Rupert Davor
September 16, 2024
Six days after the presidential election in November this year, the annual United Nations climate change talks will be held in Baku, Azerbaijan. Unlike an election, no one is holding their breath. Baku will be the twenty-ninth in the series. Climate change often attracts gatherings of world leaders like no other. When the President of the United States shows up, so does everyone who counts. These events often represent milestones in the ongoing progress of global climate action. The first was the 1992 Earth Summit in Rio, attended by President George H.W. Bush. Then came the Kyoto Protocol, and President Bill Clinton shrewdly sent Vice President Al Gore to Japan. The 2009 Copenhagen climate summit, attended by US President Obama, has faded into memory; it was then that China, along with India, Brazil and South Africa, vetoed a binding climate treaty that was approved in 2015 The redemption of the 2016 Paris climate agreement (President Obama again).
Yet the only year that matters for climate realism is 2006, the year of the leap, when China’s carbon dioxide emissions surpassed those of the United States. This helps explain why China exercised its veto power at the Copenhagen climate summit three years later. By 2019, U.S. carbon dioxide emissions were down 875 million tons from their peak in 2005. During the same period, China increased by 3.511 billion tons. A twelve-year decline in U.S. carbon dioxide emissions was offset by a three-year rise in Chinese emissions.
Source: https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions
This has led to a reality check on U.S. climate policies pursued by Presidents Obama and Biden. What the United States does or doesn't do in terms of the amount of anthropogenic carbon dioxide it pumps into the atmosphere is declining in importance. The emissions math supports solipsistic climate activists’ claims that unless the U.S. cuts emissions to zero, Americans will face climate disaster in all its forms. But here’s the rub: While U.S. emissions are declining rapidly as a share of global emissions, the negative economic impact of climate policies on the U.S. economy, jobs, and Americans’ living standards is growing.
The United States could learn from the example of the UK’s poster child for climate leadership. When Congress passed the Climate Change Act in 2008, it was the first major economy in the world to adopt binding emissions reduction targets. , the target was raised to 100% by 2050, and the Biden administration also adopted this target in 2021. Huge subsidies for wind and solar power, funded by consumer taxes rather than taxpayers; and anti-coal regulations, a strategy also pursued by the Obama and Biden administrations.
As a net-zero emissions laboratory, the UK's renewable energy experiment provides clear evidence that wind and solar increase the cost of electricity. While the cost of coal and gas used by UK power stations was flat between 2009 and 2020, residential electricity prices in the UK soared 67% to 17.9p (23.4 cents) per kilowatt-hour (kwh) – 75 above the average % In 2020, U.S. households paid 13.5 cents per kilowatt hour. These increases are due to a nearly tripling of environmental and social taxes, as well as increased infrastructure spending needed to connect distant wind farms to where people actually live and work.
Forcing electricity customers to pay for additional grid infrastructure, as well as costs to make up for the intermittency of renewable energy when the sun is not shining and the wind is not blowing, could make renewable energy incredibly profitable for investors. The UK's top six energy companies received an average price of £112.81 ($147.78) per megawatt hour (MWh) from their renewable energy portfolios between 2009 and 2020, compared with an average price of £56.22 per MWh for their coal and gas Twice the pound ($73.65) – thermal power plant. Renewable energy is incredibly profitable, meaning that in one year (2017) the profit from renewable energy was £54.93 ($71.96) profit Above average £52.47 ($68.74) per megawatt hour price per megawatt hour the Big Six earn from their thermal power plants.
Aggressive use of carbon taxes to punish fossil fuel generation and force coal off the grid (“powering the coal of the past”) resulted in the Big Six taking a £1.603 billion ($2.1 billion) hit on their coal and gas power stations in 2017 and write-downs. In 2009, the UK had 18.6 gigawatts (GW) of non-intermittent (i.e. reliable) generation capacity for every 1 GW of intermittent (i.e. unreliable) wind and solar. Eleven years later, this figure has fallen to 1.7 GW of uninterrupted capacity for every 1 GW of wind and solar generation, a dangerous level that will worsen unless the UK abandons net zero emissions.
