Here at Energy Renewals, we like to bring news items of interest to your attention and last week it was a piece in The Guardian which explored a decade on from the Stern Report, and laid out in no uncertain terms a high carbon future was the road to self-destruction.
It was music to ears or rather poetry for my eyes to read that the British economist Lord Nicholas Stern was advocating a low carbon future as the only option.
Often the trends we see at a macro level are reflected at grassroots and his message is very much in line with our approach to our clients. Effectively, yes, we will, of course, find you the most competitive tariff out there for your energy, but ultimately the real, sustainable and long term gains come from reducing your energy consumption. Like Lord Stern, we believe it is the only viable way forward.
But enough of my opinions, let’s explore Lord Stern’s views further.
If you’re not familiar with the original report, The Guardian very helpfully summarises it here. Warning of the dangers of unchecked climate change and global warming, the report recommended ‘carbon taxing’ and introducing a raft of energy efficiency measures. The report also predicted a move to a low carbon future could boost the economy by around $2.5 trillion a year whilst low carbon technologies could be worth $500bn.
Ten years on and Lord Stern reiterates his view, which is possibly one most of us would agree with, that green development is the only way to attain global economic growth. The eye-opener for me was he also points to China as a leading light on action on climate change.
Stern was interviewed ahead of two 10th anniversary lectures of his influential report and said the cost of not putting measures to halt global warming in place had risen but the cost of taking action had fallen. According to the original report, the economic price of unchecked climate change was around 5-20% of global GDP each year yet reducing our carbon footprint would cost just 1% of GDP. For example, he said the cost of solar power was around 10 times less than it was in 2006 and technologies had increased at a faster rate than anticipated.
Stern told The Guardian that any attempt to follow a path of ‘high carbon growth’ was the route to ‘self-destruction’.
When I read that Stern says the argument is being won ‘intellectually’ but progress is ‘too slow’, it certainly echoes our experience. Companies absolutely buy into the concept of reducing consumption to lower energy bills, but take-up is not as extensive as it should be, mainly because of the perception that it is too difficult to implement. In fact, if companies utilise the services of a third party, it is much more straightforward and the rewards can be extensive.
As for China, Stern said the country’s reliance on coal hit its high two years ago and droughts, floods and air pollution being a major threat is helping to drive change. Meanwhile, China already leads the world in wind and solar energy installations as well as having a major nuclear power programme. In fact, Stern estimates China could create 100-150 new nuclear plants in the next 15-20 years.
Stern did have some good words about the UK citing its legislation to reduce climate change as very much leading the way along with being a key player in the Paris climate change agreement but ‘a wobble’ last year saw its backing for renewables waiver. Cuts in solar and wind power subsidies has seen the UK fall out of the top 10 internationally in league tables ranking national energy sectors with the World Energy Council highlighting a lack of clarity and changes as the culprit. Along with solar and wind with storage, all low carbon energy technologies, including nuclear, are needed if we are to sustain our energy for the future.
My view is simple: we can all do our bit and nothing is too small. Companies and organisations, no matter their size, can both make a difference by reducing their energy consumption which in turn results in lower bills. Handing the logistics to a third party means companies reap the benefits whilst leaving the legwork to the specialists.
Ken Warner, managing director, Energy Renewals.
