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Why Renewables Are a Better Investment Than Cheap Oil to Grow the Global Economy

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With the price of oil plummeting in the last year, there's been much conversation about what that means for the future of fossil fuels as a source of energy—and a source of the carbon emissions that drive climate change. Oil prices fell to less than half their previous high in the last six months of 2014, creating an unstable situation for every business and economy.

Oil prices have historically been volatile, so turning away from renewables just because oil prices are currently low is risky and short-sighted.
Photo credit: Shutterstock

The Global Commission on the Economy and Climate, which includes leaders in government, finance, business and economics, has issued a new report, Oil Prices and the New Climate Economy, that outlines the economic implications of volatile oil prices and how governments should address them.

"Reacting to the recent drop in oil prices is anything but straightforward for economic decision makers," the report says. "In the short-term, consuming countries may be delighted at their improving trade balance or producers troubled by suddenly lower GDP and high budget deficits. But understanding the impact beyond the next few years is much harder."

It suggests, first of all, that countries, businesses and consumers who welcome the low oil prices and use them as an opportunity to rely more heavily on oil need to take a hard look at the larger and longer-term picture. While low oil prices are saving consuming countries hundreds of billions of dollars are year, oil prices historically have been unreliable. And the report proposes that, because of that and despite the seeming attractiveness of oil consumption at its current price, it's an ideal time to invest in renewable energy sources.

The report warns that while it might be tempting for governments and businesses to turn away from investment in renewable sources and improving energy efficiency, this would be the wrong course, making them more vulnerable to the price swings that are normal in the oil marketplace and, hence, inevitable in the future.

"Governments must peg their policies to long-term energy trends rather than betting on oil prices staying low," says Lord Nicholas Stern, one of the report's co-authors and co-chair of the Global Commission on the Economy and Climate. "These prices have never been stable, and price shocks are becoming more drastic and frequent than ever before. Instead, governments should boost investment in renewable energy sources that are increasingly competitive, moving away once and for all from the current outdated carbon-intensive and unsustainable economic model. Missing this chance would be devastating for the future health of our economy and our planet.”

The report suggests that governments prepare to deal with future increases in oil prices by establishing carbon pricing and moving away from fossil fuel subsidies. It points out that in 2013, fossil fuel subsidies reached $550 billion, "encouraging waste, straining public finances and weakening growth by depressing investment in the energy sector." Dozens of countries, it says, are already reforming fossil fuel subsidies or actively considering doing so.

“Reducing our fossil fuel dependency is easier now than ever before,” says Per Klevnäs, senior project manager at the Stockholm Environment Institute and report co-author. “Just a year or two ago, consumers were paying double the price for gasoline as they are now, meaning they are less likely to notice a few extra cents on each gallon of gas due to a carbon price or reduced energy subsidies. The increased revenues could be used to offset impacts on low-income households and to finance reductions in other, distortionary taxes.”

The report adds that solar, wind and other renewable energy sources offer the potential for long-term stability, competitive costs, future cost reductions, energy security and decreased healthcare costs from reduced air pollution.

"In the long run, renewables are a safer bet than fossil fuels," the report concludes. "They have little or no operating cost after being installed, and therefore no price volatility. This means renewable projects can effectively lock in the cost of energy for 20 years or more. And the price of installing wind power and solar photovoltaic projects continues to fall dramatically making renewables already cost-competitive even with cheap natural gas in many places."

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By Zak Smith

It is pretty amazing that in this moment when the COVID-19 outbreak has much of the country holed up in their homes binging Netflix, the most watched show in America over the last few weeks has been focused on wildlife trade — which scientists believe is the source of the COVID-19 pandemic. Make no mistake: Tiger King: Murder, Mayhem and Madness is about wildlife trade and other aspects of wildlife exploitation, just as surely as the appearance of Ebola, SARS, MERS, avian flu and probably COVID-19 in humans is a result of wildlife exploitation. As a conservationist, this is one of the things I've been thinking about while watching Tiger King. Here are five more:

1. We are in a biodiversity crisis.

A million plant and animal species are threatened with extinction, many within decades, including tigers. The leading drivers of species decline and the impending collapse of ecosystems are ocean and land use changes (like converting wildlands into other uses, usually agricultural) and the direct exploitation of species (like taking animals out of the wild for eating, "medicinal" purposes, or status motives). It is for these exact reasons that there are more tigers in cages in the United States than there are in the wild. Developers continue to destroy tiger habitat and, in the not-so-distant past, hunters shot and killed tigers for sport or for trade in tiger products (and some still do illegally).

