Facebook is now called Meta – it’s just the corporation behind Facebook, Instagram and WhatsApp. That sounds familiar? Perhaps to Alphabet, which to this day everyone knows only as Google? Will it be a bit more confusing for the regulators in Brussels and Berlin if they have Alphabet and Meta regulation as their task in the future?
A look at the serious topics, of which we can offer you a veritable cornucopia in this issue. The Data Act will now probably not come into force until February instead of December as planned – Till Hoppe and Jasmin Kohl have researched the exact reasons and why this comes along with some economic concerns for you.
In previous issues, Lukas Scheid has already explained to you some of the key discussion points for the COP26 conference– today this short series concludes with a look at Article 6 of the Paris Climate Agreement, which will keep the negotiators very busy.
The revision of the NIS Directive is on the fast track. It could start as early as mid-November – what the revision does not deal with and what may cause discussions with the member states can also be found in this issue. At an even earlier stage are the discussions on the eID, which the Committee on Internal Market and Consumer Protection (IMCO) started yesterday – an important topic, also for Germany’s digitization plans: you will surely remember the movie-like false start of the German ID wallet a few weeks ago.
Finally, at the Apéropa: enjoy the long weekend – as long as the Member States let you.
“Paris has set the vision, in Glasgow it will become concrete,” EU Commission President Ursula von der Leyen said on Thursday with a view towards the world climate conference starting on Sunday. Three issues in particular are to become concrete: How does the 1.5 degree target remain within reach? Who will finance global climate protection and adaptation measures? How will emission reductions be measured and rewarded? The latter is considered to be the key to the success or failure of COP26, as is the finalisation of the “Paris Rulebook“, the plan that is supposed to turn the promises made in Paris into results.
The Paris Rulebook sets out how the goals of the Paris Agreement will be achieved, the criteria countries will use to set their national CO₂ reduction targets and how measures taken will be monitored. At the 2018 World Climate Conference in Katowice (COP24), countries agreed on this rulebook. What was missing, however, was a fleshed-out implementation of Article 6 of the Paris Agreement. Even a year later in Madrid, no agreement was reached, and so now it is supposed to work out in Glasgow.
The Paris Agreement states that countries can cooperate on a voluntary basis and to achieve their reduction targets, and can transfer emission reduction results. Translated: A country that removes CO₂ from the atmosphere can transfer this reduction to other countries. The principle is global emissions trading.
Many industrialised countries are not in a position to reduce their own emissions fast enough to meet the specified reduction and climate protection targets. So each country is allocated a fixed amount of emission rights, in proportion to the size of its population. If the emissions caused exceed the emission rights, a country can then buy emission rights from other countries. Conversely, if a country emits less than it is entitled to, it can sell its surplus rights. The result is a transparent system in which the emission, reduction and storage of emissions are made verifiable.
Such a principle for more sustainable economic activity at the global level had already been agreed in 1997 in the Kyoto Protocol, but it expired in 2020. Moreover, numerous industrialised countries – including the USA, Canada, Japan, India and China – had either already withdrawn from the agreement or had not committed themselves to further reduction targets. Kyoto is therefore now considered a failed climate agreement, as it did not lead to a significant reduction in greenhouse gas emissions. However, it was not emissions trading per se that was to blame, but the lack of commitment to meet reduction targets.
With the Paris Agreement, a successor to the Kyoto Protocol was created. However, the establishment of global emissions trading threatens to fail once again if Article 6 does not deliver what it promises in its concrete form: the reduction of emissions to a level that keeps the 2 degree target and ideally the 1.5 degree target within reach.
That this goal is currently out of reach is shown by the UN Emission Gap Report 2021, released this week. With current NDCs, the planet is heading for global warming of 2.7 degrees compared to pre-industrial levels. And even if all countries’ climate neutrality targets are met, the report says, warming is still 2.2 degrees. But the report also gives reason for hope – hope in Article 6. Emissions trading could help reduce emissions. However, this is only possible if rules are clearly defined, transparency and monitoring are guaranteed, and the aim is to actually reduce emissions, it says.
Von der Leyen pushed on Thursday for a mechanism based on scientific findings that holds the biggest emitters equally accountable, but also prevents double counting of emissions savings. That is also what is written in the Paris Agreement.
