14 Jul 2014

In The Weekend Australian, Danish writer and Adjunct Professor at the Copenhagen Business School, Bjorn Lomborg, makes a compelling argument about the significant role natural gas has and will continue to have in reducing global greenhouse emissions.

In one sense, the world is a victim of its own economic success as more CO2 emissions are a direct result of rising economic growth. The more economic growth, the more you emit. The less you grow, the less you emit.

For example Lomborg says that China’s economy has rocketed since 2000 and in the last 30 years 680 million people have been lifted from poverty courtesy of increased use of coal for electricity generation. Yet, Germany has reduced its emissions 27 per cent since 1990 largely due to a collapse of CO2 intensive-industries in the former East Germany and an increase in the use of renewables

While that may sound like an achievement for Germany, he points out the reality is much different in that such a reduction led to subsidies for renewable energy last year that reportedly reached a phenomenal $25 billion.

In other words Germans paid $29 billion for energy that otherwise could have been produced for about $4 billion.

Lomborg writes that Germans in 2011, also paid $33bn for investments in new renewables and for solar panels alone, will end up paying subsidies in the order of $145 billion, though they supply only 0.5 per cent of German energy.

Such costly policies deliver little benefit for the environment.

However, more natural gas, not less, is making a difference particularly in the US which has seen significant greenhouse reductions courtesy of increased gas use to replace coal for electricity generation.

As Lomborg notes:

“….Brookings Institute recently found that to cut CO2, it is by far the cheapest to replace coal with gas, as gas is cheap and emits less than half the CO2 per kilowatt hour. Wind and especially solar leave us worse off, even with a very high carbon tax.

And that is why it is terrible when well-intentioned people suggest powering the Third World with renewables. A new paper from the Centre for Global Development puts it clearly. If we want to help electrify the world for $US10bn, we can use it on gas and lift 90 million people out of poverty. If we use the $US10bn on renewables, we will help only 20 million people, leaving the rest in darkness and poverty.”*