Climate Change and the New Tech Revolution

In recent decades climate scientists, international organizations and environmentalists have produced several reports and articles foretelling the likelihood of human-induced climate change due to the burning of fossil fuels and the cutting down of forests. Most of these have focused on the probability of largely detrimental effects like rising sea levels, extreme weather events, and adverse effects on agriculture, pests and diseases, etc.

Many view this as “doom and gloom,” or as some avowed climate skeptics call it, “doomsdayism.” This is understandable if it is seen as scare tactics that threaten existing profitable enterprises and investments that provide jobs and support communities. What the skeptics and many in the business community see are “doom and gloom” reports advocating reduced greenhouse gas emissions through reductions in existing fossil-fuel based enterprises, thus threatening their investments and interests.

What the skeptics and the broader community need are not simply warnings of future negative impact but suggestions of positive alternatives that provide hope and future prosperity.

Environmentalists and those concerned about human-induced climate change do attempt the positive by advocating renewable energy through targets or taxes on emissions. This includes international moves towards national or global emissions reduction targets.

However mainstream investors and businesses see this as a threat to their existing fossil-fuel based enterprises, and as costly and damaging to the economy, and therefore oppose such measures.

A technological revolution is already underway, with renewable energy a rapidly growing fraction of the energy mix in many countries including Germany, the USA, and even China and India. This has had wide international news coverage and many details are available on the web. In contrast, the market for fossil fuel exports is about to decline rapidly, so investment in fossil fuel industries will soon become “stranded assets.”

Renewable technology, including not only solar, wind and tidal power, but also electric cars and storage batteries, will soon storm the market. Products from innovative companies like Tesla Motors will be the driver of new growth industries.

The key question for many investors is the time-scale for this inevitable technological change and how it compares with investor expectations, political election cycles, and voter expectations.

The new Tesla battery storage development demonstrates the technological revolution that is already taking place. Off-grid renewable energy supplies, recharge of electric cars reducing reliance on oil, and the chance for rural and remote communities to become self-sufficient will all have massive economic and social benefits and can be expected to take off rapidly.

It is time policymakers, businesses and investors realize the implications of the technological revolution already happening before their eyes. It is not only that it is happening overseas now, with falling demand for fossil fuels, and thus of exports of coal and maybe natural gas in the near future. More importantly, many countries (like Australia) are lagging far behind in their deployment of renewable energy and thus missing out on the new cheaper energy sources that will be needed to replace jobs and income lost from falling minerals exports.

Countries around the world need investment now in renewable energy technology and installations, which will not only be cheaper than coal-fired power, but will create jobs and income especially in rural and remote communities that desperately need them. We should be looking forward to remote communities which are not only energy self-sufficient but exporting energy in the form of recharging electric cars and trucks on nearby highways  but also renewable fuels generated via renewable energy. Renewable energy is thus a good long-term investment with the potential to increase jobs and income all over.

Clean fuel storage and transport such as via the production of hydrogen is already a developing technology. These non-polluting fuels can be exported, and huge potential markets exist in Asia, such as China and Japan, where they can be used to regenerate electricity via fuel cells (in the case of hydrogen) or used to fuel vehicles.

Meanwhile investment in fossil fuels, such as in coal mines and export facilities will rapidly become stranded investments. That is the reality. The sooner policymakers recognize this the better off we will all be. That is quite apart from avoiding the bad effects of enhanced climate change.

We need to join the technological revolution or suffer the consequences of being left behind.