The world is changing rapidly, and there are endless opportunities for losing sleep at night: increasing conflict, inequality, loss of biodiversity, escalating climate change. At times, it may seem difficult to remain an optimist, but I am happy to convince you otherwise.
Here are five main reasons why global climate optimism is still in place – and why what we have seen so far is only the beginning.
1. The Paris agreement has entered into force
In record time, countries around the world have ratified the climate agreement from Paris 2015, which has now entered into force.
The agreement is a game changer: no trade deals, no geopolitics, no national or international infrastructure planning, no big businesses can any longer avoid the premise of decarbonizing. Yes, the commitments made by the nations in Paris are insufficient, but the ambitions will increase over time. There is no turning back on the direction.
During COP22 in Marrakech, it was obvious that no other countries intend to follow US President-Elect Donald Trump and withdraw from the Paris Agreement. If some countries or businesses step down, others will step up. The examples are plenty: in the last weeks, while the world was discussing a possible coal revival under a Trump administration in the USA, both France and Canada declared that their coal energy facilities will be phased out. In addition, during COP22, 47 developing countries announced through the Climate Vulnerable Forum that they will strive to meet 100% domestic renewable energy production as rapidly as possible.
2. Money is on the move
For the first time since fossil fuels took off, global investments in renewable electricity are now far bigger than in electricity production from other sources.
Global investments in renewable generation hit a new world record, with $286 billion invested in 2015, more than double dollar allocations to new coal and gas generation. Since 2013, more renewable power capacity has been installed annually around the world than fossil and nuclear together. In 2014, the ratio was 50/50. In 2015 it was 90 to 10 in favour of renewables.
The green energy shift is happening, and for some, the speed of change goes too fast. Earlier this year, coal giant Peabody filed for bankruptcy. The four oil majors Exxon, Shell, BP and Chevron have doubled their debts over the last two years. Expensive carbon reserves like the Canadian tar sands are increasingly becoming stranded assets.
You do not have to be an environmentalist – or an economist – to conclude that investors will increasingly be seeking out objects that are more promising. In addition, there are many reasons to believe that many of those objects are in industries providing climate solutions. This development is unstoppable, even in the US. We will be seeing growing renewable industries and closing of coal plants also during the coming presidency.
3. Employment grows
According to IRENA, more than 8.1 million people worldwide are now working in renewable energy, which means global renewable energy employment increased by 5% in 2015. In the US, there were more than three times as many jobs in renewable energy as in oil, gas and coal put together in 2015.
Generally, renewable energy creates more jobs and more distributed jobs than fossil energy. In contrast to other depressed labour markets, the number of jobs in renewables worldwide continues to rise, with the top five with jobs in renewables being in China, the EU, Brazil, the US and India.
4. Markets are changing
The growing markets for renewable energy and other new technologies and business solutions are rapidly disrupting existing markets. Electric cars, buses and ferries are currently being introduced at record speed, causing large oil companies like Shell and Statoil to admit that their markets will be shrinking very soon.
New and improved battery technologies are rapidly making energy storage more accessible, affordable and wider distributed. This development goes hand in hand with the growth of solar energy, both through huge parks and more distributed options. Energy markets are being disrupted and new actors are growing fast.
However, the green transition is not only happening in the energy sector. 3D printing will drastically reduce the need for costly and energy-intensive transportation and be a disruptive factor for industry production. Self-driving cars and car-sharing services will change the idea that everyone is better off owning a car or two.
Generally we are seeing a rapid growth in solutions where user-friendly IT and tech provides us with access to the services we need, without all the hassle that material stuff requires. The potential for increased resource effectivity is immense. As LSE professor Carlota Perez has pointed out: green lifestyles are information- rather than materials-intensive.
5. The biggest emitter is now biggest on solutions
China is the world’s biggest climate polluter – but it’s also the biggest country when it comes to new climate-friendly solutions. Recent data show reductions in Chinese coal use three years in a row. China is by far the biggest investor in renewable energy, leading in both wind and solar investments. There are many signs that China is more than ready to aim for a leading role in the global development towards cleaner and more climate friendly industries – with or without the US. The economic and political gains by leading this development will by far outweigh the costs.
Investments, investments, investments
We are entering an era where international society will protect our biggest common interest: the global climate. We have united against common enemies before. This is the time to unite against the biggest threat to the human race. Those who will not lead will have to follow.
Climate policies, and particularly the energy shift, will be increasingly important for all aspects of business – but also for all aspects of geopolitics, as there are clear links between environmental degradation and conflicts, unrest and migration. There can be no security in a world of galloping climate change.
On the other hand, renewable energy solutions like solar and wind will reduce the reasons for fighting over fossil energy resources, while reducing energy poverty and providing development opportunities and jobs.
We really have all the reasons in the world for investing in the green solutions: climate, jobs, economy, security. What we have to do is to dedicate our investments – whether it be in infrastructure or product development – to the solutions that will stand the test of the green time. It is happening, it is happening fast, and it will change the world quicker than you can spell landline.
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The author is a member of the World Economic Forum’s Young Global Leaders Community, a network of exceptional leaders from all walks of life who operate as a force for good to overcome barriers that stand in the way of progress.