1. Decoupling. The global economy can be decoupled from fossil fuel and stay the same. It cannot.
If there was ever any doubt in folks minds about this, take a look at Germany, as an example right now. Having substantially shut down its nuclear and coal generation plants over the past decade or so, according to various articles, it is now restarting some of the coal plants. The logic for doing this is that as the supply of gas from Russia has been decreased, there is a significant shortfall in electricity generation capacity that needs to be addressed. But this indicates that despite decades of investment in solar and wind generation capacity and large scale energy efficiency programmes, the country is still well short of
being able to run its existing economy without fossil fuel.
Meanwhile over in the USA, indications are that the Biden administration are backtracking on some of their commitments about shutting down fossil. In fact they are ok with further exploration in Alaska. They are now realising that if we are to rely substantially on renewable energy the future economy will need to be different, not 'decoupled.'
2. The Global energy crisis is due to Russia and will go away when the war ends. It won't.
This sounds quite plausible and convenient. But it doesn't coincide with reality. Energy was trending up in price before war broke out. The problem is that, in general terms, energy is becoming more costly to get, because of the increased effort
required to get it. The easy to get oil, coal and gas is already gone. There are still existing supplies and some new ones ready to develop, but production from new fields is likely to be at increasingly higher price points. And there may be times in the future when the price at the pump goes down, depending on the levels of demand at the time. (Eg a recession kills demand). For example future traded in oil are actually trending down, due to recession forecasts. This will not be because the cost of production is decreasing. We are probably in for a future of constantly fluctuating prices.
3. Money can fix anything
It cannot.
As described above, there is a 'Big energy problem'... that is driven by three physical factors.
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Fossil fuel is getting scarcer and increasingly more difficult and costly to get;
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Reducing GHG emissions (as we have committed to do) means less fossil energy can be used anyway;
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Renewable energy cannot keep the economy going in the same way that fossil fuels can.
These are physical limits problems. Trying to address them with money is likely to drive more inflation. Another consequence of the above is that the system as a whole slows down and that there are typically less surpluses. Simply put, there will probably be less money for the government to spend on itself, on social services and on transitioning effectively.
Did any of the above come as a surprise to you? Any questions or comments, don't hesitate to drop us a return email.