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Does Ground-Breaking India-U.S. Announcement Put Clean Energy in the Catbird Seat?

Energy
Does Ground-Breaking India-U.S. Announcement Put Clean Energy in the Catbird Seat?

The ground-breaking announcement Tuesday that India, the U.S. and a group of U.S. foundations have joined together to create two innovative financing mechanisms for rooftop and distributed solar power in India is emblematic of the new stage of the ongoing global energy transformation.

President Barack Obama and Prime Minister Narendra Modi of India talk after a working lunch in the Cabinet Room of the White House, June 7, 2016. Photo credit: Pete Souza / White House

It's exciting enough that energy access for the poor—which has been treated as a second thought for decades—is now at the top of the U.S./India diplomatic agenda, and that in partnership with U.S. foundations funding has been committed which will leverage up to $1 billion in investment. But this announcement also caps the opening round of a period in which emphasis on technology will be replaced by collaborations around business models, finance and the regulatory context. (The U.S. and India also agreed to jointly support amendments to the Montreal Protocol which will phase out the single most potent global warming pollutant, HFC refrigerants. One of the six major greenhouse gases is now on the way out. Five more to go).

Each year for 60 days' clean energy and climate advocates and innovators gather in a series of forums to assess the state of their movement and market. This “Season" (punctuated by fossil fuel gatherings like the June OPEC meetings) begins with the early April Bloomberg New Energy Finance (BNEF) forum in New York and ends with the June Clean Energy Ministerials hosted by major governments, this year in San Francisco. (Other major U.S. talk-fests in the 2016 season were the World Energy Innovation Forum, Climate Action 2016 and the Aspire Forum).

This first post-Paris agreement “Season" unequivocally signaled a new phase. Clean Energy is now in the global cat-bird seat.

This new phase has four markers:

  1. Clean energy is unavoidable and inevitable because it's cheap, not just because it is essential.
  2. The focus is no longer on future engineering—the new story is market share and policy barriers.
  3. Fossil fuels fade in the rear view mirror, a story whose end is nearing.
  4. Austerity, not climate denial or cost, is emerging as the major barrier.

1. Cheaper, cleaner

It took a year of intensive lobbying of the White House to get President Obama, in his January State of the Union message, to concede forthrightly that clean energy was now cheaper than fossil fuels. At this week's global Clean Energy Ministerial in San Francisco Energy Secretary Moniz boasted that while climate change had motivated investment in clean energy, the price advantage now made that revolution “inevitable," only to be trumped by Southern Company CEO Tom Fanning, leading one of America's most coal dependent utilities: “You can't keep the waves off the beach."

What drives this? Recent, unsubsidized, prices for solar in Abu Dhabi at 2.9 cents/kwh and wind in Morocco at 3.0 cents.

2. Market share not panel efficiency gets the spotlight

BNEF's Michael Liebrich launched the season with a keynote which highlighted that growth in clean energy investment had been undeterred by the collapse in coal and oil prices, and that investment in renewables for the first time exceeded the oil industry's historically sector-dominant exploration and development budget.

At ASPIRE, retiring U.S. Climate Envoy Todd Stern summed up Paris by saying, “It sets a vector. Things are going in one direction—towards a low carbon economy." Fatih Biroh of the International Energy Agency focused on the breakthrough that for two years' energy related CO2 emissions had remained flat while GDP kept increasing at 3 percent—carbon and prosperity, he said, are now decoupled.

While everyone emphasized that more innovation was needed, the conversation was strikingly unfocused on the details of making this happen. Bill Gates's cry that we need “an energy revolution" because the present trajectory will not get us the clean energy required got almost no traction. Liebrich openly mocked it, while Stern diplomatically praised the newly crafted Solar Alliance led by the Government of India as an important first step towards Gates's goal. Energy innovation was no longer a challenge, but an inevitability. Former ARPA-E Director Arun Majumdar led an ASPIRE panel featuring policy voices not engineers.

3. The twilight of fossil fuels

Fossil fuels are now seen as a fading, but still dangerous incumbent. At the Climate Action Summit UN Secretary General Ban Ki Moon warned that progress has not yet reached the critical speed needed to meet global climate goals. At the Energy Innovation Forum Elon Musk shifted his focus from the superiority of electric vehicles to warning that the enormous subsidies lavished on coal and oil could still block cleaner, cheaper technologies. Musk called for a “global revolt" against these subsidies. The G7 at their Tokyo Summit instead set a stunningly lethargic date for phasing out those subsidies—2025.

