Cheaper energy thanks to climate protection
Measures against climate change are commonly associated with energy taxes and high costs. But the opposite is true: with the switch to renewable sources, energy prices will fall significantly.
When gasoline prices skyrocketed in the early 1980s, I asked my father how much gas had cost when he was learning to drive, back in New York in the 1930s. Twenty cents a gallon, he said, a mere five centimes a gallon. But that was only apparently cheap: Measured by wages and the cost of living, driving was actually more expensive in the 1930s than it was in the 1980s. And more expensive in the 1980s than it is today.
In fact, most things related to energy have become cheaper. It's a well-known economic principle: the more an industrial society produces of something, the sooner economies of scale kick in, efficiency increases and costs fall. This has brought us affordable cars, computers and LED lights.
Renewable becomes cheap
To limit climate change and preserve the planet for future generations, we have about 25 years to eliminate CO2 emissions from energy consumption. The most economical way to get there is to use electricity from renewable sources for our cars, heating systems and almost everything else. In the few cases where that doesn't work, such as airplanes, we can also use renewable energy to synthesize clean fuels from air and water. That may sound utopian from today's perspective - but it's not. The point is that renewable energy also follows the same economic rules of falling costs, even more so than fossil fuels.
Over the past 20 years, the total cost of producing solar power has dropped 90 percent to about 5 cents per kWh, about the same as electricity from coal and natural gas. Over the next 20 years, the cost of solar power is expected to drop by another 50 to 75 percent.
The situation is similar with electric mobility. Ten years ago, the total cost of ownership of an electric car was many times higher than that of a comparable petrol or diesel car. Today, the electric car is already somewhat cheaper overall; the purchase price is slightly higher, but the operating costs are significantly lower. In ten years' time, the electric car will also be significantly cheaper to buy.
Limited additional consumption
But should we be worried about this cheap energy, because we will use all the more of it? I see no reason to panic. First, energy consumption is "inelastic": a change in price has little effect on demand. If the price of energy goes up, we still commute to work and heat our homes because we have to. If the price falls, this also has only a small consumption-increasing effect, which can be counteracted with efficiency measures.
Second, there is more than enough sunshine, wind, and geothermal energy to supply all the renewable electricity and much of the heating we will need. While these sources are not evenly distributed across the planet, neither are fossil fuels. We have simulated the climate-neutral Swiss energy system in detail, with hourly weather patterns and seasonal fluctuations. And find that it works most reliably and cost-effectively if we import about 25 percent of our energy consumption in the future. Today, energy imports account for around 75 percent.
Steering change
In the heated debate about the planned levies, it is easy to forget what is at stake: incentive levies make fossil fuels more expensive and thus encourage the switch to renewable energies, which become increasingly cheaper as a result. An incentive tax is successful if no one has to pay it at the end because everyone has switched. Other instruments create direct incentives, for example by providing financial relief for electromobility or the replacement of heating systems. Most countries use both means to promote the switch. This is also provided for in the new CO2-law before.
Climate protection: swift action is crucial
It is possible that one day we will need stricter regulations, as was once the case with leaded petrol or mandatory catalytic converters, in order to move away from fossil fuels altogether. However, such regulations will only be able to gain majority support when renewable energy is so cheap and commonplace that only a few people and companies still want to use fossil fuels. This could well happen on its own. But with the right measures, the process can be ensured and significantly accelerated.
A stringent Swiss climate policy can reduce CO2 emissions in this country and make a significant contribution to renewable energy becoming cheaper than fossil energy ever was. This is also relevant for other countries, whose climate course in turn determines our future. In the next 20 years, a billion people in Africa and Asia will have access to energy. Their governments have a vested interest in choosing the cheaper form of energy. Action is therefore important, and speed counts.
Source: ETH News
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