Ex-UK energy minister: Politicians keep arguing, but business moves world towards green energy
As humanity spews more fumes in the air from burning fossil fuels, the planet strikes back with rising temperatures and violent hurricanes flooding entire cities. Is it too late to reverse the damage done? And how do we do it? We ask Charles Hendry, former UK minister for energy and climate change.
Sophie Shevarnadze: Charles Hendry, Former UK Energy and Climate Change Minister, welcome to the show, it’s good to have you on our program today. When trying to cap carbon emissions with new regulations, limitations, taxes, sometimes politicians have to choose between fighting climate change and winning elections. For instance, President Trump got the coal vote, promising to revive the industry battered by Obama’s environmental policies. You’ve been a politician tasked with dealing with this issue - can you commit to combat climate change and not lose votes?
Charles Hendry: I think our track record shows that we can. Since 1990 the UK economy has grown up by 60%, but our carbon emissions have dropped by 40%. So, we’ve delivered better standards of living, we’ve delivered cleaner environment, and we’ve maintain security of supplies. So, we’ve shown that we’ve been able to actually look after interests of consumers, whilst moving very strongly in a no-carbon direction.
SS: Trump’s promise to bring back coal jobs remains unfulfilled. Perhaps the coal industry is on its way out - so what do you do with the people who are left behind in this industry?
CH: I think it’s more difficult in countries where they have very large populations in particular area, focusing on one industry, as it is in some parts of the U.S. and indeed in some parts of Russia. For the UK the decline of coal has been for a much longer period, over the course of 40 years. Therefore, it’s been a more gradual change. These job losses have been difficult to manage all the same, but nevertheless they have been able to find new levels of employment, new opportunities, re-trained, re-skilled, and we’ve been able to move away from coal. We will completely remove coal from our generation system by 2025, and we’ve been able to keep the lights on. So, we’ve managed that transition, I think, quite effectively.
SS: So while there’s consensus among scientists about climate change, not everyone is convinced - polls show that a quarter of Americans, for example, have doubts about it. How do you combat this attitude, work against those denying climate change?
CH: I think, there’s two aspects to it. First of all, one simply has to win the battle of science - there’s 99% of world leading scientists in this area saying that climate change is happening, and that man is being responsible for making that worse, and therefore one should simply got to go on repeating the evidence of the science. For policy-makers like I was, who don’t have scientific backgrounds, we have to be guided by the experts in this sector. The other element which I think is becoming increasingly important is the cost of some low-carbon technologies is now dropping to a point where they don’t need subsidy. This week, in the UK, we’ve seen the first large-scale solar farm being turned on without any subsidy whatsoever. Some would say, if you could do that in the UK, without sunshine record, then you can do that anywhere. So now we’re seeing the prices going down, we can do this in a more affordable way and it makes economic sense to go in a low-carbon direction, it’s not just because of a climate.
SS: Why is it that hard conservative media like Breitbart or the Daily or the Washington Times are the voice for rubbishing climate change, why does the right leaning media like them so much?
CH: I think sometimes they talk on two different sides of the subject and so, we will see some columns in some in some of our newspapers… normally, it’s the view of an individual journalist rather than the view of that newspaper overall. Those journalists would take a very skeptical view. But then you also see those newspapers talking in a very positive terms about the cost of offshore wind coming down and the opportunities of the UK in that sector, the opportunities of the UK in the tidal sector, the importance of new nuclear here. So, actually, when it comes to individual technologies, they can be much more supportive than one would sometimes get the impression. One shouldn’t take the view of one journalist and say that it is the corporate view of that newspaper because it quite clearly isn’t.
SS: From your experience and observation, why is it so hard to make people fight climate change? Why are climate change policies met with so much resistance? I mean, it’s enough to open up the window and see how the weather has changed around us, we don’t have four seasons anymore. I’ve just mentioned the hurricanes that swept away North America and Latin America. Anyone in their right mind can see that something is wrong - so why is it so hard for them to understand that climate change exists, and why not fight it?
