Climate change concerns mostly emanated from rich countries—which got wealthy by burning fossil fuels—and are primarily framed around their interests rather than those of the less privileged.
Last year, France, Germany, the UK and four other European countries said that they would end public support for certain fossil fuel projects abroad. At November’s COP26 conference, 39 countries and banks pledged to end new funding for the sector by the end of this year. In 2018, Ireland moved to divest from all fossil fuels. A database says 1,485 institutions with assets of over $39 trillion have now committed to some form of fossil fuel divestment.
In August, however, oil-producing Nigeria’s deputy president Yemi Osinbajo expressed his concerns: “For countries such as my own, Nigeria, which is rich in natural resources but still energy poor, the transition must not come at the expense of affordable and reliable energy for people, cities, and industry.”
The Energy for Growth Hub, a high-level research network, agrees. It said in October that in a “rush to demonstrate their own commitments to climate mitigation”, promises of “equity” were being undermined by donors. “Prevailing definitions of climate justice rarely fully capture the priorities, challenges and perspectives of low-emitting energy-poor countries.”
These views should be taken seriously, as should those from poorer people in richer countries suffering the consequences of energy policies that contributed to electricity prices increasing 230 percent in Europe from 2019 to September 2021.
Industrial-scale hypocrisy
Rather than a smooth transition to a cleaner, cheaper future for all, sufficiently rapid decarbonisation to all-but eliminate extreme risks from rising temperatures is set to be destabilising.
That is partly as it involves a series of sensitive trade-offs in a world where roughly 3.45 billion people still do not have access to reliable electricity. That means regular power outages for life-saving health, water, heating, and cooling systems, among many others.
Blackouts kill and bring chaos on the rare occasion they hit rich countries, though some experts think they are set to become more common. For almost half the world’s people, they are already a regular deadly reality.
Not least among the trade-offs is that it is not at all clear that poorer countries can rapidly escape such precarity without extensive use of fossil fuels, and without increased wealth they will keep suffering from the fatal effects of poverty—including exposure to the natural elements and the widespread use of toxic household fuels.
Industrialised nations finally looking to clean up their act after decades of blowing greenhouse gases into the atmosphere therefore appear myopic about the impact of some of their policies on poorer countries and citizens.
It is unchallenged that the vast majority of emissions came from developed nations as they engineered their rise to riches. Now, Nigeria and others want to emulate them. For sure, no European government would be so hypocritical as to explicitly deny a country the right to develop. But as well as divesting from fossil fuels, historical emitters have also been sluggish to send funds southwards for decarbonisation. Therefore, in practice, they are hypocritical.
Though this is what the likes of India have been saying, plenty of rich country voters concerned about climate change would still stop and think before signing up for higher taxes to help a country of 1.4 billion people switch from coal to solar. Another tricky trade-off. Unless, that is, you are wealthy enough to not worry about the higher taxes.
Rich man’s world
The simple truth is that the affordability of a new technology—or indeed an ideology—is tied to wealth. For someone who makes half a million dollars a year, buying a Tesla (prices start at $40,000; bottom of range competitors are now under $30,000), putting in a solar roof and buying a battery pack is affordable. For someone earning a tenth of that, it makes zero economic sense—and this is by no means just an issue for those who live in semi- or non-industrialised nations.
There are millions in the rich world who do not make anything close to $50,000 a year, let alone half a million. Many of them still get their electricity from coal-fired power plants and drive old VWs and Renaults.
They cannot afford steep energy prices or a new electric vehicle. This means they may well not prioritise the medium-term goal of slowing the increase of average global temperatures because they—like billions of others across the globe—have more immediate concerns, such as staying warm during the winter. Let us not forget, although heat-related deaths are rising with temperatures, cold still kills far more people.
This is where the divide between political discourse and reality gapes wide. It is also where it becomes clear that, actually, climate change is largely a rich people’s game, even if the players often use the downtrodden for campaigning purposes by casting them as the prime victims of its impact.
Powerful prices
In Europe, the first results are in: the energy crisis that started hitting the continent last autumn amid a global six percent rise in electricity prices was caused, according to the International Energy Agency (IEA), by rebounding demand and cold winters. The result was an all-time high in carbon emissions from the electricity sector as production from coal also hit a record peak.
