Charlotte Street Partners



Green energy is capitalism’s low-hanging fruit

Written by Alex Massie
8 October 2020

Viewers in Scotland can be forgiven for recalling that they have heard Boris Johnson’s pledge to make the United Kingdom “the Saudi Arabia” of green energy before. This, they will remember, was how Alex Salmond liked to describe Scotland’s energy potential, if only we had the courage and the confidence to grasp the independence upon which this possible bonanza depended.
Salmond was fond of suggesting that green power was the key to “reindustrialising” Scotland. Well, we are in the midst of a green revolution, but the jobs it was to deliver have not, as yet, principally been created in Scotland. In the wider scheme of matters, this is a point of mere parochial importance, but one may still sympathise with those who ask why, if conditions for wind energy in particular, are so perfect here, these have not yet created the conditions for job creation.
Still, as I say, this is a smaller matter than the bigger picture. The prime minister may not have committed much in the way of public funds to back his new enthusiasm for green energy projects, but this is less significant than the signal sent. When the Conservative party officially swings to support renewable energy – after years in which it viewed it with, at best, polite suspicion – then a turning, or tipping, point has been reached.
In like fashion, the UK government has signalled that, following the Scottish government’s own ambitious target, it wishes to bring forward the date at which petrol and diesel cars will be phased out. In ten years’ time, all being well, we shall no longer be relying on the internal combustion engine. This is, viewed historically, a genuinely revolutionary ambition. We shall abandon petrol-driven cars far more quickly than we adopted them in the first place.
Green campaigners are, by definition, pessimists. The planet is burning when it isn’t flooded, and we are running out of time. The end is always nigh. As a rallying point for action, or for prodding politicians to change direction, this pessimism – or alarmism, if you prefer – has its uses but it should not be permitted to overshadow the remarkable progress that is being made to ‘decarbonise’ the economy. By way of an illustration: as recently as 2012, 40% of British electricity production came from coal; now months pass without any coal being used at all.
Gas, of course, is still a fossil fuel, albeit a cleaner one than coal, but when fossil fuel companies such as Shell and BP announce plans to dramatically increase their commitments to renewable power, the long-term picture is clear. A small beginning, perhaps, but a significant one. Climate concerns should not curdle into fatalism; change really is possible and we know this because we see it happening all around us.
There is, to be sure, a long way to go and the pace of change will never be fast enough to satisfy campaigners who want it delivered yesterday. And, again, they have a point: worldwide temperatures were higher in September than they have been in any previous September on record. This is not a blip, either, and we should expect this trend to continue for some time yet.
From which we may also draw this conclusion: even if you (mistakenly) believe man-made global warming is a myth or, more reasonably, think other forces beyond our own behaviour are also contributing to heating the planet, there is still a requirement for humanity to do what it can to mitigate the impact of climate change. That is not just an environmental responsibility, it is an economic and a moral one, too.
But if political leadership is required, so is public buy-in. That means bringing voters with you, not telling them the world as they know it must end. A ‘degrowth’ agenda that depends on national impoverishment to achieve its ambitions is, and will remain, a niche enthusiasm. (Mercifully so, you may think, and I would not be inclined to disagree.) However fashionable this may be in certain parts of the western world, it is not going to catch on in China, India, or any other country that wishes to improve the quality of its peoples’ lives.
The planet will be saved by capitalism, not destroyed by it. For capitalism is, at root, the means by which resources, both human and natural, are exploited with greater efficiency. The plummeting cost of solar power – by some measures, prices have fallen by 80% in the past 10 years – is matched by the ever-cheaper production of onshore and, crucially, offshore wind. Government subsidies have helped create this marketplace; innovation now means many of these subsidies can be phased out. Green energy is not just better for the planet, it will be cheaper too.
That incentive drives everything else and it bears repeating that capitalism is the answer, not the problem. So, yes, China is still building new coal-fired power plants, but China is also the world’s biggest producer of green energy. It has to be, of course, but China is expanding its renewable capacity more quickly than it is adding fossil fuel plants. A quarter of its electricity already comes from renewable sources. Over time, it will become a greener powerhouse.
The same patterns are increasingly evident in the United States and will be encouraged if, as seems likely, Joe Biden replaces Donald Trump as president. The Democratic party is committed to expanding the US’ renewable capacity and while many vested interests will continue to oppose this, the direction of travel is again clear.
Thus Texas is on course to produce more energy from wind power than coal this year. Indeed, if it were an independent country, Texas would be the world’s fifth largest generator of wind-powered electricity. The Lone Star State’s solar capacity doubled last year and is likely to double again this year, albeit from an admittedly low base. That is because of, not despite, Texas’ market incentives.
In 2010 wind power, globally, produced just under 350 terawatt hours (TWh) of energy while just 33 TWh came from solar power. Last year wind power generated more than 1,400 TWh and solar 724 TWh. A decade ago, combined wind and solar capacity was around one tenth of the world’s hydropower capacity; now wind and solar is equal to about half the planet’s installed hydro capacity, even though hydro power has itself increased by around a fifth in the past 10 years.
From which we may conclude that the future is happening already and that in most of the world this trend is now all but irreversible. The future will be powered by wind, water, and the sun. This is no longer an ‘if’ but instead a matter of ‘when’. Other technologies, perhaps including hydrogen energy, will play their part too.
So there are, despite everything, reasons to be optimistic. We still burn too much coal and too much oil and too much gas, but global emissions targets no longer seem as fanciful – or ambitious – as they once did. Viewed with only a reasonable measure of perspective, these are astonishingly rapid changes. Transformational ones, even, and the pace of change is increasing every year.
Optimism has been hard to come by in 2020, but this is one area in which optimism may actually be rewarded. No one is in any doubt that much more needs to be done, but that should not inhibit an awareness of how much is already being done. Meeting emissions targets is not incompatible with economic growth; indeed, growth is now likely to be encouraged by meeting those climate ambitions. That too is a sea change in possibility. And the better news, in this regard, is that despite the rapid progress made in the past five years, this process is still in its infancy. There is a lot of low-hanging fruit to be picked. Above all, however, it is worth noting that our ability to remake the world as a better, cleaner, healthier, more prosperous place is by no means exhausted. Some things do get better.

About Beyond the Street and Alex Massie

We are all guilty of being too inwardly focused sometimes, especially as we navigate these changed times. It is all too easy to be caught up in the problems close to home, and for overarching trends to pass us by.

To remedy that short-sightedness, Charlotte Street Partners has enlisted the ingenuity and talent of the writer and commentator Alex Massie. As our new correspondent at large, Alex will look at the bigger picture for us each week. We have challenged him to come up with something a bit different: broad, lateral thinking, thematic insights and a more global perspective.

Alex is a freelance journalist and commentator based in Edinburgh. Not only is he Scotland editor of
The Spectator, but he also writes a political column for The Times and The Sunday Times. He features regularly on the BBC as a political commentator and has written in the past for The Telegraph, Politico, The Washington Post, the Los Angeles Times, The New York Times, the New Statesman, The Observer, and TIME magazine, among others. He was also the Washington correspondent for The Scotsman and assistant editor of Scotland on Sunday

We hope you enjoy his work – and do feel free to forward this email on to colleagues and friends you think might be interested. They can subscribe to Beyond the Street and our other regular briefings here

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