Why Tony Blair needs to reset his climate reset

Two weeks ago (timed to come out just before the UK local elections), Tony Blair released a report calling for the climate movement to change tack. He's right - and also very, very wrong.

The Climate Paradox: Why We Need to Reset Action on Climate Change - a new report from the Tony Blair Institute. And yes, that’s the Climeworks Mammoth plant in Iceland on the cover ¯\_(ツ)_/¯ Image: Tony Blair Institute

Just as I was clearing the decks to write about the need for a climate reset, for my next piece for Bloomberg, Tony Blair (my guest for Episode 38 of Cleaning Up in April 2021) stole my thunder. In the introduction to a new report from the Tony Blair Institute, he laid out his argument that the climate movement “needed a new public mandate, attainable only through a shift from protest to pragmatic policy”.

So far so good, great minds, etc. Except not really.

When is a fact not a fact?

First of all, in order to create a burning platform for change, Tony states in his foreword to the report a number of things he calls “inconvenient facts”. Except many of them aren’t facts at all, they are forecasts, and those that are facts are sloppily interpreted. For instance:

• Fact: “Production of fossil fuels and demand for them is set to rise further up to 2030.”
  
  Maybe, maybe not. Global coal use was flat from around 2015 until the recent natural gas price spike pushed China and others back to coal. The resulting blip now looks like it’s unwinding, with China’s use perhaps past its peak.

• Fact: “China initiated construction on 95 gigawatts of new coal-fired energy, which is almost as much as the total current energy output from coal of all of Europe put together.”

  
  This is a word salad. Coal capacity is not coal-fired energy or coal energy output. If you want facts, China has added 34GW of capacity each year for the past five years, and retired 2.5GW. So it is adding just over 30GW of capacity each year. The capacity factor of China’s coal-fired power stations dropped from nearly 80% in 2000 to under 50% in 2020-2022. If want forecasts instead of facts, my forecast (particularly in the light of the tariff war’s impact on its exports to the US) would be that capacity factors will now head back down and lots of Chinese power stations will slump back into the red.

• Fact: “Meanwhile, India recently announced they had reached the milestone of 1 billion tonnes of coal production in a single year.” India’s coal use is indeed increasing, though not enough to offset the slump in coal use in the G7. But focusing on domestic production only is weird: India has been reforming its domestic coal production ever since the 2012-2014 “Coalgate” scandal, and is reducing coal imports.

• Fact: “Airline travel is set to double over the next 20 years.” Whether it does or not, this is not a fact. There could be a global recession. There could be a nuclear conflict (there are at least three good candidates right now). There could be a new generation of much more efficient planes and AI-enabled air traffic control. I hope air travel does double over the next 20 years because at least it means the economy is in good shape, creating surpluses that can be invested in the common good.

• Fact: “By 2050, urbanisation is expected to drive a 40 per cent increase in demand for steel and a 50 per cent increase in demand for cement.”
  
  Again, maybe, maybe not. I suspect not - yes, urbanisation is in full swing in India and picking up in Africa and other growing nations, but China’s great urbanisation surge is largely over. More likely demand for steel and cement will remain high but not grow much.

• Fact: “Africa – at present responsible for just 4 per cent of global emissions – will see its population double in the next thirty years. This growth will demand energy, infrastructure and resources".
  
  Once again, I very much hope Africa’s wealth and energy use soars. However, Africa is leapfrogging to a far cleaner energy mix than, Europe, US, China, India or Latin America at the equivalent stage of their development. If you think Africa is going to embrace coal, read about how Medupi and Kusile, two huge coal-fired power plants pushed on South Africa by the World Bank [hi Jamal, I remember your role in this even if you want to forget it!] brought down Escom and resulted in extensive power shedding and economic carnage.

• Fact: “Though action by the developed world is still vital, by 2030 almost two-thirds of global emissions will come from China, India and South-East Asia.” Sure, but if you really want to deal in facts not forecasts, the fact is that coal is falling off the grid throughout the G7. It’s completely gone in the UK, going in Europe and declined as fast when President Trump tried to stop the “war on coal” in his first term as it did under his predecessor or successor.