But the stark implications of increasingly dominant clean energy received more and more thoughtful attention from fossil fuel stakeholders. (And 40 percent of ExxonMobil's shareholders, if none of its managers.) The Saudi Government resolutely refused to embrace a goal of $100 oil through production limits, recognizing that this would simply accelerate the end of oil's dominance in transportation. A draft report prepared for Canadian government concluded demand for oil could fall so fast that producers simply dump their barrels on to a shrinking market, leaving high cost oil like Canada's, along with pipelines and other facilities, stranded. For a major oil producer to face a world where its reserves will fetch a price of “$0" would have been shocking a year ago. But in Calgary oil analyst Paul Sankey lectured the industry: “Demand forecasts are way too positive … really, the essence of the opportunity for oil is to be dividend stocks to pay out. Not to attempt to grow, but actually to orderly liquidate."

4. Austerity the great barrier. Credit the great need.

Back to my opening, it was startling that one of the major announcements made by the governments of the UN and India yesterday while Narendra Modi was in Washington had to do with the creation of two new credit facilities, both designed to serve companies developing distributed solar projects.

If the $60 million pledged leverages additional private investment of $300-600 million these funds, matched with the $1.5 billion advanced to India's banks by the World and Asian Development banks could jump start India's rooftop solar revolution, and provide electricity to hundreds of millions who currently lack it. Excellent work.

But the focus on this innovative but relatively small piece of financial architecture also underscores the failure since Paris to move forward on credit arrangement that would unlock the $3 trillion that developing nations will need to meet their pledges by 2030—and those pledges, in turn, get the world no more than 50 percent of the way to decarbonizing its economy.

More stunning, the total need for urban infrastructure by 2030 will be $90 trillion. The money is there—investors, companies and banks are awash in funds seeking good, long term investments. The demand is there—global urbanization, the climate crisis and the energy transformation make this the perfect moment for massive investment.

But the big lie—that the world economy is overleveraged—blocks action. That lie led Europe to adopt “austerity" (a non-solution) after its economic collapse. In the U.S. it has blocked funding for desperately needed infrastructure like bridges and the grid, projects that bring together the Chamber of Commerce and the AFL-CIO—but not Republicans in Congress. And now its echo leads the industrial nations to veto financial innovation which could transform a halting, sporadic and painful transition from fossil fuels into a moment of dynamic excitement and growth.

Climate denial is still a threat and a problem—particularly in the politics of the U.S. But the ace in the whole that the coal and oil industry still hold, and that may enable them to cripple the growth in clean energy for 20 or 30 years, is the reluctance of wealthy industrial nations to recognize that this is a time to invest in—not strangle—the future.

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In early October, Britain's Prince William teamed up with conservationist David Attenborough to launch the Earthshot Prize, a new award for environmentalist innovation. The Earthshot brands itself the "most prestigious global environment prize in history."

The world-famous wildlife broadcaster and his royal sidekick appear to have played an active role in the prize's inception, and media coverage has focused largely on them as the faces of the campaign.

But the pair are only the frontmen of a much larger movement which has been in development for several years. In addition to a panel of experts who will decide on the winners, the prize's formation took advice from the World Wildlife Fund, Greenpeace and the Jack Ma Foundation.

With more and more global attention on the climate crisis, celebrity endorsement of environmental causes has become more common. But why do environmental causes recruit famous faces for their campaigns? And what difference can it make?

'Count Me In'

"We need celebrities to reach those people who we cannot reach ourselves," says Sarah Marchildon from the United Nations Climate Change secretariat (UNFCCC) in Bonn, Germany.

Marchildon is a proponent of the use of celebrities to raise awareness of environmental causes. In addition to promoting a selection of climate ambassadors who represent the UN on sustainability issues, Marchildon's team has produced videos with well-known narrators from the entertainment world: among them, Morgan Freeman and Mark Ruffalo.

"We choose celebrities who have a lifestyle where they are already talking about these issues," Marchildon explains.

"Sometimes they reach out to us themselves, as David Attenborough did recently. And then they can promote the videos on their own social channels which reach more people than we do — for example, if they have 20 million followers and we have 750,000."