Brazil has long been considered a major opponent of preventing double counting . The country with one of the world’s largest carbon sinks – the Amazon – would like to use the rainforest’s CO2 storage potential to achieve its own climate targets, while at the same time reselling emission rights for exactly the same storage potential. This dual use could impede global emissions reductions and would undermine the credibility of effective emissions trading. Brazil, however, indicated last week that it would travel to Glasgow ready to compromise on the issue. Brazil’s chief negotiator, Leonardo Cleaver de Athayde, said in an interview with the Brazilian newspaper Valor Economico that they would be flexible to reach an agreement.
The second stumbling block is a remnant of the Kyoto Protocol. At that time, it was agreed to issue certificates for emission-saving measures in developing and newly industrializing countries, which in turn could be purchased by industrialized countries – the so-called Clean Development Mechanism (CDM). Brazil, South Korea, China, and India account for almost 85 percent of all CDM certificates issued to date – so-called CERs. These countries now want to take their unused CERs with them into the new system under the Paris Agreement. However, this could ensure that the market is flooded with certificates for saved emissions from the past right from the start. The big concern is that the countries issuing the certificates will be less ambitious in pursuing their climate protection goals and will rest on their existing certificates.
The negotiations in Glasgow will therefore be about whether and under what conditions emission rights may be counted twice and to what extent CERs from the Kyoto Protocol may be carried over into the new system. One possibility is that some of the CERs may be carried over. It could also be that certain countries can double count emission rights over a certain period of time. However, for the EU negotiators, the mantra that a bad deal is worse than no deal at all applies in this respect. The outcome is open.
The revision of the Network and Information Security Directive (NIS) cleared an important hurdle yesterday: The lead Industry Committee (ITRE) gave the negotiating mandate to Dutchman Bart Groothuis (VVD/Renew) and agreed on common amendment requests to the Commission proposal. This means that negotiations could start quickly. If the other committees agree to the ITRE’s petition, the start of negotiations in the trilogue would be possible as early as 9 November.
Rapporteur Groothuis is also in a hurry: “If we could do it before the end of the French presidency, that would be great”. He also believes this is urgently needed in view of the ransomware blackmail wave. The Biden administration has already responded to the problems, he said, Joe Biden with Vladimir Putin in his first conversation not without reason addressed cybersecurity. “We need to act quickly – because we don ‘t want Europe to be a more attractive target for attackers than other regions,” Groothuis says.
To ensure that the obligated organizations actually take action, the penalty range for repeated violations of the obligations will in future be up to two percent of turnover or up to ten million euros.
According to the will of the European parliamentarians, the managing directors of the companies should be responsible for the compliance with the duties. “As a last resort, female managers could even be temporarily relieved of their responsibilities,” explains Rasmus Andresen (Greens/EFA).
For Bart Groothuis it is clear: “Cybersecurity is no longer a niche, but a matter for the boss. He therefore does not see the idea of holding those technically responsible for IT security accountable as being effective. In many places, it is primarily a matter of very simple but effective measures such as an obligation for two-factor authentication or backups.
The core of the revision, also known as the NIS2 Directive, is a higher level of cyber security for operators of critical infrastructures. These are already covered by the old NIS Directive and national laws such as the IT Security Act, which to a large extent have the character of implementing legislation.
However, the revised NIS Directive is now to cover more areas than the old regulation, according to the EP’s industrial policy makers: in future, health care facilities and research institutions are also to fall within its scope.
In Germany, the IT Security Act, which was revised in anticipation of the NIS revision, already covers all larger hospitals and, via the Patient Data Protection Act, all hospitals from 2022. Research institutions have so far not been subject to the German regulations in general, but only in certain sectors.
A potential point of contention with the Council could lie in the obligation of smaller municipalities: Within Europe, independent municipalities are sometimes very small entities for which a higher level of IT security could well cause practical implementation difficulties. At the same time, however, it is precisely these that have often become an easy target for blackmailers in recent months.
