Too much of a good thing is bad for you. That’s what my mother always told me. Her pronouncement was echoed by my father, teacher, doctor….
That appears to be the case for environmentally-friendly green technology. I mean, how can you go wrong with windmills, solar panels, tidal power and pedal power? They are the good, politically correct thing.
Well, according to a report recently published by Cambridge University, green technology could cost the world economy up to $4 trillion by 2035. This, is of course, grist for the mill of the climate change denial lobby—until you examine the fine print. The cost is the poorly planned transition from non-renewable to renewable energy.
The reasons for the potential problem are manifold: It is costing more and more to extract fossil fuels from the earth; the additional extraction cost requires time and heavy investment; green energy technology also requires investment and time before it can come fully on stream; and the transition between the switch over from fossil fuel to environmentally-friendly energy production will be very expensive.
The countries that will hurt hardest will be the ones who currently benefitting the most from recently increased fossil fuel production—the US, Russia and Canada.
Canada and the US, especially, are now heavily into shale oil production. The US invested $22 billion from private equity sources alone in the US shale oil business in the first three months of 2018. Oil production is this year set to reach a record high of 9.7 million barrels a day. American investment in green energy was about half of the money put into fossil fuels.
According to the International Energy Agency, the world invested around $700bn in oil, gas and coal in 2016. China is leading the way in investment in renewable energy. It is still building coal-fired power stations, but in 2017, according to Bloomberg, it poured $132.6 billion into green energy resources. This was more than twice the investment of the US and EU combined and half the world total invested in renewable energy.