A Few Reasons for Optimism on Climate

It's never been like this before

Photo by Austin Schmid on Unsplash

Among all the dire warnings on climate, many of which are alarming and depressing, there is also reason to be optimistic — creative people and serious amounts of money are behind initiatives to change the world’s energy profile. People, companies, and governments are all working toward solutions. While there are deniers and naysayers, humanity as a whole is starting to get it. That alone is a reason for optimism, but there is more to it than that.

First, the Big Picture

No matter what you think of the power and influence of the fossil fuel industry, market forces are pushing them aside. Make no mistake… this is a sea change. Market forces in the past were always the reason to stay with fossil fuels. They were cheaper, required no new investment, and kept things running — industry, cars, home heat, electricity, etc. The environmental movement came up against resistance on this time and time again in all kinds of pollution debates. It was framed as “economy versus environment” for decades, and people were scared into thinking that controlling pollution meant they would lose their jobs. This was Politics 101 for opponents of environmentally friendly solutions.

The mass of people globally who are concerned about climate are changing the market dynamics. The concern is showing up as carbon pricing. At least forty countries have some kind of carbon pricing mechanism in place covering about 25% of global emissions. The concern is also showing up as corporate prioritization of de-carbonization efforts. Consumers are making new choices. This massive collective effort is exactly what is needed.

As a result, the tide is changing. New sources of energy are being developed and deployed, and in most cases, the alternative source is less expensive than the fossil fuel solution. I’ll get to examples shortly. When people who make decisions, from homeowners and consumers to high-level corporate executives and government officials, look at opportunities and see a low-cost solution that is not fossil fuels, their decision-making will change. No longer do they have to justify spending more to go green and do the right thing. Rather, they would have to justify the reason to spend more on fossil fuels and stay dirty. I cannot think of a business person I know who would want to be making that argument — it is a career-limiting position to advocate. For homeowners and consumers, on the other hand, managing their budgets will almost certainly mean welcoming less expensive green options, especially if the products are better than those they are replacing. Again, market forces are at work.

Here are a few examples of how this massive change around the globe is beginning to move people in new ways toward the solutions we need and which will work.

Aviation Is Going Carbon Free

Many climate-concerned people are reducing air travel as a way of managing their carbon footprint. Regardless of the actual efficacy of such an effort, it may not be necessary for much longer. The airline industry is moving toward an emissions-free future.

Airlines, aircraft companies like Boeing and Airbus, and a trove of small startups are committed to creating this new future. Right now, it looks like a competition between electric planes and hydrogen planes.

With current technology, batteries are too heavy for a given amount of power to be feasible for large, long-haul aircraft. This reality could change as battery technology changes. Small companies like Diamond Aircraft are coming to market with small electric planes that feature a 40% reduction in operating costs with about 90 minutes of fly time. Large plane manufacturers like Airbus are working on hybrid solutions as a first step, much in the way that car manufacturers like Toyota led the way to EVs with hybrids like the Prius.

There is also a lot of excitement about the path to emissions-free flying with hydrogen (see my previous article on this topic). What is exciting about these efforts is that the industry sees that it must go to a green energy source, and they are investing heavily to do so. Everyone recognizes that hydrogen is not emissions-free unless the hydrogen is produced using green electricity like solar or wind, and while that slice of the hydrogen production market is currently very small, it is expected to grow as the demand for clean green hydrogen grows. At that point, prices decline and the market forces will drive the entire industry to hydrogen. A good reason for optimism, indeed.

Hydrogen Is Also a New Storage Solution

In this TED talk podcast, Denmark’s climate minister, Dan Jorgenson, describes how Denmark envisions using hydrogen to solve the renewable energy storage problem at the same time as they meet the needs of industries in which electricity isn’t the best source of energy.

First, they plan to build renewable power generation at a level that is far more than a country needs. For Denmark, it will be off-shore wind power, but other countries can use solar, hydro, or even nuclear.

Second: use the excess electricity to create hydrogen using electrolysis. In electrolysis, electricity is used to split hydrogen and oxygen from water, thereby creating hydrogen. The input is water, the output is hydrogen and oxygen. By using the excess renewable energy, the electricity is green so that makes the hydrogen green. The hydrogen, in effect, stores the excess energy created by the solar or wind-powered system.

Third: use the hydrogen for direct combustion or in fuel cells to power industrial machines and applications for which batteries are too heavy, impractical, inefficient, or just too expensive. Airplanes, as we have just seen, is one such application. But it might also have uses in other industries — perhaps steel making, aluminum smelting, or chemicals.