In addition, the industry politicians also want to oblige companies that play a critical role in supply chains to increase their IT security obligations. “Once important supply chains, power supply or public administration come to a standstill due to an attack, then it is too late,” says Angelika Niebler (CSU/EPP). The fact that the requirements for cyber security are now being increased is the right thing to do. This also applies to the stricter reporting requirements for companies affected by serious attacks, she said. “This must not lead to more burdens for our SMEs, but SMEs must also pay more attention to cyber security,” Niebler said.
Parliamentarians want to set a deadline of 72 hours for the initial notification of serious inc idents to cybersecurity authorities, analogous to the data protection incident rules. The Commission proposal only provides for 24 hours here.
The NIS Directive is considered an essential building block of the European cybersecurity architecture – but suffers from a structural problem: Since the EU lacks competences in the field of security, but cybersecurity is handled by intelligence services, military and civilian institutions depending on the incident or national preference, the EU can only partially intervene here.
Rapporteur Bart Groothuis, who himself worked for the Dutch Ministry of Defence in the field of cybersecurity for over a decade, sees the problem. He therefore thinks that a change through the NIS revision in particular would be helpful for better cooperation: a common database for serious incidents and a security breach database should remedy the problem. In this context, the European Network Security Agency ENISA should become “a kind of Switzerland”, “with which everyone can share their information without everyone knowing what kind of source it comes from”. This would also make it easier for intelligence services to share information.
However, Bart Groothuis does not want to see one particularly critical area regulated under any circumstances: the Internet’s Domain Name System root servers. This central administration of domain names in the network is currently distributed among 13 operators, two of which, RIPE and Netnod, are based in the EU. All Internet providers obtain the translation of domain names to IP addresses from these central servers.
From an IT security point of view, regulating this infrastructure is actually necessary, says Groothuis. But it would be politically wrong to regulate into it – because that would open the way for China and Russia, who want this under completely different premises, to influence this central system of the Internet. Which is why, while all relevant downstream DNS servers in Europe are to fall under the NIS, the root servers are to remain exempt.
As the NIS revision is limited to critical infrastructures, another aspect is soon to be addressed in regulatory terms: all so-called smart devices. Industry and Internal Market Commissioner Thierry Breton is expected to present his first proposal for a Cyber Resilience Act (CRA) for connected devices in 2022. “We have also advocated for stronger regulation in the context of the NIS2 directive, but this horizontal law is not the panacea to fix all cybersecurity problems at once”, says Green Rasmus Andresen. His CSU colleague Angelika Niebler welcomes the CRA announcement: Without clear requirements for the devices in the Internet of Things, this cannot come, she says. “It’s inconvenient enough if someone can hack my smart fridge, but, if we think about autonomous driving or similar, we have to put utmost emphasis on the cybersecurity aspect.” The EU is already further ahead on the issue than the national level, she says.
For years, we at the Rocky Mountain Institute (RMI) have argued that the transition to clean energy would cost less and happen faster than governments, businesses, and many analysts expected. In recent years, this view has been fully borne out: The cost of renewable energy has consistently fallen faster than expected, while its deployment has been faster than predicted – further reducing costs.
Thanks to this virtuous circle, renewables have made a breakthrough. And now, new analyses from two authoritative research institutes have added to the mountain of data showing that a rapid shift to clean energy is the most cost-effective way forward.
Policymakers, business leaders, and financial institutions must urgently take into account the promising implications of this development. With the UN climate conference in Glasgow, it is important that global governments understand that reaching the Paris climate agreement’s 1.5-degree warming target is not about making sacrifices; it is about seizing opportunities. The negotiating process needs to be recast so that it is less about burden sharing and more about a lucrative race to deploy cleaner, cheaper energy technologies.
One can only guess why forecasters underestimated the falling costs and accelerating pace of renewable energy deployment for decades . But the consequences are clear: their poor forecasts have underpinned trillions of dollars of investment in energy infrastructure that is not only more expensive, but also more harmful to humanity and all life on the planet.
This is possibly our last chance to make up for a decade of missed opportunities. Either we continue to waste trillions on a system that is about to kill us. Or we quickly switch to the cheaper, cleaner, more advanced energy solutions of the future.
New studies shed light on how a rapid shift to clean energy would work. In the report by the International Renewable Energy Agency(IRENA)… The Renewable Spring lead author Kingsmill Bond shows that renewable energy follows the same exponential growth curve as previous technological revolutions, building on predictable and well-known patterns.
