The Market Economy - Not Climate Change - Will be the Driver for the Transition to Renewable Energy
With virtually every new global climate report with even bleaker and more alarming predictions for the future, it’s easy for humankind to become discouraged and lose hope.
However, breakthroughs in renewable energy technology are more encouraging and hopeful.
Clean energy is becoming less and less expensive by the day. Odds are that this trend will continue into 2020 and beyond.
What’s more, there are numerous cutting-edge innovations on the horizon that will not only improve old technologies but that will also create entirely new systems, processes, and approaches to energy generation, agriculture, transportation, manufacturing and construction that will make far greater positive impacts.
Major companies, investors, and entrepreneurs are beginning to pour money into clean energy because it is now clear that doing so will both reduce global warming and increase profits—in both the long-term and short-term.
It has now become possible to store substantially greater amounts of renewable energy once it has been generated. This alone serves to reduce wasted energy while simultaneously increasing profitability.
The achievement of grid parity has greatly reduced the resistance to embracing renewable energy. A recent article in Forbes Magazine points out that: “Grid parity occurs when an alternative energy can generate power at a cost and performance level equal to or less than electricity generated from conventional methods. . . . Solar and wind are already more efficient and cost-effective than conventional sources, and evolving technologies will continue to improve their price and performance.”1
It’s inevitable that there will be people, companies, and governments that will continue to advocate for the use of fossil fuels over clean sources of energy, but their numbers will continue to decline as more and more of them are forced to realize that it is less profitable for them to do so.
This is key: when even those who think climate change is a hoax start opting for renewable energy in order to maximize profits, significant progress toward mitigating global warming is inevitable.
Climate change deniers aside, MIT is making breakthroughs that will result in substantial progress on their own: new electrolytes will greatly improve supercapacitor performance, ionic liquids will be capable of storing large quantities of energy, molten salt will become the next generation of nuclear power, solar heat from home heating and industrial applications will be utilized to far greater degrees, and enhanced solar cells will be developed every few years as opposed to every few decades.2
Not only is the global world choosing clean energy over fossil fuel energy more frequently, but it is also restricting the use of old energy sources altogether. According a report by Arbella Advisors, a firm devoted to providing guidance to foundations and other philanthropic organizations, “almost 1,000 institutional investors” have moved their investments away (divested) from fossil fuels. As a result, “the funds committed to fossil fuel divestment now total more than $6 trillion.”3
This has not only caught the attention of companies and governments, but it has also compelled billionaire philanthropists like Bill Gates, Jeff Bezos, and Jack Ma to significantly alter their investments: total investments in clean energy will be greater than $9 trillion by the year 2050, and it will be more than $35 trillion in 2030.4
Traditionally, it has been difficult to find enough investors to fund large-scale renewable energy projects, for all the reasons already mentioned and because of the perceived uncertainty—or lack of genuine knowledge—surrounding green energy.
However, companies like Malta Inc. have ways to innovate that provide solutions to both issues. As per CEO Ramya Swaminathan, “Malta’s technology allows energy grids to store excess electricity during times of peak production for redistribution to the grid when production decreases, a key enabler for weather-dependent clean energy sources such as wind and solar;” it’s easy to comprehend the value of technologies like this, so it’s far easier for venture capital entities such as Breakthrough Energy Ventures to raise tens of millions of dollars for companies like Malta Inc. to keep making significant advancements.5
Indeed, the best approach to getting more of the world involved with renewable energy projects must involve communicating the profitability of doing so.
It may be even more important to do this than it is to communicate the peril to all living things on Earth if green technologies are not embraced.
According to Rob Day, managing partner at Spring Lane Capital investment firm, “I happen to believe if you want to unleash trillions of dollars into this, you need to show mainstream investors they’re not sacrificing returns if they do this right …. That creates a good signal to the rest of mainstream Wall Street capital that ‘hey, the water’s fine, jump in.’”6
It’s tempting to focus on highlighting all of the negative impacts that climate change will have on humankind in order to convince more of the global population to buck fossil fuels in favour of clean energy, but, the truth is, the most important thing is compelling more people to embrace renewable energy, period. The reasons why people, companies, and governments choose to do so really don’t matter, even if it should.
Even though it’s becoming clear that virtually all alarming climate change reports have grossly underestimated the time we have left to shift to green energy in order to avoid the catastrophic effects of global warming, next generation advancements in technology truly have made it possible to avoid these repercussions.
That being said, it’s still necessary to convince everyone to embrace clean alternatives to fossil fuels as soon and as much as possible, and it’s still imperative to continue to improve green technology on all areas.
Again, the best way to ensure this happens is to make it clear that the sooner renewable energy is embraced, more money will be made. If people choose to see saving future life on earth as a secondary bonus rather than the primary concern—that’s just fine.
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1 6 Renewable Energy Trends To Watch In 2019
2 Renewable energy
3 Fossil fuel divestment funds rise to $6tn, https://www.theguardian.com/environment/2018/sep/10/fossil-fuel-divestment-funds-rise-to-6tn
4 Here’s why Bill Gates, Jeff Bezos, Jack Ma and other investors are pouring billions into clean-tech ventures