OneWorld.net (U.S.)

“With competition for oil intensifying, the peak of oil production, whenever it comes, will almost certainly trigger a period of soaring prices. The aggregate effects on the global economy…are likely to be grave. Just how grave will depend on many things, but especially on governments’ political will to restrain consumption and otherwise find a path away from oil.” Worldwatch Institute State of the World 2005

Lifestyles in the industrialized world revolve around fossil fuels—including oil, coal, and natural gas. For oil alone, according to U.S. government figures, the world consumes over 80 million barrels per day, with the U.S. accounting for roughly a quarter of that total.

© Friends of the Earth Europe / Corporate Watch (US)Oil is used in industry, agriculture, automobiles, and in the manufacture of myriad modern conveniences. In short, oil moves the engines of the modern economy. Although estimates vary, the Worldwatch Institute asserts that its combustion accounts for just over 40 percent of carbon dioxide emissions. While oil and other fossil fuels are not the only cause of climate change, they are increasingly seen as primary contributors.

The majority of the industrialized world still relies on gasoline-powered vehicles and the fossil fuels industry is a major employer with a great deal of money and power behind it. With this kind of influence, it is no surprise that lobbying groups have come out strong to defend the industry—and to oppose the environmental treaties that would force them to change course.

The Kyoto Protocol on Climate Change is no exception. In 2000, a group of non-governmental organizations (NGOs), including the Natural Resources Defense Council and the Union of Concerned Scientists, released a report noting that, “during the months leading up to the December 1997 climate treaty negotiations in Kyoto, Japan, industries opposed to strong treaty provisions launched a $13 million ad campaign to try to undermine the talks.” Intent on protecting their interests, some of these companies have also taken pains to paint global warming as an alarmist hoax. A series of articles published in Mother Jones magazine in June 2005 has tallied some 40 organizations funded by ExxonMobil that seek to undermine the scientific consensus behind climate change.

© Centre for Science and EnvironmentFor their part, the bulk of independent environmental NGOs stand by their assertion that, not only is climate change a serious threat to the planet’s future, but fossil fuels are a contributing factor. As “energy independence” comes into vogue, NGOs have pointed out other problems with dependence on fossil fuels—above and beyond the obvious environmental ones. At least in the U.S., a majority of petroleum is imported, they note, with a hazardous reliance on Middle Eastern reserves. This fact has led to a foreign policy that sometimes supports repressive regimes and, thus, is not in alignment with the values of many Americans (see Worldwatch link below).

Alternative Options Explored

Environmental organizations have long encouraged companies and governments to implement fuel efficiency measures for automobiles. Doing so can go a long way to reducing both dependency on fossil fuels and carbon emissions. NGOs in the U.S. note, however, that fuel efficiency standards have been getting worse, not better. Although a 1975 law mandated the doubling of the fuel economy of new vehicles in the U.S., these standards have been allowed to stagnate, says the Sierra Club and other groups. Aside from fuel efficiency measures, promoting the use of cleaner, renewable energy in homes and businesses is a mantra of the environmental movement, not to mention an increasing number of state and local governments. Such renewables include wind power, solar energy, biomass, and geothermal energy, among others. Renewable energy emits little, if any, greenhouse gases and other pollutants. Nuclear power is considered a clean fuel in terms of emissions, but many environmental groups have opposed it on the basis of its safety and health risks—radioactive waste for one. The drawbacks for using renewable energy are that the cost of needed technologies is still relatively high and it is generally not as easy to store and transport as are fossil fuels.

According to the International Energy Agency, 13.4 percent of the world’s total primary energy supply in 2002 was produced from renewable energy sources, which is still a relatively small share of total energy use. If adopted more widely, however, using renewable energy could well be a means to significantly raise living standards in the developing world. By using indigenous resources, these energy alternatives can better provide electricity to the rural poor.

© International Energy AgencyDespite the relatively limited use of renewable energy, the momentum for change has been building. As companies pursue innovations and demand from consumers increase, the economies of scale may shift. There is, for example, a growing demand in the U.S. for gasoline-electric hybrid cars, with eager buyers willing to remain on waiting lists for months to purchase them. An ability to get up to 55 miles per gallon is a big incentive.

A report from the Earth Policy Institute (EPI) claims that using a combination of gasoline-electric hybrids with wind-generated electricity to power automobiles could reduce gasoline use by some 70 percent (see NGO Viewpoints in this issue). Other papers from EPI note trends in Canada, the U.K., and Germany to phase out the use of coal; the growth of wind-generated electricity that is expected to satisfy the residential electricity needs of half of Western Europe’s population by 2020; the rapid growth in the market for hydrogen fuel cells; and Japan’s leadership in solar cell production. These are just a few select examples among thousands of global initiatives.

Leveling the Playing Field

There is increasing recognition across the political spectrum that new, and more sustainable, energy sources must be developed. Based, in part, on growing concerns over the impacts of fossil fuels on climate change, national governments have voiced support for cleaner energy options. Despite this endorsement of “green energy,” financial support still favors fossil fuels. A 2004 report from the New Economics Foundation in the U.K., for example, estimates that global subsidies for fossil fuels amount conservatively to about $235 billion a year.

In the U.S., subsidies for what some call “dirty energy” are extensive and they affect the price of gasoline. While the mainstream media has focused attention on the “outrageous” price of gasoline for American consumers, which in June 2005 averaged over $2/gallon, most Americans do not realize how much the U.S. government financially supports petroleum producers. Furthermore, America levies the lowest rate of tax on transportation fuel of any of the developed nations, which makes fuel very inexpensive for U.S. consumers. In comparison, European citizens pay at least $5-6/gallon.

According to a report by the International Center for Technology Assessment, the real price of gasoline in America is equivalent to at least $5/gallon, and raises as high as $15/gallon when considering the significant environmental, health, and social costs associated with gasoline use. Chief among these external costs are air pollution and environmental degradation. Taxing polluting fuels could cover these external costs, promote emissions reductions, and directly address global warming. It’s also politically unpopular.

© Worldwatch Institute When fuel costs are kept artificially low, however, there is little inclination for producers or consumers to move toward cleaner energy options. If the market were allowed to operate freely, note NGO sources, other energy providers would have more of an equal footing. Although gradual, some federal resources are going to renewables—especially for the development of hydrogen fuel cells—and U.S. State Department documents indicate that $5.8 billion has been committed in 2005 to address climate change specifically. It’s still minor, however, compared to subsidies in the U.S. for fossil fuels and nuclear power.

On a systemic level, tax systems need to be put in place to provide incentives for companies to produce green energy. Replacing fossil fuel subsidies with temporary support for renewable energy would give the latter a chance to be competitive. That’s also a plus for business. The interest, the technology, and new job options in emerging energy industries all exist, but the political will to make these changes—at least at the national level—has been less obvious.

For stories on the climate change debate and on local initiatives, see “Climate Change 101” and “In the Vanguard.”