Yves here. Of course, as some readers are likely to point out, we, as in “those who like or need the conveniences of modern civilization” can’t not afford an energy transition if we want to have any prospect of keeping that. A more dire view came in our post, Preparing for Collapse: Why the Focus on Climate/Energy Sustainability Is Destructive. Key bits:
Daniel Brooks: Well, the primary thing that we have to understand or internalize is that what we’re dealing with is what is called a no-technological-solution problem. In other words, technology is not going to save us, real or imaginary. We have to change our behavior. If we change our behavior, we have sufficient technology to save ourselves. If we don’t change our behavior, we are unlikely to come up with a magical technological fix to compensate for our bad behavior. This is why Sal and I have adopted a position that we should not be talking about sustainability, but about survival, in terms of humanity’s future. Sustainability has come to mean, what kind of technological fixes can we come up with that will allow us to continue to do business as usual without paying a penalty for it?…..
It is conceivable that if all of humanity suddenly decided to change its behavior, right now, we would emerge after 2050 with most everything intact, and we would be “OK.” We don’t think that’s realistic. It is a possibility, but we don’t think that’s a realistic possibility. We think that, in fact, most of humanity is committed to business as usual, and that’s what we’re really talking about: What can we begin doing now to try to shorten the period of time after the collapse, before we “recover”? In other words — and this is in analogy with Asimov’s Foundation trilogy — if we do nothing, there’s going to be a collapse and it’ll take 30,000 years for the galaxy to recover. But if we start doing things now, then it maybe only takes 1,000 years to recover. So using that analogy, what can some human beings start to do now that would shorten the period of time necessary to recover? Could we, in fact, recover within a generation? Could we be without a global internet for 20 years, but within 20 years, could we have a global internet back again?
And now per below, we are seeing no one is even prepared to pay for technological fixes which at best will only someday slow the pace of global warming.
A small correction. Bruegel is a economic/policy think tank based in Brussels, and not an energy industry participant or specialist.
By Irina Slav, a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice
- A new report estimates the EU’s green transition could cost €1.3 trillion annually until 2030 and €1.54 trillion annually until 2050.
- The high cost of the transition may require higher taxes, subsidies, and potentially national green investment strategies.
- Concerns exist about public support for the transition due to rising living costs and potential harm to businesses’ competitiveness.
Climate finance is a white-hot topic right now. The COP2 delegates failed to agree on a generous enough deal for the transition in developing countries; in the U.S., project Veritas revealed that the EPA was funneling billions into climate activist organizations ahead of Trump’s presidency to ensure continued pressure on the government; and in the EU, a think tank put a price tag on the transition. The EU cannot afford it.
Bruegel, the Brussels-based energy outlet, published a policy brief this week focusing on what the EU needs to get to its stated goals of net zero and how much it would cost. It appears that, for these goals to be hit, the bloc would need to spend 1.3 trillion euros, or about $1.4 trillion, every year until 2030. After that, the price for the transition jumps to 1.54 trillion annually and stays this much until 2050.
The impressive amount of money that needs to be spent on the transition is divided into three categories by Bruegel: energy supply, energy demand, and transport. It may also be an underestimation by the EU itself—because it does not include all the costs associated with the transition, omitting, for instance, financing costs that could be quite significant in their own right. As Bruegel points out, “the cost of financing investment will be significant for cash-constrained agents, and public finances will need to step in with de-risking instruments to facilitate private investment.”
What this means is that the European Union will need to step up subsidies in all of its transition directions in order to motivate private investors to join it in funding the transition. That could be a tough job given the current context in transition technologies, which is one with subdued demand despite the strong government support in the form of subsidies.
Yet the European Union—as represented by its executive arm, the Commission—also omits other costs from its financial plans for the transition. It does not include the manufacturing costs associated with that transition into the budget, and these could be steep as well. As Bruegel notes, the buildout of local manufacturing capacity in line with a policy that requires 40% of European transition tech to be made in the bloc would require additional investments of 100 billion euros annually between this year and 2030.
It sounds like the tab just keeps getting items added to it, but who is going to pick it up and how they are going to afford it is becoming increasingly unclear. Of course, on the face of it, the payers are perfectly clear: governments and private investors. It is below this face that things get interesting—and challenging.
The government receives money from the taxpayers. So, the government part of the transition tab will be, in effect, picked up by people who pay taxes—and who vote. But with the transition about to get even more expensive than it already is, European governments would need to find more money than previously expected in order to do their bit for the common green good, and that would have to mean higher taxes—while trying to incentivize taxpayers to adopt greener and more expensive lifestyles.
