The world must invest $2.4 trillion in clean energy every year from now to 2035

By Charles Ellinas

The UN Inter-governmental Panel on Climate Change (IPCC) issued on October 6 a Special Report on the ‘impacts of global warming of 1.5C above pre-industrial levels and related global greenhouse gas emission pathways’.

The report, commissioned by the Paris agreement signatories, makes grim reading. It states that global warming has already exceeded 1C and is on track to reach a temperature increase of 3C by 2100, well in excess of the Paris agreement to limit the increase to 1.5C, with “far reaching and unprecedented changes in all aspects of society”.

One of the key messages that comes out very strongly from this report is that we are already seeing the consequences of 1C of global warming through more extreme weather, rising sea levels and diminishing Arctic sea ice, among other changes. In Cyprus we have been experiencing drought, dust and unbearable temperature increases.

The report highlights the serious climate change impacts of such an eventuality and makes recommendations for rapid and far-reaching measures to be implemented “in land, energy, industry, buildings, transport, and cities”, needed to avoid the consequences of such change. Key among these is that “Global net human-caused emissions of carbon dioxide would need to fall by about 45 per cent from 2010 levels by 2030, reaching ‘net zero’ around 2050.”

As would be expected, the report received immediate and widespread coverage worldwide. Achieving the report’s key recommendation would require extending the decarbonisation progress achieved in the electricity sector into other areas such as heat, transportation, industry and land management. It would also require removing billions of tonnes of carbon dioxide from the atmosphere through methods such as reforestation, soil carbon sequestration or direct air carbon capture and to do this at a fast pace.

The report also outlines a plan of how to achieve its recommendations. The world must invest $2.4 trillion in clean energy every year from now to 2035 and reduce coal-fired power generation to more or less zero by 2050.

It piles pressure on policymakers, business and industry to take the required measures to achieve this change. But this would require worldwide coordinated and concerted action, involving all major economies, at a scale never seen before. But how practical is this and how can it be achieved?

Level of response

Apart from strong response by environmentalists and a short-lived response by the media, general response to the IPCC report has been muted. In fact the best way to describe this is that the IPCC findings have been greeted by global climate change indifference – and even more so in Cyprus. So why?

Public opinion surveys in Europe and China show that the European and Chinese public is well informed about climate change, but while most think the consequences of climate change will be bad, many only feel a moderate responsibility to reduce climate change and think that personal efforts will not be very effective. The small lifestyle changes they are prepared to make will not bring about the unprecedented change IPCC believes is needed.

Following the release of the report, Hoesung Lee, chairman of the IPCC, said “We assess the scientific information and then provide policy-relevant messages to our member governments as well as the relevant stakeholders.” It is their decision how to proceed.

UN Secretary-General, Antonio Guterres, added his support, saying that “We must rise to the challenge of climate action and do what science demands before it is too late.”

But is it happening, or at least is it about to start happening? Are governments rushing to use the ‘policy-relevant messages’ and the ‘manual of solutions’ the IPCC has provided? Cyprus certainly is not.

Global policy efforts to address climate change face a degree of uncertainty due to the lack of leadership, particularly from the US. Even the EU and China, despite strong commitment to the Paris Agreement reaffirmed in July, face challenges.

The European Commission is a strong advocate, pushing policy within the EU, but as public opinion shows it will struggle to get the support needed to push through radical policy changes.

But at least Europe agreed to new targets for energy efficiency, 32.5 per cent, and renewable energy, 32 per cent, and 40 per cent emissions reduction – in comparison to 1990 – by 2030.

The position of Chinese experts is that the country’s climate change targets and commitments are in line with the country’s stage of development and circumstances, and they will not change just because of new discussions regarding the 1.5C target. China is expected to remain committed to working towards its own low-carbon development goals.

India’s environment minister, Harsh Verdhan, said that the country did not wait for any report to realise that climate change posed a threat and that it is making all efforts within its capacity to combat global warming. But even though in October India increased its target of non-fossil fuel in its power mix to 40 per cent by 2030, a lot more needs to be done to meet IPCC recommendations.

The US administration has been mostly quiet, with President Trump admitting that climate change is not a hoax, but saying that he hasn’t read the IPCC report yet, and will be doing so soon. He asked, though, “who drew” the report, not hiding his mistrust. In the US, lack of national leadership is leaving states, cities and business to take whatever action they can. This is commendable under the circumstances, but cannot rise to the level required by IPCC.

The world governments, business and industry must be ready to spend $2.4tn in clean energy annually. But according to Bloomberg NEF estimates, this is about seven times the amount invested globally in renewables in 2017 – a big challenge.

It is also equivalent to about three per cent of global GDP. As an example, for the UK this would amount to over 1.5 times the annual defence budget being spent annually on clean energy. Neither the UK nor any other major governments have rushed to make such commitments following the IPCC report.

Without making such commitments it will not be possible to achieve what IPCC recommends. If past responses to earlier climate change reports are an indication, little serious action should be expected. Responses by major economies so far do not give confidence that it will be any different now.

The key to all of this may not lie in the developed world but in Asia, with China and India at the forefront as the lead energy consumers in the world. It is highly unlikely that these countries will sacrifice economic growth and energy security by divesting from coal even by 2050. The hope lies in the faster growth of renewables, something which the IPCC report may help accelerate.

The world needs to decarbonise and all countries must do it collectively. But it remains to be seen what emerges from the review by world governments of the Paris Agreement at the Katowice Climate Change Conference in Poland in December. Not only bolder commitments will be needed, but they must also be adhered to. This highlights the enormity of the problem.

And in Cyprus?

Much of the reaction to the IPCC report has centred on bolstering use of renewables. But in Cyprus we are dragging our feet. Instead of pulling out all stops and implementing renewable power, especially solar power, as fast as we can, we are proceeding with expensive LNG imports. These will reduce emissions but nowhere near what IPCC and the new EU targets demand. Solar power will achieve that and more. It will also bring electricity prices substantially down. Imported LNG will have the opposite effect.

A recent ranking shows how European countries stack-up on climate protection. Cyprus is in 24th position together with Malta. We need to move away from grandiose statements into action

On November 1 and 2, the ‘6th International Conference on Renewable Energy Sources & Energy Efficiency – New Challenges’ will be held at the University of Cyprus. This follows the very successful ‘Climate Change in the Mediterranean and the Middle East’ conference organised by the Cyprus Institute in May this year.

These conferences are attracting some of the top experts in the world with top class advice on what needs to be done.

We are not lacking advice or investment, what we need is urgent action to unlock one of our best potentials – sun power.

Dr Charles Ellinas is a nonresident senior fellow at the Global Energy Centre of the Atlantic Council @CharlesEllinas





