Back in the 80s, Australian band Midnight Oil became internationally renowned both for its rock music and its political activism.  In those days we talked about the green ‘movement’, a fringe of society that fought for the conservation of our environment.  Today the world is going green.  

 

So what is the problem exactly?  Why is the entire industrial world preparing for a radical transformation of the energy system? Why are we in Belgium going to have to spend several billion Euros in the coming decades on cleaning up our industries and homes? 

 

The problem is complex and very broad.  Volatile oil prices, import dependency, nuclear risks, greenhouse gas emissions, global warming, rising sea levels, fine particle air pollution, NOX & SOX pollution, hazardous substances, carcinogenic substances... the list can go on.   But conceptually we can simplify the issue since most of these challenges are interrelated. From our Belgian perspective it makes sense to look at the problem along two axes.  On the horizontal axis we make a distinction between Energy & Climate on the one hand, and Pollution and Waste on the other hand.   Along the other axis, we make a distinction between the base problems (e.g. global warming, toxins in surface water) and the challenges inherent in our response to those problems (e.g. reducing CO2 emissions, building vast renewable energy capacity).  Let’s take a closer look at each of these themes.

To state the obvious, energy is fundamental to humanity’s progress.  The problem is that about 85% of the world’s energy mix comes from fossil fuels.  In Belgium, we are about 78% reliant on fossil fuels; with the remaining covered by equally contentious nuclear energy (renewable energy covers about 2-3% of our needs).(1)  The importance of this point needs to be understood in its proper context.  Our entire economic and, one could argue, demographic system is dependent on fossil fuels.  Most people associate fossil fuels—oil, natural gas and coal—with heat and engines.  In other words, we burn the stuff.   There is more to it though, as Michael Pollan sketched so elegantly in ‘The Omnivore’s Dilemma.’(2)   Indirectly, we eat fossil fuels too.  The green revolution that transformed agriculture following WWII, and that in turn makes possible an expanding world population, is reliant on the nitrogen that we chemically extract from natural gas.  To illustrate, the BASF plant in Antwerp is one of the country’s largest consumers of natural gas for the production of ammonia, a major precursor to foodstuffs and fertilizers.

 

Thus, we are fundamentally reliant on fossil fuels.  Unfortunately, there are a number of problems associated with fossil fuels.  Yes, they are running out, but as the World Energy Outlook 2008 (3) report states, that is not the most pressing problem.  In the years ahead to 2030, we are facing increasing price volatility, uncertain investment in new production (and hence supply), and most importantly, the impact of greenhouse gas emissions on the climate.  

 

In 2008, oil prices increased dramatically to peak at approximately $140 per barrel.  Such price escalations place significant pressure on the world’s economic system, with some economists arguing that it helped trigger the economic recession we currently find ourselves in.  Robert Ayres from INSEAD (4), for example, posits that energy (expressed as ‘energy converted to useful work’) can be seen as a third factor of production, next to capital and labour.  Ayres finds that his three-factor model is able to explain historical growth of the US economy since 1900 with remarkable accuracy.  The key implication of this theory is that continued economic growth depends on a continued supply of cheap energy.  In the past, the cost of energy has declined because new sources of cheap oil were discovered, extraction technology improved, and the energy-efficiency of industry, combustion engines, etc has gradually improved.  All this seems to be coming to an end or at least slowing down markedly.  New sources of oil and gas are increasingly difficult and expensive to extract (technically and geopolitically), which, in combination with increasing demand, is responsible for the dramatic rise in oil prices in 2007-2008.  New advances in energy efficiency are possible, but will be increasingly expensive to achieve.  And alternative energy sources (renewable and nuclear) to date are not proving cheap to develop.  The point is that the world will need to get used to higher and more volatile energy costs, but this in the face of rising worldwide demand for energy.  

 

From a Belgian perspective, we face the additional problem that we are 100% dependent on oil and gas imports from geopolitically unstable regions.  We are exceptionally reliant on oil for transport (almost entirely), home heating and the chemical industry.  On gas, we are particularly dependent for industrial applications and electricity generation. (5)  To sum up, our economy is inherently reliant on a secure and affordable supply of energy, but increasingly, this is will be neither secure nor affordable.   And this is looking at it only from the perspective of fossil fuel supplies, when the most important factors we really ought to consider are the problem of greenhouse gas emissions and pollution.

How much do we know about climate change and the impact of our energy system?  While a dwindling number of experts still try to question whether climate change really is happening (6) and whether human activity is responsible, the consensus today (both scientifically and politically) is more robust than ever.  The most credible source on the matter is the Intergovernmental Panel on Climate Change (IPCC), a scientific body established by the United Nations that is tasked with evaluating the risk of climate change caused by human activity (in 2007 it shared the Nobel Peace Prize with former Vice President of the United States Al Gore).   In its latest Assessment Report (7) in 2007 the IPCC makes a number of key conclusions.  

 

Firstly, warming of the climate is unequivocal.  Recorded temperatures in the 1995-2006 period rank among the warmest in the instrumental record of global temperatures.(8) Sea levels are rising faster: the sea level rose at an average rate of 1.8 mm per year over 1961 to 2003 but at an average rate of about 3.1mm per year from 1993 to 2003.  Thus far, about half of the rise in sea level is ascribed to thermal expansion; a quarter is due to the melting of ice.  And the ice clearly is melting: the Arctic sea ice has shrunk by 2.7% per decade since 1978 and the world’s mountain glaciers and snow cover are declining.  The warming of the climate appears to be associated with increased rain in some parts of the world (e.g. northern Europe), more droughts in others (e.g. southern Africa), and a range of extreme weather events.  Also, this is having an impact on natural systems, especially marine systems.  Probably most critically, CO2 emissions are acidifying the seas (the world’ oceans are 30% more acidic compared to pre-industrial times), which some scientists claim could lead to a mass extinction of sea life.(9)