Per Bruegel, “There will be a great need from 2025-2030 to deal with the complex distributional implications of buildings and transport decarbonisation, from which emissions reductions have so far been relatively small. Avoiding political backlash may involve offering financial incentives to households in return for adopting costlier green technologies.”
This is quite a conundrum because it effectively comes down to European governments taking money from people with the one hand and giving them some back with the other, all for the purpose of reducing the emissions of carbon dioxide by 55% from 1990s levels by 2030 and then achieving net-zero status by 2050. Judging by the latest political events in Europe, notably Germany, Romania, and now France, it is not going well.
It might get even worse in the near future because Bruegel has suggestions about how to ensure the money for the transition is there: by effectively binding all national policies with the European Green Deal. The EU is currently seeking to achieve its transition goals via a scheme featuring national energy and climate plans, or NECPs. Per Bruegel, in order to be effective, NECPs “must be turned into real national green-investment strategies, providing a point of reference for investors, stakeholders and citizens in making investment decisions.”
“Governments should be obliged to set out in their NECPs a detailed, bottom-up analysis of their green investment needs, and an implementation roadmap with clear milestones or key performance indicators (KPIs),” the think tank also wrote, basically suggesting that transition policies should be turned into the focus and basis of all national policies.
While that might be possible, if difficult, to do with all pro-transition governments across the EU, the implementation remains dependent on over a trillion euros in investments every single year between now and 2030—and Europeans are already angry enough with their rising cost of living. Bruegel calls the criticism of EU climate policies populism and accuses critics of making false statements about the damage that the transition would do to the EU’s competitiveness. Yet evidence points in the opposite direction: the transition is making life in the EU a lot more expensive, destroying European businesses’ competitiveness and even threatening their survival. The impossibility of finding enough money to fund the transition could be a blessing in disguise.
This article quite seriously mischaracterises the Breughel report. The report highlights uncertainties and potential underestimates of the costs of the transition in some detail but also concludes:
and:
When you consider that last year the EU spent over 600 billion euro in importing oil and gas alone, the capital investment needed to displace this alone makes it not just a viable investment, but a highly desirable one in purely financial terms.
The biggest cost of climate change will not (as the report points out), be the transition itself, but the cost of building in resilience to infrastructure to deal with climate events that are now more or less baked in. These costs dwarf the cost of zero carbon infrastructure, much of which is cheaper than the alternative anyway – over the time period the cost of just keeping things ticking over runs into many trillions.
The final paragraph of the article is simply untrue. It is dependence on natural gas which is destroying Europes economy. As retail electricity prices are set by the most expensive input, this is keeping prices high, even while there has been a massive transition to solar and wind (its also making vast profits for the solar and wind industry). Transitioning away from natural gas for electricity, industry and home heating to cheaper alternatives is probably Europe’s only industrial hope and the only way to keep the lights on.
In reality, Europes huge mistake goes back to the 1990’s and its implicit decision to allow natural gas to replace coal as its primary energy source. Many of us pointed out at the time that this was based on bad economics as well as bad environmental policy. It seems weirdly ironic that somehow or another the high price of natural gas is used to argue that we can’t afford to invest in cheaper, cleaner alternatives.
“The biggest cost of climate change will not (as the report points out), be the transition itself, but the cost of building in resilience to infrastructure to deal with climate events that are now more or less baked in. ”
So so so true.
I have to work on a risk assessment in my area, related with climate change impact, and my pet peeve is heat and drought. The lack of knowledge of what is underground is astounding here in my neck of the woods. And what would cost to build some resilience. Uh, oh!
Don’t you just love these bland sounding broad terms that mask all the consequences?
“We have to change our behavior”
So, to reduce our energy consumption, folks should just stay home. Travel on holiday consumes energy right? So fewer trips to closer destinations makes sense.
And the tourist industry takes a hit.
Manufacturing clothes consumes energy, so folks should not buy as many and be content with just a few outfits and only replace them as they wear out.
And the fashion industry takes a hit.
Just two examples of consequences buried under bland terms.
In the meantime the energy transition results in a net increase in the cost of energy where EU energy prices are already relatively high. So folks can’t keep their homes as warm in the winter.
And it’s all for your own good, people. Pipe down and vote like we tell you and pay higher taxes and just take it.
Not going to happen. What will happen is unrest, and worse.