Accordingly, Bond points out that the energy transition will continue to attract capital and develop its own momentum. However this process can and should be supported to ensure that it happens as quickly as possible. Policymakers who want to drive change must create an environment that supports an optimal flow of capital.
Current signals from financial markets show that we are in the first phase of a predictable transformation of the energy system, with new energy sectors spectacularly outperforming and the fossil fuel sector experiencing a downgrade. This is the point at which smart policymakers can step up to the plate to create the institutional framework necessary to accelerate the energy transition and realize the economic benefits of establishing local clean energy supply chains.
The findings of the IRENA report are confirmed by a recent analysis by the Institute for New Economic Thinking (INET) at Oxford Martin School. This shows that a rapid shift to clean energy solutions will save trillions of dollars while keeping the world on track for the 1.5 degree Paris Agreement target. A slower rollout would be more financially costly than a faster one, and would have significantly higher climate costs from avoidable disasters and worsening living conditions.
Due to the power of exponential growth, a faster transition to renewable energy is readily achievable. The Oxford INET report finds that if the exponential growth trends in solar, wind, batteries and hydrogen electrolysers continue for another decade, the world is well on its way to achieving net zero emissions power generation within 25 years.
In his response to the INET study, Bill McKibben (350.org) points out that fossil fuel costs are not going to fall. Moreover, any progress on the technological learning curve for oil and gas would be outweighed by the fact that the world’s easily tapped reserves have already been exploited. He warns, therefore, that precisely because solar and wind are saving consumers money, the fossil fuel industry will continue to try to delay the transition to cut its own losses.
We must not allow any further delays. It is essential in the run-up to COP26 that governments understand that we already have cleaner, cheaper, ready-to-go energy solutions. Reaching the 1.5 degree target is not about making sacrifices, it is about seizing opportunities. By taking action now, we can save trillions of dollars and avoid the climate devastation that will otherwise plague our children and grandchildren.
Translated from English by Jan Doolan. In cooperation with Project Syndicate, 2021.
Facebook is now called Meta – it’s just the corporation behind Facebook, Instagram and WhatsApp. That sounds familiar? Perhaps to Alphabet, which to this day everyone knows only as Google? Will it be a bit more confusing for the regulators in Brussels and Berlin if they have Alphabet and Meta regulation as their task in the future?
A look at the serious topics, of which we can offer you a veritable cornucopia in this issue. The Data Act will now probably not come into force until February instead of December as planned – Till Hoppe and Jasmin Kohl have researched the exact reasons and why this comes along with some economic concerns for you.
In previous issues, Lukas Scheid has already explained to you some of the key discussion points for the COP26 conference– today this short series concludes with a look at Article 6 of the Paris Climate Agreement, which will keep the negotiators very busy.
The revision of the NIS Directive is on the fast track. It could start as early as mid-November – what the revision does not deal with and what may cause discussions with the member states can also be found in this issue. At an even earlier stage are the discussions on the eID, which the Committee on Internal Market and Consumer Protection (IMCO) started yesterday – an important topic, also for Germany’s digitization plans: you will surely remember the movie-like false start of the German ID wallet a few weeks ago.
Finally, at the Apéropa: enjoy the long weekend – as long as the Member States let you.
“Paris has set the vision, in Glasgow it will become concrete,” EU Commission President Ursula von der Leyen said on Thursday with a view towards the world climate conference starting on Sunday. Three issues in particular are to become concrete: How does the 1.5 degree target remain within reach? Who will finance global climate protection and adaptation measures? How will emission reductions be measured and rewarded? The latter is considered to be the key to the success or failure of COP26, as is the finalisation of the “Paris Rulebook“, the plan that is supposed to turn the promises made in Paris into results.
The Paris Rulebook sets out how the goals of the Paris Agreement will be achieved, the criteria countries will use to set their national CO₂ reduction targets and how measures taken will be monitored. At the 2018 World Climate Conference in Katowice (COP24), countries agreed on this rulebook. What was missing, however, was a fleshed-out implementation of Article 6 of the Paris Agreement. Even a year later in Madrid, no agreement was reached, and so now it is supposed to work out in Glasgow.
