician, if honest, should agree that advocating for renewables is a winning campaign strategy,” Greenpeace USA legislative representative Kyle Ash told IPS.

“Do they really care about jobs? Do they really care about U.S. competitiveness and energy independence?” he asked. “The president and Congress have no shortage of reasons to acknowledge renewables are the only path forward when it comes to energy production. If they truly want to keep their own jobs, our elected leaders will soon see ties with coal, oil and gas as a serious political liability.”

The Environmental Protection Agency’s proposed carbon rule requires that new coal plants capture CO2, and emphasises the CO2 be used to augment oil extraction. Oil rigs then pump the carbon dioxide underground so the oil expands and more is forced up the well.

Greenpeace says that rather than actually storing carbon, it comes right back up the well with the oil. Every major power plant CCS project in the United States intends to sell the scrubbed carbon to the oil extraction industry.

“We don’t just have statistics, technology, and climate science on our side – we have a growing body politic that is opposing fracking, tar sands, coal exports, and other ways an archaic industry is trying to hold on,” Ash said.

“CCS is really the last gasp of the political pandering to coal, an industry widely known to have been horrible to workers and horrible for the environment. What we should soon see is more pandering to workers and the environment.”

The Obama administration has won kudos from environmental groups, including Greenpeace, for at least acknowledging the problem. In a videotaped statement for Earth Day this year, the U.S. president declared that “Today, there’s no greater threat to our planet than climate change.”

The million-dollar question, most scientists say, is whether the transition to renewables will be fast enough to restrict warming to the benchmark two-degree increase by 2020, beyond which the consequences could be catastrophic.

“Although the adoption of renewable energy worldwide is moving in the right direction, more quickly than virtually anyone predicted even five years ago, the race is definitely not over yet,” Roney said. “Cutting into oil use by electrifying the transport sector is key, but electric vehicle adoption is not yet moving quickly enough to have a big impact.”

He noted that batteries, a major part of the price tag for an EV, are set to come down by half by 2020, according to UBS, making EVs fully competitive with conventional cars.

“At that point, buying an EV over a car that runs on gasoline will be a no-brainer, with up to 2,400 dollars in anticipated annual savings on gas. More broadly, pricing carbon would likely be the most effective way to accelerate the shift fast enough to keep climate change from spiraling out of control,” Roney said.

“The good news is that some 40 countries now have implemented or plan to implement carbon pricing, through a cap and trade system or carbon tax, including China. When its anticipated national cap and trade system begins in 2016, roughly a quarter of global carbon emissions will be priced—not nearly enough, but a decent start.”

Edited by Kanya D’Almeida

Seventy-three countries and 22 lower-level governments offered formal support Monday for a global price on carbon dioxide emissions, including China, Russia and the European Union.

Together, these countries account for more than half of all greenhouse gas emissions, according to the World Bank, which unveiled a major new push towards global carbon pricing. Other backers include South Africa, Indonesia, Mexico and the Philippines.“If governments put good policies and carbon pricing in place, investors can help finance the transition to a low carbon economy.” -- Stephanie Pfeifer

The World Bank also announced that more than a thousand corporations and investors have recently signed several high-level statements on the issue, urging policymakers to take substantive steps towards a global price on carbon emissions.

The data comes as more than 100 government leaders are in New York this week for a United Nations-sponsored summit where governments and the private sector are to announce new climate-related commitments. Around that event, a record 310,000-plus demonstrators took to the streets in New York on Sunday, urging action.

“Today we see real momentum,” World Bank Group President Jim Yong Kim said Monday. “Governments representing almost half of the world’s population and 52 percent of global GDP have thrown their weight behind a price on carbon as a necessary, if insufficient, solution to climate change and a step on the path to low carbon growth.”

While there are several ways to impose a financial cost on carbon – including a tax, a trading system and others – proponents say any of these would bring multiple benefits. They would create economic incentives to both reduce emissions and boost the development of renewable energies, while resulting revenues could be used to finance adaptation and mitigation efforts.