CH: I think it’s a very good question. I think part of the challenge is that people see conflicting reports and then they don’t necessarily know which one to believe, and therefore, that’s why it’s so important to keep on pushing this argument and demanding that this course of action should be taken. The other aspect, which I think we need to take into account here is the role of companies and businesses who have been moving in a very strong low-carbon direction to cut emissions, and the role of businesses across the world is incredibly important in this. And I think people got very excited when the electric car has moved from being a small vehicle which wasn’t a particularly attractive vehicle, to a new Tesla. People think “you know, I’d like to own one of these”. The roles which have come through now, where people think they can have an electric car which performs extremely effectively and is not going to cost significantly more than a petrol car of the same caliber - then in those circumstances, people start to wonder around more. We are seeing attitudes changing and it’s undoubtedly a generational issue as well - young people are much more seized of the challenges and the need to take action urgently than sometimes their grandparents will be.
SS: So, you’ve just said that it’s also about how the issue is presented to the general public and, like you’ve said, there’s an overwhelming scientific consensus about climate change happening. But on TV the issue is presented as a two-sided coin, with one-on-one debates. Why give the impression that climate change denial is equal to scientific fact?
CH: Because I think we live in a country here with free speech, as in America and so many other places, and people with different views are entitled to express those. It’s not a job of media to determine between which one of those is right and which one is wrong. It’s the viewers, individually, who come to these conclusions. But I think we are gradually winning than battle, and I think people are being persuaded that there's a need to do things, and the government has shown very strong leadership on these issues for the last decade, starting under Tony Blair, then under David Cameron, a will continue in the UK under Theresa May.
SS: I’m not just talking about the UK, but the media all over the world in general, it still does give you an impression that these two arguments weigh the same, that there’s like a 50\50 chance that it’s happening or not happening, while we all know, those who are actually looked into these issues that it is happening. So it gives you false impression that it may not be happening.
CH: I think people will reach different conclusions, that is the nature of debate on all sorts of different issues and this is just one example of that. I think it means, therefore, for those of us who believe strongly that there’s a problem and there’s a challenge that needs to be faced, we have to work all that much harder. As I said, I think we are turning a corner, we are winning that battle, people do believe that there’s an issue. And every time we see huge hurricane or a catastrophic storm in UK, and issues of that nature and flooding, then that persuades more people that the seasons really have changed, the climate has changed, and therefore government has to lead. This is not an area where government can sit behind and follow public opinion. At times, there’s difference between people who want… whether they want green power or whether they want cheaper power - the big tipping point, I think, comes when you can actually have both. When see the costs of some of those renewable technologies coming down very significantly, and therefore, it becomes an economic thing to do and people will say “Let’s do it!” because it makes economic sense, not simply because it’s right for the climate.
SS: The Paris agreement is an ambitious initiative that was picked up by almost every state on Earth - only U.S. and Syria are staying out of it. But how do you make sure that it won’t just be another treaty on paper like its predecessors - the deals of Kyoto and Copenhagen?
CH: I think that’s a very-very good question, because with the Paris agreement, there were no penalties for countries which failed to meet the targets which they set for themselves, these were not internationally-agreed targets, individual countries have decided for themselves, what they want to do. So, one has to rely on some extent on the leadership of those countries to help deliver that. But, I think we should recognize that this isn’t just about now what happens within governments. The leading companies around the world are keep to be good citizens in terms of climate change. They are determined to reduce their carbon emissions. They are determined to make sure the products they make are evermore energy-efficient. So, we are seeing that change happening - which I think, is unstoppable. Quite often I think in this debate now, the politicians are actually behind the pace of change which industry is delivering. So, we see often politicians debating and talking about it, whilst industry is investing billions on make the change happen. And that’s why in a way I think President Trump’s decision is not as significant as it actually have appeared, because businesses in the U.S. are really moving in low-carbon direction.
SS: Really. So, U.S. being the second biggest polluter of carbon dioxide - you think Paris deal still makes sense without the U.S. on it?
CH: Because many of the state governors across the U.S. still support Paris agreement. Businesses, large businesses, overwhelmingly support what’s happening there, and even since President Trump has come to office, we’ve seen the number of coal plants in America closing down. So the direction of travel is absolutely set. And while he may be skeptical - we don’t know his final position on this at this stage, but we are seeing is the pattern of investment in the U.S. and in other countries right across the world is showing that low carbon is gaining importance all the time.
SS: Why was the ministry that you headed up - of Energy and Climate Change - scrapped by the British government, is London not interested in doing something about this anymore?
