By Simon Evans
For the first time ever, investment in new renewables was more than enough to cover rising global electricity demand in 2015, according to the first World Energy Investment report published by the International Energy Agency (IEA).
While fossil fuels still dominate energy supplies, the IEA says changing investment flows point towards a "reorientation of the energy system."
Carbon Brief has seven charts showing why the IEA thinks an energy shift is underway.
1. Energy Investment
World energy investment amounted to $1.8 trillon in 2015, the IEA says, equivalent to 2.4 percent of the global GDP. Around half went towards fossil fuel extraction and distribution, mainly for oil and gas.
Renewables accounted for 17 percent of the total, around $300 billon. The vast majority of which was in the electricity sector, where nearly 70 percent of investment in power stations went towards renewables.
Global energy investment in 2015, by sector.World Energy Investment 2016 / IEA
2. Oil Slide
Investment in energy was down 8 percent year-on-year in 2015—around $150 billon—largely because of falling investment in oil and gas. Soft demand and Saudi Arabia's determination to squeeze competitors has created a prolonged period of cheap oil that has decimated incomes.
Reductions have been particularly steep in North America, the IEA says, with investment halving in the past two years. The smaller companies that dominate the U.S. shale industry have been particularly hard-hit by the falling oil price, with scores of firms filing for bankruptcy.
Upstream oil and gas investment in 2015, by region.World Energy Investment 2016 / IEA
3. Falling Costs
The Saudi strategy has only been partially successful. Some two-thirds of the fall in oil and gas investment has been absorbed by cost reductions, particularly in the shale sector. Upstream oil and gas costs fell 15 percent in 2015, the IEA says.
These recent oil and gas cost reductions have been easily outpaced by those for new energy technologies. Costs for onshore wind are down by nearly 40 percent since 2008, solar by more than 80 percent, LEDs more than 90 percent and grid-scale batteries by 70 percent.
The IEA says renewable costs will continue to fall, while the reverse will be true for oil and gas:
"IEA medium-term analyses foresee lower costs in renewables, lighting and electricity storage and eventually modest cost increases in upstream oil and gas."
Energy cost developments 2008-2015, by technology.World Energy Investment 2016, IEA
4. Power Shift
The large clean energy cost reductions are behind a continuing shift in the power sector, where 70 percent of investment in generating assets goes to renewables and fossil fuel investment is in decline.
Renewable power investment held steady at around $290 billon in 2015, the IEA says, yet cost reductions mean more capacity could be bought for the money. Solar investment was lower than 2011 in dollar terms, but 60 percent more capacity was added.
Last year, rising renewable additions combined with weakening power demand growth in a landmark way.
The IEA says:
"For the first time, investment in renewables-based capacity generates enough power to cover global electricity demand growth in 2015."
New renewables commissioned in 2015 have the capacity to generate 350 terawatt hours (TWh), against an increase in demand of less than 250TWh. This means all other capacity brought online in 2015 was effectively surplus to requirements.
(It's worth adding a couple of qualifiers: first, 40 percent of investment was to replace aging assets; second, renewables often generate power intermittently rather than on demand).
Net of retirements, nuclear also expanded last year, adding the capacity to generate an extra 50TWh. In total, new plant added in 2015 has the capacity to generate 1,000TWh of electricity a year, more than four times the increase in demand.
Global investment in power generation and electricity networks (colored bars, left axis) and electricity demand growth (line, right axis).World Energy Investment 2016, IEA
Investment in electricity networks is increasing, reaching $260 billon last year. This is partly down to the need to incorporate renewables. However, the IEA says around 90 percent is being driven by the need to expand electricity access and replace old kit.
The network investment figures includes grid-scale batteries. Spending here has risen 10-fold since 2010, the IEA says, though it still amounts to less than 1 percent of the network total.
5. Investment Map
Power sector investments were disproportionately concentrated in China and other Asian countries. The split was particularly stark for new coal-fired generation, where more than 80 percent of investment was in Asia.
This trend is likely to continue. The IEA says around half of under-construction coal capacity is in China, which added more than 50 gigawatts (GW) of coal plant in 2015.
Investment in electricity generation and networks by region and type, 2015.World Energy Investment 2016, IEA
6. China Stranding
The IEA, in comments that echo recent Greenpeace analysis, says that much of this surge in Chinese coal capacity is unnecessary. It says:
"China has over-invested in new fossil fuel capacity … low-carbon sources are expected to be able to cover annual demand growth … through 2020, leaving little scope for an expansion in fossil fuel generation."
It illustrates the problem with the chart below, which shows falling demand growth being more than covered by consistent expansion of nuclear and renewables.
China's power generation growth (bars) and demand growth (line).World Energy Investment 2016, IEA
Fossil over-investment in China and elsewhere, will lead to stranded assets that become redundant before they have repaid the money spent to build them, the IEA said. It calls Chinese investments "inconsistent with market fundamentals."