The situation was exacerbated in Europe by low gas inventories and below-average wind output. “Average wholesale electricity prices in the fourth quarter of 2021 were more than four times as high as their 2015-2020 average,” the IEA said about the continent.
“Ultimately, policies focusing exclusively on emissions reduction have compounded the situation. As the winter season sets in, soaring prices heighten inflationary pressures, constrain post-Covid recovery objectives and exacerbate the energy poverty predicament of millions of Europeans,” said the European Union Institute for Security Studies last month.
The situation has, so far, caused soaring electricity bills and, for example, slashed production of aluminium. Aluminium is versatile and shortages will hit lots of industries. Fertiliser production has also been affected, with two UK plants closing temporarily due to high gas prices, and warnings issued about crops.
In the UK, households could see electricity prices rise by more than 50 percent this year. Utilities are reportedly sinking in droves because of the gas spike, creating £3.2 billion bill to cover the costs associated with the busts.
Low energy Europe
Across Europe, people are struggling with surging bills despite milder weather reducing demand and stronger winds increasing turbine output. The result has been a splurge of government support, much of which amounts to the fossil fuel subsidies decried by climate campaigners.
In Germany, electricity prices rose by about 30 percent in 2021. The government had to slash renewable energy taxes to help people cope. Still, it has shut down half of its remaining nuclear power capacity and plans to phase the remainder out this year, insistent that low-carbon nuclear has no place in a low-carbon future.
Charges for Italians could climb by 25 percent soon without government intervention. Gas bills could soar by 50 percent, and that is after electricity costs leapt by 29 percent in October. It would have been worse at 45 percent if the government had not provided €3 billion to cushion the blow.
Spain, in December, extended tax cuts on electricity until May to help households cope. The reduction to 10 percent from 21 percent was first made in June when gas prices were far lower. France may spread-out tariff hikes to help those struggling to pay.
In Bulgaria, the government froze electricity prices as it assessed the situation. Critics were quick to warn that such action only delays inevitable increases.
On top of all this, the Ukraine crisis is leading to further gas price rises driven by uncertainty about Russian supplies. These will flatten when tensions ease. But it is anyone’s guess when that will be.
Meet, therefore, the new energy poor—millions of households in wealthy Europe, already reeling from the pandemic and having lived through the 2008 crash, that perhaps now need to sacrifice another comfort they have taken for granted and choose which rooms to heat.
As a result, protests have occurred in the UK and Spain. Gas prices triggered the turmoil in Kazakhstan. This is no surprise: an IMF study found fuel prices are often a factor driving social unrest, while academics looking at six non-rich countries in the decade to 2017 found energy-related unrest was “common, possibly increasingly so”.
Precious metals
Of course, there are plans in place to try and prevent a repeat, with the focus on building more wind turbines, solar farms, and battery storage. This partly depends on a substantial increase in the supply of certain metals and minerals—which is set to be comfortably outstripped by demand.
Prices for current key inputs such as cobalt, lithium, and nickel may increase by several hundred percent over the next few years, the International Monetary Fund said in a December blog. “Soaring costs could last through the end of this decade and could derail or delay the energy transition itself,” it wrote. Much will depend, as often in the climate change game, on promised technological developments.
Right now, the EU has insufficient local supplies of these commodities, and it is unlikely to develop them soon because of its stringent environmental standards. More broadly, the global mining industry is incapable of snapping its fingers and delivering three billion tonnes of new metals and minerals by 2050, which is how much the IMF estimates may be needed.
Unlike oil and gas companies, which have improved extraction technology to cheaply reach even the farthest corners of oil-bearing rock, miners do not have the luxury of a full-scale support industry at their side, so improvements emerge more slowly.
Of course, the situation in Europe is not the only example of some of the challenges that are trailing the good intention to usher in a clean energy era.
Make your mine up
In the US, President Joe Biden in August issued a non-binding executive order for half of all new vehicles sold in 2030 to be electric. The administration’s watered-down infrastructure bill envisaged billions in spending on projects that would lead to a huge increase in demand for certain metals and minerals. For electric vehicle batteries alone, it had allocated $6 billion.
But, as in the EU, these commodities are unlikely to be mined in the US because opposition against new pits is as fierce as that to new pipelines.
There is also federal incoherence. In Nevada, the US Fish and Wildlife Service is about to label a rare flower at a Nevada lithium mine site endangered, jeopardising licensing, even as the Department of Energy assesses whether to lend the developer more than $300 million.
