The scientific verdict on climate change is long-since decided: we must
act now, now in a decade, but now. The financial case has also become
clear: it is past time to create the new clean and low-carbon energy
economy. The Copenhagen Climate Council is the right venue
at the right time to forge new understanding of the opportunities to
blend best science with progressive economics to create new business opportunities that can bring about the energy system we want, not just tinker with the one we inherited.
– Daniel Kammen, Distinguished Professor of Energy, University of California, Berkeley
Founding Director, Renewable and Appropriate Energy Laboratory
Lead Author, Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize
The current increase in energy costs is the second large-scale upheaval we have seen in the energy sector. The first “shock” was the OPEC oil crisis of the 1970s and early 1980s. In retrospect, it is clear that the OPEC crisis was driven by economic and political factors rather than an absolute scarcity of resources. In many ways, this distinction is akin to Nobel Laureate Amartya Sen’s classifi cation of famines which differentiates between those caused by a shortage of absolute food resources and those prompted by a lack of “food availability,” with the latter a matter of politics and logistics, not total global resources.
In contrast to the crisis of three decades ago, the run-up we’re seeing now — while it certainly has political elements — is driven by a much broader set of factors. To begin with,
competition for energy resources has intensified. Supplies, at least of conventional oil, are also dwindling, but the supply of unconventional fuels, such as heavy oil, tar sands, shale oil and fuels made from coal is truly vast. In fact, with these resources taken into account, the world has not used roughly half of the available oil as the “Peak Oil” story suggests, but less than one-fortieth of the total. The problem is we are running out of atmosphere far faster than we are running out of dirty fossil fuels to burn. And so, in Tom Friedman’s words, “this is not your mother and father’s energy crisis; this is a fundamentally different one.” The overriding consensus is that oil prices will not drop back to the $20, $30 or even the $40 or $50 per barrel range. I think we’re much more likely to see $150 per barrel than we are ever to see $50 per barrel again. This fundamentally changes the debate about our energy future.