Black, Red and Green – what are the right choices?

Malcolm Latarche

Malcolm Latarche · 26 February 2020

ShipInsight


However much individuals believe otherwise, there is a constant battle in which economics and environment appear to be pitched against each other. Some will take the view that life is not worth living if we do not have pristine environments and thriving biodiversity while others believe that while the environment should be protected as much as possible, it is economic well being that matters most to humankind in general and there is no point in being green if it drives you into the red.

Earlier this month, in a Bloomberg opinion piece Noah Smith, opened by saying “Modern living standards — indoor lighting, affordable food, heat in the winter, an internet connection — require energy. And every energy source has its drawbacks. It’s easy to point out the downsides of a given energy source and call for it to be banned. But if we’re not careful about weighing costs against benefits, we’re liable to end up with something even worse”.

Smith’s article revolves around how Japan switched to coal, oil and LNG to cover its energy needs following the Fukushima disaster in 2011 when a nuclear power station was destroyed by a tsunami. More than a decade on Japan has reigned back a little but is still on track to add more than 20 coal plants in the next five years.

Although not hit by a tsunami, Germany also switched away from nuclear power to coal. Coal is also being used in many countries through Asia to meet expanding popular demand for energy. Building coal-fired power plants is not something that is done for amusement and it must be accepted that they are planned for a 20-50 year lifespan at the very least. More to the point many of those may well be built without the environmental considerations such as scrubbers that are an essential element of all plants in the developed world. As well as coal, it will not be long before oil and gas-fuelled plants are built to take advantage of new reserves such as those found of East Africa.

This is of course completely the opposite of what environmentalists say we must do but unfortunately there are very few suggestions as to how the increase in demand can realistically be met. According to DNV GL’s recent Energy Transition Outlook 2019 report, the world needs five times more wind power, ten times more solar power and fifty times more battery storage if we are going to limit global warming by 2030. Meanwhile the IEA says that world power demand is rising by around 1.3% per year on current trends but notes that in 2018 demand actually rose by 2.3%.

It is actually quite difficult to judge demand. What for example is the demand for the near one billion people around the globe who currently have no access to electricity? Have their aspirations been measured and taken into account? – probably not.

Almost certainly, the ambition to cut world GHG emissions by 2030 will not hit its target. Even if the developed world reins in its use of fossil fuels, the reduction in GHG there will not exceed the growing production in Africa, Asia and South America and Central America. Looking again at the DNV GL figures, some might say that the need for more renewables is very much understated as currently only around 3% of world energy demand comes form a combination of wind, solar and geothermal sources and that percentage has virtually stood still for the last ten years despite the billions or even trillions of dollars invested in renewable projects.

One of the more interesting facts that has emerged over recent years is that the world is actually getting greener – not in the sense of people being more environmentally aware but in terms of vegetation coverage. This phenomenon was reported in 2016 and again in 2019 by NASA and was also included in the last IPCC reports.

The causes of this greening have been put down to a combination of increased atmospheric CO2 and improved land use particularly in India. With a growing world population and what might be a fashion fad interest in vegan life-style in the west, a greener world must be seen as desirable. If – as the reports suggest – atmospheric CO2 has played a significant role, might we not be embarked upon a wrong course with drives to decarbonise? Predictably the answer to that question will be split by those who say no and those who say yes.

Shipping is caught in the middle of these arguments and is obliged under current regulations to follow the decarbonisation course regardless of whether or not the IMO’s plans for a carbon-free future are implemented. That is because of the EEDI rules that are in place for the next several years for newbuildings.

What might be the situation in five or ten years from now remains to be seen but I suspect that the aspirations of the world population for modern living standards will play the greatest role in determining that situation.

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