So Tony starts by overstating the failure so far of attempts to arrest climate change. If we are going to create a platform for action, it need to celebrate the successes that have been notched up, even if these do not solve the whole problem.

When is a solution not a solution?

Where things really go wrong for Tony’s argument is when it comes to the solutions. He states that “Net-zero policies, once seen as the pathway to economic transformation, are increasingly viewed as unaffordable, ineffective, or politically toxic.”

Quite right. But then he goes on to endorse a list of the most unaffordable, ineffective and politically toxic solutions.

There’s a clue in the picture on the cover of the report: it’s Climeworks’s Mammoth direct air capture plant in Iceland. Whatever the solution to climate change is going to be, it is certainly not going to involve anything that costs $1,000 per tonne of carbon removed, or even the $400 to $600 that they promise by 2030. Climeworks itself seems to understand this, now offering the much cheaper nature-based removals.

In addition to going all-in on direct air capture, the new report is big on carbon capture. “At present,” Tony asserts, “carbon capture is not commercially viable despite being technologically feasible – but policy, finance and innovation would change this.” Would it?

First of all, what does “competitive” mean? Clean electricity is competitive when it is cheaper than fossil. CCS is always a cost: it costs money to build CCS capacity, and then it costs money to run it, in terms of maintenance and parasitic load (thermodynamics matters). So CCS can never be competitive in the sense of working economically in the absence of a policy framework to price in the cost of carbon, unlike clean electricity. It could be competitive in terms of eliminating emissions at a lower price per tonne than other solutions, but it is far from clear that “policy, finance and innovation” would indeed change this, given the rapidly-falling cost of other technologies that don’t require the world to wake up and apply carbon pricing.

Onwards. The second big solution Tony is promoting is nuclear power - yes, Small Modular Reactors as the get-out-of-jail-free card. “The new generation of small modular reactors offers hope for the renaissance of nuclear power, but it needs integrating into nations’ energy policy.” Wait, what? SMRs are absolutely embedded in many nations’ energy policy, in particular the US and the UK - presumably Tony’s main targets. The problem is that what they offer is exactly that: hope. The inconvenient facts are that SMRs has so far disappointed, and look like being as slow to get through the permitting process as GW-scale reactors, and even more expensive.

I’m as big of a fan of SMRs as it is rational to be, but as I wrote in my Power and Glory piece on AI for Bloomberg, I would be highly skeptical of any claims that you could build a First-Of-A-Kind SMR producing power for under $180/MWh or an Nth-Of-A-Kind for under $120/MWh.

As for how much of the climate problem SMRs could solve, just to match the current output of wind and solar power worldwide would require 5,000 SMRs with 100MWe output. And then those 5,000 SMRs (OK, only 1,670 if they are 300MWe units) would produce just 17% of the world’s electricity, which is only 22% of its Final Energy, so they would meet around 3.4% of the world’s energy needs.

You would need many tens of thousands of SMRs to make a serious dent in global emissions in 2050. In the world of facts, we will be lucky to see half-a-dozen by 2030, and perhaps a few thousand by 2040.

In summary

The point is not that wind and solar on their own will solve climate change, or EVs or heat pumps or any combination. They clearly won’t. The point is that any solution to arresting and rapidly reversing the growth in global emissions has to start with a rigorous understanding of the energy system - its physics, its engineering, its economics and its finance - before trying to sell it in to the political system and civic society.

So, do we need a climate reset? Absolutely. Will it look anything like Tony Blair’s version? Absolutely not.

Selah!

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If you want to know what a reset really might entail, you’ll have to wait for my next piece for Bloomberg NEF, and the corresponding audio episode of Cleaning Up.

Meanwhile, please make sure you watch the episode of Cleaning Up on Project Bo, the solar and battery project providing reliable power to a neonatal unit in Sierra Leone, helping an amazing medical team save hundreds of lives per year.

YouTube shadow banned the episode as US political advertising. We re-edited it, removing a line on the global context in international aid, but now it needs you to watch, comment, like and recommend. And, if you feel inspired, please donate to the appeal to maintain and expand the project (US appeal, UK and RoW appeal).