Free Thoughts - Revealing moments: The Greens

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The Greens are excited about the potential of solar power. So am I.

The greater the potential of solar power and other non-fossil fuels, the less we need to worry about current projections on CO2 emissions and global warming.

Somehow it seems the Greens have not quite got their heads around this.

The issue of climate change animates the Green Party. I don’t entirely dismiss the concerns of the Greens on this issue, but do note that they invariably reach for the worst possible scenarios to make their case. There are many scenarios, with enormous uncertainty about probable outcomes.

As for solar power, a recent tweet from Gareth Hughes linked excitedly to a report that suggests solar will become the dominant electricity source around the world in the coming decades. The Deutsche Bank report he linked to argues that as solar becomes cost-effective versus conventional fuels it will eventually displace large amounts of fossil fuels.

The report suggests that by 2050 solar will represent 30% of energy markets.

I share the excitement about such developments. I have been following this issue with interest for some time.

For example, last year the International Energy Agency said that solar could be the top source of energy by 2050. Financial markets are focusing on this issue. Barclays Bank downgraded the corporate bonds of US electricity utilities in May last year because of concerns about the long term challenge of solar power to existing utility businesses.

So something significant is happening. There is undoubtedly a major energy transition ahead – the issue is just how many decades ahead that may be.

Given these trends, all the panic about rising CO2 levels through the second half of this century will have to be jettisoned.

All the IPPC projections for this century will be wrong.

Not just a little bit wrong, but wildly wrong.

All the worries about extreme temperature rises due to sustained increases in CO2, on the usual “no technological change” assumption, will be beside the point.

As they often say in financial markets, the thing everybody gets wrong is underestimating technological change.

In short, if the Green Party excitement about solar is justified – and I hope it is – then rising CO2 levels through this century and consequential global warming is much less a concern than the Greens think.

You can’t have it both ways.

If so, once again human ingenuity, technological change and market mechanisms will have solved a pressing problem.

One final point. If solar power cell and battery storage costs continue to fall, the justifiable excitement about the future of solar does not mean we should start a wholesale shift to solar now. That would be to waste money. It just means that before too long most of us will be investing in solar for perfectly normal market reasons: it will be cheaper than the alternatives.

ends

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