How we could benefit from renewables

Dave Olsen
Aug 20, 2018 · 5 min read

If we want to reverse climate change, we should probably start now. However, many fear that taking steps towards alternative energy and lower resource usage will harm both people and countries economically. They say that building new infrastructure for energy will be extremely expensive and a long process, and that jobs will be lost in the hydrocarbon industry.

These are perfectly valid concerns — but, if the process is managed correctly, they needn’t ever arise. Indeed, the first major economies to make the switch will likely benefit from it. The countries who choose to lead the world in renewable energy will control the market and be able to leverage great power politically, as well as benefitting economically.

Let’s take the UK as a prime example of how investing in renewables could lead to huge rewards. It is an island nation, and so is surrounded by the potential for tidal and wave power harvesting. It also has huge potential for renewables inland, with plenty of areas ripe for wind farms, solar energy, and hydro-electric power (HEP) from reservoirs.

As such, it could produce enough energy for its own population, and additionally export huge amounts to other countries. Moreover, it currently is a net importer of energy — relying hugely on oil from NATO’s main adversary, Russia — with around 38% of energy being imported, as of 2015.

It also comes with the benefit of not angering the international community. If we want to meet the targets set out in the Paris Climate Accords, then we must, as the government appreciate, “virtually decarbonise” the energy sector by 2030. That’s just 12 years away. To achieve this, there are two choices: switch to nuclear and renewables, or go 100% renewables immediately.

While the UK government has already started the process of constructing Hinkley Point nuclear power station, there is still the choice to use this as a backup or supplement only.

If Brexit is to go ahead, the UK needs as much help as it can. Switching to a variety of renewable sources of energy will help the country to appease the EU and global geopolitical powers, as well as the benefit of becoming, potentially, a powerhouse economy. Many Remainers question how the country will survive economically after its exit from the EU — and this could be the answer.

But that’s just one tiny island nation. Could, and if so, how could, other countries achieve success through renewable energy?

Many smaller nations already have made huge strides: Albania has 85% renewable usage; Iceland has 100%; Bhutan produces 400% of its energy from renewables, and so sends 300% to India.

Generally, though, these countries have special circumstances — HEP, geothermal power and wind power respectively — under which the renewable sector thrives. Larger economies don’t necessarily have the same capacity, so could they manage a full 180 degree switch?

This much is for sure — every single country in Europe can. Germany, Denmark, Norway, Sweden, Spain and others have already recognised this and begun the process to make their energy sector entirely dependent on renewables. Other countries, such as France and Italy, have elected to first switch to nuclear and renewables (France has a huge nuclear sector already), with a view to phase out nuclear once the future is clearer.

There is merit to the model that France, Italy, and the UK are going with. First, infrastructure in the future will be more technologically advanced, so the system for renewables will be more efficient. Second, the costs of the building can be spread out over a longer time. However, this does mean that these countries won’t receive the same benefits economically as the countries that switch now to renewables.

The reasons for Europe’s ability to quickly switch to renewables is three-fold: it has a diverse climate, beneficial geography, and most of it is combined in a wealthy free trade bloc.

The climate helps because most renewable sources rely on it: solar, wind, hydro-electric, and bio-fuel energy. The geography contributes because there are very few landlocked countries, so there is a large coastline for tidal and wave power harvesting. The EU ensures that countries can trade energy resources freely, and that private companies can supply to all of the nation states in the EU.

South America may also do well for the same reasons — their Mercosur trade bloc (consisting of Brazil, Argentina, Paraguay, and Uruguay) will ensure the long-term economic sustainability of renewables for these wealthy nations.

There are also benefits for many smaller, less developed countries. As the world generally moves towards renewables, countries with plenty of potential for energy harvesting outside of hydrocarbons could be the first to really take advantage and advance their economies. This could reduce global inequality and bring many more people out of poverty, especially in Africa.

Yet, there are a few regions that will struggle. This isn’t to imply disaster, but rather that they will have to make sacrifices. For example, North America, Central Asia, and the Middle East will all struggle.

North America is richer in hydrocarbons than renewable energy potential, although its prospective loss is tiny. This doesn’t mean that Trump is right to take such a stand against the transition — given time, the US, as well as Canada and Mexico — will have to make the switch and will become stable, slight importers of renewable energy.

However, the same cannot be said of the other two regions. While the Middle East is focusing more on trying not to collapse into dust at the moment, they will eventually have to deal with a post-oil age. Saudi Arabia stands to lose out, as well as Iran, the UAE, Yemen, Oman, etc.

Go further into Central Asia and the same issue is present, but in a more exacerbated form. There is very little room for renewable energy, and the current electricity is almost entirely from oil from within the countries. This is because these countries cannot afford to import, and a switch to having to import renewables will likely cripple Kyrgyzstan, Afghanistan, Uzbekistan, Kazakhstan, Tajikistan, and Turkmenistan. With Afghanistan beset by terror and war, it could become one of the poorest countries on the planet, along with Yemen.

So, if some of the poorest regions stand to lose the most, how can the move to alternative energy sources be managed? Well, the rest of the world should be able to produce more than enough energy for every country. Using nuclear fuel as a backup could allow the larger, developed economies to feel more secure in exporting more of the energy they produce to those who cannot produce it themselves.

As western countries generally stand to gain massively from renewables, and they have the initial capital to make the investment, why aren’t they? It’s about time we start investing in renewables, properly.

Dave Olsen

Written by

Politics, education, environmentalism, geopolitics, health, economics, philosophy. Deputy Editor at Leading a policy paper on 14–16 education.

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