Five reasons why switching to renewables is ‘smart economics’

The global energy transition is now “unstoppable” due to “smart economics”, UN secretary-general António Guterres has said in July in an online speech titled: “A moment of opportunity.” The speech is based on reports providing details of how the “plummeting” cost of renewables has helped the sector expand at pace, meaning that renewables now almost match fossil fuels in terms of global installed power capacity.

1.      Renewables are increasing as costs fall

The cost of renewable energy technologies has fallen over the past decade, with 96% of new solar and wind now costing less than new coal and gas plants, according to IRENA. In 2024, the global average cost of electricity generated by solar photovoltaics (PV) and onshore wind was 41% and 53% cheaper, respectively, than the least-cost new fossil fuel-fired power plant. There were some small increases in costs between 2023 and 2024 for some technologies, IRENA notes. Solar PV’s levelised cost of electricity (LCOE) increased by 0.6%, onshore wind by 3%, offshore wind by 4% and bioenergy by 13%. According to Bloomberg, increases were broadly due to inflation and supply chain pressures.

2.      Investment in clean energy tips $2tn

In 2024, global annual clean-energy investments exceeded $2tn for the first time, according to the UN report. This is $800bn more than fossil-fuel investment, up almost 70% in 10 years. Subsequently, the number of jobs in the clean-energy sector has also continued to grow, reaching 34.8m in 2023, of which 16.2n were in the renewables sector. In addition, under IRENA’s 1.5C scenario for the energy transition, global GDP would increase annually by 1.5% between 2023 and 2050. 

3.      ‘Stability…in a volatile global energy landscape’

In 2024, renewable energy helped avoid $467bn in fossil-fuel costs globally, according to IRENA. This reinforces renewables’ role as “not only as the lowest-cost source of new power, but also as a key driver of energy security, economic stability and resilience in a volatile global energy landscape”.

4.      China dominates deployment…others should now follow

Of the 4,448GW of total renewable capacity installed globally as of the end of 2024, 41% was in China, 39% in OECD countries and almost half of the remaining 20% in Brazil and India. Africa made up just 1.5% of the capacity installed by the end of last year, despite accounting for 85% of the global population without electricity access and having a renewable energy resource potential 10 times larger than the continent’s projected electricity demand in 2040.

5.      ‘Faster and fairer’ for 1.5C

While progress in transitioning the energy sector away from fossil fuels is underway, “the transition is not yet fast enough or fair enough”. Guterres set out six “opportunity areas”, which include NDCs, meeting surging energy demand with sustainable sources and using trade and investment to “supercharge” the energy transition.

Source: Carbon Brief

Striding into the future on solar sidewalks

Kamloops, British Columbia, is a radiant place, receiving over 3,100 hours of sunshine a year. So it’s no wonder that in 2016, Thompson Rivers University (TRU) decided to harness all that luminescence and convert it to electricity. TRU didn’t follow trends — it set one: It became the first place in Canada to embed solar panels into the ground. By 2017, a 12-meter walkway with 16 solar modules near the campus together with an additional 62 modules in front of another building were producing power. By its second summer of operation, the set up produced enough electricity to power an entire classroom of computers at TRU for the day.

For Amie Schellenberg, an electrical instructor at TRU and part of the team that spearheaded the sidewalks, ground-mounted solar arrays just make sense: “Why wouldn’t we use the space we already have?”  she asks. “We don’t need to plow fields or redo rooftops — the ground is there.” Historically, solar panels have been mounted above ground, typically on roofs or in gigantic solar parks. But wide-open spaces and sunlit rooftops aren’t always an option in cities.

“It’s hard to integrate traditional rooftop solar into urban centers,” says Gilbert Michaud, chair of the American Solar Energy Society’s policy division. “Buildings shade each other and condo buildings may have restricted Homeowners Association policies. It makes it really hard for people in urban environments to install solar, even though population centers have a demand for cool energy and want to see it.”

