Growth rates in the developed world, however, were dwarfed by those in some of the bigger emerging economies. Does this make us any happier? Jacobs says there is little prospect of countries hardening up their commitments between now and December, but it would be progress if there were agreements to tackle particularly damaging forms of climate change, such as deforestation, and to cut emissions to zero in the second half of the century. One four-letter word underpinned economics: more. Well, according to Betsey Stevenson and Justin Wolfers, economists at the University of Michigan in the US, the evidence is that wellbeing rises with income, and that the satiation point has yet to be reached, even in the richest countries. With the world barely recovered from one global recession, policymakers are now concerned about another. And so, it has to be seen. But there is going to be a lag, even on the most optimistic assumptions, before renewables can take the place of coal. And why shouldn't Canada be an active participant in offering our products into that market long term? Mac, you're also involved in the Real Jobs Real Recovery Task Force. Thatcher was no climate change denier. And as a strategy, as a government strategy and governments all over the world are doing this, I can see that it made sense for them. But talk about why attracting investment back to Canada is so important right now. I think thatâs totally naive.â. And so, is that not, does that not give Canada some competitive advantage to attract investment? To have a realistic prospect of preventing global temperatures from rising by more than the previously recognised danger threshold of 2C, scientists say it is not possible to burn all the proven fossil fuel reserves owned by companies and governments. Thatâs right â the plastics used to make electronics ⦠As things stand, the offers will fall a long way short of what the experts say is a level consistent with the 2C target â about 12bn tonnes a year, short according to Michael Jacobs. Even without Keystone, however, the United States now relies on Canada for more than half of its imported oil. It's kind of -- it's right across the country. The U.S. is now starting to go in that direction somewhat. The UN is hosting a conference in Paris in late 2015 that will seek commitments to reduce carbon emissions from all the countries attending. We create jobs across a wide range of other sectors to support our activities. The business-as-usual camp says that the scientific consensus is wrong about climate change, or that climate scientists have exaggerated the risks, which can be tackled if and when they become apparent. âWe know what works,â US president George HW Bush said at the time. Nevertheless, he is certain, âsolar and wind will be two major sources th⦠I mean, I feel like we could talk a lot longer about this. And they don't have enough confidence and faith in in the process of ingenuity and inventiveness and how powerful the incentives are to solve society's problems. And that's the way we have to think. And there's always the risk of a truly hostile policy. Bahrain stands as a model for other countries, as theyâve never had much oil to boost the economy. There are only three ways of reducing our carbon footprint: reduce the amount each person consumes, reduce the number of people, or make each unit of growth less carbon-intensive. And how dominant it will be in economic terms has to be seen because there are offsetting areas of positivity and growth that are still present. This is an uncomfortable thought. There's no question that markets’ supply and demand, certainly with the COVID impact, has really impacted the prices of oil and natural gas. Mac: Well, you know, at first, let's start marketing at home. The next wave looks like it will be dominated by digital technology, robotics, biotech, lighter materials and renewable energy. And I think you're aware that when I talk about ESG, I always talk about economics. Globalisation means that people in the developing world know how we live in the west and they want some of what we have. Food production became less oil-intensive, as every possible scrap of land was exploited. China currently builds a new coal-fired power station every two weeks. But do you think that industry is responsive enough and able to adapt quickly enough? Italy. The IEA also makes the point that it is time the world got its act together. In terms of reducing global poverty capitalism has been a success, but this growth has put pressure on the planet. Ugandaâs Economy to be strong with or without oil 4th January 2019 EABW Editor 0 Comments Razia Khan, the Chief Economist, Africa and the Middle East for Standard Chartered Bank has predicted a robust medium-term economic growth for Uganda â with or without first oil â as the government ramps up infrastructure spending. Atlanta and Barcelona have the same number of people and share the same per-capita incomes, but Atlantaâs carbon emissions are 10 times those of Barcelona. Let us begin with one basic idea: 250 years of growth based on the exploitation of fossil fuels has brought real benefits. The possibilities opened up by this new wave of technology, he believes, provide hope that growth can be decarbonised over the decades to come. The image of Iran's economy as oil, carpets, and pistachios was always flawed, but has now become badly dated. vast majority of fossil fuel reserves are unburnable, Investment in clean energy is growing at a double-digit rate, Atlantaâs carbon emissions are 10 times those of Barcelona. Joining the podcast today is Mac Van Wielingen. The final chapters of The Bone Clocks, David Mitchellâs 2014 novel, describe a future in which progress has gone into reverse. Now the underlying driver of economic growth is technical change, and technical change is accelerating. 