by Red Constantino
It’s not merely the content of recent climate and energy-related news that should give the country’s economic managers pause. It’s that news agencies – business wires, in particular – are now paying close attention to global threats and trends that the Philippine government continues to ignore.
Perhaps it was easy before, even convenient, to belittle demands for action that green groups had been making as “alarmist” or excessively rosy. But maybe it’s now time to pay attention?
Bloomberg News alone published two stories this month that should give the country’s leadership serious pause.
On April 27, the news agency released a story based on a paper written by Erich Fischer and Reto Knutti for the scientific journal Nature Climate Change.
The Nature study attributed to global warming “about 75 percent of the world’s unusually hot days and 18 percent of its extreme snow or rain.” The paper said “the fraction of precipitation extremes attributable to human influence” could reach up to 40 percent as the planet continues to warm.
“What used to be a one-in-a-thousand day, a one-in-three-year event, actually occurs four times in three years,” said Fischer, a researcher at the Zurich-based Institute for Atmospheric and Climate Science.
Elsewhere in the Philippines, unnoticed by many policymakers, a state of drought-induced calamity has been declared in the province of Maguindanao, North Cotabato, South Cotabato, including Cotabato City, and other neighboring provinces.
Earlier in April, Bloomberg’s headline blasted out an outcome that was projected a decade ago by non-government organisations: “This is the beginning of the end,” wrote the Bloomberg — as mainstream and pro-business as any news wire today. “Fossil fuels just lost the race against renewables.”
The conclusion wasn’t difficult to arrive at. Bloomberg’s Tom Randall reports “The race for renewable energy has passed a turning point. The world is now adding more capacity for renewable power each year than coal, natural gas, and oil combined. And there’s no going back.”
Deutsche Bank recently came out with a report projecting solar will attain grid parity – grid price equal to the est fossil fuel, coal – in two years time. Currently, solar is already at grid parity in more than half of countries globally. In some countries, solar electricity is already 40 percent “below the retail cost of electricity.”
No less than the National Bank of Abu Dhabi reports that “while oil and gas has underpinned almost all energy investments until now, future investment will be almost entirely in renewable energy sources.” It said “the vast bulk of the $US48 trillion needed to meet global power demand over the next two decades will come from renewables.” The conclusion of the report commissioned by the Middle East bank was simple. “Cost is no longer a reason not to proceed with renewables.”
According to the Economist, investment in renewable energy, mainly in wind and solar power, “rose by a sixth in 2014, to $270 billion” while “the cost of battery storage, a vital part of a solar-powered future, has fallen by 60 percent since 2005, and the overall cost of a solar-power system is down by 75% since 2000. IHS, a consultancy, reckons the cumulative fall will be 90% by 2025.”
Other renewable energy industry analysts anticipate the electricity market to “double to $US4 trillion” over the next two decades, with the solar sector during the same period increasing “by a factor of 10,” generating during the period “$5 trillion of cumulative revenue.”
The US coal sector is now in a structural decline, with the coal industry losing 76 percent of its value in just five years. Over 250 coalmines were closed between 2011 and 2013 with the world’s largest private coal company, Peabody Energy, losing 80 percent of its share price. According to the financial analyst Carbon Tracker Initiative, this indicated “a decoupling of US economic growth from coal.”
News agency Reuters says “China is reducing coal use for power generation faster than expected as the use of cleaner-burning fuels and slowing economic growth drags thermal utilisation rates to a potential record low, implying imports and prices will fall further.”
Beijing’s drive “to curb … air pollution is raising serious doubts about coal demand from the world’s top consumer of the fuel – right after imports slumped a third in February from a year ago.”
Based on monthly power generation and consumption figures, Reuters calculates that “utilisation rates at thermal power plants – nearly all coal-fired – have dropped to 52.2 percent in the first two months of this year.” It would represent “a new annual low” for China if the rate is sustained for the entire year.
According to Reuters, “China’s coal imports fell 11 percent in 2014 compared to the previous year, the first annual decline in at least a decade” with markets taking note. The news agency said “Australian coal prices – a benchmark for Asia – slumped 30 percent last year and dropped below $60 a tonne this month to the lowest level since May 2007. Producers are now holding back shipments to China amid uncertainty over quality checks under new ash and sulfur restrictions imposed in January.”
Officers in the Philippine bureaucracy – working on agriculture, climate change and resilience – are deeply aware of the increasing severity and frequency of climate change impacts. But the country’s economic managers? The answer is uncertain.
As top policymakers dither, it is clear staggering opportunity costs will simply mount. Each coal plant project approved can lock out for three decades – the lifespan of a coal power station – clean energy options for entire regions.
The government does not have the luxury of downplaying climate impacts threatening vulnerable communities – including a growing Filipino middle class, whose rise is likely to be violently yanked down as impacts to ecosystems, water and food hit household pockets. It is also sheer folly to ignore short to medium term risks to the country’s economy that will only accumulate as economic managers delay action.
In April, top officials from 20 major economies, also known as G20, agreed to probe into global financial risks posed by fossil fuel companies investing in ventures “that clash with international climate goals and may never be viable.” The investigation is yet another indication of growing anxiety in the financial establishment over unburnable fossil fuel reserves.
Aggressively pursuing low carbon energy strategies now rather than tomorrow will allow the Philippines to rapidly transition away from fossil fuel dependence and slide into a more efficient renewable energy-powered economy that is able to generate green jobs, promote decentralized economies, and increase overall urban and rural community resilience.