For the US government, expanding demand combined with choked domestic supply means more imports and greater vulnerability to geopolitical rivals like China and Russia. For the rest of us, it spells higher prices.
Unintended consequences
The UK plan to ban internal combustion engine vehicle sales from 2030 is set to be another case of undesirable unintended consequences. The EU has proposed plans to prohibit sales of cars with them from 2035. To some, opposing this could be compared to American gun enthusiasts rejecting any suggestion of a ban on owning firearms. That, however, would be unfair.
Cars are often essential, even in countries with excellent public transport. For many, such as myself, it is about convenience: I would rather spend 20 minutes driving my daughter to school and back in my 10-year old Mazda than sit for more than an hour on a bus.
Moreover, for a great number in the EU, electric vehicles are unaffordable. With a cost of living-adjusted per capita annual income of $25,000 in 2020, Bulgaria is one of the poorest countries in the union. Most cars are second-hand, as people simply do not have the money for new ones.
Bulgaria is unlikely to become as rich as, say, Norway in the next 13 years, not least because it does not have oil or as much hydropower as Europe’s greenest country. So, it is unlikely that significantly more people will be able to afford an electric vehicle—unless prices plummet.
This was the plan, of course, and everyone was talking about how much cheaper electric vehicles were going to get. Now, we have the opposite trend.
As often, the intentions were great: ditching gas guzzlers and switching to exhaust-less electric vehicles that became affordable after battery costs nosedived. The reality—if the bans survive—is that personal vehicles may become a luxury good.
These prohibitions can also be viewed as an attempt at doing the unthinkable, at least from a political perspective—lowering energy consumption in developed countries. That is perhaps the simplest solution to our carbon problem, yet it will not happen voluntarily.
And regardless, some estimates say electricity usage will double in Asia-Pacific and Latin America and triple in Africa between 2020 and 2050, not least to deal with climate change, with, for example, residential cooling demands expected to increase by a factor of 20 in Africa.
“Climate adaptation solutions including cooling, desalination, and the construction of resilient infrastructure are energy-intense,” says The Energy for Growth Hub.
Energy justice
Last year’s COP26 ended with a minor scandal. In the final version of the Glasgow Climate Pact, leaders agreed to “phase down” coal use rather than phase it out. Apparently, the last-minute change almost made COP26 President Alok Sharma cry. This indicated, once again, that we are not all on the same page when it comes to climate change, and that we may never be.
India, which generates almost half its energy from coal, was one of the movers behind the phase-down stipulation. After all, it is more concerned about climate justice—that is, the failure of the historical emitters to atone for their actions—and being denied the right to power its own development.
Another speaking out is Malawi’s president Lazarus Chakwera, as well as Uganda’s long-serving leader Yoweri Museveni, who criticised the renewables he alleged were being foisted unfairly on Africa. “This stands to forestall Africa’s attempts to rise out of poverty, which require reliable energy,” he wrote before COP26. Uganda struck oil in 2006 but the resource is not yet developed.
Although for sure some African civil society organisations sing a different tune as they push for fossil fuels to be phased out, the presidential views represent the type of growth-focused thinking that will make it hard to achieve the eight percent annual reductions until 2030 needed to get on track to stop global temperatures rising to 1.5 degrees above their pre-industrial level, the goal of the landmark 2015 Paris Agreement.
These realities suggest a rethink is needed. As the most privileged countries wean themselves off fossil fuels, the impact on their citizens not wealthy enough to absorb the costs of decarbonisation must be prioritised, as should poverty reduction elsewhere. This means donor countries heeding calls to not just pay their dues, and play fair, but also to shift more of the promised $100 billion a year for developing nations towards helping them cope with climate change rather than prevent it.
In the life-saving power sector, renewables clearly will have the starring role, but cleaner gas can be a key member of the supporting cast, especially in developing nations where its expansion will not be too detrimental to the struggle against warming. Hydropower must be backed not blocked. Self-defeating nuclear shutdowns should be reversed into turbocharged expansions, as with China’s plans for 150 new reactors in 15 years. For those with a shortage of options and electricity, coal will still be burned, and donor governments must offset those emissions elsewhere.
Because, the fact of the matter is, there is no such thing as climate justice without energy justice.
