Beneath the despair at the lack of serious global action on climate and more broadly on sustainability, there is a quiet but exciting revolution happening on the ground. While the politicians talk, the market is preparing for the inevitable failure of the old economy by starting to build a new one. That’s why I’m excited to be part of this RenewEconomy venture. While there is a great deal of focus on the failures of our global political system, there’s a bunch of people out there who, as Tom Friedman in the New York Times puts it, didn’t get the message that we’re not acting, didn’t get the message that the old economy is fighting back, didn’t get the message that we’re sticking with our old ways.
That’s the thing we often forget about people and markets – no one is in charge. Not government, not the financial markets, not even the corporate sector. While we focus, for good reason, on all the bad sides of Wall St greed and stupidity along with the frustrating corporate corruption of our political process, we forget there are millions of people out there who are ignoring all that and are instead hard at work creating the future. These people know that, ultimately, the world is driven not by politics, but by physics. That if you increase the thickness of the earth’s greenhouse blanket it gets warmer, despite those who vainly wish it weren’t so. They know that while our political processes can be painfully slow, we are not as a species stupid and we will respond. They also know that when we do, fortunes will be made, new industries built and billions of people will lead better lives for it.
So they want to be part of the action. They want to build a new energy infrastructure, they want to transform personal transport, they want to dramatically change the way we grow our food, build our homes and use our energy. Whereas many of us look at the rapidly worsening rate of climate change and see disaster, these people see further scientific evidence that the market will just have to shift.
The exciting thing about this moment is that after decades of talk and forecasts, we are now entering a period of reality hitting the ground. Even the IEA, for a long time a resisting, conservative force aligned to the fossil fuel industry’s world view, is now imagining a world where solar could provide over 1/3 of end energy use after 2060 at an affordable cost. The opportunity in such solar growth is mind boggling in scale. Perhaps more importantly we are seeing dramatic growth today in installed solar with many utility scale solar renewables projects already in operation and many more under construction.
Prices are falling as expected with such dramatic growth and with continued price reductions we will see grid parity as an emerging reality for solar in many countries over the next few years. While such rapid change will inevitably lead to a chaotic market, with volatile share prices and bankruptcies alongside the rapid growth, the trend is clear and such high-risk growth is where markets come into the own sorting the good from the bad.
But aside from these and other exciting technologies there is a deeper and more important transformation going on, that’s why the name RenewEconomy is so appropriate for this site. As I’ve written before, the Occupy Wall St movement and the debate it has sparked suggest there is something much deeper happening. It is now clear that the challenge we face is not a technological one but a human and economic one. Our global economic model, framed around the delusion of the possibility of infinite growth on a finite planet, is not delivering. It is destroying the life support system of humanity, the ecosystem, and it is no longer delivering improved quality of life for those in Western countries who have their basic needs met. The result will not be a gentle process of change but a crisis driven transformation more akin to a war mobilisation than anything most people are expecting.
Another indication that change is well underway is that investors are observing the emerging crisis and resulting transformation of the global economy that I write about, and seeing an investment framework. This view is argued by Paul Farrel in this piece on WSJ’s Market Watch where he says “Wall Street’s mutant capitalism is destroying our world. We must make a choice. Save Wall Street? Or save the world? We can no longer do both. Only one will survive.”
Many argue the change coming is not this dramatic, others that it is even more so. Whatever the result, it’s a debate no one can afford to ignore and in these pages I will be exploring these deeper questions alongside the exciting market and technology developments. So welcome to RenewEconomy and welcome to your future.