A clear example of this can be found here in Vietnam, where leaders of the Asia Pacific will soon meet at the APEC summit in Danang. We used to think of Vietnam as a country that would continue to burn coal for decades. That is no longer the case. The political leadership in this country understands that coal is yesterday’s fuel — it is dirty, severely detrimental to public health and becoming more expensive than solar and wind power. Like other countries in the region, including China and India, Vietnam is on the cusp of a clean energy revolution.
Meanwhile, the White House also intends to repeal the Clean Power Plan and a few other measures that are key to meeting the Paris pledge. I am often asked about the impact of Washington’s stance on climate change. My response is that a White House withdrawal from implementing the Paris accord does not mean a U.S. withdrawal.
In fact, the White House declaration has only accelerated the determination of many American stakeholders to reach their climate goals. What we are seeing in the U.S. itself is quite a dramatic reaction in the other direction. By my last count, nine states, hundreds of cities and over 1,700 corporations in the U.S. have declared they will continue to implement policies and practices aimed at decarbonization consistent with the commitments of the Paris accord. They are saying, “We are still in” and moving forward regardless of what Washington does. With large states like California and New York leading the way on the transformation to an economy built on sustainable energy, we can expect significant progress even as the Trump administration pushes back.
The biggest story since the Paris accord was agreed in 2015 is that the shift toward renewable energy is happening faster than we thought possible just a few years ago. This year, for example, represents a turning point on the electrification of transport. Volvo announced it will make only electric or hybrid cars starting in 2019. General Motors will go “all electric,” with almost two dozen electric vehicle models scheduled to be released by 2023. Volkswagen will offer electric or hybrid versions of all of its 300 models, including Audi, Bentley and Bugatti, by 2025. Ford announced it will get on schedule to go electric, while BYD from China joined the race with zero-emission cars and buses.
The significance of this collective shift in transportation should not be underestimated: it will cut into petroleum sales around the world and will bring forward the moment when oil production peaks. This shift helped drive a growing group of countries and cities that will no longer allow internal combustion engines: Norway, the Netherlands, France and the U.K. have all announced they will ban the future production of diesel and petrol cars by 2040 or earlier. New vehicles sold in India must be electric by 2030, and China is expected to announce a similar transition.
Advances in energy production are no less remarkable. We are no longer talking about isolated rooftop solar panels but a serious transition to other energy sources. Global Infrastructure Partners, a massive infrastructure and energy investment firm, completed the largest-ever acquisition in the renewables sector just last week with a $5 billion purchase of Equis Energy, one of the largest renewables companies in Asia. India recently announced that it would electrify every un-electrified home in the country with solar power. And Statoil, the traditional oil and gas conglomerate based in Norway, announced it will undertake massive new investments in renewable energy.
As the head of the International Energy Agency declared, we are witnessing the birth of a “new era” in solar and renewable energy technology. Overall, the growth of energy generation from renewables was greater than all fossil fuels put together for the first time last year. What we are seeing is a “hockey stick” transition to the exponential growth of solar energy — a sudden upsurge after a long, slow period of development.
Finally, we are also seeing an explosion in financing of alternative energy. More than $90 billion in green bonds has been floated so far this year, a level expected to reach $100 billion by year’s end, with some predictions as high as $130 billion. This is a dramatic increase from the $8 or $9 billion in financing just a few years ago.
In Bonn next week, technical experts from national governments will come together to hash out rules for the implementation of the Paris agreement and begin to prepare for 2018, when political leaders will again gather to assess progress so far. With the dramatic advances in the real economy continuing, my expectation is that by the time leaders meet next year they will find that, far from falling short in meeting the goals of the Paris accord, they can increase their ambition to act on climate change.