Global Clean Energy: Silver Linings Against a Dark Canvas

In 1992 in Rio de Janeiro, Brazil, the nations of the world agreed to stabilize greenhouse gas concentrations in order to “prevent dangerous human interference with the climate system.” Combustion of oil, natural gas, and coal was the dominant cause of those dangerous emissions in that year.

Today, the world still gets 81.5 percent of its primary energy from those three fuels. Their share has barely changed since the Rio summit. Global energy consumption, however, has grown substantially since the 1990s, which means that energy-related emissions have, too.

Why has this problem proven so stubborn? Is there any hope for future progress? As the thirtieth meeting of the parties to the Rio agreement approaches this fall—once again hosted by Brazil—those questions merit global attention.

Of course, there are many answers. The global energy system is extraordinarily complex, and no government controls it. Instead, it is more useful to focus briefly on four major forces that help sustain the fossil fuel-based energy system: technology, economics, politics, and culture.

CFR’s Climate Realism Initiative will explore those and many other questions as it expands and deepens in the coming years.

Technology

The biggest reason that fossil fuels have been hard to displace is that they work very well. They are abundant, relatively easy to transport, and pack a lot of energy into a small volume. The system for delivering and using them has been optimized over decades to meet a huge variety of needs. As new end uses emerge, such as artificial intelligence (which is poised to drive significant demand growth [PDF] for energy in the coming years), fossil fuels are often the most convenient resources to draw on.

Any clean alternative will meet stiff competition from these incumbents. Some have done so. For instance, kerosene lamps were the predominant source of light [PDF] in the late nineteenth century. They were displaced by electric light bulbs after Thomas Edison’s invention in 1883, and they continue to get better more than a century later: LED bulbs, which have been widely adopted in recent years, use 90 percent less energy and last twenty-five times longer than traditional bulbs.

Expanding and accelerating such progress depends on sustained government investment in clean energy science, technology, and market development. Only the boldest entrepreneurs are willing to take on deeply entrenched incumbents. Publicly supported innovators, however, can dream big without worrying as much about going out of business, giving birth to new paradigms such as LED bulbs.

Economics

The low market price of fossil fuels goes hand-in-hand with their technological versatility. Although the price fluctuates, the share of the average household budget spent on energy has generally declined over time in many countries. Recent innovations such as hydraulic fracturing (“fracking”) for oil and natural gas have helped prices fall even further.

Fortunately, some low-carbon energy resources have gotten cheaper even faster than fossil fuels. The price of solar panels, for instance, fell by 90 percent in the last decade, leading them to dominate new electricity generation worldwide. Lithium-ion batteries are now following roughly the same price trajectory. Low-carbon growth pathways to meet the demand created by artificial intelligence have become increasingly viable in many locations.

Creative public policies will be required if additional, needed clean technologies, such as geothermal and nuclear power, are to join this parade. At the same time, the real cost of fossil fuels, including the cost of climate change, should be incorporated into their price, a step most governments have been reluctant to take. 

Politics

The political power of the jurisdictions and organizations that benefit from fossil fuels’ extraction and use reinforces their technological and economic strengths. Saudi Arabia, for instance, relies on oil revenue for the bulk of its national budget and stands up for that interest in international politics. In the United States, Congressional representatives from Texas (oil), West Virginia (coal), and Michigan (cars) famously look out for their industries’ interests.

The costs of climate change are much more widely distributed than their benefits. This asymmetry creates a classic collective action problem for public policy. The defenders of the status quo are far more motivated than those who seek to change the system. But, as climate-related damage to societies and ecosystems has become more visible, public support for clean energy has grown.

Once clean energy establishes a beachhead in the market, a self-reinforcing cycle of stronger policy could take root. New centers of economic activity, where new, clean-energy industries are being built, could emerge to counter the influence of the old order.

Culture

The final big explanation for fossil fuels’ staying power lies in human habits and beliefs. The existing energy system makes possible ways of life that many people value and which they are reluctant to put at risk. In the United States, for instance, the gasoline-powered automobile made suburban living and interstate travel relatively easy and cheap, enabling a popular culture that is now several generations old.

Clean technologies that fit the expectations of existing dominant cultures are more likely to catch on and displace incumbents. Electric vehicles (EVs) in the United States, to extend the example, will be adopted by American suburbanites much more quickly if they can travel long distances on a single charge and recharge quickly. Not surprisingly, EV companies are hard at work trying to meet those consumer demands.

Over a longer period of time, cultural change could also allow societies to embrace clean technologies more easily. If, for example, working from home becomes more highly valued, consumers could look for different qualities in transportation technologies than if they were commuting to work every day by car.

Conclusion

One might justifiably look at the growth in fossil fuel consumption and weep. The world is not making much progress at cleaning up its energy system. But against this dark backdrop, some silver linings that ought to provide hope can be found.