By Anders Ferguson, Partner
Over the past few years, it feels like “climate change deniers” have won the day – or at least were gaining the upper hand. But then weird weather produced billions of dollars of damage, large ice flows melted and raised the seas, and a growing number of businesses and governments said enough was enough.
At the same time, ordinary people are continuing to suffer from the negative effects of climate change, while still others are seeing the positive effects of the rapid growth in the renewable energy economy.
Change is never easy. It requires a faith in the future and the willingness to change our mind. But when we do, we produce the energy and power we each need for both optimism and action. Lately, there has been a lot of reason for faith and reasonable optimism. Let’s take a look.
Europe and China Lead the Way
That the Trump administration pulled the U.S. out of the Paris Accord 2016 wasn’t surprising. What was surprising was the groundswell of global support for climate change solutions.
The response from hundreds of cities and other entities that signed onto protocol agreements to uphold the Paris Accords’ goals was both catalytic and encouraging. Side by side, American and global businesses are marching ahead in decarbonizing. Lacking American presidential leadership, Europe and China are leading the way. The U.S federal government has surrendered moral and policy leadership, but that has empowered the private sector to lead the decarbonization of the economy. American people are taking action.
The Good News
There is plenty of reason for optimism. Around the world, the private and public sectors are taking meaningful steps to address climate change. The following are just a few recent examples:
Renewable energy sectors are transforming transportation, buildings and electric power generation. By some estimates 90% of decarbonization is likely to unfold in renewable energy, and all three of these sectors are changing because of it. International Renewable Energy Agency
The Administration wants to reduce CAFE mileage standards for cars, but even auto companies are not asking for this. California and other states currently have high CAFE and environmental standards. They push the entire country in continually raising the bar. They are initiating numerous lawsuits to stop the Trump administration. Automotive News, 2/4/19
Electric vehicles in the U.S. represent less than 4% of total auto sales in 2019. By 2030, they are estimated to reach 30% to 40% of sales. The major global auto companies like VW are retooling for a future centered on electric vehicles. China is currently the largest market of total numbers of EV’s. It’s widely accepted that the coming boom in self-driving cars is dependent on fleets of electric vehicles for operational and engineering fundamentals. International Energy Agency, Global EV 2018 Outlook
In Calgary, our northern neighbor’s oil capital, oil company offices are being converted to apartments due to the exodus of oil companies and job losses. In part, this is attributed to failure to get new pipelines built south through the U.S. and east through Canada. Bloomberg, 6/10/2019
The sunset of the oil age is actually occurring. One notable example is Shell Oil’s decision to spend down its oil reserves and prepare the company for a “lower carbon future.” This shift includes Shell’s increased commitments to the Paris Accords. Shell is the fourth-largest petroleum company in the world.
The New Green Deal is motivating political candidates and activists to think bigger. Apparently, some oil companies are doing the same. Four major global oil companies, including Shell and BP, announced their active support for a carbon tax. LittleSis, 5/28/2019
The nuclear era is winding down and renewables are taking its place. Connecticut, over the next 10 years, will replace a 2000MW nuclear plant with 2000MW off-shore wind farm integrated with energy storage. The wind farm operators expect to significantly increase system efficiency via the rapidly expanding energy storage systems emerging. CleanTechnica, 6/6/2019
Carbon Sequestration. We know that plants and trees remove carbon from the air. U.S. estimates for forests is 10-20% of total carbon emissions sequestered. Soil is less clear on a national level, but getting increasing attention in Regenerative Agriculture. Forest Service, USDA
The Big Picture
What does this all mean?
Driven by innovation and change, we are moving rapidly to a whole new decarbonizing economy. This is the beginning of an enormous economic and societal transformation. Business and the marketplace are the change agents.
This realignment of the world’s power infrastructure is inspiring entrepreneurs, business and governments to dream and build a new future without fossil fuels. Just as importantly, it is inspiring average people to take positive actions, which in this case only reinforce themselves. Home insulation to PV on the roof to an electric vehicle. “I am inspired and my risk taking is encouraging my neighbor. Critical mass sprouts.”
For success, we need greater government support in building a low-carbon economy. Only governments can mandate these rapid changes, which must be implemented to make a difference in climate change on our world and all its beings.
Anders Ferguson, Partner and Co-founder of Veris Wealth Partners, is a long-time champion of climate change solutions.