At the heart of efforts to combat climate change are electrifying everything and decarbonising electricity through renewables. But despite ambitious goals, lots of rhetoric, and rapid growth in renewable technologies and production, global emissions from electricity production are still growing. While the share of electricity generated by fossil fuels has been falling, electricity generated by fossil fuels has still been hitting all-time highs.
The main reason for this is the world's voracious appetite for electricity. Since 2015 when the Paris Agreement was signed, electricity production has risen by 25 percent. Google's electricity emissions, for example, have increased by 50 percent in the last five years driven by the explosive growth of AI, and that's despite its target of zero emissions by 2030. Australia is, to some extent, bucking the trend with electricity sector emissions declining as solar and wind displace coal-fired generation. But that doesn't mean we can rest on our laurels. We still have a lot to do domestically, and we can also make significant contributions regionally and globally as a renewable energy superpower.
The stakes are incredibly high, particularly because the climate responds to actual total atmospheric emissions, not greenwashing, lies, well-intentioned plans, or incremental improvements. The Potsdam Institute found that the global economy is on track to suffer an almost 20% income reduction by 2050 due to climate change. This is despite the fact that the costs of mitigating climate change are only a fraction of the losses it will cause.
The physics of global warming is clear, and predictions made by climate scientists have been accurate, if not overly cautious. Hurricane Beryl's record-shattering escalation into a scale-topping Category 5 tropical storm, for example, stunned even the most seasoned meteorological experts. It flattened the island of Carriacou in half an hour and knocked out 95 percent of the power in Grenada, leaving hospitals without water or electricity.
The fossil fuel industry and neo-conservatives try to make climate action an ideological issue. But even staunch free-market advocates like Margaret Thatcher and Ronald Reagan acknowledged that environmental externalities represent a significant market failure, and that climate change is the largest and most complex externality of all. In an address to the United Nations, Margaret Thatcher highlighted the “insidious danger” of climate change and “the prospect of irretrievable damage to the atmosphere, to the oceans, to Earth itself.”
Economists like Nicholas Stern and Joseph Stiglitz have argued that taking stronger actions on climate change can enhance economic growth - using conventional measurement methodologies, and even more so in terms of well-being. They've also noted that capital markets are failing to value the future welfare of humanity. According to a recent Financial Times article, addressing the climate crisis requires influencing the real cost of capital to incentivise clean energy. That's because most current investment strategies are disregarding long-term environmental impacts and costs, assuming that the future will somehow be fine. But this is clearly perilous. It's selling our kids down the river.
There is no more time for complacency, greenwashing, or political spin. Atmospheric physics doesn't respond to that. Climate safety requires deep and fast emissions reductions. That's why with global electricity demand growing, fast-tracked renewable energy solutions are essential. Renewables are the cheapest and fastest way to achieve zero emissions. We must move now. And move fast. Our future, and the future of our kids, depend on it.
Image from Martin Wolf in the Financial Times.