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The next existential threat provides us with a big opportunity

Created: Thu, 11 Jun 2020

While there is going to be economic pain ahead post COVID, of medieval proportions, there is a gleaming big opportunity sat right in front of our faces to soften the next existential threat. I am of course talking about tackling climate change.

The next existential threat provides us with a big opportunity

I don’t expect anyone will ever forget the surreal experience of 2020, with COVID-19 causing the biggest disruption to life and the economy in living memory. Whilst there still will be many twists and turns ahead for this chapter to play out, we are currently in a moment (post first lockdown) where we can now take a breath and try to comprehend what has just happened. I’d say we all accept, that things will never be quite the same again. While there is going to be economic pain ahead, of medieval proportions, there is a gleaming big opportunity sat right in front of our faces to soften the next existential threat.

I am of course talking about tackling climate change. It is one of the potentially biggest existential risks facing humanity, but with funding, innovation and coordination it can likely be mitigated. The climate change science is pretty much unequivocal, the long term effects are best-estimated but with the signals getting louder each year it cannot be ignored any longer. Australia has one of the highest emissions per capita in the world and three quarters of this is driven by the energy sector, so has a global duty to act.

The advent of the deadly coronavirus (COVID-19), was pretty much predicted, scientists and epidemiologists have been telling us for years that a coronavirus will be the source of the next global pandemic. One of the world’s most prolific (and intelligent) philanthropists, Bill Gates, told us this on stage at a TED talk in 2015. Vocalising his opinion, that we are not prepared for the next viral pandemic. Ironically the same geniuses who protest that 5G antennas cause COVID also believe Bill Gates is responsible (because he predicted it).

So governments around the world were warned, they just didn’t know when and how bad it would be.

While some nations have been painfully slow to react (and are paying the human price), others reacted swiftly and effectively minimising life loss with effective authoritative mechanisms. Both sets of nations will endure significant economic affects, but what is clear is that a prevention plan to the virus (better preparedness or immunisation) would have been better.

When economic arguments are put second

When the threat is presented right in your face then you’ll generally accept it’s existence, this is what happened when images from China and Italy were broadcast around the globe. That’s why there was a general compliance from civilians to adopt the necessary isolation measures to stop the exponential spread. Isolation and forced unemployment are interventions that were much-needed as there was no vaccine or natural immunity.

Humans are the only species that can plan and think ahead of the current moment, yet we have a very hard time of planning ahead for eventualities that may or may not play out. However, if the lizard brain is triggered with fear (as experienced with COVID) – then prevention measures to protect future harm is accepted.

In Toby Ord’s book "The Precipice: Existential Risk and the Future of Humanity", he discusses the need to assess and invest in mitigating the big risks that threaten humanity. Pandemics and Climate Change are two of the biggest existential threats to our race. Importantly though he discusses how hard it is for humanity to grasp long term threats, until it is too late.

Climate change is playing out more slowly but no less dramatically. It’s only a few months since the South Eastern part of Australia was burning in an unparalleled fire season, killing people and devastating properties and wildlife. The bushfire season instilled a real sense of fear, helplessness and anger in the Australian population. At the time government tried to play down the role of the climate change science and didn’t like being reminded that they had been adequately warned by none other than ex-fire servicemen.

Prevention is better

We now enter a period of time where economies worldwide require kick starting from Governments, they simply will not get back on their own accord. Governments will need to spend big and spend for the future, so that jobs are created and the economy benefits the population for years to come.

It is ironic that we are getting very close to the tipping point with global warming and now seeing the affects first hand. Without sounding too dramatic, anyone who saw the scale of those Australian fires first hand would agree they were Armageddon-esque.

Fortunately, we have now passed the tipping point where renewables are cheaper than fossil fuels. In Australia (a country that is abundant with cheap coal and gas), the effect of month on month growth of renewables onto the grid is having a massive effect on the reduction of wholesale electricity. Only a month ago, the grid in Australia experienced a long period where 50% of the generation was renewable and wholesale electricity prices continue to fall.

And can strengthen the future economy

However, the number of large scale renewable projects has now stalled due to lack of strong renewable targets from the Federal Government. The states have had to take it upon themselves to help pick up this momentum and re-incentivise large solar, hydro, wind and batteries. The Australian states are also heavily supporting the growth of the home power station where the solar, batteries and eventually electric vehicle become mini generation and trading assets.

In the background the energy market regulator is changing the way the grid works, so that it can become more nimble and opens the way for a more dynamic and intelligent grid. The clumsy, wasteful coal power station will become less and less relevant to the new grid – base load requirement is a nice to have and not a necessity.

The Hornsdale big battery in South Australia (which received much publicity thanks to Tesla and Elon Musk) recently announced that they’d recouped the construction costs of the battery in under two years. This is a phenomenal investment return and demonstrates that even seemingly expensive parts of the equation (i.e. batteries) can pay their way. Recent teases by the ever-showman Musk, seem to demonstrate that the next leap in lower cost/higher performing batteries are not too far away. If this eventuates electric car prices will drop in line with petrol cars. Should we not be now be preparing the grid, homes and carparks ready for this?

There is an overwhelming support for a kick-start to the green economy

World Economic Forum has just released a statement in support of the European Union’s "Green Deal", declaring that it must become the "cornerstone" of Europe’s pandemic recovery.

"Rather than rebuilding the 20th-century economy, we must focus on spending stimulus money wisely and on preparing Europe for a competitive and inclusive 21st century, climate-neutral future."

Earlier this month, the University of Oxford released findings of a study of 700 previous stimulus packages which showed that a green stimulus created more jobs per dollar spent than a black one.

Launching a local Australian study, one of the lead authors, Professor Cameron Hepburn, said he believed the decisions politicians made in coming weeks would decide how future generations experienced climate change.

"The recovery packages are vital to getting our economies going again and to putting us on a cleaner path to avoid the worst impacts of climate change," he said.

We have an amazing opportunity to now kickstart a de-carbonised new energy grid with more large batteries, solar, hydro and wind but also domestic energisation and electric vehicle readiness. This initiative will create many new jobs and will be big step towards mitigating the very real threat of climate change.

Author: Ross from EnergyIQ