Surging oil prices return spotlight to renewables

Soaring oil prices brought on by the war in the Middle East may have nasty short-term economic consequences but, from a longer-term perspective, they provided the perfect backdrop to last week’s summit meeting of the Sustainable Markets Initiative at Hampton Court. What better illustration could there be of the case for diversifying from dependence on oil and gas into alternative sustainable, cleaner and more locally available energy sources?

No wonder King Charles, who founded the SMI in 2020 to encourage private-sector investment in sustainability, was in high spirits as he toured an exhibition of new clean technologies, reportedly in full “fantastic” and “magnificent” mode as he spoke with participants in the summit, which gathered hundreds of CEOs from around the world. Many were from America, including Bank of America CEO Brian Moynihan, who moderated much of the discussion.

Despite predictions that the Trump administration’s hostility to renewable energy and kowtowing to the oil majors and coal miners would derail, or at least slow, the transition to clean energy, the long-run shift away from carbon fuels has continued. The president’s decision to bomb Iran, by disrupting the oil and gas markets, may have far greater significance, and in the opposite direction, than his pulling the US out of the Paris climate agreement.

Last year, renewable capacity grew by an estimated 12%, dominated by solar with wind a distant second, and now represents nearly 45% of total global energy capacity.

Certainly, the transition has far to go, especially as several oil and gas companies, including BP and Shell, are shifting from renewables back to their original dirty business. Yet the underlying economics of renewables, both cost and sustainability of supply, are now surely too powerful to be resisted by politicians complaining about woke capitalism.

Photograph by Adrian Dennis/AFP via Getty Images