The Paris Agreement states that countries can cooperate on a voluntary basis and to achieve their reduction targets, and can transfer emission reduction results. Translated: A country that removes CO₂ from the atmosphere can transfer this reduction to other countries. The principle is global emissions trading.
Many industrialised countries are not in a position to reduce their own emissions fast enough to meet the specified reduction and climate protection targets. So each country is allocated a fixed amount of emission rights, in proportion to the size of its population. If the emissions caused exceed the emission rights, a country can then buy emission rights from other countries. Conversely, if a country emits less than it is entitled to, it can sell its surplus rights. The result is a transparent system in which the emission, reduction and storage of emissions are made verifiable.
Such a principle for more sustainable economic activity at the global level had already been agreed in 1997 in the Kyoto Protocol, but it expired in 2020. Moreover, numerous industrialised countries – including the USA, Canada, Japan, India and China – had either already withdrawn from the agreement or had not committed themselves to further reduction targets. Kyoto is therefore now considered a failed climate agreement, as it did not lead to a significant reduction in greenhouse gas emissions. However, it was not emissions trading per se that was to blame, but the lack of commitment to meet reduction targets.
With the Paris Agreement, a successor to the Kyoto Protocol was created. However, the establishment of global emissions trading threatens to fail once again if Article 6 does not deliver what it promises in its concrete form: the reduction of emissions to a level that keeps the 2 degree target and ideally the 1.5 degree target within reach.
That this goal is currently out of reach is shown by the UN Emission Gap Report 2021, released this week. With current NDCs, the planet is heading for global warming of 2.7 degrees compared to pre-industrial levels. And even if all countries’ climate neutrality targets are met, the report says, warming is still 2.2 degrees. But the report also gives reason for hope – hope in Article 6. Emissions trading could help reduce emissions. However, this is only possible if rules are clearly defined, transparency and monitoring are guaranteed, and the aim is to actually reduce emissions, it says.
Von der Leyen pushed on Thursday for a mechanism based on scientific findings that holds the biggest emitters equally accountable, but also prevents double counting of emissions savings. That is also what is written in the Paris Agreement.
Brazil has long been considered a major opponent of preventing double counting . The country with one of the world’s largest carbon sinks – the Amazon – would like to use the rainforest’s CO2 storage potential to achieve its own climate targets, while at the same time reselling emission rights for exactly the same storage potential. This dual use could impede global emissions reductions and would undermine the credibility of effective emissions trading. Brazil, however, indicated last week that it would travel to Glasgow ready to compromise on the issue. Brazil’s chief negotiator, Leonardo Cleaver de Athayde, said in an interview with the Brazilian newspaper Valor Economico that they would be flexible to reach an agreement.
The second stumbling block is a remnant of the Kyoto Protocol. At that time, it was agreed to issue certificates for emission-saving measures in developing and newly industrializing countries, which in turn could be purchased by industrialized countries – the so-called Clean Development Mechanism (CDM). Brazil, South Korea, China, and India account for almost 85 percent of all CDM certificates issued to date – so-called CERs. These countries now want to take their unused CERs with them into the new system under the Paris Agreement. However, this could ensure that the market is flooded with certificates for saved emissions from the past right from the start. The big concern is that the countries issuing the certificates will be less ambitious in pursuing their climate protection goals and will rest on their existing certificates.
The negotiations in Glasgow will therefore be about whether and under what conditions emission rights may be counted twice and to what extent CERs from the Kyoto Protocol may be carried over into the new system. One possibility is that some of the CERs may be carried over. It could also be that certain countries can double count emission rights over a certain period of time. However, for the EU negotiators, the mantra that a bad deal is worse than no deal at all applies in this respect. The outcome is open.
The revision of the Network and Information Security Directive (NIS) cleared an important hurdle yesterday: The lead Industry Committee (ITRE) gave the negotiating mandate to Dutchman Bart Groothuis (VVD/Renew) and agreed on common amendment requests to the Commission proposal. This means that negotiations could start quickly. If the other committees agree to the ITRE’s petition, the start of negotiations in the trilogue would be possible as early as 9 November.