This is where in-ground solar shines. On a similar trend as TRU, the city of Barcelona installed in 2021 Spain’s first photovoltaic (PV) pavement as part of the city’s goal to become climate neutral by 2030. In the Netherlands, an embedded 400-meter solar sidewalk in front of Groningen Town Hall is powering the building as part of that city’s ambition of becoming CO2 neutral by 2035. The project is part of the European Union’s Making City project, which aims to develop positive energy districts (PEDs) that demonstrate innovative solutions to tackle climate-neutral goals. The 400-square-meter installation is projected to avoid approximately 18 tons of CO2 annually. “It is an example of how to use space in the city in a smart and sustainable way,” Philip Broeksma, councilor of energy from the Municipality of Groningen said when the sidewalks were revealed in 2023.

Source: Reasons to be cheerful

Your food budget is more expensive because of climate change

A 300% spike in Australian lettuce prices. A 50% rise for European olive oil and 80% for US vegetables. Researchers from the Barcelona Supercomputing Center and the European Central Bank have traced back those price jumps to extreme weather they say is linked to climate change. The group analyzed 16 weather events around the world between 2022 and 2024.

Climate change brings with it higher temperatures and extreme rains, which can lower yields and make the crops that are harvested more expensive. British households’ food bill, for instance, was £361 (about $484) more in 2022 and 2023 due to climate change, according to estimates by the nonprofit Energy and Climate Intelligence Unit.

Is climate inflation permanent? Prices tend to respond as soon as one or two months after an instance of extreme heat or drought, says Max Kotz, the study’s lead. These kinds of food price shocks typically turn out to be short-term in nature, because high prices incentivize more production, which in turn brings prices back down, says Andrew Stevenson, a climate analyst for Bloomberg. Products like coffee and cattle are the exception, because they require certain conditions such as a tropical climate or large swathes of land for grazing that limit where they can be grown and bred. Coffee and cattle futures, contracts that represent near-term pricing in those markets, have marched up in price since 2020.

Sources: Bloomberg, Carbon Brief, Novethic

Caught between a fossil fuel past and a green future, China’s coal miners chart an uncertain path

As the world’s largest greenhouse gas emitter transitions to cleaner energy, families are on the precipice of being left behind by China’s green revolution, fearing for their economic prospects as the country charts a delicate path between its fossil fuel foundations and clean energy ambitions.

Born in 1971 in Lüliang, a small city in western Shanxi, China’s coal heartland, Wang joined his local mine at the age of 18. “My family was poor and there was no work to do,” he says. Coal is at the heart of Shanxi’s economy. Between 2018 and 2023, more than 10% of all the coal produced globally was dug up from Shanxi’s, according to analysis from Global Energy Monitor. But the natural resource occupies an uneasy place in China’s national plans. On the one hand, the country is pursuing renewable energy at a jaw-dropping scale: in May, China installed enough wind and solar to generate the same amount of electricity as Poland. On the other hand, the majority of China’s power generation still comes from coal, with officials seeing it as essential for ensuring energy security and jobs.

Although China is now the dominant producer of the technology such as solar panels and electric vehicles, it is also the biggest emitter of greenhouse gases, which contribute to natural disasters such as the extreme floods that hit Shanxi in 2021, displacing nearly 2 million people. But climate change means little to Wang. “I don’t know about national policies on reducing emissions,” he says, as he hopes his grandson can avoid a life in the mines, adding “It’s too dangerous”. But he admits there are few alternatives. About one in 10 people in Shanxi are employed in coal and related industries.

Source: The Guardian

BP returns to oil and changes CEO

-          Company: BP

-          Sector: Energy

-          Clover rating: 2/10

Although BP had the most ambitious climate goals in the sector, the major is turning its back on renewable energies.

The British energy giant has just announced the appointment of Albert Manifold, former CEO of construction materials group CRH, as chairman of its board of directors. This change in governance comes at a time of great turmoil for BP. Despite record profits in the oil sector thanks to the war in Ukraine, BP's results are disappointing, and pressure is mounting. The influential activist fund Elliott Management, which recently acquired a stake in the company, is campaigning for a refocus on the most profitable activities. "BP's recent strategic shift appears to be motivated by panic following the acquisition of shares in the company by a short-term activist. We are seeing a lot of frustration from long-term investors on this issue," commented Mark van Baal of the pro-transition shareholder collective Follow This. "The new chairman must be competent in climate and transition issues and resist short-term activists," he said.

