Amid all the climate gloom, let’s not ignore the good news

Powerful economic and technological factors are driving the shift to clean energy

This article was originally published by the Financial Times.

It’s easy to become overwhelmed by the seemingly relentless onslaught of disturbing news about the world’s deepening climate crisis. Last year was by far the hottest on record, bringing with it a catalogue of devastating storms, floods, droughts and heat waves.?And the worrying trend of unusual heat has continued into this year. Meanwhile, the amount of greenhouse gas emissions humans are releasing into the atmosphere keeps going up, not down.

What’s more, elections in major economies around the world are creating heightened uncertainty about energy and climate policies. But amid all this, it’s important also to pay attention to the good news — the areas where real progress is being made that can still enable us to avoid the most severe effects of climate change. Nowhere is this clearer than in clean energy, where technologies like solar, wind and electric cars are increasingly replacing the need for fossil fuels and reining in emissions.?

The impetus here is coming not just from government policies but from other powerful economic, industrial, strategic and technological forces.

The first is simple economics. Clean energy technologies are already competitive in many key areas and are getting more so as production scales up. It’s now cheaper to build onshore wind and solar power projects than new fossil fuel plants almost everywhere worldwide.

Meanwhile, the price of electric cars continues to come down and their market share keeps rising. In 2020, around one in 25 cars sold worldwide were electric; just a few years later, in 2023, it was one in five. EVs are now at the heart of most automakers’ strategies for the future. Together with the rapidly increasing investments going into battery manufacturing, this makes a U-turn away from them improbable and impractical.?

Clean energy is also benefitting from a flurry of technological innovation. After concerns that supply bottlenecks for critical minerals such as lithium could hamper the production of EV batteries, the industry responded by quickly bringing to market new battery chemistries that will reduce their dependence on key minerals. And innovation is moving fast in other emerging low-emissions technologies such as electrolysers for producing hydrogen and new processes for making green steel.

Another key force at work is energy security. The global energy crisis that erupted in 2022 has put a lot of pressure on the cost of living and laid bare the frailties of our existing fossil fuel-dominated energy system. It highlighted the energy security benefits of renewables, nuclear power and energy efficient technologies such as electric cars and heat pumps, that reduce consumers’ exposure to volatile fossil fuel prices.

These economic and energy security considerations have made it clear that the future of energy — and therefore of our economies and industries — lies in clean technologies. This has prompted a renaissance of industrial policy among governments around the world as they seek to ensure their economies are at the forefront of the new global energy economy that is emerging.?

The country leading the growth of clean energy is China, which installed as much solar capacity in 2023 as the entire world did in 2022. China is also comfortably the biggest player in global supply chains for solar panels, wind turbines, electric cars and other major technologies, and is investing in manufacturing capacity in other regions, as well. Regardless of where they stand on climate policy, if countries want to compete with China in the industries of the future, they need to double down on clean energy plans, not dial back on them.?

Clean energy is also where the jobs are. Its industries — including renewables, electric cars and heat pumps — already account for more than half of employment in the global energy sector and are continuing to add more jobs all the time.

Last but not least, the worsening impacts of global warming, mainly caused by emissions from fossil fuels, are increasingly apparent to citizens around the world, who will over time demand more, not less, climate action from their governments.

We already have ample evidence that the journey to net zero emissions is likely to be a bumpy one. But the events of recent years — including the turmoil caused by the global energy crisis, the sharp spikes in fossil fuel prices and the impacts of extreme weather — are all reminders of why we need to press ahead.

And while changes in governments may well affect the pace of energy transitions — accelerating them in some cases, slowing them in others — they won’t alter the fundamental direction of travel.