Renewables: The Path to a Sustainable Future is Long and Costly
Written on
The Current State of Renewable Energy
The journey to protect our planet from climate-related damages is still in its infancy. To truly transform our energy use, resources, and land management, a significant overhaul is necessary. This shift is already in progress, as evidenced by the impressive growth of renewable energy sources in 2022, which added 295 gigawatts of capacity. However, despite this growth, we still have a long way to go.
The financial commitment required to transition away from fossil fuels is enormous but essential. These renewable sources offer greater independence, safety, and minimal environmental harm, along with the potential for job creation.
A significant leap was made in 2022 regarding energy transition investments, totaling an eye-watering $1.3 trillion. This amount encompasses investments in renewable sources, low-carbon non-renewables like nuclear, and enhancements in energy efficiency. To put it into perspective, $1.3 trillion is roughly equivalent to the entire economy of Indonesia.
Despite this substantial figure, it falls short of what's needed to avert climate catastrophe. According to a recent report by the International Renewable Energy Agency (IRENA), to achieve the goal of limiting global warming to 1.5 degrees Celsius, we must increase our annual energy transition investments to $5.2 trillion.
It's crucial to remember that even a 1.5-degree rise in global temperatures can disrupt weather patterns and lead to severe weather events, endangering ecosystems, public health, and economic stability.
Investment Needs in the Energy Sector
Why is such a vast investment necessary? The answer lies in the current energy landscape. In 2022, fossil fuels—oil, coal, and gas—accounted for an astounding 84.1% of global energy production, while low-carbon options made up only 11.4%. Among these, wind and solar energy represented a mere 1.1% and 2.2% of total production, respectively.
Despite the heightened focus on renewable and low-carbon energy sources over the past decade, their contributions to reducing global carbon emissions have been minimal.
Next, we must consider where to source an additional $3.9 trillion. For context, the total annual budget of the U.S. military was just $766 billion in 2022, a fraction of the needed sum.
You might think raising such an amount seems implausible, but theoretically, it is manageable. The fossil fuel sector invests heavily in discovering new oil and gas reserves, with projections for 2023 indicating an investment of $950 billion in unabated fossil fuels. This is despite the IEA's warnings that new fossil fuel investments must cease to meet climate goals.
Moreover, the fossil fuel industry benefits from substantial subsidies—$5.9 trillion in 2021 alone—designed to maintain a steady supply and ensure affordable energy for consumers. Redirecting a portion of these funds towards renewable energy and halting the pursuit of new fossil fuel reserves is not an unfeasible proposition. As more renewable energy is developed, reliance on fossil fuels will decline, mitigating the need for new reserves. Additionally, renewables are becoming cheaper per kilowatt-hour, which would ultimately reduce energy costs.
To achieve our goals, we only need to redirect 56% of the $6.85 trillion received annually by the fossil fuel industry in subsidies and expansion expenditures.
The Mismatch of Investments and Future Needs
You might still perceive this as overly ambitious. However, IRENA reveals a surprising statistic: 41% of planned global energy investments through 2050 are still aimed at fossil fuels, which will only fulfill 5% of energy requirements by that time. This indicates a glaring disconnect between where investments are going and future energy needs, potentially wasting trillions of dollars on fossil fuel projects.
IRENA holds a more conservative view on the necessary redirection of funds, suggesting that reallocating $1 trillion annually from the oil sector towards renewable energy initiatives could put us on track to meet our climate objectives. This figure represents less than 15% of the annual investments and subsidies that the fossil fuel industry receives.
The reality is that renewables, nuclear power, and other sustainable technologies require significant financial support to grow and combat the effects of climate change. Yet, the fossil fuel sector continues to operate under the assumption that business will remain unchanged by 2050, despite the looming depletion of oil reserves and the impracticality of current climate pledges.
We possess both the technology and the financial resources necessary to halt climate change. What remains is to extract this capital from the tightly held grip of the fossil fuel industry.
The Power Hungry Podcast discusses the critical need for investment in sustainable energy.
Chapter 2: The Human Element of Energy Transition
The human dimension of virtual power plants highlights how technology can facilitate a smoother transition to renewable energy.
This video explores the social aspects of integrating virtual power plants into the energy landscape.
Thank you for your support! Content like this thrives with your encouragement. To support such initiatives or access articles early, please follow my project, Planet Earth And Beyond, on various platforms including www.PlanetEarthAndBeyond.co, Google News, Flipboard, Threads, TikTok, YouTube, and Twitter.
Originally published on Planet Earth & Beyond
Sources: National News, IRENA, IMF, IEA, Our World In Data, Electrek, IRENA, IMF, PGPF, IEA, VOX, IMF, Y Charts