March 13, 2019 — Industry Trends
Democracy, the downfall of humanity
“Democracy is the worst form of government, except for all the others” – Winston Churchill.
When it comes to saving the world from climate change, this statement may not actually be true. As it stands today, the world is nowhere near reaching the 1.5 °C Paris Agreement target. And why is that? It is certainly not due to constraints on capital. There are massive pools of capital seeking to get into renewables. I would argue that the technology is there as well, or at least will mature quickly enough with a larger inpour of capital; but the political will is not there - at least not in western democracies.
As of February 2019, 185 countries have become a party to the Paris Agreement. In order for nations to take their responsibility, they need to take the grandiose plans of the Paris Agreement and break it down to boring regulatory frameworks that enable large amounts of capital to be deployed into renewables - and that is not happening quickly enough. Politicians in a democracy care about being re-elected and they tend to be re-elected by constituents who care mostly about what is near and dear to them. What is near and dear to any individual tends to be short term, and a lot more about economic prosperity rather than a slow – 50-100 year – increase in temperature, affecting people in another part of the world, or another generation.
Large, and I mean very large, deployment of wind, solar and storage has the potential to curb temperature – if matched by reduced usage of hydrocarbons. As it stands today, developers of wind and solar worldwide struggle with a range of issues that curb a fast transition to a sustainable energy future. Examples are:
- Ageing grid infrastructure
- Military zoning
- Oil and coal lobby
- Access to land
In a democracy, very few politicians are going to take the fight on these issues if their constituents are against them – and they generally are.
- To replace ageing grid infrastructure, would incur extra cost for the consumer of electricity, either as higher taxes or higher prices on electricity. Most consumers of electricity do not want to pay more money for their electricity.
- In many countries, the military has zoned large areas of land or sea to perform exercises. Areas that sometimes have excellent conditions for large scale deployment of wind and solar. In these situations, matters of national security – or arms trade – stand in conflict with a transition to renewables.
- Large renewable energy plants tend to be located where no people live, but animals live there. Here a matter of local ecology stands in conflict with global temperature rise.
- Archeological interests are often concerned that a renewable energy plant will destroy undiscovered archeological sites.
- Powerful oil & gas and coal lobbies wish to protect the interests of shareholders in oil & gas and coal companies, while communities earning their living from these industries wish to protect their livelihood.
- In many countries, getting title to land is difficult. This can be due to overlapping claims to land, hereditary law etc. An investor in renewable energy needs to know with certainty that each piece of land can be used for the 25+ years that the asset will be producing energy.
The politician is optimizing for being re-elected. The constituents are optimizing for their own short-term prosperity. Who is optimizing for the survival of the earth? Capitalism is – if there is money to be made. But is democracy – the people?
There seems to be a tradeoff between getting serious about avoiding climate change and the liberal freedoms westerners have become accustomed to. The slow deterioration of our climate is a problem that will be difficult to solve with short term political thinking.
I wonder what Winston would say.