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The Paris climate talks don’t matter

by Pramod Dibble 04 Dec 2015
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The Paris climate talks are in progress, with President Obama and 150 other world leaders hashing out their commitments to a sustainable energy future. As this highest-of-high profile meeting occurs, speculations on implications to the global economy come thick and fast, to which I propose to add my two cents.

It doesn’t matter what political leaders decide in Paris.

Fossil fuels are gasping their last, propped up by an industry aging badly and the political agents they fund. Obfuscation and misinformation have succeeded in deliberately misleading enough of the citizenry that decisive political action is difficult, while taxpayers shoulder the burden of a $50 billion annual subsidy to fossil fuel companies, and the negative $415 billion economic impact of burning coal, $590 billion for oil, and $342 billion for natural gas*. The combined unpaid cost of fossil fuels to the USA is about $1.35 trillion annually.

Meanwhile, renewables including wind, hydro, and solar produce no emissions at all, eliminating that $1.35 trillion cost to the economy (by the way, that’s equal to 8% of the US GDP). It should be noted that our economy is wholly dependent on a reliable energy supply, thus without this $1.35 trillion dollar unpaid cost, our $16.77 trillion GDP could not exist given the technologies available to 20th century developed nations.

But it’s no longer the 20th century. Our technological capabilities have exploded over the last 3 decades, and energy generation is no exception to the trend. Solar, for instance, costs less than one quarter to generate today than it did in the year 2005, and is still declining by about 14% annually. In comparison, the price of electricity from coal and natural gas has not declined since 1990, and fluctuates primarily with the price of fuel.

Wind power has achieved cost parity with natural gas, which is often touted as the cheap, clean alternate to coal fired plants, and geothermal has long been the least expensive way to generate electricity. Solar will achieve cost parity with natural gas before 2018.

Further evidence that renewables are edging fossil fuels out of the limelight is on the demand side. Walmart, Costco, Kohl’s, IKEA, Macy’s, to name but a few, have installed hundreds of rooftop solar systems to manage their operating expenses, and benefit from cheap, clean energy and the positive brand image that goes along with it. These are consistently cost-conscious organizations, and if the economic case were not compelling we would not see this level of adoption.

This has become an economic issue, rather than a political one. We will continue to see entrenched, anti-innovation companies clinging to the dirty technologies of the past, but those who make their decisions based on data rather than legacy will see the clear path forward is renewable.

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