The tough thing about halting climate change is that it means altering pretty much everything about how we get and use energy. We have to change how we generate electricity — how we power our homes, our buildings and operate the grid. We have to change transportation, how we get around, travel, transport goods.
And you can’t really miss anything. If any change lags behind, then suddenly a specific sector — say, the airline industry — will come to stand out as the next big emissions problem.
It’s in this context that it’s worth thinking about a new report on global patterns of energy investment — $1.8 trillion worth in 2015 — just released by the International Energy Agency. Because what that report essentially says is that although there’s clear progress, we’re also missing some things. Some very big things.
Let’s go through the report and see where we are — and aren’t — on pace:
1. Wind, solar and electric cars. First, the good news. The IEA says that when it comes to these three major clean energy solutions, the change is really upon us. The flow of international investment money proves it.
Of the $1.8 trillion spent on global energy investments in 2015, the IEA reports, a major part of the expenditure, or $313 billion, was on renewable energy in all its forms, led by wind and solar. Meanwhile, the document adds that 550,000 electric vehicles were sold last year, even as 600,000 charging stations were put in place. If such growth continues, we could eventually begin to see a significant dent in global oil demand.
“Wind, solar PV and electric-vehicle investments are broadly on a trajectory consistent with limiting the increase in global temperature to 2°C,” the report concludes.
In this, IEA is referencing a so-called “2 Degree Scenario” that the agency has outlined for keeping our planet from overheating and crossing all manner of dastardly tipping points and irrevocably changing the Earth in ways that become increasingly destructive. That scenario “lays out an energy system deployment pathway and an emissions trajectory consistent with at least a 50% chance of limiting the average global temperature increase to 2°C,” by ensuring that we don’t emit more than 1,000 gigatons (or billion tons) of carbon dioxide from the year 2015 onward.
Alas, there’s a good case to be made that even this is not ambitious enough. The 50 percent odds aren’t very good when you’re betting on the planet — but better odds would mean fewer emissions and the need for still more rapid energy system change. Moreover, it is becoming apparent that a more appropriate guardrail might actually be closer to 1.5 degrees Celsius. Even at about 1 degree Celsius, around where we are now, Greenland is hemorrhaging ice and large parts of the Great Barrier Reef have been killed by ocean waters that are too warm.
2. Nuclear and carbon capture and storage (CCS). But outside of these three sectors, things don’t look so good. The problem is that two additional electricity generation technologies that will lower the world’s carbon emissions — by providing a “baseline” source of electricity that can replace the burning of coal — are off schedule for the 2-degrees scenario.
“In several countries, nuclear capacity is aging with little investment going to replacement capacity, and renewables are struggling to compensate for reduced nuclear output. Large-scale investment in CCS has yet to take off,” the IEA reported.
When it comes to nuclear, the problem is that while China is installing huge numbers of plants — adding the bulk of the global total in 2015 — others aren’t necessarily following. And then there’s CCS, which refers to outfitting carbon emitting plants, such as coal-fired electricity generating stations, so that some large part of those emissions are captured and don’t reach the atmosphere.
“While seven CCS projects are under construction, the outlook for CCS has been clouded by the diminished appeal of enhanced oil recovery (on which five of these projects depend for their revenue) due to low oil prices,” the IEA found.
The IEA doesn’t make a big statement about why nuclear and CCS are faring so much more poorly than wind and solar, but there are a couple of obvious reasons. One is the nature of the investments — we’re generally talking about really huge plants for nuclear and CCS. And without prices on carbon in place in many countries, advocates say, the value of these enormous investments isn’t necessarily being appreciated in the marketplace.
And then on top of that, there’s politics: Nuclear has never made environmentalists comfortable, and with CCS, the technology essentially allows you to continue extracting and burning coal. Many environmentalists aren’t okay with that, either.
3. Other transportation. And the nuclear and CCS problem is just the beginning. Consider the transportation sector.
Even though they have a long way to go, electric vehicles really are starting what looks like a boom right now. But as the IEA report notes, we also consume huge volumes of liquid fuels to operate aircraft, ships and more. “On the demand side, economically viable alternatives to oil have yet to emerge in aviation, heavy-duty transport and shipping, which collectively account for the bulk of oil consumption,” the report notes.
It’s far easier to connect cars and buses to the grid than to connect planes and ships to it. They’re on land! For these other kinds of transportation, liquid fuels may still be required, and that raises the idea of using renewable biofuels. But the IEA report also notes that biofuels haven’t seen the kinds of beneficial price drops that wind and solar have enjoyed.
4. Global coal. Finally, IEA adds, we’re investing a great deal in renewables, but we’re also still investing a lot in coal-fired electricity generation in some key parts of the world. India, for instance, is ramping up coal production — and it’s the nation where electricity demand is expected to spike the most in coming years.
“The government is targeting 1.5 billion tonnes (Gt) of output by 2020. Investment by coal producers, especially state-owned Coal India, which accounts for 80% of the country’s production, is rising accordingly,” notes the IEA report. “Coal India increased capital expenditure in coal mining by around 20% to over USD 800 million in 2015 and plans to spend even more in 2016.”
As for China, it’s easing off coal slowly, but it’s still at huge levels: The country saw 52 gigawatts worth of coal plants light up last year, and has 200 gigawatts worth still under construction, according to IEA. The agency says that China has “overinvested” in new coal plants — which is very problematic, IEA notes, because that infrastructure’s very existence could mean “locking in carbon emissions for decades.”
It all leads to a picture in which we are beginning to realize that while wind and solar and electric cars are great, they may also be the easy part. We still have a great deal more to grapple with before we can get climate change under control.