0. What is best at this time is to conceive of a economy without oil revenue and construct an economic management model based on that premise. Not everybody buys into this narrative, of course. And private sector spending, of course, is going the other way. John Lewis commissions expensive ads to encourages us all to spend more at Christmas. Either way, it would suggest that governments had started to take seriously what Stern calls one of the greatest market failures in history: the failure to take account of the damage caused by burning fossil fuels. She told the Royal Society that her government supported the idea of sustainable economic development, and concluded: âStable prosperity can be achieved throughout the world, provided the environment is nurtured and safeguarded. It is hard to explain the consumer-led recovery in the euro area without assuming a positive impact from lower oil prices. If it comes to pass, it will be because, despite all the warnings, climate change has not been taken seriously enough. Oil and Natural Gas 101: What is ESG — and why does it matter? I mean, as you would know, many people will say over and over and when I talk about this in Ottawa, for example, I always apologize. The mission could be to phase out domestic use and export of coal by a fixed date, or to set a deadline for shifting 50% of US energy consumption to renewable sources. It's how can you be the best barrel? Some places remained off limits. Mac: Well, the record spending that you're talking about is government spending. There was an acute shortage of fuel for tractors. Again leaving South Africa to one side, the average person in sub-Saharan Africa consumes the same amount of energy in a month as the average Briton does in a day, according to Kevin Watkins, director of the UKâs Overseas Development Institute. Last modified on Wed 14 Feb 2018 13.34 EST. ... and sink with the price of oil. And so, from the point of view of the world, Canada really deserves to be in the market developing its resources. By this he means that central banks and finance ministers are set up to deal with short-term problems, such as whether inflation will hit its target in two or three yearsâ time, or whether another housing bubble can be prevented before the end of the decade. Thirty years ago the UAE was one of the least developed countries of the world. At the end of the 18th century there were fewer than 1 billion people on the planet. It would involve the share of gas used in power generation rising from just over 20% to more than 35%; coal with carbon capture and storage rising from almost zero to just under 10%; renewables increasing from around 5% to just over 20%; and finally, nuclear power almost doubling from just under 10%. Businesses that did not expand were viewed as failures. But there is a deleveraging and in that kind of an environment that weighs heavily on the economy. And with the contraction that has occurred, you can, and with ultimately, as we come out of it, you can reasonably anticipate that there's going to be a deleveraging that occurs to some extent. And so, my point is that we need to think synergistically across a number of fundamentals and the economic fundamentals should always be there. âWe absolutely can have growth and protection of the climate at the same time, and in doing so we will construct a much better form of economic activity and growth in terms of clean air, less-congested cities and so on,â Stern says. Almost 90% of that energy is provided by fossil fuels â coal, gas and oil. Fewer people go hungry. And then with respect to the government sector spending, the spending they've been doing. Tracy: Mac, is there anything before we wrap up our discussion that you would like to add? That is incompatible with the climate change projections made by the International Energy Agency, which thinks fossil fuels should make up no more than two-thirds of the energy mix. It is easy to see why governments, especially those in poorer parts of the world, want to help citizens with their energy bills. The natural advantages that you were asking earlier. âDelaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.