As the latest round of UN climate talks hits the halfway point, this weekend attention will turn from Bonn to Bavaria, where G7 leaders are facing a clear choice: address the addiction to dirty energy and reap the huge benefits of the transition to 100% renewables, or condemn the world to a future of economic and environmental decline.
The science is crystal clear, the public is backing the transition, the market is moving in leaps and bounds ahead of politics, and business-as-usual is no longer an option.
Following warnings on plummeting coal in China, the US and Australia,new analysis from the Carbon Tracker Initiative released today shows that Europe’s five biggest utilities are also struggling, collectively losing €100 billion – or 37 per cent of their stock market value – between 2008 and 2013.
Matthew Gray, advisor to Carbon Tracker said:
In many respects, the EU’s electricity sector has been the ‘canary in the coal mine’ with regards to understanding how the low carbon transition will create winners and losers. What has happened in Europe over the last five years should send a stark warning to investors. Coal has got caught in the path of the utility death spiral, which is likely to continue wiping out value for shareholders if they keep betting on new coal plants.
In another blow for the flagging industry, French utility ENGIE’s announcement of its withdrawal from a huge coal power plant project in South Africa demonstrates that the industry’s desperate “energy poverty” narrative is PR makebelieve.
A new report from Kofi Annan’s Africa Progress Panel shows African countries can lead the clean energy transition and “achieve universal access to energy by leapfrogging into new technologies”.
The report concludes that “the argument that coal holds the key to eliminating Africa’s energy poverty combines implausible economics with unsubstantiated evidence.”
Kofi Annan, Chair of the Africa Progress Panel said:
We categorically reject the idea that Africa has to choose between growth and low-carbon development. Africa needs to utilize all of its energy assets in the short term, while building the foundations for a competitive, low-carbon energy infrastructure… Countries like Ethiopia, Kenya, Rwanda and South Africa are emerging as front-runners in the global transition to low carbon energy. Africa is well positioned to expand the power generation needed to drive growth, deliver energy for all and play a leadership role in the crucial climate change negotiations.
If this was not enough of a reality check for G7 leaders to stop their investments in dirty infrastructure, the decision by Norway’s parliament today to pull most of its $900 billion sovereign wealth fund out of coal should send a chill down the spine of any leader or investor with a fossil-heavy vision for the future.
The reality is the coal era is over, and the unstoppable rise of renewables is now impossible to ignore.
G7 leaders have a golden opportunity at the Germany meeting to send a strong signal back to negotiators in Bonn that they, as representatives of the world’s largest economies, support an ambitious climate deal that will lead the world away from dirty fossil fuels and towards a 100% renewable energy future.
Martin Kaiser, Head International Climate Politics, Greenpeace said:
At the G7 Summit this weekend, leaders can back a phase out fossil fuel emissions in favour of 100% renewable energy by 2050. Doing so, would give a strong signal to investors, and could build trust in UNFCCC talks underway here in Bonn. But Canada and Japan are blocking efforts to send this signal. President Obama needs to walk the talk now and help Chancellor Merkel to bring Japan and Canada on to the team so that the G7 leaders stand on the right side of history.
Laggards like Japan, Australia and Canada may want to cling to dirty energy and hold back climate action, but as we saw with the intense questioning of Australia’s weak position on Thursday, they will only further marginalise themselves as others do what is right for humanity.