2. We must fundamentally change our relationship to nature.

Transformative change is necessary to limit species extinctions and secure human well-being (functioning ecosystems provide the clean air, clean water, carbon sequestration, flood control, healthy soils, pollination of plants and healthy coastal waters humans need to survive). Transformative change in this context means "a fundamental, system-wide reorganization across technological, economic, and social factors, including paradigms, goals, and values." We aren't going to halt the loss of species and strengthen ecosystems if we continue to treat wild plants and animals as expendable and renewable resources that we can use however we want. The tigers and other animals in Tiger King are exploited for profit and personal interests. Regardless of how they may be respected, coveted, or cared for, they are still treated as exploitable objects, which reinforces other destructive attitudes toward nature. A tiger cub is something to be held and photographed, a wetland is something to be filled and built upon, a rhino is something to be killed so we can use its horn for fake medicine. It's a view of nature as being in service to human wants, an attitude that is destroying our planet and one that must change.

3. Most wildlife trade should be banned and we should protect more wild places.

As noted above, ocean and land use changes and direct exploitation of species are causing an extinction crisis and threaten the ecosystems we depend on for human well-being. In line with our exploitative mindset, we've been stuck for centuries with economic and social patterns that allow unfettered use of wild places and wildlife until there's a problem. We need to flip that model on its head and only use wild places and wildlife if we can affirmatively demonstrate that such use won't contribute to the biodiversity and climate crisis. Tigers and the other animals appearing in Tiger King wouldn't be endangered today and wouldn't require "sanctuaries" if we hadn't destroyed their habitat and taken them from the wild for food, pets, "medicine" and trophies.

To set things right, we should ban most wildlife trade and protect more of the natural world. I say "most" wildlife trade to account for the exception of well-managed fisheries. NRDC has long sought to limit irresponsible wildlife trade (fighting for imperiled species internationally, supporting state efforts to limit trade, providing recommendations to China on revisions to its wildlife law), and now we must go further by banning most trade. In addition, we should support efforts to set aside vast swaths of ocean, land and terrestrial water to rebalance the functioning of our natural world. That's why NRDC and others support an initial call of protecting 30 percent of the world's oceans, lands and water areas by 2030. In China, we're protecting areas in a way that helps tigers by supporting the government's development of a National Park system, with targeted efforts on one of its pilot parks, the Northeast Tiger and Leopard National Park, which provides an important habitat for China's struggling populations of Amur tigers and leopards.

4. Not​ all sanctuaries are sanctuaries.

A lot of so-called sanctuaries are dumpster fires; they serve no purpose other than exploitation of animals for profit, and the animals suffer needlessly. It doesn't look like the Greater Wynnewood Exotic Animal Park — the park formerly owned by Joe Exotic — is a sanctuary, though it styles itself as being one, so the public may be confused. According to the International Fund for Animal Welfare, legitimate sanctuaries "do not breed, allow public contact with, sell, or otherwise exploit the animals that they take in." Legitimate sanctuaries can play an important role in saving imperiled species, promoting animal welfare, and educating the public. But those that do not meet strict standards are part of the problem, not the solution. The Global Federation of Animal Sanctuaries (GFAS) provides accreditation for sanctuaries that abide by a set of policies, including the maintenance of a nonprofit/noncommercial status. Big Cat Rescue, which is featured in the Tiger King series, "has held GFAS Accreditation status since 2009."

5. Changing our relationship to nature must include a just transition.

Throughout the world and in the United States, millions of people use nature in destructive ways for their livelihoods. I don't say this with judgement; often, people are just doing what we've always done — business as usual — which is unfortunately destroying the planet. Workers in the fossil fuel industry, fishermen in unsustainable fisheries, clearcutters in the tropics and boreal forests, and even people working at fake sanctuaries depend on the current system of exploiting nature to provide for themselves and their families. Unfortunately, it's at the expense of other people who depend on healthy, thriving ecosystems for their livelihoods and at the expense of human well-being overall. If we want to succeed in charting a new path for our planet, we must commit to making people and communities whole. The rampant exploitation appearing on the screen in Tiger King isn't just of wildlife — it is also of many desperate people brutalized by a political and economic system providing few options. We're not going to successfully realign our relationship with nature if we don't provide the necessary support for people and communities to transition to more sustainable, ethical means of providing for themselves and their families.

So, watch Tiger King and see if for you, like me, it informs the horror of the current moment, then maybe think about building a different world when we come out of this — a vibrant, natural world filled with wildlife and wonder, where we orient ourselves around preserving nature, not exploiting it, and embark on a new human journey.

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