To try and solve the intermittency problem of wind and solar, the previous government created a capacity market so that power stations were paid for providing capacity on demand. Capacity markets have proven to be an extremely expensive way to generate electricity. In 2020, electricity consumers paid an average of 224.31 pounds ($293.85) per megawatt hour to Germany's Uniper for electricity from its coal-fired power plants. This explains one of the reasons why the power generation cost of grids dominated by renewable energy is relatively high. It requires two parallel generation systems – intermittent renewable energy and fixed backup generation. This is reflected in the deteriorating capital efficiency of the UK grid. Between 2009 and 2020, electricity generation per gigawatt fell 28.5% compared to 11 years ago due to an influx of wind and solar power.
Producing less energy with more capital is the essence of the energy transition. This reversed the pattern of economic growth since the onset of the Industrial Revolution. Increased capital productivity (getting more out of fewer resources) as well as higher labor productivity and product innovation are key drivers of long-term economic growth. In a capitalist economy, capital, like labor and other inputs, is a real cost. However, the metric commonly used to compare renewables and uninterrupted power stations, the levelized cost of electricity, rules out the negative impact of adding more renewables on overall system capital efficiency – the reason why renewables are claimed to be cost-competitive One is to treat it with a pinch of salt.
Having more renewable energy will not only drive up costs but also reduce the value of the electricity it generates. Since renewable energy has no fuel input costs, wholesale electricity prices tend to be zero on days with plenty of wind or sunshine. The way the wholesale electricity market works is that all generators supplying power to the grid at the same time receive the same wholesale price. The impact of renewable energy on electricity prices is new investment that is killing traditional capacity.
So when Vladimir Putin began driving down gas prices ahead of his invasion of Ukraine in February 2022, Britain's decision to move beyond coal power left the country dangerously ill-prepared. The cost of coal is more than five times higher and 72% higher than the cost of coal, plunging the UK into its first energy crisis since the 1970s.
The Obama administration has also waged a war on coal through environmental regulations. There is only one reason why the United States escaped a similar fate to Britain. In 2008, the price of natural gas for power generation reached $9.26 per thousand cubic feet (tcf); in 2012, the price had dropped to $3.54 per TCF. This has nothing to do with Obama’s vision and everything to do with fracking and the shale revolution. Despite falling prices, coal remains the cheapest source of fuel for electricity generation. Unlike natural gas, coal does not require specialized pipeline and storage infrastructure, in addition to being cheaper. For these reasons, coal is the energy source of choice for countries in the Global South, including China, which has a coal-based economy.
Although coal consumption in the United States peaked in 2005, China's coal consumption surpassed that of the United States in 1985. ton. The United States is not burning coal, but China is. For every ton that the United States stops burning coal, China will burn two and a half more tons.
Source: https://ourworldindata.org/fossil-fuels
In terms of policy, China has adopted a strengthened energy realism policy. Its bureaucrats are even beginning to reconsider renewable energy. Contemporary historian Adam Tooze wrote in the Financial Times in July that there was a “worrying” gap between the pace of China's renewable energy investment in recent years and its future plans. “Although China's solar and wind energy industry will add nearly 300 GW of new installation capacity in 2023, the National Energy Administration predicts that the annual new installation capacity will be slightly more than 100 GW in the future.” Tuz believes that the reasons for the economic slowdown One is that Chinese energy officials pointed out the need to “operate the pricing system more smoothly to ensure the reliability of the renewable energy system.” If true, this would suggest that China’s Communist Party bureaucrats understand the disruptive economics of wind and solar energy better than their Western counterparts.
The current architecture of the UN climate process is designed around China's needs. The rejection of a climate treaty with legally binding emissions targets at the Copenhagen climate conference led the Obama administration to incorporate Sinatra's climate action doctrine into the 2015 Paris climate agreement: signatories would have their own way. China's nationally independent commitment in the agreement aims to achieve “carbon neutrality” by 2060. Benefit. There’s a lesson here for U.S. political leaders: If the United States wants to win the geopolitical competition with China, it also needs to abandon the Biden-Harris net-zero target and embrace energy realism.
Rupert Darwall is a senior researcher at RealClearFoundation and author of The folly of climate leadership: Net zero emissions and Britain’s disastrous energy policy.
This article was originally published by RealClearEnergy and provided via RealClearWire.
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