7. Climate Inconsistent
Low-carbon sources of power are on the rise and fossil fuel's share of the global energy mix is falling. Yet despite identifying a change in direction for energy investment, the IEA says spending on low-carbon will need to increase rapidly over the years ahead if countries of the world are to meet their agreed climate goals.
It concludes:
"Globally, energy investment is not yet consistent with the transition to a low-carbon energy system envisaged in the Paris Climate Agreement reached at the end of 2015."
New low-carbon electricity generation and growth rates in the IEA 2C scenario (2DS).World Energy Investment 2016, IEA
This article was reposted with permission from our media associate Carbon Brief.
According to Forbes, the Three R's sustainability catch-phrase, and the recycling cause it bolstered, remain synonymous with the U.S. environmental movement itself. There's only one problem: despite being touted as one of the most important personal actions that individuals can take to help the planet, "recycling" – as currently carried out in the U.S. – doesn't work and doesn't help.
Turns out, there is a vast divide between the misleading, popular notion of recycling as a "solution" to the American overconsumption problem and the darker reality of recycling as a failing business model.
The Myth: Recycling Began as a Plastics' Industry Marketing Tactic
A recycling dumpster in Los Angeles. Citizen of the Planet / Education Images / Universal Images Group / Getty Images
When it was first introduced, recycling likely had altruistic motivations, Forbes reported. However, the system that emerged was never equipped to handle high volumes. Unfortunately, as consumption increased, so too did promotion of recycling as a solution. The system "[gave] manufacturers of disposable items a way to essentially market overconsumption as environmentalism," Forbes reported. Then and now, "American consumers assuage any guilt they might feel about consuming mass quantities of unnecessary, disposable goods by dutifully tossing those items into their recycling bins and hauling them out to the curb each week."
Little has changed since that Forbes article, titled "Can Recycling Be Bad For The Environment?," was published almost a decade ago; increases in recycling have been eclipsed by much higher consumption rates. In fact, consumerism was at an all-time high in January 2020 before the pandemic hit, Trading Economics reported.
But, if the system doesn't work, why does it continue? Turns out, consumers were misled – by the oil and gas industry. News reports from September 2020 revealed how the plastic industry-funded ads in the 1980s that heralded recycling as a panacea to our growing waste problem. These makers of virgin plastics were the biggest proponents and financial sponsors of plastic recycling programs because they created the illusion of a sustainable, closed-cycle while actually promoting the continued use of raw materials for new single-use plastics.
To the masses, these programs justified overconsumption and eased concerns over trash that could be thrown into recycling bins, Forbes reported. Generations of well-meaning Americans since the 1970's and '80's – believing these communications masterminds – have dutifully used-then-recycled plastics and other materials. They trusted that their discards would be reborn as new goods instead of ending up in oceans and landfills.
The plastics industry went even further, lobbying 40 states to put the recycling triangle symbol on all plastic – even if it wasn't recyclable, Houston Public Media reported. This bolstered the public image of plastic as a renewable resource, but the cost was clarity about what actually can be recycled. As recent as 2020, a Greenpeace report found that many U.S. products labeled as recyclable could not actually be processed by most domestic material recovery facilities.
The Reality: Most Recyclables Aren't Being Recycled
An initial pre-sort removes contaminates, items that can't be recycled, at Republic Services in Anaheim, California on Thursday, April 15, 2021. Paul Bersebach / MediaNews Group / Orange County Register / Getty Images
The U.S. relies on single-stream recycling systems, in which recyclables of all sorts are placed into the same bin to be sorted and cleaned at recycling facilities. Well-meaning consumers are often over-inclusive, hoping to divert trash from landfills. Unfortunately, the trash often ends up there anyways – with the additional cost of someone at a recycling plant sorting through it.
The single-stream system is easier on consumers, but results in a mixed stream of materials that is easy to contaminate, hard to sort and more expensive to process. There are a variety of items – including dirty pizza boxes, old clothing, hangers, plastic bags, aerosols, batteries and electronics – that, if added to a residential recycling bin, will contaminate the entire batch of recyclables, a Miami recycling center representative told EcoWatch. At that point, it can be too costly and too dangerous for employees to hand-pick out erroneous items. Because these items cannot be processed in the same way as recyclable materials, their inclusion often means the whole batch will fetch a lower price from buyers or must be thrown away.
"Most people have the attitude that if they just put it in the blue bin, it will get taken away and somebody will figure out what to do with it, but putting something in the blue bin and actually recycling it are two very different things," said David Biderman, CEO and executive director of the Solid Waste Association of North America.
Misunderstandings, misinformation and mislabeling aside, the harsh reality was and remains that most plastic can't and won't be recycled, reported NPR. For example, the EPA reported that plastic generation in 2018 was 35.7 million tons, accounting for 12.2 percent of municipal solid waste (MSW) that year. Of this total, only three million tons were recycled (an 8.7 percent recycling rate). The vast majority – 27 million tons – ended up in landfills, and the rest was combusted. The environmental agency also estimated that less than 10 percent of plastic thrown in bins in the last 40 years has actually been recycled.
