The Energy of Nations

By Jeremy Leggett, social entrepreneur, author, founder & chairman of Solarcentury & SolarAid. This article first appeared in the summer 2014 edition of the RSGS's magazine, The Geographer.

As the unprecedented British floods of last winter subsided, ruinous as they were for so many, it was worth remembering that psychologists tell us we have a very worrying collective tendency for blindness to the kind of risks that can crash economies and imperil civilisations. I believe that Big Energy is repeating the failing, guilty of an enculturated risk blindness that, unless action is taken, will lead to an inevitable global crash, and not just because of the climate change they fuel.

Since the oil price began its inexorable rise in 2004, I have watched captains of the energy and financial incumbencies at work as the risk taking has built in energy markets. Too many people across the top levels of government and business have closed their eyes and ears to systemic risk taking.

I see four systemic risks. The first and biggest is climate change. We have way more conventional fossil fuel than we need to wreck the climate. Yet the energy incumbency wants us to pile unconventional deposits on the fire, not least by fracking. Second, we risk creating a carbon bubble in the capital markets: puffing up assumed value in fossil fuels that can never be realised. Third, we risk surprising ourselves with the so-called ‘shale boom’ in US gas and oil production. That too may prove to be a bubble, maybe even a Ponzi scheme, I believe. Fourth, we court disaster with our assumptions about oil depletion. Most of us believe the narrative that there will be adequate flow rates of just-about affordable oil for decades to come. I am in a minority who disbelieve the story.

It would be unwise to forget how few whistle-blowers there were in the run-up to the financial crash. Because of the sheer prevalence of risk blindness, overlain with the pervasiveness of oil dependency in modern economies, I reluctantly conclude system collapse is probably inevitable. But there is better news. I believe that there will be a road to renaissance, in the re-building, and especially so if we make the right decisions as we awaken to warnings like the UK floods. We have to nurture clean energy industries, and strategies, and accelerate them as though mobilising for war. We have to kick our fossil fuel dependency into touch. The two-year preparations for the vital December 2015 climate summit in Paris will provide one opportunity to do it. If that doesn’t work, the next great crisis of capitalism will provide another. There won’t be any more, I fear.