â Fossil fuels are not going to disappear overnight, but the phasing-out process needs to start immediately, and that process could be hastened if governments used the opportunity provided by the recent halving of global oil prices to remove the $1tn annual subsidies for fossil fuels. But the economics of more, together with a rapidly rising population, have created problems unforeseen at the time of James Wattâs steam engine. But the problem goes much further than figures such as Tony Abbott, the prime minister of Australia, or Nigel Lawson, the former UK chancellor of the exchequer, or about every Republican harbouring hopes of winning the nomination for the 2016 US presidential race. After the crash, when the developed world was struggling to emerge from the deepest slump since the Great Depression, it was China and India that acted as the engines of growth. Yet, the picture we are confronted with is different: demand for fossil fuels keeps growing. New technologies, particularly those with firstâmover advantage, tend to be profitable, and there will be incentives for pension funds and insurance companies to get their money out of the fossil fuel sector and into a sector that has massive growth potential. Cuba, subject to a US economic embargo, was one such country. Historical evidence shows there is a link between income and population: as people become richer, they have fewer children. So what will the world look like in 2043? Life expectancy was 40 at best, the working week was long, disease was rife and diets were poor. Tracy: Given all the work that you've been doing, looking at strategies for recovery Mac, can you point to anything, and this might not even be a fair question, but is there something you can point to as, what's the most important thing that we need to do now to enable a strong recovery for Canada? It is instructive that a ⦠Or, even for a household, putting money into the house for repairs and maintenance, those can be at least partially explained by or looked at as investments, and you've got an enhanced asset. Tracy: Mac, I really enjoyed this discussion and I hope I get to talk to you again. But we have to bear in mind that -- and you create jobs because people are going out and planting trees and all the related work. All of this may be true, but it leaves unanswered the question of how we get from where we are now to the kind of world the deep greens want to see. If climate change can simply be blamed on âthe Manâ, on the evils of capitalism, or on a cabal of fossil fuel companies hell-bent on destroying the planet, then the solution is to take on the Man, replace capitalism with something kinder and gentler, and force the fossil fuel companies to shut down. Here is one such warning: âFor generations, we have assumed that the efforts of mankind would leave the fundamental equilibrium of the worldâs systems and atmosphere stable. Like Stern, he is not really talking about replacing the economics of âmoreâ with the economics of âlessâ; he is suggesting replacing it with the economics of âbetterâ. What one has to appreciate at the end of the day, what we will have, even if the economy comes back 100 per cent, is what we will have is an extraordinarily high level of debt and new debt that was created to deal with the COVID problem and the loss of income. And then naturally, that moves out publicly and globally. It is hoped that if oil prices keep rising, alternatives will be developed and this will enable a smooth transition. Tracy: Well, Mac, when we're talking about investment in the industry, then, why is it so important that we turn to that? The country is richly endowed with natural resources such as oil and gas, fish, forests, and minerals. You can't see it. It's about the same size, interestingly, as the entire banking and financial services business in Canada, which is always a surprise for people to hear. Mac, thank you for being on the podcast today. The fossil fuel age will end either when there are newer, better and cleaner ways of providing energy, or when it is too late to prevent irreparable damage to the planet. The IEA is right: further delay will be costly. The rest of the world can help poor African countries with the cost of developing renewable energy; the rest of the world can provide Africa with expensive carbon capture and storage for coal-fired power stations; or the rest of the world can do nothing and watch Africaâs carbon footprint rise rapidly as it burns dirty fossil fuels. That is going to require some tough decisions and some compromises. Mac: The oil and gas sector is Canada's largest industry sector. In part, it is because the reserves of the big western fossil fuel companies make up only a small chunk of the global total, and it is hard to see Vladimir Putin being too troubled by a divestment campaign. Tracy: Right. But it is possible that with all these enormous changes â population, agricultural, use of fossil fuels â concentrated into such a short period of time, we have unwittingly begun a massive experiment with the system of this planet itself.