CH: No, it was a path that I have myself recommended to a former PM David Cameron, because I felt that we have set in law the changes which would drive the low-carbon economy. We delivered electricity market reform, which had provided a form and mechanism for driving investment into new, low-carbon technologies. We had set very tough legally-binding requirements on the country to de-carbonize, and that I thought what was important then was whilst those were going forward and taking force, what was important is that we were getting maximum benefit for UK companies, maximum industrial benefit that can, and therefore it made great sense to link up the department of energy with the department of industry and so we got that industrial gain alongside the new clean energy investment.
SS: Transportation, power generation, even farming industries and others are producing huge carbon emissions - which one of these industries is the worst offender, which should be targeted for pollution reduction?
CH: If I can phrase your question slightly differently, I would say that “where do you start to make the most impact?”, and what we have done in the UK and other countries are doing as well, is starting with power generation side. We are very rapidly moving in a low-carbon direction. When the Conservatives came into government in 2010, it was just 5% of our electricity came from renewables, and it is now over 25% seven years later. So, we’ve seen a fivefold increase in clean energy in that time, and we have a strategy for rolling out much more renewable energy generation and more nuclear power stations as well. So that’s the place to start with. After that, I think, you tackle heat and transportation. We’re now a seeing a move towards electrification of vehicles which is happening faster than anybody thought possible, just a couple of years ago. So, I think, the focus then needs to be on heat, because we use a lot of hydrocarbons to heat our homes and our businesses and we need to find better ways of dealing with that.
SS: Electric cars are getting more popular across the globe. Germany even passed a resolution which would phase out combustion engine cars by 2030. But if we replace all gas cars with electric cars, are we really being environmentally friendly, since the electricity still comes from burning gas and coal? Not to mention the batteries…
CH: It only works if you are going to generate power in a low-carbon way. That’s why, in the UK, we are committed to a major rollout of renewables, we’ve just announced a range of new large offshore wind farms which are going to be very significant. We are very committed to a new fleet of nuclear power stations, because we absolutely recognize that if you want to decarbonize transport, then you need to move in the electric direction for trains and for vehicles and then you need to do that in a way that the power for those is generated in a low-carbon way. I think you should also add into that what’s called a “smart economy”, a way in which you can plug your car and to take advantage of the power in the night, when there’s not so much demand, and so you can use power which would otherwise not be taken advantage of. So, we can smooth out the demand across the day in a way which is not happening as well as it could do at the moment, and do that in a way that reduces overall carbon emissions.
SS: Europe seems very serious about getting rid of carbon-producing power generation. So why is there such a backlash on the continent against nuclear power, which doesn’t put as many pollutants in the air as coal or gas does?
CH: I think you have to look at each country in its turn. So, clearly, in France, 80% of France’s electricity comes from nuclear and they have made it a very important part of their electricity mix for the last 40 years. They are now going to start scaling that back a bit, they take more advantage of some of the renewables, but they will still remain very strongly pro-renewable nation. The bigger question mark is particularly over Germany. Germany’s reaction was one to the Fukushima disaster in Japan after the tsunami, and the decision of German people, of German government was that they should phase out early their nuclear power plants. But the consequence of that phasing out has been that they’ve had to go back to more coal plants and therefore they’re one of the few countries at the moment where their carbon emissions have been rising. So there’s a consequence, of which the German government is much aware of, and as I understand, is very keen to address, but they have a different history when it comes to nuclear.
SS: There are other methods to curb carbon dioxide emissions besides energy production - like storing it underground and using it for something else, for example, plastic production. Can these measures make a real dent in carbon emissions?
CH: If they can be shown to be both workable and affordable - then absolutely, they can make a huge difference. We’re seeing some very interesting work being done in some of the British universities, in China and in Russia, on carbon capture and reutilization or storage. The outcome of that, though, will depend on the progress of the science. It still seems to me that we are some years away from being able to make it happen. But if it does work, and I believe in time it will, then that means that we can continue to use coal and, after that, gas, in the mix. For many other countries, that if they can’t be made to work, they will have move away from those technologies, if they are going to meet their climate change objectives. So I think this is one of the most important areas of science, and I want to see more investment in many countries towards trying to realize it and to commercialize it sooner that currently appears to be the case.