If this wasn’t such a life-and-death issue it would be comical. All of these plans completely ignore the lack of industrial base and skilled labour force needed for implementation. It takes 10 years to train skilled machinists, 20 to train engineers and scientists. Money is the least of the problems here.
I see no effort to rectify this, if anything skilled labour force is squeezed even further for short term profits. Ironically, China is the only entity with some capability to pull this off. but rather that cooperating, EU and US are engaging in trade wars that will slow down the energy transition even further.
https://news.cgtn.com/news/2024-12-09/China-s-new-energy-passenger-car-sales-surge-in-November-1zcfACDm6Pe/p.html
December 9, 2024
China’s new-energy passenger car sales surge in November
China’s new-energy passenger vehicle market continued to experience strong growth in November, with retail sales reaching nearly 1.27 million units, according to industry association data released on Monday.
This figure represents a 50.5 percent year-on-year increase and a 5.9 percent rise from the previous month, as reported by the China Passenger Car Association (CPCA).
In November, production of new-energy passenger vehicles reached about 1.48 million units, reflecting a 49.3 percent year-on-year increase and a 7.1 percent rise from the previous month.
The penetration rate of new-energy vehicles – an indicator of their popularity – in the domestic market climbed to 52.3 percent last month, according to the data.
During the first 11 months of the year, total retail sales of new-energy passenger cars amounted to 9.59 million units, marking a 41.2 percent increase from the previous year, the CPCA data showed…
It seems to me the passenger car, even an EV, is NOT going to solve climate issues. More vehicles for more people equates to more expensive and polluting roadway construction. More expanded use of land for housing. More. . .
The solution is radical conservation by the golden billion. That is where the consumption/pollution begins.
The article starts with stating several “facts” without links… one whopper stood out:
What did this mean? I dug a bit and found a fair-and-balanced source at FOX News:
Taken at face value you may get the impression this is $2.8B for lobbying or something like paid BIPOC or trans climate activistsand demonstrators. Let it suffice to say the are a lot of BS programs out there, but without knowing the “who, what, where, when and how” grants are awarded and for what purpose, this reeks of garbage. If the grants are for modern heating and cooling or weatherization in disadvantaged areas, this is useful. Perhaps some is for studying the siting of plants near communities (think of Louisiana’s cancer corridor). Who knows? Does Project Veritas or FOX give an honest summary?
Stating this as fact without context or detail amounts to fake news.
I’d thought using OilPrice agitprop on AGW-mitigation was being a nudnik to foment commentariate contentiouness & simply ignored Rick Berman style BS, like Hillary’s TD Bank/ TransCanada as rich white people learned the hard way: it wasn’t JUST we the peons, they’d red-lined into sacrifice zones (Manhattan & NOLA?) Verbatim gaslighting to gavage GE Monoculture, geo-engineering, SMR, bridge/ bio-fuel & carbon sequestration SCAMS are likely about to kill a few billion, by delaying already effective & job creating renewable, efficient, smart & regenerative alternatives they dread?
Not everybody wishes to live like a 1970s jet set Honky Hegemon yuppie!
And in the (slightly) longer term, “a famous, decades-old warning from MIT about the risk of industrial civilization collapsing appears to be accurate based on new empirical data. “:
https://www.vice.com/en/article/new-research-vindicates-1972-mit-prediction-that-society-will-collapse-soon/
Ian Welsh has a lot of good articles on this topic:
https://www.ianwelsh.net/category/age-of-war-and-revolution/civilization-collapse/
The “Club of Rome” study was not very popular at the time. A small subculture of researchers has kept it going.
Thanks for the link, Jorge.
An example related to the energy-transitions, the costs and who pays might be Northvolt.
https://www.euronews.com/business/2024/11/22/northvolt-files-for-bankruptcy-in-major-blow-to-european-ev-sector
Short story:
Technology bought from Asia to EU and Americas, machinery and hired in expertise. The outcome might also indicate what difficulties there might be when re-shoring industry.
So far very little production and huge write-downs for investors. Some early investors and the founders made fortunes. In Sweden some of the early investors were political heavy-weights, possibly unimportant detail but possibly relevant to how funding was secured.
The ones who appears stuck with the bill so far appears to be pension-funds, a few government bodies and suppliers who appear to not get paid due to chapter 11 in US and possible restructuring in Europe.
The limited liability will work for the big limited liability company – it looks likely that investors/owners lose a lot of their investment but nothing more. However, the small suppliers face a different situation – they often had to provide personal guarantees to get trade-credits and to get bank loans so for them the fallout might be personal bankruptcy if/when their biggest customer stops payment.
