TIME
- Bill Gates
|
Green Premiums have helped solar power plants—like this one
near Copiapó, Chile, shown in July 2017—become cheaper
sources of energy than fossil fuels.
Jamey Stillings
|
I came to focus on
climate change
indirectly—through the problem of energy poverty.
In the early 2000s, I learned
that about a billion people didn’t have reliable
access to electricity
and that half of them lived in sub-Saharan Africa. (The picture has improved
since then, though today roughly 860 million people don’t have electricity.)
In
remote villages,
Melinda and I met
women and girls who spent hours every day collecting firewood so they could cook
over an open flame in their homes. We met kids who did their homework by
candlelight.
I thought about our foundation’s motto—“Everyone deserves the chance to live a
healthy and productive life”—and how it’s hard to stay healthy if your local
medical clinic can’t keep vaccines cold because the refrigerators don’t work.
And it’s impossible to build an economy where everyone has job opportunities
if you don’t have massive amounts of reliable, affordable electricity for
offices, factories and call centers.
I began to think about how the world
could make energy affordable and reliable for the poor. But the more I
learned, the more I came to understand the dilemma of energy and climate
change: although the world needs to provide more energy so the poorest can
thrive, we need to provide that energy without releasing any more greenhouse
gases. In fact, we need to eliminate our emissions, all the way to zero.
The climate is like a bathtub that’s slowly filling up with water. Even if we
slow the flow of water to a trickle, the tub will eventually fill up and water
will come spilling out onto the floor. That’s the disaster we have to prevent.
To stop filling the tub—to get to zero—we have to understand everything we do to
cause emissions.
Did you brush your teeth this morning? The toothbrush probably
contains plastic, which is made from petroleum, a fossil fuel. If you ate
breakfast, the grains in your toast and cereal were grown with fertilizer, which
releases greenhouse gases when it’s made. They were harvested by a tractor that
was made of steel—which is made with fossil fuels in a process that releases
carbon—and ran on gasoline.
If you had a burger for lunch, as I do occasionally,
raising the beef caused greenhouse-gas emissions—cows burp and fart methane—and
so did growing and harvesting the wheat that went into the bun. In short, fossil
fuels are practically everywhere.
Some sources of emissions, like electricity and cars, get lots of attention,
but they’re only the beginning. The biggest contributor to climate change is
manufacturing—making things like steel, cement and plastic—at 31% of global
emissions. Second in line is producing electricity, at 27% of emissions; after
that comes growing things like crops, at 19%. Transportation comes in fourth,
at 16%, followed by the emissions from heating and cooling buildings.
These
percentages are less important than the overall point: any comprehensive plan
for climate change has to account for all the activities that cause emissions,
and that’s much more than making electricity and driving cars. Unless you’re
looking across all five areas—how we plug in, make things, grow things, move
around, and keep cool and stay warm—you’re not going to solve the problem.
It’s also crucial to understand how much getting to zero will cost. Right now,
the primary reason the world emits so much greenhouse gas is that fossil- fuel
technologies are by and large the cheapest energy sources available. In part,
that’s because their prices don’t reflect the environmental damage they
inflict. In other words, moving our immense energy economy from “dirty,”
carbon-emitting technologies to ones with zero emissions will cost something.
These additional costs are what I call Green Premiums. For example, the
average retail price for a gallon of jet fuel in the U.S. over the past few
years is $2.22. Advanced biofuels for jets, to the extent they’re available,
cost on average $5.35 per gallon. The Green Premium for zero-carbon fuel,
then, is the difference between these two prices, which is $3.13. That’s a
premium of more than 140%.
During every conversation I have about
climate change, Green
Premiums are in the back of my mind. Once you’ve figured Green Premiums for
all the big zero-carbon options, you can start having serious discussions
about trade-offs. How much are we willing to pay to go green? Will we buy
advanced biofuels that are twice as expensive as jet fuel? Will we buy green
cement that costs twice as much as the conventional stuff?