â That was Margaret Thatcher, in a speech to Britainâs scientific elite in 1988. The answer is that it will be hellishly difficult, but it is just about feasible if we make the right choices â and start making them now. We could be living through the green technological revolution, in which energy has been decarbonised. I literally have come to view the industry the way it's evolved is, that it's a technology business, it's technologically driven, and it's so reliant on technology, it really, can be understood as a technology company that's focused on resource development. And in fact, we expect to see a deleveraging within both the consumer sector, which has, in Canada has among the highest levels of debt of any country in the world, countries in the world. Because there is an enormous opportunity for Canada to maintain this vital sector of our economy, even if it's not growing, maintain it and ensure that it maintains, that it's stable and profitable and protected in a sense by policy and not attacked, not torn down. In a conversation with Energy Examined host Tracy Larsson, energy thought leader Van Wielingen discusses why productive assets from a strong oil and gas industry are vital to counterbalance growing deficits, and why Canada needs to better support its homegrown industry in a global competition for investment capital, focusing on its strong environmental, social and governance standards. âTo say that we have to stop growing â that we have to go backwards â I think is factually wrong, and also politically unlikely to be successful.â. He said that oil has been closely blended with the developments in Iran and the region during the last century as well as with the politics, history and independence of these countries. Of course, renewable energy alone wonât replace the huge economic and employment opportunities traditionally supplied by oil. That is why Japanâs population is ageing and shrinking. We can't really see it anywhere else in the world. And just given the breadth of your experience, I thought it would probably be of benefit to the listeners if you could take just a minute and talk a bit about Canada's natural gas and oil industry in terms of its size and its actual impact on Canada's economy. That's the thing about innovation is, it's generally, major innovation's unpredictable. Several of the lines carrying that crude are in the midst of expansions. The role of oil in Iran's economy is declining, undercutting Western efforts to press the regime by reducing its oil export revenue. The latest bout of financial blues, however, has been a doozy. The economy of the State of Texas is the second largest by GDP in the United States after that of California.It has a gross state product of $1.887 trillion as of 2019. And tax initiatives are on the horizon.' Oil & Gas: Overall Economic Contribution Trade is just one element of a nationâs overall economic performance. To get a better idea of how important oil is to the Canadian economy, public and private consumption, government investment and spending and foreign balance of trade (net exports) among other factors must be considered. I mean, it's not that it's not possible. Our Reporter . As the west outsourced its manufacturing to low-cost centres in Asia, energy demand in China, India and Indonesia rocketed. They should be, but it needs to be presented that way. They don't really want that closeness. But even then, you know, we just don't think, we don't see the same level of polarization we see in Canada. We want technical change, for example, to build new solar technologies. Between two-thirds and four-fifths will need to be left in the ground. The same 2bn tonnes of CO2 could be saved through substantial improvements in energy-efficiency over and above those already expected. The stone age did not end because of a shortage of stone. Please join us again next time. Andreas Wagner poetically termed the tackling of challenges related to climate change as âour generationâs moon landingâ, saying that we need âenormous efforts globally to build a future beyond fossil fuels and prevent a climate change disasterâ. Tracy: So, you have a long history of working in Canada's energy sector. Calorie intake fell by a third. And so, it's developing its resource and it has in a sense, you don't have the same splits within a country like Norway as you do in Canada with the regional split. That problem is us. The amount of money currently allocated by international bodies, such as the UN, for climate change adaptation and mitigation is less than $1bn a year: it needs to be at least 10 times bigger. Tracy: Right. And that's been going on actually prior, well, prior to COVID. And the corporate sector is also, the debt levels are among the highest in the world. And it's the highest in Canada of all subsectors. It's our political institutions as well. And then, further out, what we need are new technologies.â. And then, of course, there's the Atlantic-based oil and gas activity as well, which is certainly very significant to those provinces, Newfoundland and Labrador specifically, for example. Nicholas Stern, who authored a 2006 report on the economics of climate change commissioned by then-chancellor Gordon Brown, says stopping growth misses the point. The market model spread quickly to parts of the world that previously it could not touch: to China, where the reforms begun by Deng Xiaoping were accelerated; to India, where the idea that the worldâs biggest democracy could go it alone was abandoned; to the Soviet Union and its former satellites, which received a strong dose of economic shock treatment. In addition to higher consumer spending, that also means higher demand for energy, the bulk of which comes from fossil fuels. Here at the Guardian, we want to sell more newspapers, and more ads to companies selling their own goods and services to readers. The energy needs of a bigger and richer global population have risen sixfold in the past 50 years. 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