In the first 100 days of the Biden administration, the new president, like his predecessors, did what he decided to do during his campaign. The main one is to bring the United States into a post-carbon world. Apart from “economic equity and inclusion”, the cause of climate change is at the forefront of this new administration. The hope is that the rest of the world – namely India, China and to a lesser extent Russia and Brazil – will one day follow, making the climate theirs. famous cause.
China already started this some time ago with their Al Gore-ish climate-themed documentary “Under the Dome”. In it, a CCTV reporter reveals his daughter’s breathing problems caused by smog in Beijing. Go ahead, meet in Beijing and look in the hotel bathroom. I bet there’s a dust mask in there, just in case the sky turns gray with the soot from the coal particles.
For Biden, the cancellation of the new phase of construction of the Keystone XL pipeline from Alberta to the Midwest and the temporary ban on new oil and gas drilling on federal lands has not stopped climate change in the United States. United or elsewhere.
China is building more coal-fired power plants than ever.
In his new book, “The Prologue: The Alternative Energy Megatrend in the Age of Great Power Competition,” Atlantic Council Vice President Alexander Mirtchev defines the megatrend of alternative energies as it relates to national security and the use of energy as a lever with other countries. It does so against the backdrop of the new great power rivalry between the West and China, in particular. Mirtchev is also a founding member of the Kissinger Institute on China and the United States and Distinguished Visiting Professor at the Schar School of Policy and Government at George Mason University.
Richard Evans, former CEO of defense firm BAE Systems, called it a “breakthrough study”.
His pager of 300+ is a future magnum in the energy sector. He takes a multifaceted look at energy policy as it becomes more techno-economic, socio-political and ideological. If you think the planet is doomed in 12 years, you are all for the cancellation of Keystone, oil drilling and coal. You are all for more wind turbines, more solar panels, more battery-powered electric vehicles. But if you don’t worry about the planet turning around and becoming uninhabitable within a generation, you’re still going to have all of these things.
What does it all mean?
This is what Mirtchev seeks to address in The Prologue. Anyone interested in the great energy debate and who wins and loses in the post-carbon future should spend some time with this book, which is due out later this month.
While Megatrend’s ability to play a role in strengthening global economic security remains uncertain, Mirtchev writes that alternative energy technologies promise a number of solutions to rid the world of its climate change fears.
From an economic point of view too, these new technologies can “help stabilize the world economic system, create and maintain new sources of economic growth and optimize economic development”, he writes in the third part of the work in four parts.
Approaching energy as security, he says that the transition to a post-carbon economy could lead to more economic security because you would have a greater level of certainty of resources, “which is beneficial because the more the There is great uncertainty, the less rational the behavior of market players. “Mirtchev also reminds us of the wild swings in oil prices, especially as the political dramas in the Middle East heat up.
Will there be more jobs? And where will it be? This is a question Mirtchev does not seek to answer. For now, many of these alternative fuel supply chains are in Asia, especially China. It is only a matter of time before Vestas – the large Dutch wind turbine maker – is predominantly in China – or owned.
However, all that could change with good national policies, Mirtchev argues.
“The development of renewable energies, in conjunction with market opportunities and entrepreneurial advances, can also stimulate the creation of new industries directly or indirectly involved in the renewable energy value chain, which could lead to new growth paradigms. economic, ”he wrote. “How this catalytic process unfolds will determine the means by which the global economy adapts to the resulting changes.”
Alternative energy sources have been the subject of jokes for at least two decades. Remember when British Petroleum said its acronym BP now stands for Beyond Petroleum. Royal Dutch Shell, its British counterpart, is investing in offshore wind turbines after leaving solar power.
Just five years ago, you would be hard pressed to find a Tesla outside of California, New York, and Boston. Now they are in small towns across the country. In 15 years, gasoline cars will be something you will only see at classic car shows.
The United States, Europe and, increasingly, China have become the largest business and investment markets for the Energy Transformation Megatrend.
Capital markets have formed around renewable energy with a number of stock market indices tracking the performance of the sector, such as the S&P Global Clean Energy Index or the NASDAQ Clean Edge Green Energy Index.
London investment banks like Schroders and Paris-based BNP Paribas constantly tout their green status.
New investments in renewable energies have increased fivefold since 2004. A notable shift in capital flows towards the development of alternative energies “would have considerable implications in the future,” says Mirtchev.
Much of this push to reshape and rebuild the global energy market will come from government, as is the case in China.
“The new great energy game will have a greater influence on world affairs in the 21st century than ‘Star Wars’ did in the 20th century.eLord Peter Truscott, former UK energy secretary, wrote in his review of the Prologue. Star Wars was the policy of the Reagan era to develop satellite defenses against the Soviet Union.
The ideological constructs and values that underpin the megatrend of alternative energy, as well as the innovative and insufficiently established nature of alternative energy technologies, encourage government domination of the sector.
According to the International Renewable Energy Agency, the share of direct public investment varied between 12% and 16% of the total between 2013 and 2015 (40 billion dollars on average), before falling to 8% in 2016 (21 billion dollars). of dollars). The real share of public finances allocated to the promotion of renewable energies is much greater.
When various public support expenditure regimes are taken into account, including regulatory instruments and tax incentives, the share of public funding in Western Europe in 2015, for example, increased by 55% for total energy investment. renewable.
The contribution of government incentives to the development of renewable energy markets – from solar manufacturing protections in the United States to tax breaks for electric vehicles for buyers – is what makes this all plausible.
An example: in Western Europe – where countries like Germany have outsourced their traditional energy like coal to Poland and nuclear to France, shut down their zero-carbon nuclear power plants and plugged into wind turbines and solar, around 50 % of total electricity produced from these non-fossil fuel sources in 2015 obtained some form of subsidy. The United States is next on the list, surely to follow in Europe’s path given the new Biden government’s concerns about climate change.
The current state of development of alternative energy is comparable to that of the Apollo project, says Mirtchev. Political will and pressure from civil society propels the megatrend, with considerations of economic security often trumping political concerns and practical needs.
To limit the rise in global average temperature to less than 2 ° C, the share of renewables in primary energy supply must increase to around 65% by 2050. It is estimated that to achieve this, a total of 25 trillion dollars is expected to be invested in renewable over the next 30 years. This would be a tripling of the current annual investments. But the “megatrend” is on, and nothing and no one in sight seems to be able to stop it.