PHOTO: AFP/FILE

REUTERS, Melbourne

The transition to green energy is messy, contradictory and too slow. It’s roughly a decade since 195 countries struck the Paris Agreement, opens new tab at the United Nations’s 21st Conference of the Parties (COP) in France, pledging to hold the average global temperature to “well below 2 degrees Celsius above pre-industrial levels”.

UN Secretary-General António Guterres has effectively declared dead, opens new tab the more stretching goal of limiting the increase to 1.5 C. The climate denialism of US President Donald Trump is indeed impeding the fight. Yet, the future is brighter for renewables than it seems.

As delegates head to next week’s COP30 summit in the Brazilian city of Belém, two conflicting accounts of the energy transition are true. For the first time, solar, wind and other renewable power is now generating more electricity globally than coal, per research outfit Ember.

Yet more of the carbon-heavy rock is being burned than at any point in history. It helps stoke the argument, popularised by Daniel Yergin, author and founder of Cambridge Energy Research Associates that renewables are not replacing fossil fuels, but merely adding to the mix as energy use increases.

That story requires ignoring some basic facts. The process is called a transition for a reason: it takes time. The UN Intergovernmental Panel on Climate Change’s 2018 report on how to limit the average global temperature rise to 1.5 C assumed that emissions wouldn’t peak until this year in any event. On top of that, money talks.

The low-carbon economy will attract some $2 trillion in investment globally this year, according to Aniket Shah, head of sustainability at Jefferies. He points out that number has grown more than fivefold since the Paris Agreement, and is roughly double what’s heading to fossil fuel-related projects. More solar and wind energy is now being installed than was projected a decade ago by the IEA and others.

The trouble is, it’s not enough: the planet is warming faster than scientists had expected, in part due to emissions increasing and in part due to knock-on effects like reduced ice sheets meaning less solar radiation gets reflected back into space. Limiting the global average temperature rise to 2 C by hitting net zero emissions in 2060 - 10 years later than the stated goal - would require spending an average of $4.3 trillion a year, estimate analysts at Wood Mackenzie.

The consulting firm reckons emissions may not now hit their peak until 2028 and will only decline 2 percent a year for a while afterwards. Based on decarbonisation plans submitted over the past year by 60 or so countries, the UN calculates that greenhouse gas pollution will only fall 10 percent by 2035 from 2005 levels, compared with the required level of 60 percent as estimated by the Intergovernmental Panel on Climate Change.

There are plenty of reasons for the shortfall. But the person who made the most succinct explanation in a prescient speech, also a decade ago, was then-governor of the Bank of England Mark Carney. He dubbed the problem the tragedy of the horizon, opens new tab, pointing out that the “catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors,” meaning business and political cycles as well as the remits of agencies like central banks, and thus “imposing a cost on future generations that the current generation has no direct incentive to fix”. So once global warming becomes a pressing financial problem, it may be too late to stop. Carney himself now arguably risks falling victim to his own prognostication. Since becoming prime minister of Canada in March, he has rolled back some of predecessor Justin Trudeau’s climate-related initiatives, opens new taband tried to improve relations with the country’s fossil-fuel industry.

Going too slow is a big problem: it locks more carbon, methane and other planet-warming gases in the atmosphere, pushing up temperatures and increasing the likelihood and intensity of floods, droughts, wildfires and the like. But global momentum is on decarbonisation’s side. Renewables projects are now cheaper than their fossil fuel counterparts nine times out of 10, reckons Christina Figueres, who as executive secretary of the United Nations Framework Convention on Climate Change played a key role in COP21.

Assuming a 5 percent annual growth rate for clean energy – far slower than it has managed to date – renewables would effectively oust fossil fuels by 2065, calculates EcoPragma Capital co-Managing Partner Michael Liebreich. Granted, that would mean missing the 2050 net zero target by miles. And some sectors of the economy that are big emitters, like steel and cement production, remain in the very early stages of transitioning. But adoption, as Liebreich points out, is likely to go much faster than his deliberately understated model suggests.

Moreover, most places are not like Canada: 80 percent of people live in countries with limited or no local oil, coal or natural gas. Those states have an interest in reducing their dependence on dirty energy