Richard Heinberg is the author of numerous environmental books and essays, including the recently published Power: Limits and Prospects for Human Survival, as well as a senior fellow at the Post Carbon Institute. He will be sharing his perspective on the global energy crisis and its consequences for the economy and the energy transition in his opening keynote address at Environment Analyst’s upcoming Global Business Summit (23-24 August, Denver).
Here, Richard offers a preview of his insights.
EA: You’ve written widely on the intertwined energy, food and economic crises. In light of your deep understanding of their implications, what is your view on the national and corporate commitments to climate goals (e.g. net zero by 2050)? Will they make a difference, or will wider forces outrun them?
RH: As the IPCC acknowledges, current national commitments are insufficient to avert the risk of catastrophic climate change. Further, existing commitments are in many cases aspirational, with no clear methodology in place for achieving stated goals. This is glaringly evident in the case of the United States, the country responsible for the largest share of historical emissions and the world’s second-highest emitter currently. There is currently no obvious political path for the US to achieve net zero by 2050. Further, there are indeed outside forces that could make the transition even harder, including political upheaval, economic instability, broken supply chains, and the global energy/food crisis. Aspirational goals are a good first step, but it’s a pretty small step, considering what must come next.
EA: What sorts of commitments, if any, would you prefer to see?
RH: For nations, what is required is a two-part plan, customized for each nation.
First part: a technical plan for how the nation will transition electrical generation and transmission (including new renewable generation capacity plus energy storage); transportation (including trucking, shipping, and aviation); food (with sub-plans for reducing and/or transitioning farm machinery fuels, fertilizers, pesticides, packaging, and transport); manufacturing (notably, high-heat industrial processes like metallurgy and cement making); mining (with consideration of resource limits — including limits to the minerals needed in the renewable energy industry); and building construction and operation (with consideration of substituting low-carbon materials for current ones, optimum insulation, and heat pumps to replace furnaces and air conditioners).
Second part: an economic and political plan for how the technical plan can be implemented within necessary energy (fossil fuel) constraints. I just don’t see how a technical transition will be possible without some form of fuel rationing, so that remaining fuels can be used primarily for transition purposes rather than for discretionary purposes (e.g. consumerism and tourism). But that creates potential political problems, unless all parties are on board with the overall goals. The design of rationing systems, and the ways of accommodating businesses and households to likely economic disruption — these are political and social challenges.
Without such plans, aspirational goals and commitments are unlikely to have much meaning.
The best way forward would probably be to make plans as granular as possible, so that big transition tasks that can only be accomplished nationally are separated from tasks that can be accomplished locally. Then local communities can be enlisted and incentivized to do as much of the transition work as possible. If it’s all left up to national governments, there is always the possibility that years of effort could be undone in a moment by a change of leadership. Also, people are more likely to feel a sense of responsibility, ownership, pride, and participation at the local level. Maintaining social cohesion will be vital to success at all levels.
EA: Given the enormity of the challenges and opportunities faced by the energy sector, what in your view are the prospects for a complete energy transition that meets the Paris goals?
RH: Realistically, the transition is most likely to be incomplete, divergent (some nations succeeding much more than others), and messy (causing political, economic, and social problems while it attempts to solve the climate problem). Therefore, we’ll also be forced to do a lot of adaptation to climate disruption. Planning should therefore also be ongoing for ways to minimize casualties.
EA: Do you have any comments on prospects through and beyond the energy transition for other industry sectors such as manufacturing, agriculture or infrastructure?
RH: All of these sectors (and more) will require thorough transformation. There is already a significant amount of discussion within each sector regarding new pathways.
For example, within agriculture, alternative low-carbon, or carbon capturing, techniques are being researched and demonstrated. In the manufacturing sector there are efforts underway to identify alternatives to plastics and to increase opportunities for recycling and repair of products. All of these alternatives will require government and community support in order to move into the mainstream and displace current methods and materials that are, for the time being, often cheaper or more functional or convenient.
"Consultants can’t know all the answers, so it’s a matter of creating a learning/research culture in the relationship between the consultant and the company, and within the company itself."
EA: There has been some debate about the possibility of decoupling economic growth from carbon emissions. Do you believe that green growth is possible?
RH: While growth is measured in GDP, it is practically understood to mean an increase in population and per capita consumption. Growth of this kind is unsustainable even if it can be decoupled from carbon emissions (and, historically, the coupling has been close at the global level; some countries, for example the US, have apparently decoupled somewhat on a relative basis by importing more products from, and thereby outsourcing carbon pollution to, for example, China).
Nature has limits. For example, the resources required to build solar panels, wind turbines, and batteries are limited. Recycling could help, but it’s never 100 percent efficient. Ultimately, we have to see just how much nature can sustainably provide, and then limit the scale of our economy and consumption to that. The Global Footprint Network does a good job of making those calculations, and they report that we’re already overusing what Earth can provide. We’re burning the past (fossil fuels) and stealing from the future (reducing resources that will be available to future generations).
EA: What aspects of the global economy would have to change to ensure the destructive aspects of a growth economy are no longer incentivized?
RH: The destructive aspects of growth can be minimized to a certain degree by emphasizing quality-of-life indicators over GDP. Then we can concentrate on direct methods of improving people’s lives. Right now, by demanding growth we just incentivize society to make and distribute more products while assuming that this will result in greater overall satisfaction. Surveys suggest that this is not working out so well. We can be happier even if we’re consuming less, as long as our basic needs are met and we have a sense of purpose and connection with others. But if we’re consuming more with each passing year and there are more of us, we’ll eventually hit a wall — even if what we’re consuming is more climate-friendly.
EA: Given that the lifeblood of companies and economies in their current form is growth, how can short-term growth imperatives be reconciled with long-term eventualities?
RH: I think the shift in indicators is a key. But it has to be tied to an overall examination of goals and means. What’s an economy or company for? We assume it’s to produce jobs and products. But if it’s also producing extreme economic inequality, then we need to acknowledge that and deal with it. Companies have a responsibility not just to be profitable, but to enable their employees and customers to be more aware and happier. Fairness is a basic human value, so companies have to look at their internal financial/economic structure in that light. Does the CEO make 400 times as much as the average worker? Is it possible to move toward employee ownership or a cooperative business model? Is the company doing a good job not just of virtue signaling, but of actually educating customers and employees about the sustainability challenges it faces and how it’s addressing them? What about company operations — vehicles, buildings, travel, and transport — can the company enlist employees in finding ways to make all of these more sustainable while making work more enjoyable?
EA: How might a sustainability consulting firm acknowledge these tensions between long- and short-term, and between global and local, when advising their corporate clients?
RH: One word: education. Yes, of course companies come to consultants to improve their bottom line. But they also need and appreciate some straight talk. Consulting firms naturally need to do their research, so that they’re aware of alternative processes and materials, and so that they can connect companies with relevant suppliers. But it’s also important that they understand the big picture — the challenges ahead not just for the industry, but for society as a whole.
Of course, consultants can’t know all the answers, so it’s a matter of creating a learning/research culture in the relationship between the consultant and the company, and within the company itself.
You can hear more from Richard Heinberg at Environment Analyst’s Global Business Summit next month on 23-24 August in Denver, where he will be giving the opening keynote address.
Please do join us at the Summit, for your chance to hear from Richard and other sustainability leaders, and to share in the latest thought-leadership for the environmental and sustainability consulting sector.