Renewable energy is coming to an economic crossroads, one that could have dire unintended consequences for some of the most vulnerable populations — the poor and the elderly.
As renewable energy expands, activists around the world are calling for programs that would supplant conventional fuels — coal, oil and, to a lesser extent, natural gas — with renewable sources such as wind and solar.
Programs such as the misguided fossil fuel divestiture movement ignore the costs that forcing a move away from fossil fuels imposes on those who are slowest to embrace the change. While there are benefits to diversifying our fuel portfolio, in its current form, the growing use of renewables requires a subsidy from fossil fuels.
This isn’t a cost being foisted upon those who deny climate change. Quite the opposite. In many cases, it is those who already face the biggest impact from global warming who are being saddled with the greatest cost for switching to renewables.
Caleb Rossiter, an adjunct professor with American University’s School of International Service recently outlined his concerns with how the fossil fuel divestiture program could affect Africa:
“Africa accounts for 5 percent of global emissions. America’s per-person emissions are 20 times higher. Successful divestment would freeze African economic development while having little effect on global emission levels. Africa has not taken part in the energy revolution that has boosted education, comfort, income and life expectancy. According to the World Bank, only 24 percent of Africans have access to electricity. The rest must resort to burning dung and wood in their houses and huts, leading to horrific rates of lung and heart disease.
The typical African business loses power 56 days each year, constraining commerce, agriculture, education and industry. Growth suffers, and because wealth allows people to live healthily, so does life expectancy.
Energy poverty is stunting the sort of economic growth that Africa needs if it is to move from 59 years of life expectancy to the 79 that China has achieved through 20 years of economic growth fueled by intense, government-backed promotion of carbon-based electrical capacity.”
It isn’t just Africa, though. The cost of increasing renewables use is being borne in developing countries, too. On Sept. 14, the New York Times had a story about the expanding use of renewables in Germany. Germany leads in the industrialized world in renewable energy production, and it will soon get 30 percent of its power from renewable sources.
That sounds great, but as the Times piece points out, all of Germany’s investment in offshore wind and solar has resulted in an increase in intermittent power sources. The country’s conventional utilities are still expected to find a way to keep the lights on when the wind doesn’t blow.
That means in Germany, just as in the U.S. and other countries, the shift to renewable power is being subsidized by those who continue to use conventional energy sources.
In most countries, customers pay for electricity based on the amount they use. Using less – by, say, putting solar panels on your house — means paying less. But renewables, despite their growth, remain supplemental energy sources. Utilities are still responsible for maintaining reliability of the electric system, and they still bear most of the same costs as they did before renewables entered the mix.
Those costs get spread disproportionately among ratepayers who are still using conventional power. As a result, customers who don’t use renewables wind up subsidizing the reliability for those who do. In many cases that means poorer customers who can’t afford to install solar panels, or the elderly who are slower to embrace new technology.
The irony is that if everyone embraced renewables completely, no one would be able to afford them. Like it or not, in the developed world, the shift to renewables is being funded by fossil fuels, and probably will be for decades.
In developing regions like Africa, the subsidies are even more damning, because the development of affordable and reliable power is the road out of poverty. Activists in the west would have their green dreams financed by the continued poverty of the poorest nations on earth.
Loren Steffy is a managing director with the communications firm 30 Point Strategies. He is a writer at large for Texas Monthly, a contributor to Forbes and the author of Drowning in Oil: BP and the Reckless Pursuit of Profit and The Man Who Thought Like a Ship. Follow him on Twitter: @lsteffy; on Facebook or at lorensteffy.com.