SS: Of course, a big question is, will the rise of alternative power sources be the fall of the old producers – like BP or Shell - or are they here to stay?
CH: They are absolutely here to stay. If you look into the ways in which the countries which have the best hydrocarbon resources in the world are now looking for their own power, then you can see that they too believe in alternative sources of power. In Russia you’ve got Rosatom investing in onshore wind, in Kazakhstan you’ve got them looking at alternative sources of energy, in Middle East and Saudi Arabia they are looking at concentrated solar power. Norway has always used hydro in a very significant way. So, if it’s right for the hydrocarbon countries, for providing for needs of their own people, then it has to be right for the rest of the world, and I think what we are now seeing amongst many of the power companies is that they see this as an integral part of their business. They are very serious indeed about supporting emerging technologies, not just in the alternative energy space, but in the demand reduction, in AI which will help to balance the grid in a better way - some very significant investment is coming from those very large companies, and that would be a very good force for good, because we need that sort of large investment and the people who have immense expertise, often in working in difficult environments.
SS: More than one billion people on Earth live without electricity - that’s according to the World Energy Outlook 2016. At the same time – When it’s a windy day in Germany power output exceeds power consumption, and they just release the surplus to its neighbors’ networks causing overloads. Why not create an effective mechanism to send energy to those who really need it?
CH: You have found an extremely good issue, and it is one which I absolutely believe you’re right. I’ve been a very strong supporter of a Northern Power Grid, which will be essentially across the North Sea, linking countries around the North Sea and the Baltic and providing them with greater energy security, enabling power, when there’s too much off-shore wind in one country, to be transported easily to another. An alternative grid would be Mediterranean to bring power from North Africa into Southern Europe, or when it’s too much solar, to ship it back the other way. I think that the transformative issue of this century is going to be decentralized power for many of those people. You are right, than a billion of our fellow citizens live without a light bulb. And therefore, we need to find a way of delivering this in a way that doesn’t exacerbate climate change. We can’t just simply turn around and say: “Look, we’ve had a 150 years of great growth and we want to stop growth in countries which haven’t seen those benefits” - we have to give them the opportunity to grow and to prosper as well. In many communities, particularly in Africa, you can have it on a very small-scale basis and it doesn’t just bring an electric light. It means you have education, when the schools otherwise be dark. It means you have hospitals, you can keep medicine refrigerated, you can keep food refrigerated to stop disease. You can desalinate or de-pollute the water. You make an absolutely transformational change through affordable low-carbon energy to those communities and to those people. I think that’s going to mean that places like Africa or India will be some of the most exciting areas to see their growth over the coming decades. It’s been only 40-50 years ago, that the places like Dubai in the Middle East were themselves very impoverished communities. But through energy they’ve become some of the richest places in the world, and what I would hope to see now over the coming decades is places which have been without power through cheap, almost limitless solar power, in particular, would have the chance to share those benefits.
SS: There’s this Danish financier, which specializes in natural resources, Per Wimmer, head of Wimmer Financial consulting, thinks green energy is just another bubble, like that of dotcoms in 2000 and the U.S. mortgage crisis. Does he have a point - keeping in mind that green energy is now 80 per cent debt-financed?
CH: No, I don’t think it’s another bubble, I think it’s something where many countries have found a long-term way of funding it. In America and the UK we’ve given an essentially a price guarantee for 2\3 of a life of a new low-carbon plant, and that could apply to nuclear or to offshore wind. So we found a long-term way of making sure that these are sustainable. What we’re also finding, through that early commitment that we’ve been able to bring down the costs - the costs of the offshore wind. The UK has almost half of the offshore wind in the world - and the cost of that has come down by half in about 6 years, and will continue to come down further. So, through that sort of leadership, rather than an attitude of people saying “Look, it can’t be done, it’s too difficult, it won’t last”... that sort of government leadership, and industry leadership which will make an enormous difference to the well-being of our people and to the sustainability of our planet. This is not something which is nice to have. This is something which we have to do, and the leadership which I think many European governments, and actually, many governments right around the world, shows that they now get the importance of this and are determined to deliver on it.
SS: Mr. Hendry, thank you so much for this lovely interview. We were talking about the role renewables play in our planet’s future with Charles Hendry, former UK minister of Energy and Climate change, and that’s it for the latest edition of Sophie&Co, I’ll see you next time.