The situation is slightly better for other recyclables, though they make up a smaller percentage of MSW. For example, glass products totaled 12.3 million tons in 2018, or 4.2 percent of the annual MSW generation. Almost 25 percent of glass was recycled, 61.6 percent ended up in landfills and 13.4 percent was combusted.
Post-consumer paper and cardboard for 2018 totaled 67.4 million tons, or 23.1 percent of total MSW generation for the year. The material also had the highest recycling rate of any other material in MSW – 68.2 percent. 25.6 percent of paper ended up in landfills and 6.23 percent was combusted.
According to this EPA data, recyclable plastics, glass and paper accounted for 18.5 percent, 5.2 percent and 11.8 percent of MSW landfilled in 2018, respectively. Those three materials alone comprised 35.5 percent of the total landfilled trash in the U.S. for the year; had they been properly collected, processed and purchased, they theoretically could have been diverted and recycled.
The Reason: Recycling Is Bad Business Around the World
Recyclable waste must be sorted, cleaned and processed before it can be sold as a commodity on the open market. Nareeta Martin / Unsplash
Unfortunately, the EPA data also shows that 2018 was not an anomaly but rather another data point showing how the single-stream system in the U.S. has never been economically viable or feasible on a large scale. To further understand why recycling in America is failing, we need to think of recycled goods as commodities – because that's what they are.
According to the recycling center representative, municipalities and counties pay for residential and commercial recyclables to be trucked to local and regional recycling plants for processing. Clean batches are sorted and/or compressed into bales of similar plastics, paper, aluminum or glass. The centers sell the cleaned recyclables on the open market to buyers who will process them into recycled materials like plastic pellets or post-consumer paper; these can be turned into new products.
This entire process – the processing and creation of saleable recycled goods – costs money. As with any good, profitability requires selling for a higher price than it costs to make. Contaminated batches are harder to process into new products and therefore fetch a lower price on the market, if they can be sold at all. Currently, U.S. recyclables are no longer profitable, and no one wants to buy them.
China used to buy the majority of the world's plastics and paper for recycling, The New York Times reported. The U.S. has been the #1 generator of plastic waste in the world for years and used to ship more than half of its total plastic production to China, a November 2020 study found. The research also noted that up to one-fourth of American plastics sent abroad were contaminated or of poor quality, which would make it extremely difficult to recycle anyways.
Starting Jan. 1, 2018, China banned imports of most scrap materials because shipments were too contaminated, The Times reported; the country no longer wanted to be the "world's garbage dump."
As a result, the U.S. and other Western nations who had relied on China to offload their recyclables saw a "mounting crisis" of paper and plastic waste building up in ports and recycling facilities, The Times reported.
The Western nations began sending recyclable waste to other Southeast Asian countries like Vietnam, Indonesia, India and Malaysia. These countries often lacked the infrastructure to handle recyclables, so a lot of the waste ended up incinerated or landfilled
In response, in 2019, the United Nations passed an amendment to the Basel Convention hoping to protect the poor and developing countries who'd taken up China's vacated role in the global recycling trade. The amendment ambitiously aimed to clean up the global trade in plastic waste, making it more transparent and better regulated and allowing developing countries to reject contaminated shipments. The U.S. did not ratify the amendment, and new evidence suggests it continues to send illegal and/or contaminated shipments to developing countries.
Domestically, the closing of the Chinese market to U.S. recyclables bankrupted many domestic recycling programs because there was too much supply and no real demand. The smaller Asian countries could not accept nearly as much as China had. Prices of recyclables dropped, and bales of scrap materials were sent to landfills and incinerators when they couldn't be sold, another Times article reported.
This left waste-management companies around the country with no market for recyclabes, The Atlantic reported. They've been forced to go back to cities and municipalities with two choices: pay a lot more to get rid of their recycling or throw it away. The news report noted that most are choosing the latter.
"The economics are challenging," agreed Nilda Mesa, director of the Urban Sustainability and Equity Planning Program at the Earth Institute's Center for Sustainable Urban Development. "If there is not a market for the recycled material, then the numbers do not work for these facilities as well as cities, as they need to sell the materials to recoup their costs of collection and transportation, and even then it's typically only a portion of the costs," Columbia's State of the Planet reported.
Tiffany Duong is an avid ocean advocate. She holds degrees from UCLA and the University of Pennsylvania Carey Law School and is an Al Gore Climate Reality Leader and student member of The Explorer's Club.
She spent years as a renewable energy lawyer in L.A. before moving to the Amazon to conduct conservation fieldwork (and revamp her life). She eventually landed in the Florida Keys as a scientific scuba diver and field reporter and writes about the oceans, climate, and the environment from her slice of paradise. Follow her on Twitter/Instagram @lilicedt.
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