Climate change due to greenhouse gas emissions increasingly strong and impacting our lives, companies, governments and creating growing economic damage >>> energy transition towards a world with fewer / zero emissions increasingly necessary and urgent >>> investments very large needs, development of new technologies, construction of a world more based on the circular economy >>> great business opportunities for decades in this field.
It seems like a very simple and linear mathematical equation, but it is not; things are much more complicated. Today and in the coming weeks we will try to tell you why.
We take the first point for granted: the correlation between the greater quantity of CO2 and other gases in the atmosphere and the increase in temperatures (see the BBC graph) with consequent increasingly extreme climate phenomena is scientifically proven. In recent years each of us in Italy has experienced situations that were unthinkable a few years ago: from the hail that submerges the streets of Turin, to the chronic lack of snow at Christmas in the Alps, from the drought never seen before in Puglia this year, to the record rainfall for 70 years now in the Biella area in these first five months of 2024. There are countries where these events are even more intense and catastrophic than here. And they are all due to ongoing climate imbalances.
The need to reduce greenhouse gas emissions has been known since the 1990s and some countries/geographies started taking action years ago; the European Union, Norway, New Zealand are virtuous examples in this sense.
Euro 1 cars date back to 1993 and therefore 30 years have passed in which the regulations on emissions allowed for vehicles have evolved for the better; the regulation of some economic sectors within the EU which determines the quantities of CO2 allowed dates back to 2005.
To see how much has been done in Europe in this sense, just look at how much the emissions of the sectors affected by the regulation have fallen on average (automotive, cement, manufacturing, aviation, etc.): by 47% in these 19 years as Credit Agricole shows us .
So why are we so behind in containing the rise in temperatures? Why have investments, despite growing strongly in recent years (1,770 billion dollars globally in 2023), not yet reached the necessary levels (6 times as much, see the Statista graph) to implement the transition?
There are essentially three reasons in my opinion:
- The status quo: the world energy system has been based on fossil fuels for over a century and the electricity and gas distribution network was built to bring energy from production plants (few) to all private and corporate users (many). The model based on renewable energy (wind, solar, hydroelectric, geothermal, mini nuclear) works in a diametrically opposite way: many “small” production sites all connected to the networks and then an intelligent interconnected system for accumulating and managing the energy produced . Going from the first to the second is very complicated and expensive.
- The resistance of the “fossil fuels” world: as with any change there is strong resistance from those who have a business linked to the old model. The lobbies in this sense are very strong, there are countries that live thanks to the production and export of fossil fuels (Persian Gulf area, Russia, Nigeria, Venezuela and many others), OPEC which has governed production and partially the price for decades of crude oil is a very strong historical institution.
- Politics: governments and supranational institutions must have a primary role in this process. Rules and also obligations are needed to lead in the right direction. The transition takes time and has a cost that must be correctly shared between nations, companies and consumers. While Europe is clearly aligned and other individual countries are strongly accelerating, political conviction is lacking in nations such as the United States, China and other major emerging countries. Only a united world can lead to concrete results.
Stay tuned for the next episodes.
