For those interested in the economics of energy, there is a much more significant question to answer than Trump’s designs on the Paris accord: whether climate change is a hoax or not, does it any longer matter? Put more succinctly, is it actually necessary to have binding national targets for carbon emissions in order to move to a low-carbon economy? If not, then Paris will eventually be seen as of little importance, a well-intentioned, but largely pointless talk-fest of backslapping mutual governmental congratulation barely deserving of a footnote in the history books. We may not be there quite yet, but we are close. Green technologies are reaching a tipping point of take-up, cost and efficiency which make their eventual wholesale adoption virtually inevitable, regardless of anything that might be done to reinvigorate fossil fuel industries in the meantime. It is the economics which will in future drive the transition to a low emissions environment, not government intervention and carbon taxes. Never mind electric cars and LED light bulbs, peering into the future, we can already see a world of virtually cost free energy, of smart phones powered by radiant light alone, and of office blocks and houses that derive all their energy from the sun, the wind, and their own waste. In terms of cost, longevity, and efficiency, all these technologies are showing almost exponential rates of improvement. Ironically, much of the cutting-edge research and development, from Elon Musk’s Tesla to thin-film solar cells and the latest in long-life battery storage, takes place in America. Mr Trump might be on to something politically in the sentimentality of his appeal to the coal miners of Pennsylvania and West Virginia, but in terms of the hard-headed economics, no amount of environmental deregulation can turn back the clock and save these industries. Coal isn’t yet entirely dead. It’s got some years left, particularly in the developing world. But its cost effectiveness is already under siege from the new technologies. Clean energy has developed an unstoppable momentum. Even oil industry stalwarts are beginning to see the writing on the wall. Remember “peak oil”? This was the idea popularised by a geologist at Shell back in the 1970s that fossil fuel reserves were finite and would soon reach maximum production potential, after which they would go into precipitous decline. By now, we were meant to be running out, resulting in sky high oil prices, rationing and descent into international conflict for scarce resources. So spare the righteous indignation when Trump pulls out of the Paris accord; beyond the symbolism, it’s not going to make a great deal of difference. The power of markets is much more likely to deliver results than the meaningless public relations of a self-congratulatory government target.
Telegraph 2nd Feb 2017 read more »