The above might indicate a problem with limited liability and that the cure is probably not to make it easier to create limited liability companies while decreasing reporting and audit-requirements for small limited liability companies.
Making it easier to create limited liability companies while decreasing report and audit-requirements has made it easier to get away with financial shenanigans and more difficult to get trade-credit and bank loans. But hey, who could have predicted that?
I see no desire or willingness or for the most part awareness that a change in behavior is necessary if the worst effects of climate change are to be ameliorated. Avoiding the Jackpot? Impossible. Nothing is going to fundamentally change until there is a catastrophe so shocking that even the lotus eaters pay attention. Perhaps not even then. Growing up in rural America in the 1940s, I have some notion of what that change in behavior might involve. Most do not. Our children and grandchildren will not thank us for the world we have given them.
Growing up in rural Michigan in the 50s & hearing stories from my parents & grandparents about the great depression (mother taught 8 grades in a one room schoolhouse), I also have a notion of the behavior changes necessary to avoid the worst of the Jackpot.
Voluntary or involuntary simplicity is coming, and soon- if we somehow avoid nuclear omnicide.
“Can Europe Afford Its Energy Transition?”
An important question and fine article. An approach to an answer could from from looking to national wealth and income levels. Wealth and income levels through Europe strongly suggest energy transition can be afforded, rather easily afforded, but the problem is intent even from “Greens.” European carmakers had years to transition to a range of electrics, avoided even ample research and development investment on the transition and Greens are doing all they can to make sure Chinese electrics are not sold in Europe.
The problem does not seem what can be afforded, but beyond slogans an unwillingness to spend on transition.
Low carbon energy is here and more is coming.
Technology got us into our mess, tech will play a major roll in getting us out of it.
This came across my feed this am.
The growth of renewables is staggering
This video doesn’t discuss costs, but they have dropped to almost $.10 per watt at the factory. It was about $.20 for many years.
As I’ve mentioned, the largest three lithium battery companies, are rapidly implementing sodium ion instead of lithium ion. They expect a 25% cost reduction in 2025 and 70%+ by 28/29.
These are truly game changing solutions.
Not a long video (14 minutes)but it does a good job of showing the production advances and its growing faster than expected.
Recycling is also discussed and correctly explained that it is a mature industry, and as the scale of retiring increases it’s ready to address that.
https://m.youtube.com/watch?v=FuJw09G5YIE
Forgive me, but I am unable to comprehend the video without specific reference links for verification and clear explanation.
There are reference links right under the video.
This channel also gives more detailed links and references to patreon subscribers. Its one of the few that does. Despite the somewhat annoyingly patronising tone of the presenter, this is one of the best channels on YT for upcoming energy trends.
Not sure I understand
The website is Just have a think, 600,000 subscribers
Some of the links he refers to
https://iea-pvps.org/trends_reports/trends-in-pv-applications-2024/
https://flowcharts.llnl.gov/sites/flowcharts/files/2024-10/energy-2023-united-states.png
https://www.eia.gov/todayinenergy/detail.php?id=55419
He interviews one of the main authors of the IEA article.
Thank you so much for explaining how to use the video for references. I almost never use unlabelled “youtube,” for lack of time, so I had no idea what to look for when I tried. I will now click on the kindly provided references.
Again, thank you.
Done with the video and references. The references were just what I needed. I needed and appreciated the help given, and I know better now how to explore a “youtube” suggestion.
Why no mention of the $7tn in tax subsidies to the fossil fuel industry, then there are all those to the automotive and electronics sectors, all massive consumers of energy.
The question is not of cost but of where the subsidy is directed and at the moment it is going the wrong way
And what about the “defense” industry, which uses stupendous amounts of energy for ultimately destructive purposes and is a giant polluter to boot?
The sheep found a break in the fence and wandered off to new pastures. Their grazing has despoiled the formal gardens and golf courses. The Overlords have engaged sheepdogs to round up the sheep behind secure fences
The Defence Contractors including the 25,000 strong private army the CIA has and 60,000 armed IRS agents are the sheepdogs
Here’s what is happening with Solar PV in California:
https://www.latimes.com/environment/story/2024-11-24/california-has-so-much-solar-power-that-increasingly-it-goes-to-waste
(Use Text Reader function on your browser to bypass subscription notice.)
This has been expected. To produce enough solar power to cover the night you have to produce more during the day than you can use. You need more during weather events, more for winter etc.
That solar is curtailed during this time is normal now because installing storage hasn’t keep pace with how much solar has been produced.
