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Wil Sillen

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We can accelerate the energy transition enormously
By: Sandra Phlippen, ABN AMRO
Source: FD
Technology can do a lot for us in fighting global warming. But according to Sandra Phlippen, we should focus our attention and euros on the things that have the greatest impact.
The goal of a maximum of 1.5℃ global warming is almost out of reach. That was the depressing message of the latest report from the UN climate panel IPCC. Countries must do everything they can now, otherwise the Paris climate target is doomed, the UN warned. Many media took up the warning.

But the report also says: anything is still possible. With today's technology, we can quickly reduce our emissions. My guess is that this is correct. Technology can mean a lot to us, but then we have to focus our attention and euros on the things that have the greatest impact. The point is that we use technological innovations en masse (enough). Then the innovation crosses a crucial threshold, which is also referred to as the positive tipping point.
Over the threshold
One measure that pushed such new technology over the threshold for mass use was the German subsidy on solar panels. This subsidy started in 2004 and started a process of more production and growing capacity that eventually led to lower prices and massive upscaling.

Large rechargeable batteries are now also over the threshold and close to the point of mass use. The capital cost of lithium-ion batteries has fallen by 90% since 2010.

A reduction in costs is obviously a precondition for mass use, as is the attractiveness and accessibility of the technology. Renewable energy is very attractive, because it makes us less geopolitically dependent and brings the climate goals closer. Accessibility, on the other hand, is often the biggest bottleneck.

The Systems Change Lab research collective recently published a groundbreaking report on three crucial tipping points for global CO2 reduction. A relatively small measure can be an impetus for mass use. The collective came up with three concrete measures.

Passenger cars now account for 9% of global CO2 emissions. Systems Change Lab therefore proposes to make it compulsory for all passenger cars to be emission-free. By only allowing the sale of zero-emission passenger cars, production increases, as does battery capacity, and the cost of electric cars decreases.

The rapidly increasing battery capacity can then make electric freight transport profitable. This also reduces the total costs of renewable energy generation (including energy storage). This will stimulate the demand for heat pumps, as the total cost of home improvement goes down.
Green fertilizer required
A second measure proposed by Systems Change Lab is making green ammonia mandatory for fertilizer production. Green ammonia is created by compressing green hydrogen and nitrogen. If the production of CO2-free fertilizer is made mandatory, this will lead to enormous emission reductions in agriculture and food production. It also ensures the upscaling of the production of green hydrogen.

Rapidly becoming cheaper green electricity makes large-scale production of green hydrogen possible. Green hydrogen is produced by means of electrolysis, in which water is split into oxygen and hydrogen by renewable energy. This in turn contributes to balancing supply and demand at times of peak power from solar and wind.

Once the production of green hydrogen leads to a sufficient cost reduction, new tipping points will arise. For example, in the shipping industry, the steel industry and the aviation industry, which together account for 12% of current global emissions.
Finally, Systems Change Lab proposes to tempt consumers to eat non-animal products. Vegan alternatives to meat quickly get used to and become tastier as producers invest more in them. If consumer preferences change on a large scale, we can intervene strongly in the agricultural sector, which is now responsible for as much as 13% of global emissions. Less consumption of animal products leads to a major reduction in water consumption and especially in land use. We still use more than 30% of the habitable surface of the earth for the meat and dairy industry. Switching to reforestation can reduce emissions by an estimated 10%.

'We still use more than 30% of the habitable surface of the earth for the meat and dairy industry'
What's stopping us? It may all sound like a no-brainer, but there are major challenges. Such as the global coordination of the three measures, and the absorption of temporary shortages that may arise.

Another challenge is convincing the growing group of people who do not like a technological solution for CO2 emissions. How to deal with this group? In the United States, the environmental movement is protesting against solar panels. And the degrowth movement only sees the solution in a radically different lifestyle.

I do not exclude that lifestyle modification and temporary (selective) shrinkage are necessary. But let's continue to focus our energies on preventing every kilogram of emissions instead of discussing what is the 'right' method. There is still such a gigantic mountain of CO2 to reduce that every current can indulge itself to its heart's content.

Sandra Phlippen is chief economist at ABN Amro

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