This challenge is enormous. Every previous energy transition – from wood to coal, coal to oil, oil to gas/nuclear etc – involved moving up a thermodynamic ladder. Our fuels got more energy-dense!
In committing to net zero we are shifting down to less dense sources of energy (e.g. solar, wind and battery storage). Not only that, we’re aiming to do it in decades. Every previous energy transition took much longer.
In other words we’re aiming to do something totally unprecedented.
So Rishi Sunak’s right in one sense: governments have not been clear enough about the scale of the challenge. It is far-reaching, disruptive and expensive. Pretending it’ll cost nothing in the short/medium term is nonsense. But costs of doing nothing are, in the long run, far greater:
A new industrial revolution
But net zero is also something else. We’re setting ourselves an extraordinary challenge: a new industrial revolution. The scale of this is momentous (and I think massively underappreciated). It’s something I describe in my book Material World.
Think about it. Developed economies like ours have been mired in secular stagnation, with low productivity, for years. It’s hard to think of a better way of kickstarting innovation than an Industrial Revolution. In other words, net zero is also a massive opportunity.
In the coming decades we’ll need to come up with breakthrough technologies to redo everything: not just green power, but also making chemicals, refining metals, and producing fertilisers. Understand the material world and you understand how big a challenge this is.
We’re about to embark on one of the most exhilarating periods in innovation we’ve ever lived through. And if we do it right, we can and should aim not just for green energy but abundant energy, which would trigger massive gains for humanity. This is all very, very exciting.
In other words there’s a positive story here alongside the scary one. I’m surprised Rishi Sunak is so reluctant to embrace it. There’s reasons for hope alongside the despair. Not deluded hope or cakeism. Hope, because we know humankind is capable of this kind of innovation.
Where does the UK stand?
When you tour the material world you find that throughout history, we’ve repeatedly been too gloomy about our ability to invent our way out of trouble. Much of the Industrial Revolution involved British people outperforming these expectations. Chances are that’ll happen again with net zero.
But here’s the thing: right now most of those innovations, patents and advances are happening in China. On batteries, on solar, hydrogen electrolysis – even on low carbon cement. The Biden administration is trying to change that, steering investment back to the US with the Inflation Reduction Act.
Right now, it’s not clear where the UK stands. On the one hand, it’s a leader in wind power deployment. And the Government just handed out massive subsidies to Tata and BMW for electric vehicle (EV) manufacture and green steel.
On the other, you have statements like the PM’s, hinting at rollbacks. In practice, many in the industry (including the EV sector) have already thought the 2030 petrol car ban looked likely to fail, and the gas boiler deadline even less feasible. So in one sense shifting these deadlines back is simply putting this in black and white.
Right now businesses are deciding where to invest, where to site plants, where to put R&D centres, the places where this Industrial Revolution will be forged. The UK’s lack of clarity and policy on energy, net zero etc is infuriating businesses. The PM’s statement on 19 September made it worse.
Just read the statements from Ford and Stellantis:
Lisa Brankin, Ford UK Chair:
“Three years ago the government announced the UK’s transition to electric new car and van sales from 2030. The auto industry is investing to meet that challenge.
Ford has announced a global $50 billion commitment to electrification, launching nine electric vehicles by 2025. The range is supported by £430 million invested in Ford’s UK development and manufacturing facilities, with further funding planned for the 2030 timeframe.
This is the biggest industry transformation in over a century and the UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future.
Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three. We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high.”
Stellantis is committed to achieve 100% zero emission new car and van sales in the UK and Europe by 2030.
Our range will progressively move towards 100% electric, ahead of current legislation. For example, Fiat, Alfa Romeo and DS Automobiles becoming fully electric by 2027 and Vauxhall by 2028. Furthermore, as outlined in our Dare Forward 2030 strategic plan, we will be carbon net zero by 2038.
Clarity is required from Governments on important legislation, especially environmental issues that impact society as a whole.
They feel they’re being messed around. And this is the public stuff. In private they’re far, far more scathing. Why invest in a country which doesn’t seem to know what its strategy is?
This article is reproduced from Ed Conway’s X thread with permission.
You can order Ed Conway’s book ‘Material World’ here.