Environmental groups focused on their own domestic markets are also taking this approach. One Germany-based organization that uses celebrities in campaigns is the German Zero NGO. Set up in 2019, it advocates for a climate-neutral Germany by 2035.

German Zero produced a video in March 2020 introducing the campaign with "66 celebrities" that supported the campaign, among them Deutschland 83 actor Jonas Nay and former professional footballer Andre Schürrle. They solicit support as well as financial contributions from viewers.

"Count me in," they say, pointing toward the camera. "You too?"

"We are incredibly grateful for the VIPs in our videos," says German Zero spokeswoman Eva-Maria McCormack.

Assessing Success Is Complex

But quantifying the effectiveness of celebrity endorsement of campaigns is not a straightforward process.

"In order to measure effectiveness, first of all you need to define what is meant by success," says Alegria Olmedo, a researcher at the Zoology Department at the University of Oxford.

Olmedo is the author of a study looking at a range of campaigns concerning pangolin consumption, fronted by local and Western celebrities, in Vietnam and China. But she says her biggest stumbling block was knowing how to measure a campaign's success.

"You need a clear theory of change," explains Olmedo. "Have the celebrities actually helped in achieving the campaign's goals? And how do you quantify these goals? Maybe it is increased donations or higher engagement with a cause."

A popular campaign in China in recent years saw famous chefs Zhao Danian and Shu Yi pledge to abstain from cooking endangered wildlife. While the pledge achieved widespread recognition, both Olmedo and Marchildon say it's difficult to know whether it made any difference to people's actions.

"In life we see a thousand messages every day, and it is very hard to pinpoint whether one campaign has actually made a difference in people's behavior," she explains.

Awareness Is Not Enough

Many campaigns that feature celebrities focus on raising awareness rather than on concrete action — which, for researcher Olmedo, raises a further problem in identifying effectiveness.

"Reach should never be a success outcome," she says. "Many campaigns say they reached a certain number of people on social media. But there has been a lot of research that shows that simply giving people information does not mean they are actually going to remember it or act upon it."

But anecdotal evidence from campaigns may suggest reach can make an active difference.

"Our VIP video is by far the most watched on our social media channels," McCormack from German Zero says. "People respond to it very directly. A lot of volunteers of all ages heard about us through that video."

However, some marketing studies have shown that celebrity endorsement of a cause or product can distract from the issue itself, as people only remember the person, not the content of what they were saying.

Choosing the Right Celebrity

Celebrity choice is also very important. Campaigns that use famous faces are often aiming to appeal to members of the public who do not necessarily follow green issues.

For certain campaigns with clear target audiences, choosing a climate scientist or well-known environmentalist rather than a celebrity could be more appealing — Attenborough is a classic example. For others, images and videos involving cute animals may be more likely to get a message heard than attaching a famous face.

"We choose celebrities who have a lifestyle where they are already talking about these issues," says Marchildon from the UN. "You need figures with credibility."

McCormack cites the example of Katharine Hayhoe, an environmental scientist who is also an evangelical Christian. In the southern United States, Hayhoe has become a celebrity in her own right, appealing to an audience that might not normally be interested in the messages of climate scientists.

But as soon as you get a celebrity involved, campaigns also put themselves at risk of the whims of that celebrity. Prince William and younger members of the royal family have come under fire in recent years for alleged hypocrisy for their backing of environmental campaigns while simultaneously using private jets to fly around the world.

But Does It Really Work?

While environmental campaigns hope that endorsement from well-known figures can boost a campaign, there is little research to back this up.

"The biggest finding [from my study] was that we were unable to produce any evidence that shows that celebrity endorsement of environmental causes makes any difference," says Olmedo.

This will come as a blow to many campaigns that have invested time and effort into relationships with celebrity ambassadors. But for many, the personal message that many celebrities offer in videos like that produced by German Zero and campaigns like the Earthshot Prize are what counts.

The research may not prove this conclusively — but if the public believes a person they respect deeply personally cares about an important issue, they are perhaps more likely to care too.

"I personally believe in the power this can have," says Marchildon. "And if having a celebrity involved can get a single 16-year-old future leader thinking about environmentalist issues — that is enough."

Reposted with permission from DW.

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