Fossil fuel prices are notoriously volatile. As oil prices go up, hydrogen looks like a better answer for many applications. When they come down, hydrogen is less attractive. Even that volatility, however, can produce a market preference for hydrogen, and in some cases, already is. Investments are already being made as companies see the advantages of hydrogen. For example, Shell plc has just committed to the biggest renewable hydrogen plant in Europe, due to be open in 2025.

The world appears to be piecing together a new infrastructure along the lines of what the Danish Minister outlined. Maybe not as thoughtfully and strategically as he described, but it is happening anyway. Future-minded energy companies are likely to build more hydrogen plants as oil refining demand dwindles. They have the industrial expertise to do so, and this is a good thing.

Utilities Are Making the Move to Solar and Wind

Market forces are also driving the electric power industry to solar and wind. That is, solar and wind are less expensive to build and operate than coal-fired plants. This reality is accelerating the trend toward emissions-free electricity, and it has utilities looking for solutions to the storage challenges. For example, Xcel Energy, the largest electric utility in Minnesota, just received funding for a large iron-air battery storage facility as part of its efforts to eliminate carbon from its electric supply chain. Even better, these storage systems are part of Xcel’s plan to retire two coal-fired power plants and replace them with renewable energy. Incentives and funding are being deployed with increasing frequency, especially since the Inflation Reduction Act provided continued revenue and tax-credit support to projects.

The changes in costs for solar and wind create an inevitability in the market. Utilities will go for the lowest-cost alternative almost every time due to market pressures, and when that alternative is solar and wind, there is almost no way to stop the transition to green energy from manifesting.

Electric Vehicles

Market forces are also bringing down the prices of electric vehicles. Of course, there are the headline-grabbing prices of Tesla and Audi luxury EVs, but there are also much more affordable EV opportunities from Ford, Chevrolet, Kia, Hyundai, and others. There are new models in the $30,000 range, and used versions are often $10,000–20,000 — comparable with used gas-burning vehicles. An unsung advantage of EVs is that they are significantly less expensive to operate and maintain. No more gas purchases. Far fewer parts to go wrong. Easier maintenance.

At this point, EVs have a “high-end” reputation, so many people shy away from them, and there continue to be challenges with range, charge time, and battery life. Nonetheless, it is already true that in most instances, operating an EV provides significant cost savings over similar ICE vehicles, and purchase prices are close to the same, even without the tax incentives from the Inflation Reduction Act. Once again, market forces create an inevitability to the change. Because transportation accounts for over 25% of US emissions, this transition is significant, although true gains are dependent on the electricity used to charge the vehicles being clean and renewable.

What the Change in Market Forces means

We can see the momentum toward emissions-free energy in the market, and that the appliances, automobiles, and infrastructure needed are being developed. This is very good. It is happening across the economy and the energy-using world. In the long run, we will replace our emissions-generating technology with these emissions-free tools and infrastructure. That’s why there is reason to be optimistic.

The Caveat and What You Can Do

The caveat, however, is time. While these forces are at play and seem to be accelerating the transitions, extreme climate events are already happening with increasing frequency. Heat events, in particular, are expected to become much worse as El Nino occurs. Or, it could be massive hurricanes, devastating tornadoes, or massive floods. Wherever such events occur, the good news I am talking about will be far too late for the people who experience these events. All the other impacts we are concerned about with climate change are still on the table, even if we will solve the emissions problem eventually. It just might not be soon enough.

Acceleration Needed!

The most important puzzle we face is how to use these new market realities and accelerate their impact. We are going in the right direction, it is just not fast enough. How can it be sped up? I see this question as the frontline challenge in the climate discussion. If you are a person looking to get involved and take responsibility, managing your carbon footprint is only one small thing you can do. Far more impactful is getting involved enough to accelerate the forces that are already at work. Consumer decisions, business decisions, government decisions, policy choices, technology advancements, and investor preferences all play a role. Most people have multiple roles — worker, consumer, and investor, for example. Each of us can use our roles to help accelerate the change. Direct your time, resources, investments, energy, and commitments to these changes, and we can each have a substantial impact — far more than merely reducing your carbon footprint. The opportunities to have a bigger impact and accelerate the change is all around us. We need everyone to help make that change a reality.

Anthony Signorelli

---

Get your Comparison Calculator for EV vs Gas Car Emissions.

Enter information specific to your models to see how your switch to EVs will help or not. Use this link to purchase the spreadsheet at Gumroad.

Note: Paid subscribers can get it for free!

---