Could something (or someone) pull the plug on the energy revolution and opposition to climate change?

For a long time, international negotiations on climate change really looked like another case of Game Theory. As you may remember, that theory became widely popular with John Nash’s prisoner dilemma. The famous mathematician showed how, in some cases, players making rational decisions in the pursuit of their own interest could all end up in a paralyzing equilibrium. Even more terrible: once caught in it, there was no way out.

How does it apply to the matter at hand?

At the international level, if all players (in this case, nation states) decided to effectively combat climate change and share the burden of the energy revolution, the world had a real chance at limiting global warming. The problem was that for each individual player, it made much more sense to let the others do the job, make the tough political decisions and the hefty investments in clean energy, while they stood aside and enjoyed the benefit of living in a more sustainable environment. A free ride was a better option than actually cooperating.

Since all players had the same reasoning, international diplomacy on climate change came to a deadlock.

But then, with the Paris Agreement, the ruinous equilibrium was finally shaken.

All countries finally came to realize there was a de facto solidarity between them. This sudden, unexpected awareness finally overrode the fatal reflex to “let others do the job.” Change was particularly noticeable on the part of countries that were the biggest emitters and had always resisted any serious attempt at dealing with the issue. Nothing seemed to stand in the way of the energy revolution.

Unfortunately, it didn’t take long before certain political developments cast a shadow over the positive outcomes that had taken so long to achieve.

Many fear that President Trump will act on his campaign pledge to withdraw from the Paris agreement, thus dealing a serious blow to international cooperation on climate issues. In France, the energy revolution was scarcely debated between the main candidates in the presidential election.

Could all these events announce ominous signs of the return of the same old non-cooperative routine? Is the energy transition suddenly put on hold?

Given past difficulties, I can understand these fears.

Nonetheless, the situation has radically evolved since the first unsuccessful attempts at combatting climate change.

The energy revolution is already happening and is gaining momentum every year. Sure, political uncertainties may slow it down in certain parts of the world, but we are past the point where a single player, however important, could definitively bring it to a halt.

So, what are these recent game-changing developments?

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1. Renewable energies are now competitive with conventional energy sources. In 2008, solar power was delivered at approximately €700 per megawatt-hour (MWh). In August 2016, Chile announced a new record low contract price to provide solar power for less than €30/MWh. In France, the results of the photovoltaic electricity call for tenders announced in March 2017 determined an average electricity price of about €62.50/MWh, less than half the cost of electricity produced by new nuclear projects.

2. Emerging and developing nations are driving the energy revolution. In 2015, for the first time developing countries attracted the majority of renewable energy investments, with China alone accounting for about one-third of the global total. China is already the world's biggest producer of solar energy by capacity and that country’s National Energy Administration announced the country planned to plough €335 billion into renewable power generation by 2020. In December 2016, the government of India predicted that by 2027 India’s installed capacity of renewable energies would represent 43% of total installed capacity, up from 14% in 2016.

It’s not just the falling cost of renewable energies that makes them a worthy investment. The high scale development of renewable technologies will help these countries limit their energy dependence as they come to replace costly imports with domestic electricity production through wind and solar power. This development is bound to change the geopolitical balance of power and accelerate the emergence of developing countries, especially in Africa. (For more information on this issue, you can read my LinkedIn article “(Em)Powering Africa”).

3. New players are standing up for the energy revolution. We grew used to the paradigm where energy policy is determined at the national level. It’s no wonder, since national sovereignty is dependent upon energy supply. Nevertheless, local authorities have become increasingly vocal about an issue that is highly sensitive for public opinion – and for their constituents. Recently, new coalitions of cities have emerged (C 40 Cities, Covenant of Mayors) that are adamant in their support for the energy revolution. The C 40 Cities organization, for example, has set out an ambitious plan to be on track to limit global temperature rise to 1.5° C. Member Cities then follow up by announcing individual targets.

Washington DC has announced a plan by 2050 to reduce emissions 80% by improving building efficiency, switching to clean renewable energy and expanding sustainable transportation options. Regions and states can also support the energy revolution, regardless of initiatives taken at the national level. For instance, the majority of U.S. states have set portfolio standards requiring utilities to have a minimum ratio of renewables in their power mix. These requirements can be very demanding. By 2030, utilities in California and New York are required to have 50% renewable energy sources in their energy mix.

4. The radical mindset shift on climate change has spread through society. It’s not visible just in the demands of civil society or the actions of NGOs and governments. Businesses increasingly acknowledge the risks of climate change and are willing to commit to the energy revolution. For instance, big financial institutions such as JPMorgan, Bank of America, Citigroup, Morgan Stanley, Wells Fargo & Co., Société Générale and Crédit Agricole have pledged to stop or scale back support for coal projects.

Businesses that are part of the “We mean business coalition” have also made public commitments to climate action. These pledges range from setting an internal carbon price, buying 100% of power from renewable sources, to choosing sustainable alternative fuels or improving energy efficiency.

In conclusion, I would argue that no one can stop the ongoing energy revolution.

That’s because renewable energies have become competitive and, for that reason, emerging and developing nations will continue to support their applications. It’s also because renewable energy sources are no longer exclusively in the hands of nation states: public awareness has prompted local authorities, civil society and businesses to become more involved in the transition to a low carbon economy.

Compared with the original prisoner’s dilemma, we are now in a very different situation: many new players, following different agendas, with the vast majority of them convinced that the energy revolution is inevitable, fundamentally positive and better able to serve their interests.

We are out of paralyzing equilibrium, into a brave new world.