COP31 will show up the folly of cleantech tariffs
BREAKINGVIEWS-COP31 will show up the folly of cleantech tariffs The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Antony Currie
MELBOURNE, Nov 4 (Reuters Breakingviews) -
This year’s United Nations climate summit, starting on Monday in Turkey’s Mediterranean city of Antalya, has its sights on speeding up electrification. It's a worthy goal for the gathering of perhaps 100,000 attendees over 12 days and offers a chance to wrest climate realism back from the cynics, the short-sighted and the denialists.
Populism plays a big role to kill the fight to stop climate change, courtesy of US President Donald Trump’s claims that global warming is a hoax. So does a mix of defeatism and downplaying the effects, encapsulated by Microsoft MSFT.O founder Bill Gates’ assertion last year that rising temperatures wouldn’t have too much impact and that humans just need to adapt better. Then there's the new red, or perhaps green, scare: fear of China’s lead in clean technologies. These have been key in recent years to arguments that the need to reduce greenhouse gas pollution is impractical - giving companies from Alphabet GOOGL.O to Shell SHEL.L, from BHP BHP.AX to Unilever ULVR.L, cover to dial back their climate action pledges.
Now the US-Israel war on Iran helps set the stage for realising COP31's top goal by highlighting the economic security risks of dependence on oil and gas. Host Turkey is the fourth-largest market for electric vehicles in Europe, per research outfit Ember; battery-powered-car sales in Australia, which is president of negotiations in Antalya, have more than doubled this year, with BYD 002594.SZ and Tesla TSLA.O battling for market share.
The climate conference organisers aim to capitalise on that by pushing for 35% of global final energy demand to come from electricity by 2035, up from the current share of 23%. It’s timely, but even this undersells how powerful the shift can be.
The primary – and final – energy fallacy
Using final energy is an unfortunate extension of the primary energy fallacy, a term coined by Canadian analyst Paul Martin. Fossil-fuel fans fixate on this metric to claim the rollout of renewables has been a failure, as it makes it seem solar panels and windmills provide less than 5% of energy, with more than 80% coming from hydrocarbons and the rest from nuclear and hydropower.
Trouble is, it ignores the laws of thermodynamics: burn fossil fuel or any other thermal source like nuclear and it loses most of its energy potential to waste heat; as little as 15% of oil’s possible energy survives to make a petrol-powered car move, compared with up to 90% of electricity in battery-powered vehicles.
Final energy, which COP31 is using, at least measures the fuel’s potential further along the refining process when it is sold to customers. But the best metric is useful energy, which accounts only for what ends up powering our appliances. On that basis, renewables already supply 37% of electricity, per the International Energy Agency. That demonstrates the reality of their accomplishments, not the distortions promoted by the primary energy fallacy.
Degrees of inaccuracy
Fixating on the wrong numbers has helped all but guarantee that the world will not limit temperature increases to 1.5 degrees Celsius above pre-industrial levels, as the UN laid out in September. Even that number is the victim of mathematical abuse, taken to claim the world isn’t getting much hotter.
It's a global average of land and sea temperatures over 20 years, to eliminate short-term variations. Water is 70% of the planet’s surface and a great heat absorber. Adjust for that, and the average 20-year land temperature increase could approach 5 degrees Celsius, and higher in any given year. That means more excessive heat, drought, fires and floods – air holds 7% more water for each 1-degree-Celsius increase. The impact on health, comfort, infrastructure and food production will not easily lend itself to adaptation.
That’s what makes COP31’s electrification argument so powerful. Renewables are generally faster and cheaper to install than oil, coal and gas and once in place are immune to the volatile fossil fuel prices that cause much of the world’s inflation and energy insecurity. And compared to when companies and countries were first devising net-zero plans, technology and competition have improved and costs have largely fallen.
Trouble is, most of those improvements have happened in China, which produces most electric vehicles, solar panels and batteries. Concerns over the impact that will have on industrial giants like Volkswagen VOWG.DE and Ford Motor F.N are well-founded.
The European Union already relies on China for 74% of the cleantech it imports, per ABN Amro. It has imposed variable tariffs on EVs from the People's Republic, experimented with other measures like price floors and last month announced plans for sales quotas on hybrids. The US has levied import taxes of 100% on battery-powered cars, of at least 50% on solar panels and 25% on lithium-ion batteries.
China has plenty of demand for its green goods elsewhere: Pakistan, Brazil and India are among the largest buyers of its solar panels. Nonetheless, Beijing wants COP31 to address this "new problem" of protectionism, Li Gao, vice minister of the Ministry of Ecology and Environment, said last month. And the government has its own headaches: slowing domestic demand is making export markets even more important.
Cleaner air, lower emissions and fewer climate impacts are worthwhile trade-offs to accepting Chinese goods now from $180 billion battery-maker Contemporary Amperex Technology 300750.SZ, solar-panel producers like LONGi Solar and Trina Solar 688599.SS, and carmakers from BYD to Geely. Persuading these and others to set up more factories abroad would also lessen trade tensions. All that would also buy time for the West to be at the forefront of developing the next generation of cleantech. It would, though, require ditching their short-termism and brushing up on their maths.
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CONTEXT NEWS
The 31st United Nations Conference of the Parties, or COP31, on climate change, takes place in Antalya, Turkey, from November 9 to 20.
(Editing by Una Galani; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on CURRIE/antony.currie@thomsonreuters.com))