That is changing with the price of BESS storage ( battery energy storage system) dropping fast and is forcasted to drop even more and faster with LFP and sodium taking over the majority of the BESS systems.
Storage will grow dramatically if of course the idiots in the white house allow it by not putting huge tariffs on batteries.
Yes, that is the plan with the LA DWP:
https://www.latimes.com/environment/newsletter/2024-12-05/column-l-a-s-massive-new-solar-farm-is-cheap-and-impressive-more-please-boiling-point
It’s clear to me that one of our biggest impediments is that accountants have taken over and every problem is seen through a ‘cost’ lens. If only we can amass enough of the commodity called money, we can fix our problems. So that is where we must focus.
First, money is not a commodity it is a debt instrument. Second it has no value other than the need to repay it – either as taxes or interest. And third, government can create as much of it as it likes to the point that all resources in the economy are fully utilized, which is as good as it gets.
Money is created by government for future taxes (spending first and taxing second) and by banks for future loan repayments. The first is public money and the second is private money. The finance sector telling us we need its private ‘investment’ is entirely false. All needed investment can come from government at zero finance cost. And if government needs additional resources it can prise them from the private sector using taxation. The result is a government run economy, which is always what we fall back on in time of war. Whether the current energy crisis qualifies for a war-footing is a political choice. And if it is, the first thing to do is shut out the financial sector.
Then there is the management nonsense – goals, targets, all the management paraphernalia that already diesn’t work in the private sector, today. Once you start on such a massive and intertwined project as an energy transition you have no idea of a certain path – some things will bear fruit and others won’t. To go into it with a rigid plan with the notion that you will make no mistakes and always be on the look out for cost-cutting efficiencies is just silly. The only way forward is continuous assessment and not wasting resources on things that show no promise.
I agree that changing the way we live is the answer and business as usual is the enemy, especially relying on finance.
“the cost of financing investment will be significant for cash-constrained agents, and public finances will need to step in with de-risking instruments to facilitate private investment.”
This should add up a lot of public money just to facilitate private investment. Another pickpocket scheme.
The finance industry in this neoliberal economic system should revel in loads coming their way for nothing in return – particularly anything that positively enables a transition.
Isn’t ‘de-risking instruments to facilitate private investment’ another way of saying to private investment something like ‘frame whatever investments you make in a way that looks transitional and you will have guaranteed risk-free returns – better yet, borrow your investments to leverage even further – just as long as your interest payment is lower than your guaranteed citizen backed investment – you can’t lose – win win.
Don’t get me wrong but, it would be nice to get the huge overhead built into these complex fictitious capital structures removed so that, say, more efficient translation of monetary capital into physical capital is produced in aide of transition. This does not even include all the military expenses and collateral geopolitical expenses baked into the edifice
http://thehonestsorcerer.substack.com/p/europes-downward-spiral-accelerates
Thanks for that URL which was v interesting as was his link to Consciousness of Sheep
I wish I knew what these zealots are intending because I see only disastrous outcomes. If you want to reduce energy usage you reduce plastic packaging and produce more locally selling food unpackaged. You reduce car ownership. You electrify public transport and build out trams and rail.
England has highest cost rail in Europe but has reduced emissions more than any EU country by destroying industry. That is why EU figures look worse post-BreXit.
Germany has disastrous public transport with major overcrowding and unreliability. It packages everything in plastic and produces more plastic trash than any other EU country.
The policy goes along an axis designed to produce a different goal from the one stated. It is to reduce living standards for most people. German airports are facing passenger collapse unlike others on EU because of huge taxes and airport fees. Airlines are cutting schedules and Ryan Air is closing many routes especially in East.
Business passengers are not travelling as corporates review their budgets and airlines are losing money – or else business travellers fly from Poland or Netherlands or Paris or London to circumvent German politics
The market is now so distorted. Immigration boosts energy usage as entrants arrive from low energy use countries to one where everything is energy consuming – even drying clothes.
There is so little logic that it appears to be another Cult which requires forced conversion to make the Cult leaders happy. Europe cannot survive its climate without energy – it is damp and cold – it is a small landmass with huge population 300-550 million and that requires transport and food and income generation.
Sitting in an office like Berlaymont with photocopier and desk does not indicate knowledge of how that Audi or Mercedes moving motormouth to TV studio to opine is still diesel and not electric nor why Germsn politicians use government planes to fly to football matches inside Germany ! Especially when mortals are told to use trains.
The agenda is not the one propagated