A new growth story: how Europe can lead the way with decarbonization

Today, our world is facing not just one, but two huge crises – both start with the same letter, both are true global challenges, and both are life-threatening. While COVID-19 is disrupting our lives and forcing mankind to take immediate action, it is also affecting the way we live, work and travel. But alongside this, the climate crisis is smoldering under the surface and adequate countermeasures have not yet been taken. Despite the fact both crises may be fatal for millions of people, devastate whole regions and harm businesses and economies, why are people not yet willing to change the way they live, work and travel?

Unlike COVID-19, which hopefully, will be contained in the near future, the climate crisis will only worsen if we do not take action and adapt our economies and lives appropriately.

We cannot wait any longer. We cannot look the other way. Now is the time for leadership.

Greta Thunberg dominated the headlines with her comment “our house is still on fire” around the time of the 50th World Economic Forum (WEF) in Davos. The Fridays for Future champion’s appearance at the Forum was much more than just symbolic; in fact, it triggered an economic turning point. In a rarely seen demonstration of unity, the politicians and corporate decision makers attending WEF all agreed on the urgent need for a carbon-free economy by the middle of the century. The means are the end: rapidly moving away from fossil energies and thus reducing carbon emissions. In a nutshell: the decarbonization of industrial production, the energy industry, and transport. But what exactly do we mean by decarbonization?

Coal and the colonies

Let’s look back 200 years. Why did Europe become the dominant power in the world? Around the late 1700’s China and Europe’s economy was developing at a similar rate. However, both civilizations were facing the same problem – namely a shortage of land. In a pre-industrial economy, land was regarded as the primary natural resource since it provided wood, fuel, materials, and food.

But why was only England able to solve its land problems and take a leap forward? Firstly, because England leveraged its colonies. It imported tobacco and cotton, sugar and cereals from North America and from the Caribbean. As China did not have colonies at the same time, a strategy of this kind was not an option. Second, England was able to exploit coal, the “underground forest”, and went on to replace wood with coal as a source of energy. China’s domestic coal deposits, on the other hand, were located far away from its commercial centers, causing logistical difficulties.

The Euro-Atlantic industrial culture owes its rise mainly to the availability of two key resources: fossil fuels extracted from the earth’s crust and biotic raw materials from its (former) colonies. The industrial civilization, as we know it today would not have evolved at the pace it did without mobilizing resources from a distant geological past and from far-flung places.

These special conditions continued to have an effect into the 20th century. While once the colonies had provided additional land, developing countries were to become the suppliers of the OECD countries. Woodland was replaced by coal, and this was subsequently joined by crude oil, uranium, and natural gas as fuels. As a result, the steam and internal combustion engines, the electric power station and the electric motor, seemingly provided endless supplies of power, heat, and propulsion became available to boost economic power and prosperity.

The end of the expansionary modern age

What does this excursion into the past tell us? It tells us that the days of these two special features – land in the southern hemisphere and fossil resources – are numbered in the 21st century. At the same time, the global population is now four times larger than it was a century ago. In addition, the crisis of nature has really taken hold, first slowly and then increasing in speed, with the destruction of biological diversity and global warming. The result is that mankind is using 170 percent of the earth’s biocapacity – every year. Scientists talk about planetary boundaries, meaning that the earth’s critical loads in terms of the biosphere, materials cycles (nitrogen and phosphorus), and climate change have already been exceeded.

It is already true to say that the triumph of the Euro-Atlantic economy is built on sand. While the economy of the 21st century is magnificent, could it also be a public menace?  

Setting course for an eco-friendly economy

So where do we go from here? How can we achieve an economy that is truly environmentally friendly? A major transformation which focuses on the mantra “different, better, less” is needed.

“Different” relates to physics and chemistry, “better” to efficiency, and “less” to the volume of resources used. Let’s take the automobile as an example. Only when vehicles run on renewable electricity will we be in a position to talk of a sustainable transport system.

In addition to efficiency and sufficiency, the focus lies primarily on the environmental friendliness of the resource streams; and the decarbonization of the economic system lies at the heart of this. Fossil resources – release greenhouse gases during combustion which play their part in heating up the earth’s atmosphere. To counteract global warming, climate scientists are pushing for the decarbonization of the global economy to be realized by the middle of the century. No sector is spared, but it is the energy, transport, and industrial sectors which are pivotal to achieving a carbon-free economy. Electricity suppliers and distributors play a key role here, with its swift decarbonization paving the way for the gradual electrification of more areas of the economy.

From fossil to solar resources

A change in the resource base from fossil to solar resources is needed. While wind turbines and solar cells were still relatively rare 20 years ago, Germany, for instance, now gets around 40 percent of its electricity from renewable sources. But, now the current goal is to achieve decarbonization within the electricity sector by 2050. In addition to the usual requirements such as for lighting, heat/cooling, operating power, and industrial process heat, the electricity sector faces some special challenges. This is because electricity will largely replace coal, oil, and gas as energy sources – by means of sector linking. Sector linking refers to ‘switching’ the heat, transport, and industry sectors over to green electricity, making this the most important form of energy supply.

For instance, electric heat pumps will warm buildings, electric drives will propel automobiles and buses, and electrolysis will provide hydrogen and methane, “power-to-gas,” for process heat in the primary industry. Sector linking can even play its part in the storage of fluctuating green electricity level.

Decarbonization is therefore the linchpin of an eco-friendly economy. The utopian horizon of the long-term goal can already be deduced from carbon-free energy supplies, namely providing for the throughput of energy and materials based on solar income. What is important is thermal energy from the sun, kinetic energy from wind and water, and chemical energy from the plant world. Energy forms and materials generated using solar are regenerative, meaning that rather than their supplies being depleted, they are renewed over a reasonable period. In principle, they are also emission-free. Solar energies and biogenic materials therefore make up the resources which an environmental economic system is founded.

 Heading towards long-term value

Two hundred years after Europe began exploiting fossil resources to start its compelling story of power and growth, it’s time to write another growth story. A story that is inclusive and forward-looking, based on sustainability and focused on green innovation and societal progress.

A story that is driven by new technologies, strongly rooted in responsibility. Powered by companies upgrading their business on long term value, focusing on a broad set of stakeholders, measuring all impacts on society instead of mere facts and figures.

It’s time that Europe takes the lead, entering the world stage as a superpower of sustainability and climate protection. Green growth is both indispensable and green growth is possible. With the EU Green Deal and initiatives such as Sustainable Finance we are already seeing great leadership from the European Union. Let’s demonstrate that Europe learned its lesson from history, by building a better working world together.