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G7 in Bavaria: A Fairy-tale Summit

Lord Howell

Following the recent G7 meeting in Bavaria the media focussed heavily on the eye-catching commitment of the seven leaders to long term decarbonisation targets, both for 2050 and 2100.

In the absence from the gathering of Russia (excluded for bad Ukraine behaviour), China and India – three giant emitters- the real worth of such pronouncements has obviously to be limited. But more than that they provide a vivid example of the dislocated, even contradictory, state into which the global energy and climate debate has now descended.

Two unconnected worlds now exist simultaneously – both of them claiming the future – the world of renewables and low carbon and the world of oil and massive hydrocarbon expansion.

Here at the G7, as at other high profile international gatherings, we saw governments and politicians signing up to virtually fossil-free goals and the end of the age of oil. Yet out in the real world we have markets, investors, long term planners and the entire global oil and gas industry planning for the opposite, the continued long term predominance of hydrocarbons (BP estimate still 81 percent by 2035, with the implication that it will not be much order accutane less by the end of the century).

They cannot both be right. And nor in practice will either camp totally prevail. Political grandstanding and campaigning will keep pushing for global emissions agreements (as at the forthcoming Paris climate conference), for more fossil fuel penalties, for moves to turn hydrocarbons still in the ground into stranded assets. Reality will go the opposite way. Five of the G7 countries are currently increasing their coal burning. Across the globe projects ensuring huge further expansion of both production and consumption of coal, gas and oil are irreversibly in the pipeline. India, for example, is openly committed to an expanded coal-based energy future. Cheap power and green power will jostle for the lead.

New technology (notably in storage) may shift the energy balance slightly the renewables and low carbon way, as costs at last come down. But new technology will also recover, develop and process fossil fuels with steadily increasing efficiency and ingenuity.

Reality, market power and innovations as yet unseen will determine how the energy future is shared. But reality was an absent guest at the G7 gathering at its fairy-tale Bavarian castle.

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