Still, carbon prices have also been blamed for raising costs on day-to-day items, including food. Poorly structured carbon taxes could thus impact most immediately on the poor.

The new support builds on a public statement of backing for carbon pricing that the World Bank published in June. At that time, 40 national and more than 20 sub-national carbon taxes or trading schemes had been set up, accounting for a bit more than a fifth of global emissions.

On Monday, Kim also announced a new public- and private-sector grouping, the Carbon Pricing Leadership Coalition, that will begin meeting to “advance carbon pricing solutions” in advance of widely anticipated negotiations next year in Paris. There, the global community is expected to agree on a new framework for responding to climate change.

“Carbon pricing if expanded to this scale and then globally has the potential to bring down emissions in a way that supports clean energy and low-carbon growth while giving businesses the flexibility to innovate and find the most efficient choices,” the World Bank noted in a feature story on the new initiatives Monday. “This is a wake-up moment.”

Investor energy

Of course, government representatives have been meeting to discuss options around combating climate change for decades, and there is near universal agreement today that actions taken thus far have not been commensurate with the threat.

Further, market-based schemes such as carbon pricing would only offer a partial solution. Yet even so, the World Bank’s new list of supporters doesn’t include some of the most important players, including the United States and India.

The current phase in the climate discussion is nonetheless distinctive for the new corporate support for some sort of global action around climate change, particularly for a broad price on carbon. Just in the past few days, a series of major calls to action have been made by multinational companies and some of the world’s largest institutional investors.

“Support for carbon pricing among the investor community is greater than it’s ever been,” Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change (IIGCC), told IPS.

“Climate change puts the investments and savings of million of people at risk. Investors support ambitious action on climate change and a strong carbon price to reduce these risks and to unlock capital for low carbon investments.”

The London-based IIGCC was involved in developing a major statement from global investors on climate change. The most recent version, released last week, included nearly 350 signatories representing some 24 trillion dollars in assets, and called for carbon pricing, greater support for renewable energy and efficiency, and the phasing out of fossil fuel subsidies.

“Investors are willing and able to invest in low carbon energy,” Pfeifer says. “If governments put good policies and carbon pricing in place, investors can help finance the transition to a low carbon economy.”

Environment and economy

The newly stepped-up interest around climate change on the part of corporate executives and investors underscores a strengthening understanding of climate issues as posing threats beyond the environmental. Increasingly, corporations are being forced to explain to their shareholders how climate change and related regulation could impact on their underlying finances – and how prepared they are for that eventuality.

Last week, a widely discussed study found that many of the world’s largest companies, including the oil giant ExxonMobil and financial services firm Goldman Sachs, are already incorporating internal carbon prices into their financial planning and risk management. “[M]ajor corporations not only recognize climate-related regulatory risks and opportunities, but also are proactively planning for them and are outpacing their governments in thinking ahead,” the report found.

Some proponents say this engagement by the private sector could now provide key energy ahead of the Paris climate negotiations next year.

“These are vast and marked changes, and very different from any other time I can remember. The level of interest on the part of the private sector is radically different than it was even five years ago,” Mindy Lubber, the president of Ceres, a U.S. coalition of investors and others focused on sustainability, told IPS.

“It goes without saying that financial and corporate leaders calling for action does change the debate. It moves the discussion from one of the environment versus the economy to one about both.”

Still, some are concerned that the new focus on the private sector’s role in addressing climate change, including at this week’s U.N. summit, is inverting the proper role of government and state regulation.

“We’re increasingly seeing the private sector telling government how companies can be supported on energy and climate issues,” Janet Redman, director of the Climate Policy Program at the Institute for Policy Studies, a Washington think tank, told IPS.

“That’s a perversion, with public sector energy going into supporting the private sector. Instead, the public sector has to set goals and a framework for how we all need to act, both individuals and the private sector.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org