Rapporteur Groothuis is also in a hurry: “If we could do it before the end of the French presidency, that would be great”. He also believes this is urgently needed in view of the ransomware blackmail wave. The Biden administration has already responded to the problems, he said, Joe Biden with Vladimir Putin in his first conversation not without reason addressed cybersecurity. “We need to act quickly – because we don ‘t want Europe to be a more attractive target for attackers than other regions,” Groothuis says.
To ensure that the obligated organizations actually take action, the penalty range for repeated violations of the obligations will in future be up to two percent of turnover or up to ten million euros.
According to the will of the European parliamentarians, the managing directors of the companies should be responsible for the compliance with the duties. “As a last resort, female managers could even be temporarily relieved of their responsibilities,” explains Rasmus Andresen (Greens/EFA).
For Bart Groothuis it is clear: “Cybersecurity is no longer a niche, but a matter for the boss. He therefore does not see the idea of holding those technically responsible for IT security accountable as being effective. In many places, it is primarily a matter of very simple but effective measures such as an obligation for two-factor authentication or backups.
The core of the revision, also known as the NIS2 Directive, is a higher level of cyber security for operators of critical infrastructures. These are already covered by the old NIS Directive and national laws such as the IT Security Act, which to a large extent have the character of implementing legislation.
However, the revised NIS Directive is now to cover more areas than the old regulation, according to the EP’s industrial policy makers: in future, health care facilities and research institutions are also to fall within its scope.
In Germany, the IT Security Act, which was revised in anticipation of the NIS revision, already covers all larger hospitals and, via the Patient Data Protection Act, all hospitals from 2022. Research institutions have so far not been subject to the German regulations in general, but only in certain sectors.
A potential point of contention with the Council could lie in the obligation of smaller municipalities: Within Europe, independent municipalities are sometimes very small entities for which a higher level of IT security could well cause practical implementation difficulties. At the same time, however, it is precisely these that have often become an easy target for blackmailers in recent months.
In addition, the industry politicians also want to oblige companies that play a critical role in supply chains to increase their IT security obligations. “Once important supply chains, power supply or public administration come to a standstill due to an attack, then it is too late,” says Angelika Niebler (CSU/EPP). The fact that the requirements for cyber security are now being increased is the right thing to do. This also applies to the stricter reporting requirements for companies affected by serious attacks, she said. “This must not lead to more burdens for our SMEs, but SMEs must also pay more attention to cyber security,” Niebler said.
Parliamentarians want to set a deadline of 72 hours for the initial notification of serious inc idents to cybersecurity authorities, analogous to the data protection incident rules. The Commission proposal only provides for 24 hours here.
The NIS Directive is considered an essential building block of the European cybersecurity architecture – but suffers from a structural problem: Since the EU lacks competences in the field of security, but cybersecurity is handled by intelligence services, military and civilian institutions depending on the incident or national preference, the EU can only partially intervene here.
Rapporteur Bart Groothuis, who himself worked for the Dutch Ministry of Defence in the field of cybersecurity for over a decade, sees the problem. He therefore thinks that a change through the NIS revision in particular would be helpful for better cooperation: a common database for serious incidents and a security breach database should remedy the problem. In this context, the European Network Security Agency ENISA should become “a kind of Switzerland”, “with which everyone can share their information without everyone knowing what kind of source it comes from”. This would also make it easier for intelligence services to share information.
However, Bart Groothuis does not want to see one particularly critical area regulated under any circumstances: the Internet’s Domain Name System root servers. This central administration of domain names in the network is currently distributed among 13 operators, two of which, RIPE and Netnod, are based in the EU. All Internet providers obtain the translation of domain names to IP addresses from these central servers.
From an IT security point of view, regulating this infrastructure is actually necessary, says Groothuis. But it would be politically wrong to regulate into it – because that would open the way for China and Russia, who want this under completely different premises, to influence this central system of the Internet. Which is why, while all relevant downstream DNS servers in Europe are to fall under the NIS, the root servers are to remain exempt.
