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Bad news on the climate and energy transition has been impossible to avoid this autumn. Devastating floods have rocked Libya, Slovenia, Greece and Hong Kong, while drought hinders trade through the Panama Canal. These natural disasters are partly the consequence of global temperatures breaking further records this year.
If the climate news has not been sufficiently grim, environmental policies seem beset with roadblocks and petty squabbles. This autumn the EU has backtracked on plans to toughen emission reduction plans, Germany has brought additional coal-fired power plants back into operation for the winter, with its ministers locked in battles with France, seeking to prevent its neighbour from maintaining and expanding its prowess in clean nuclear power.
Last month’s annual meeting of the IMF and World Bank could come up only with the worst form of weasel words on climate, pledging to “act collectively, as appropriate, to support climate transitions, taking into account country-specific circumstances”. This fell far short of the necessary shift in finance to end poorer countries’ reliance on fossil fuels.
And as politicians squabble ahead of the COP 28 conference this month, the renewable energy sector is beset by funding problems amid rising costs and high interest rates. The capital-intensive wind power sector is encountering turbulence with Siemens seeking government support and Ørsted, the world’s largest offshore wind developer, abandoning two US projects.
The consequences appear inevitable and dire: a continued rise in global temperatures and a global inability to meet the challenge.
But stop a second. All of the above is depressing and true — but also only half the story. Scratch the surface a little and progress towards decarbonisation is still moving rapidly, helped by a continued sharp reduction in the costs of mitigating global warming.
Take Germany. The nation’s politicians have been rightly criticised for standing in the way of France’s decision to decarbonise using nuclear power. But Berlin capitulated in that spat. The fear of it becoming a heavy user of coal is not supported by electricity generation statistics. Coal use in the power sector was down more than 20 per cent in the first half of this year.
With similarly impressive figures across the EU, the US and China, fossil fuel generation of electricity rose only marginally in the first half of 2023. In the power sector, fossil fuel use will probably peak this year and begin to fall from 2024 at an accelerating pace.
Solar power installation is still rising quickly and solar manufacturing capacity rose 70 per cent in 2022 and is on track to double again by 2024. The latest International Energy Agency figures show an increase of 268 terawatt hours in solar photovoltaic electrical generation in 2022 — more than twice the level expected as recently as 2018. Every year the IEA forecasts solar installations will be a little higher than the previous one and each time has been proved extremely pessimistic. This is the sort of forecasting error that everyone can be happy about.
Along with the rapid shift to renewable electricity, we have also witnessed price effects from the energy crisis improving efficiency of power use, which gives us some breathing space to enhance the grids, essential for progress to net zero. To get there, the IEA recommends a clear focus on renewable power generation and greater energy efficiency until 2030. The good news is that this part of the process is “well understood, most often cost effective and taking place at an accelerating rate”.
Clearly, the world is not yet on track to defeat global warming. There is still much to do. But despite relentless difficulties, the trade-offs are actually getting easier. Long may that continue.
chris.giles@ft.com
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