As of this day in November 2022, Egypt is currently hosting the 27th Conference of the Parties of the UNFCCC (COP27). COP27 aims to highlight Africa’s leadership role in combating climate change, demonstrating how political action, guided by good science, can help countries achieve climate goals such as pivoting away from fossil fuels, reducing pollution and carbon emissions, and pursuing sustainable development practices. At a time when many countries in the “global south” are at risk of climate change, these countries especially will be looking for concrete action during COP27.
No one doubts these noble intentions and yet, climate action has barely seen any progress. Arctic ice sheets are set to vanish completely during the summer months, sea level rises are already in motion and countries are struggling to manage their carbon emissions. After years of talks about green economies and green energy, it has not delivered on these promises and people are pessimistic about the future of Earth’s climate.
Need more energy
Scepticism about green energy and efforts to combat climate change in general stems from a crucial concern—the world is consuming even more energy. The Covid-19 pandemic reduced global energy consumption by 4.5% in 2020, a first in decades. However, in 2021, energy consumption levels have rebounded by 5% with 2022 figures set to surpass 2021’s numbers. Major economies such as China (3,652 million tonnes of oil equivalent or Mtoe) and the United States (2,123 Mtoe) are the biggest energy consumers in 2021. Worryingly, up and coming economies such as India (927 Mtoe) and Indonesia (226 Mtoe) have seen substantial increases in energy demands with regions such as Southeast Asia expecting to grow within the next decade. This is also dangerous as the South and Southeast Asian countries are at risk due to climate change with extreme weather conditions posing a real danger to residents there.
The reality is that renewable energy resources such as solar, hydro, geothermal, and even nuclear power are unlikely to sufficiently and fully meet the global energy demands of today. Countries will still need fossil fuels to power their economies and the lives of their citizens.
What is Energy Return on Investment?
The energy return on investment is an important concept when discussing the pivot towards renewable energy sources. Energy Return on Investment (EROI) is a ratio for describing a measure of energy produced in relation to the energy used to create it. For example, an oil company may use 1 barrel equivalent of oil to power their drills and refinery machines to produce 100 barrels of oil. The EROI would be 100:1 in this example. The higher the EROI, the more profitable the energy venture will be.
In several scientific studies, the EROI of fossil fuels is on the decline and yet significantly higher compared to renewable energy sources. Oil and gas for example averages at 20:1 while biomass averages at 4:1.
Despite the lacklustre figures, there is still promise in renewable energy. In other energy studies, hydroelectric and nuclear energy show the most promise. Hydro power averages at an EROI of 35:1 while nuclear energy is at 75:1 (coal averages out at 30:1). The main issue with those energy sources is accessibility concerns. Not all countries can build dams and even those have negative spill-over effects on the environment. Nuclear energy still faces public scepticism and security risks associated with enriching uranium for potential weapons use.
Investing in Green Energy Technology and Communications
For countries to truly pivot away from fossil fuels, they need extensive investments in green energy technologies. Private companies such as Siemens and Alstom have introduced energy-efficient and sustainable practices within their core public transportation business. This is crucial since urban environments are the main consumers of energy. Pivoting public transportation towards energy efficiency and greener sources can create substantial environmental benefits.
Countries also need to invest in communicating these ideas of green energy and technologies to both companies and political leaders. Events and policies such as COP27, ASEAN’s commitment to environmental sustainability, and the Singapore Green Plan are important avenues to signal both political will and demonstrate the profitability of green energy. After all, companies are driven by profit margins and advancements in green technologies can improve the EROI of renewable energy.
Humanity only has Earth as its home. Climate change and inaction will lead to unimaginable consequences. Yet, given society’s consumerism-centric philosophy, solutions for climate change need to account for this mentality and simply telling consumers to go green will be insufficient. To learn more about how governments and companies can pivot their messages and find growth opportunities in a greener tomorrow, get in touch with us at connect@blackbox.com.sg.
Author: Blackbox Research Team
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