September was the hottest month since records began, and the numerous extreme weather events, whether ice shrinkage in the Arctic and Antarctic, wildfires in California or floods in France, are finally beginning to get through to climate sceptics. COVID-19 may be overshadowing everything just now, but there is this nagging feeling that if we can’t even handle that effectively, how can we overcome this far greater challenge? It is by no means all bad news on the climate breakdown side, though, as illustrated by two stories juxtaposed in the Financial Times recently.
The first was the announcement that Honda is pulling out of developing and producing engines for the F1 series, the world’s premier motor-racing competition. That will leave just three manufacturers making F1 engines – Mercedes, Renault and Ferrari – and casts some doubt over the future of the sport.
Honda has not been as significant as its three rivals. It withdrew once before – after the 2008 financial crash – but started up again in 2015, supplying engines for two of the ten teams. Now it is pulling out for good, following a decision to shift its engineering research and development personnel to electric and fuel-cell vehicles.
Honda’s CEO, Takahiro Hachigo, announced the decision at a press conference, saying: “This is not about short-term revenue or coronavirus impact.” The company is now emphasising its existing aim of getting two-thirds of global sales from a combination of electric, fuel cell and hybrid vehicles by 2030, and of becoming carbon-neutral by 2050. Perhaps more tellingly, Honda also takes the view that F1 does not reflect well in terms of sustainability development goals.
The other FT news item related to the performance of the oil giant ExxonMobil, which has lost half its value in the past nine months and even more since the peak of its value at more than $500 billion in 2007. Even five years ago it was still topping $400 billion, but last week it was down to $137.9 billion, not far above a quarter of the figure thirteen years ago.
On its own this is significant, reflecting partly an overall market sense that oil reserves are overrated as the need to cut carbon emissions finally dawns on even the oil and gas industry. But still more telling, and the main reason for coverage of the ExxonMobil story in the FT and other financial journalism outlets, was the news that, in contrast, a Florida-based utility specialising in renewable power sources, especially wind, had reached a market value of $138.6 billion. The appropriately named NextEra Energy’s success stems partly from the increase in renewables in the electricity industry and also from the confidence of investors in the future of the industry and reliable returns during the current climate of low interest rates.
The two items together illustrate how far a number of industries have woken up to the challenge of preventing climate breakdown. A recent article in The Guardian pointed to the extent of the change:
The rise of Britain’s offshore wind industry has made the giant turbines dotting its coastlines one of the country’s greatest industrial success stories since the discovery of North Sea oil. It has been a rapid ascent, with the transformation from high-stakes gamble to industrial triumph taking place over the last five years.
Other renewable technologies are also quietly subverting decades of energy industry dogma. In Nottinghamshire, disused mining sites host tens of thousands of solar panels, while in West Lothian an old open-cast mine has found a second life as the site for an onshore windfarm. Twenty miles away in Edinburgh another defunct colliery is the site of plans to create geothermal heating sourced from underground pools of water left behind after the coal reserves were depleted.
It really is a cause for optimism, but there are some caveats. One, obviously, is that many key political figures still have little or no interest in the matter: take Putin, Trump and Bolsonaro just for starters. Even now, fossil carbon industries and neoliberal commentators continue to argue against this kind of change.
A second is the fact that what we are seeing now should have started at least two decades ago, with serious public subsidies to promote the new industries long before costs of renewables reached grid parity with fossil carbon. We may, belatedly, now engage in the actions needed, but the task is much greater
Finally, as new technologies transform the entire global energy market, we may all benefit by their role in preventing climate breakdown but that is not remotely connected with growing a more just society. Given that the world’s 2,189 billionaires increased their wealth by 27.5% between April and July this year, the height of the first surge of the COVID-19 pandemic, the capacity of wealth to create wealth knows few bounds and the transition to a green economy could all too easily benefit the few.
Fifty years ago the ‘Green Revolution’ of new high-yielding cereal varieties was being welcomed as an aid to increasing world food production, but a handful of people warned at the time that the changes would most readily be taken up by wealthier farmers who had the resources to make the changes. One leftie slogan at the time was “No Green Revolution Without a Red Revolution”. Perhaps that applies even more today.