I oppose fracking in Britain, but not because of water pollution or earthquakes. My argument against it is quite simple. In the long term, we need renewable energy. We need it because emissions from fossil fuels are causing climate change. We also need it because oil and gas are finite resources, and we will have to move to renewable energy sooner or later anyway. There’s a double imperative here, and fracking delays the transition away from fossil fuels. It’s as simple as that.
Most importantly, hype over unconventional oil and gas draws finance away from renewable energy. That’s happening already. This graph below shows total global investment in clean energy.
As you can see, investment fell pretty sharply in 2012. If we want to prevent dangerous climate change, that shouldn’t be happening. The trend for clean energy needs to be accelerating. Here’s one calculation of the level of investment we need, and our progress so far.
The 2012 fall in investment isn’t because of the economic downturn – see 2009 for that little dip. A couple of countries, Spain and Italy for example, reduced support for renewables because of austerity. Others have brought in bizarre taxation schemes on renewable energy or adopted protectionist measures. But the biggest issue was uncertainty. “The main reason for the 12% decline in 2012” says the Frankfurt School, “was investor concern over policies to support renewable energy in its longest-established markets, Europe and the US.”
Circumstances vary in different countries, but you can certainly see that wavering over clean energy in Britain. In the last couple of years Britain has gutted its relatively new feed-in tariff, cut renewable energy subsidies, and failed to put a decarbonisation target in place for 2030. Pro-renewable ministers were shuffled out of the Department of Energy and Climate Change and punitive restrictions on onshore wind were brought in. At the same time, we’ve been lining up tax breaks to encourage investment in the North Sea, a new gas strategy was unveiled, and we’re trying to create a fracking industry from scratch as quickly as possible. It’s not difficult for investors to see which way the wind is blowing.
So it’s hardly any surprise that Britain’s investment in clean energy dropped 17% last year to $8.34 billion, while investment in North Sea oil and gas is expected to hit a record high this year at over $20 billion.
Personally, I doubt that there will be a rush of money into fracking, and I suspect that it will prove uneconomic in Britain. All this little adventure in unconventional gas is likely to do is prolong the uncertainty over renewable energy, delaying essential reductions in carbon emissions, and keeping us hooked on imported gas for longer.
Interestingly, while developed countries wax hot and cold about renewable energy, many emerging economies have made a decisive move towards it. South Africa jumped straight into the top ten investors in clean energy last year. Spending over $65 billion last year, China is the largest investor by $30 billion. Morocco and Kenya all took substantial steps towards clean energy last year, and 25 African countries now have policies to support renewable energy. Globally, there are now 99 state or regional feed-in-tariffs in operation. As predicted, the cost of renewable energy continues to fall – the cost of solar PV has fallen by 80% in five years. The renewable energy revolution is happening despite us, and investment from developing countries is likely to overtake that from the developed world in the near future.
Last week David Cameron wrote that if we don’t back fracking in Britain, “we could lose ground in the tough global race.” But in his three years as Prime Minister, he has never made a speech about renewable energy. David Cameron is in the wrong race, a fossil fueled race to nowhere, while we fall further and further behind in the one that matters – the race to stabilise the climate before its too late.