I mean “we” in the
global sense. It’s not just a matter of what Americans and Europeans can
afford. We need the premiums to be so low that everyone will be able to
decarbonize. That’s the solution to the dilemma of providing affordable energy
for everyone without causing a climate disaster. Green Premiums help us answer
questions like these:
Which zero-carbon options should we be deploying now? Answer: the ones with a
low Green Premium, or no premium at all. In the U.S., electricity is a good
example. The Green Premium is the additional cost of getting all our power
from non-emitting sources, including wind, solar, nuclear power, and coal- and
natural-gas-fired plants equipped with devices that capture the carbon they
produce.
Changing the entire U.S. electricity system to zero-carbon sources
would cost roughly 15% more than what most people pay now. That adds up to a
relatively low Green Premium of $18 a month for the average home, and it’s due
largely to substantial drops in the cost of solar infrastructure over the past
decade. Europe is similarly well situated.
These low Green Premiums mean that renewable energy sources like solar and
wind can play a substantial role in getting the U.S. and Europe to zero. In
fact, we need them to. We should be deploying renewables quickly wherever it’s
economical to do so, and building the infrastructure to let us make the most
of them—things like power lines capable of carrying clean electrons from
wherever they’re created to wherever they’re needed.
Unfortunately, few countries are as lucky as the U.S. in this regard. They
might have some sun but no wind, or some wind but little year-round sun, or
not much of either. And they might have low credit ratings that make it hard
to finance big investments in new power plants. So, they’ll have to get their
electricity from other zero-carbon options.
Here’s another question the Green Premiums can answer: Where do we need to
focus our research and development spending, our early investors and our best
inventors? Answer: wherever we decide Green Premiums are too high. For
example, advanced bio-fuels cost 600% more than the bunker fuel that cargo
ships run on. No shipping business is going to voluntarily raise its fuel
costs by that much.
In cases like this, there’s an opening for new technologies, companies and
products that make it affordable. Countries that excel at research and
development can create new products, make them more affordable and export them
to the places that can’t pay current premiums. Then no one will have to argue
about whether every nation is doing its fair share to avoid a climate
disaster; instead, countries and companies will race to create and market the
affordable innovations that help the world get to zero.
There’s one last benefit to the Green Premium concept: it can act as a
measurement system that shows us the progress we’re making toward stopping
climate change. What would it cost to use the zero-carbon tools we have now?
Which innovations will make the biggest impact on emissions? The Green
Premiums provide the answer by measuring the cost of getting to zero, sector
by sector, and highlighting where we need to innovate.
Leaders around the world will need to articulate a vision for how we can lower
the Green Premiums and make the transition to zero carbon. That vision can, in
turn, guide the actions of people and businesses. Government officials can
write rules regarding how much carbon that power plants, cars and factories
are allowed to emit. They can adopt regulations that shape financial markets
and clarify the risks of climate change to the private and public sectors.
They can invest more in scientific research and write the rules that determine
how quickly new products can get to market. And they can help fix some
problems that the market isn’t set up to deal with—including the hidden costs
that carbon-emitting products impose on the environment and on humans.
In the U.S., states can play a crucial role in demonstrating innovative
technologies and policies, such as using their utilities and road-construction
projects to drive technologies like long-duration storage and low-emissions
cement into the market. And cities can do things like can buy electric buses,
fund more charging stations for electric vehicles, use zoning laws to increase
density so people travel less between work and home, and potentially restrict
access to their roads by fossil-fuel-powered vehicles.
But you don’t have to be a politician or a policymaker to have an impact. If
you’re a voter, you can hold your elected officials accountable for having
plans to reduce Green Premiums and put us on a path to zero. As a consumer—or
someone running a business—you can also send a signal to the market that
people want zero-carbon alternatives and are willing to pay for them. When you
pay more for an electric car, a heat pump or a plant-based burger, you’re
saying, “There’s a market for this stuff. We’ll buy it.”
With the threat of climate change upon us, it can be hard to be hopeful about
the future. But as my friend Hans Rosling, the late global health advocate and
educator, wrote in his amazing book
Factfulness: “When we have a fact-based worldview, we can see that the world is not as
bad as it seems—and we can see what we have to do to keep making it better.”
When we have a fact-based view of climate change, we can see that we have some
of the things we need to avoid a climate disaster, but not all of them. We can
see what stands in the way of deploying the solutions we have and developing
the breakthroughs we need. And we can see all the work we must do to overcome
those hurdles.
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