March 3, 2015 2:50 pm
The riches and perils of the fossil-fuel age
If nations could agree a carbon tax, it would help create a more efficient, less polluting future
First, global economic output is forecast to rise by 115 per cent by 2035. Asian emerging economies — principally China and India — are expected to generate more than 60 per cent of that increase.
The primary driver of the rise in global output is expected to be a 75 per cent jump in global average real output per head, as the prosperity of emerging economies catches up with that of high-income countries. Population growth plays a distinctly subsidiary role. It is not the number of people, but rather their prosperity, that drives demand for commercial energy.
Second, as a result of rapidly rising energy efficiency, energy consumption is forecast to grow by only 37 per cent. This is far less than the rise in output of real goods and services.
So, between 2013 and 2035, output of renewable energy is forecast to grow by 320 per cent. Even so, its share in primary energy production is forecast to grow only from 2.6 per cent to 6.7 per cent. The combined share of renewables, hydroelectricity and nuclear power grows only from 9 per cent to 19 per cent. This, then, is expected to remain a fossil-fuel age.
It would be wrong to describe these forecasts as simply “business as usual”. They actually imply a faster rise in energy efficiency than between 2000 and 2013. But they are not radical.
The world would continue to rely overwhelmingly on fossil fuels and it would emit ever greater quantities of greenhouse gases. Could we do better?
If governments could agree to implement a tax on carbon, they would give a big impulse towards an energy future that is more efficient and less polluting. Governments should invest strongly in fundamental science and new technologies. Finally, governments can help the spread of new technologies abroad and help finance their uptake at home. With this push, normal market forces should pull the world economy towards a more sustainable future.
Mass poverty is not an option. But neither is taking ever-bigger gambles with the climate. The right course has to lie in between. To put ourselves on that course, we need to wean ourselves off the excesses of the fossil-fuel age. It is a daunting challenge. But it has to be met, for our children’s sake.