As the NIS revision is limited to critical infrastructures, another aspect is soon to be addressed in regulatory terms: all so-called smart devices. Industry and Internal Market Commissioner Thierry Breton is expected to present his first proposal for a Cyber Resilience Act (CRA) for connected devices in 2022. “We have also advocated for stronger regulation in the context of the NIS2 directive, but this horizontal law is not the panacea to fix all cybersecurity problems at once”, says Green Rasmus Andresen. His CSU colleague Angelika Niebler welcomes the CRA announcement: Without clear requirements for the devices in the Internet of Things, this cannot come, she says. “It’s inconvenient enough if someone can hack my smart fridge, but, if we think about autonomous driving or similar, we have to put utmost emphasis on the cybersecurity aspect.” The EU is already further ahead on the issue than the national level, she says.
For years, we at the Rocky Mountain Institute (RMI) have argued that the transition to clean energy would cost less and happen faster than governments, businesses, and many analysts expected. In recent years, this view has been fully borne out: The cost of renewable energy has consistently fallen faster than expected, while its deployment has been faster than predicted – further reducing costs.
Thanks to this virtuous circle, renewables have made a breakthrough. And now, new analyses from two authoritative research institutes have added to the mountain of data showing that a rapid shift to clean energy is the most cost-effective way forward.
Policymakers, business leaders, and financial institutions must urgently take into account the promising implications of this development. With the UN climate conference in Glasgow, it is important that global governments understand that reaching the Paris climate agreement’s 1.5-degree warming target is not about making sacrifices; it is about seizing opportunities. The negotiating process needs to be recast so that it is less about burden sharing and more about a lucrative race to deploy cleaner, cheaper energy technologies.
One can only guess why forecasters underestimated the falling costs and accelerating pace of renewable energy deployment for decades . But the consequences are clear: their poor forecasts have underpinned trillions of dollars of investment in energy infrastructure that is not only more expensive, but also more harmful to humanity and all life on the planet.
This is possibly our last chance to make up for a decade of missed opportunities. Either we continue to waste trillions on a system that is about to kill us. Or we quickly switch to the cheaper, cleaner, more advanced energy solutions of the future.
New studies shed light on how a rapid shift to clean energy would work. In the report by the International Renewable Energy Agency(IRENA)… The Renewable Spring lead author Kingsmill Bond shows that renewable energy follows the same exponential growth curve as previous technological revolutions, building on predictable and well-known patterns.
Accordingly, Bond points out that the energy transition will continue to attract capital and develop its own momentum. However this process can and should be supported to ensure that it happens as quickly as possible. Policymakers who want to drive change must create an environment that supports an optimal flow of capital.
Current signals from financial markets show that we are in the first phase of a predictable transformation of the energy system, with new energy sectors spectacularly outperforming and the fossil fuel sector experiencing a downgrade. This is the point at which smart policymakers can step up to the plate to create the institutional framework necessary to accelerate the energy transition and realize the economic benefits of establishing local clean energy supply chains.
The findings of the IRENA report are confirmed by a recent analysis by the Institute for New Economic Thinking (INET) at Oxford Martin School. This shows that a rapid shift to clean energy solutions will save trillions of dollars while keeping the world on track for the 1.5 degree Paris Agreement target. A slower rollout would be more financially costly than a faster one, and would have significantly higher climate costs from avoidable disasters and worsening living conditions.
Due to the power of exponential growth, a faster transition to renewable energy is readily achievable. The Oxford INET report finds that if the exponential growth trends in solar, wind, batteries and hydrogen electrolysers continue for another decade, the world is well on its way to achieving net zero emissions power generation within 25 years.
In his response to the INET study, Bill McKibben (350.org) points out that fossil fuel costs are not going to fall. Moreover, any progress on the technological learning curve for oil and gas would be outweighed by the fact that the world’s easily tapped reserves have already been exploited. He warns, therefore, that precisely because solar and wind are saving consumers money, the fossil fuel industry will continue to try to delay the transition to cut its own losses.
We must not allow any further delays. It is essential in the run-up to COP26 that governments understand that we already have cleaner, cheaper, ready-to-go energy solutions. Reaching the 1.5 degree target is not about making sacrifices, it is about seizing opportunities. By taking action now, we can save trillions of dollars and avoid the climate devastation that will otherwise plague our children and grandchildren.
Translated from English by Jan Doolan. In cooperation with Project Syndicate, 2021.
