In terms of energy, we are living in an “after-Paris” world. For, in the half-decade since the Paris climate agreement, its impact has only continued to grow. The idea of an energy transition to what is called “net zero carbon” by 2050, which is at the heart of the agreement, is becoming embedded in the strategies of investors and companies and in the policies of governments. There are widespread calls for large green stimuli while interest rates are low. If elected, Joe Biden’s wide-ranging climate plan would put the US on the same path as Britain and European governments.
Yet no one at that Paris conference in 2015 could have imagined that a pandemic would sweep the world in 2020 and impose an economic dark age on people across the globe. What does that mean for mapping the path towards the energy transition?
Even without Covid-19, the energy transition was challenging. “Sprint” is a good word to describe running towards the 2050 target, for three decades is a short time to rebuild the foundations of what was an $87tn world economy before Covid-19 – an economy that relies on fossil fuels for 84% of its energy.
Not that energy transitions are new. But they take time. Energy has been transitioning – evolving – for more than four centuries. Coal was being used in Britain by the 13th and 14th centuries for heating, to replace wood, which was going into short supply as trees were cut down. But it was not until the beginning of the 18th century that a metalworker in Shropshire figured out how to use coal instead of wood to smelt iron. The 19th century may have been the great age of coal and steam, on which was based Britain’s primacy in the world economy; yet it was not until the beginning of the 20th century that coal came to supply half the world’s energy.
But this is a different time, with all the advantages of modern capital and science and technology, along with widespread determination and will-power. But then there is Covid-19.