Sunday, July 26, 2009


There's been much debate and blogging time being spent on the need for political action to prevent global warming but I wonder how much positive impact politicians can make in this area. It's highly likely that politics can slow down the transition to "clean" energy (today's clean energy will be tomorrow's pollutants as we run out of silicon, lithium and other essential ingredients). However, can legislation really speed up the natural progression to this new energy world? Maybe the world would transition quicker if the world's politicians managed to negotiate a policy framework that priced carbon dioxide effectively but when in history have politicians been able to legislate a market price?

The articles referenced at this blog (a great consolidator of information by the way) demonstrate my point. It is unrealistic to think that politicians will create a world wide policy framework that will abate the affects of global warming. However, it is less unrealistic to think that the natural reduction in the cost of renewables will drive a far quicker transition through market forces than any policy ever could. Energy is the largest industry in the world and the opportunity to get a slice of this industry into the future means that there will be millions of people world wide trying to invent product. Barriers to entry were massive while oil and coal dominated the landscape, but now, these barriers have been lowered (mainly by the success of renewables supported by the focus on issues such as global warming and peak oil). New players will emerge while the encumbents scramble to change their business models and resist the transition as much as possible. These encumbents are powerful, but political incompetence may actually be hindering them even while their lobbying efforts continue to have a significant effect.

In fact, Alan Kohler's article shows how political incompetence could actually assist more than political competence. The strain that the uncertainty caused by a garbled CO2 policy has put on the coal industry is in fact having the same effect as a carbon price would. Coal fired plants are now being viewed as expensive due to their uncertain future. This will drive investment in solutions and because the coal industry is finally being hindered in competing for these solutions, less money will be wasted on the fanciful idea of carbon capture.

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