The Intergovernmental Panel on Climate Change’s Fifth Assessment Report paints an authoritative picture of the dire consequences if we fail to rapidly curb our greenhouse gas emissions.
Solving this will require many different actions in parallel: to curb energy demand, reduce the greenhouse intensity of electricity production, shift transport to renewable electricity and renewable fuels, move heavy industry away from fossil fuel, curb land clearing, and reduce the greenhouse intensity of agriculture.
Mechanisms to achieve this include research and development (R&D) funding, sector targets, carbon pricing, liberal capital investment funding and authoritative information. Australia presently has these mechanisms, although the new government plans to abolish the latter three.
Some people, such as Director of the Copenhagen Consensus Center, Bjorn Lomborg, argue the best way to reduce emissions from energy production is to allocate most greenhouse-related funding to R&D.
This sounds plausible, but it is misguided. It is essentially an excuse to spend relatively small amounts of R&D dollars, ineffectively, while putting off until 2050 or later substantial and determined action to reduce greenhouse emissions.
The self-serving argument is even made that we need to dig more coal as quickly as we can in order to generate funding to support the renewable energy R&D. There are frequent appeals to “common sense” (such as change is “just not going to happen)”, despite the evidence).
Effective R&D needs to operate in parallel with industry development, and vice versa. The rise and rise of the photovoltaic (PV) (or rooftop solar) industry illustrates this point.
For 40 years, the production of solar photovoltaics was at a cottage-industry scale. Costs of PV modules remained high, despite R&D efforts. Then the German government decided to encourage the industry by instituting attractive feed-in tariffs, or payments, for the electricity produced by the modules. This stimulus led to rapid expansion of the industry, initially in Germany and later around the world. Other governments followed Germany’s lead, albeit at a smaller scale.
The German government’s support for solar markets led directly to a profound revolution in the industry. Although only a relatively small amount of solar was installed, it kick-started the PV revolution, causing a 50-fold increase in the scale of the industry over 2000 to 2010.
This led to a vast proliferation of PV-skilled scientists, technicians, production engineers, system installers, market analysts, investment managers and all of the other professions required to operate a large industry. There was also a very large increase in production scale, with consequent large economies of scale.
The industry became integrated worldwide, with well-organised supply chains at every point. The huge increase in integration, skilled people and know-how across the entire value chain from upstream R&D through production to end-use allows rapid price reductions. It also allows market-savvy allocation of government support dollars.
This pattern is typical of new industries: learning by doing in parallel with R&D. In the case of the PV industry, it has been observed that, over the long term, the cost of PV modules declines by about 20% for every doubling of cumulative sales.
The price of PV modules declined by a factor of four in the last five years. This gratifying development is having a dramatic effect on energy markets around the world.
Mr Lomberg and like-minded people frequently fail to recognise the large recent reductions in the cost of PV and wind electricity, and the consequent rapid deployment of these technologies at a scale that is significant in greenhouse terms. Views and opinions formed a few years ago are hopelessly out of date.
Rooftop solar electricity is now fully competitive at a retail level in most places around the world, apart from northern latitudes. PV is approximately cost competitive at a wholesale level in competition with new-build coal and gas power stations in Australia and most other sunny countries.
In 2012-13, PV and wind contributed 1.6% and 3.9% of Australia’s National Electricity Market generation respectively. For South Australia the figures were 4% and 27% respectively.
This is up from nearly nothing a few years ago. If current trends of wind and PV installation are maintained, Australia will have 90% renewable electricity by 2050.
PV and wind have immensely attractive attributes. They are available in vast quantities and will be for billions of years in most countries. They have minimal environmental impact, negligible greenhouse gas emissions, no security implications, and are made using materials that we could never run out of (for PV, principally silicon, oxygen, sodium, hydrogen, carbon, aluminium and iron).
If renewable energy is to dominate electricity production within a few decades, we need a willingness to abandon previous generation methods. In Australia’s case, this means fossil fuel; primarily coal. We also need evidence-led decisions by government to support the renewables industry throughout the entire value chain.
In order to overcome the incumbency of the fossil fuel industry, renewable energy targets are important – such as Australia’s 41,000 GWh target for new renewable generation by 2020. A carbon price of some kind is needed, which helps reduce carbon emissions in all sectors. On-going government supported R&D is also important, although progressively less so as R&D spending shifts to the greatly expanded private sector in coming decades.
You can read more coverage of the IPCC Fifth Assessment Report here.
Andrew Blakers is Director of the Centre for Sustainable Energy Systems (CSES) at Australian National University. He does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.