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- The global green energy transition could be the largest market the world has ever seen according to John Kerry.
- Rapid decarbonization of the world’s industries and economies will require global cooperation and innovation on an unprecedented scale.
- “We have to embrace this transition which will, in the end, I guarantee you, be larger than ultimately than the Industrial Revolution was.”
There are two major arguments for large-scale investment in a global clean energy transition. Number one, we really have no choice; like it or not, the warming climate is going to make the planet increasingly uninhabitable for humans in the near future if we don’t decarbonize the global economy in a hurry. Number two, it’s going to make a lot of people a lot of money.
“This is the largest market the world has ever been staring at: the energy transition market,” Special Presidential Envoy for Climate John Kerry said late last week at the IV CEO Summit of the Americas, and event hosted in Los Angeles by the U.S. Chamber of Commerce. “Every aspect of life can be impacted in a positive way. It’s not something to fear — that we have to shun and shy away from. We have to embrace this transition which will, in the end, I guarantee you, be larger than ultimately than the Industrial Revolution was.”
Considering the earth-shaking, irreversible disruptions that the industrial revolution set into motion this may sound like hyperbole – but Kerry has a point. Rapid decarbonization of the world’s industries and economies will require global cooperation and innovation on an unprecedented scale. The industrial revolution was the natural evolution of science and technology – decarbonization will require willful, deliberate, and decidedly difficult uprooting of the status quo and the reversal of a system that has made and continues to make a lot of money for a lot of people. It’s a herculean task – but the experts say that the only other options end in death and destruction.
The writing is on the wall, and plenty of business-savvy companies, investors, and innovators are rushing to place themselves at the vanguard of what is going to be one of the biggest – if not THE biggest – growth sectors the world has ever seen. The tech bigwigs of Silicon Valley, for example, have been some of the earliest and most earnest supporters and adopters of green energy technology. “Technology companies are backing solar, wind, and other renewable energy projects to fuel their increasing appetite for electricity, Nasdaq reported last year. “In some countries, developers pointed to tech companies’ willingness to spend upfront, which has helped make this private sector deals more important than government subsidies as the main support in the expansion of renewable energy capacity.”
Over in Europe, even Big Oil has gotten on board with pivoting to become Big Energy in response to what they view as the inevitable decline and fall of the carbon empire. Will fossil fuels continue to rake in money during the current global energy crunch, started by the pandemic and further fuelled by the Russian war in Ukraine, the current carbon renaissance is more than likely an anomaly before fossil fuels, most notable coal, continue their terminal decline. Proponents of early clean energy investing argue that those who are short-sighted enough to cling to petroleum products without at the very least diversifying their portfolio with renewables may be in for a rude awakening when fossil fuel prices collapse and the most promising clean energy markets have already been snapped up.
Indeed, this already seems to be the case in the United States. Already, European supermajors are pushing into the U.S. market to sell renewable energy while U.S. supermajors stubbornly drag their feet on decarbonization initiatives. “European businesses including Shell, BP and TotalEnergies are seeking to expand into renewable energy, electric vehicle charging and other fast-growing businesses as U.S. companies like Exxon Mobil and Chevron mostly keep their focus on oil and gas while investing in capturing carbon from industrial plants and biofuels,” The New York Times reported earlier this month, highlighting the growing divide between Big Oil’s approach to climate change on the opposite shores of the Atlantic.
Yes, changing the energy industry overnight is going to cost a pretty penny and incur some serious growing pains. It will be difficult for the economy as well as energy sector workers – for a short time. But in the long run, the clean energy sector is fertile ground for incredible growth, and no small number of jobs. The prevailing wisdom suggests that like as not, the energy transition is coming, and if you can’t beat ‘em, join ‘em – and get rich while you’re at it.
By Haley Zaremba for Oilprice.com