A wish that does not seem to be heard. BP has announced the sale of its onshore wind business in the United States to LS Power, continuing its divestment from renewable energy. The deal, the value of which has not been disclosed, involves ten wind farms in seven US states, grouped under the name BP Wind Energy North America. It should be finalized by the end of the year, BP said in a statement. This abandonment of renewable energy marks a real shift in BP's policy. In 2020, the major oil company adopted the most ambitious climate plan in the sector, thus assuming its role as a leader.

Sources: Novethic, BBC

PepsiCo to expand regenerative agricultural practices in U.S. corn supply chain

-          Company: PepsiCo, Inc

-          Sector: Food & Beverages

-          Clover rating: 5/10

Food and beverage giant PepsiCo and multinational food, ingredients and agriculture company Cargill announced the launch of a new strategic collaboration to advance regenerative agriculture practices across their shared corn supply chain in Iowa. Regenerative agriculture practices are aimed at addressing the environmental impact of the sector, and include techniques to improve and restore ecosystems, build soil health and fertility, reduce emissions, enhance watershed management, increase biodiversity, and improve farmers’ livelihoods.

According to PepsiCo, the creation of a more resilient agricultural system is critical to its business, as the company sources 35 crops and ingredients from more than 60 countries for its food and beverages. The company recently announced a new goal to drive the adoption of regenerative agriculture, restorative, or protective practices across 10 million acres of land used to grow crops and ingredients for its products by 2030.

Iowa contributed more than 15% of the US’ supply of corn last year. As such, efforts will be led on the ground by nonprofit organization Practical Farmers of Iowa, which will provide tailored agronomic advice, technical guidance and incentive payments to help farmers transition to regenerative practices, as well as enrollment and verification services. Participating farmers will receive support to adopt techniques such as cover cropping, reduced tillage, and nutrient management.

Source: ESG Today

HSBC Switzerland under investigation by Swiss and French authorities

-          Company: HSBC Holdings

-          Sector: Banking

-          Clover rating: 5/10

HSBC Private Bank (Switzerland) is under investigation by Swiss and French judicial authorities on charges of money laundering. According to the British banking group, authorities in both countries are conducting criminal investigations against it. These investigations concern two "long-standing" banking relationships, according to HSBC's half-yearly report.

In June 2024, the Swiss Financial Market Supervisory Authority (FINMA) ordered measures against HSBC Private Bank (Switzerland) for violating money laundering rules. It prohibited the institution from establishing new business relationships with politically exposed persons until further notice and requested that it reviews its existing business relationships.

The assets are believed to have come from the Lebanese Central Bank. Its former director, Riad Salameh, is accused of embezzling more than $300 million with the support of his brother Raja Salameh. In 2020, the Office of the Attorney General of Switzerland opened an investigation into Mr. Salameh and his brother on suspicion of aggravated money laundering.

Source: ESG Today

COP15 on wetlands: estimated benefits of $39 trillion per year

Up to $39 trillion in benefits each year is the estimated value of the ecosystem services provided by wetlands. This represents 36.7% of global GDP. A new study published ahead of the 15th Conference of the Parties to the Convention on Wetlands (COP15), held in July in Zimbabwe, presents the latest economic and scientific data on the loss and degradation of wetlands and the urgent measures needed to reverse the trends.

Wetlands account for 6% of the Earth's surface. They include seagrass beds, coral reefs, mangroves, lakes, rivers and streams, inland marshes and swamps, and peatlands. Although little known, these ecosystems play a major role in supplying clean water, protecting against flooding, ensuring food security, and storing carbon. But we continue to lose them at a rate of 0.52% per year. Wetlands are among the most threatened ecosystems on the planet.

Since 1970, 22% of wetlands have disappeared, equivalent to more than half a billion football fields and more than $5 trillion evaporated. Researchers warn that if the current trend continues, another 20% of wetlands could be lost by 2050. Conversely, if all remaining wetlands are properly managed until 2050, they will provide a net present value (NPV) of more than $200 trillion over that period.

Sources: Ramsar, Novethic