Don’t bring on the clowns. Credible leadership is essential to building a low-carbon economy

Crises or impending crises bring out the best and the worst in individuals, groups and societies. More importantly, they highlight the strengths and weaknesses of leaders. Crises require leaders to understand and to communicate clearly the nature of the threats and of the choices facing society: the nature of the danger; the probability of the identified threat actually materialising; the potential impact on society if the threat materialises; the options for reducing the probability of the threat materialising and for reducing the impact; and the costs to society of these options.   

Leaders throughout society, not just the top leaders, need to have a good understanding of these threats and choices and have the ability to communicate them. Further, these leaders need the credibility within their societies to lead informed debates on policy choices, to lead the formulation of coherent policy responses and to drive through their implementation.

If you believe that climate change is indeed the greatest threat faced by human beings for many centuries, now is the time when we seek and need leadership: leadership in our national and local politicians; leadership from the managers of companies who produce energy and from the managers of companies who use energy or who make energy-consuming appliances; and leadership from our public intellectuals.

One of the major obstacles to moving towards a low-carbon economy anywhere in the world is the lack of willingness of the part of individuals to change their behaviours and lifestyles with respect to energy use – for energy lies at the heart of a comfortable, affluent modern way of living and energy use is the main driver of climate change. People will only make the required changes if they are persuaded by well-informed and credible leaders, and if they are given the economic incentives and the physical means to do so.

All this sounds very obvious – so obvious that it is hardly worth writing. But three example have come to my attention over a period of just one week in early August that demonstrate that the required leadership is more poorly developed than even I had thought. The examples come from Japan, Canada and China.

The first example concerns a commonly held fallacy. At the beginning of August, Nissan launched their new “zero-emission” hatchback car, the “Leaf”. Three cheers for Nissan and for the other companies making electric vehicles with a performance close to that of gasoline vehicles! Or maybe not?

One could be pedantic and insist that the extraction, transportation, and processing of the raw materials needed to make the car and the battery are all certain to release a certain amount of greenhouse gases. This would make the car “low-emission”. But the main issue is how the batteries are charged. In other words, what fuel is being used to generate the electricity to charge the battery, and how clean is the process of the power generation?

Given that I read this article in the China Daily, my mind immediately recalled that some 80% of China’s electricity is generated from coal. Despite China having many new and very efficient coal-fired power planets, there is no escaping the fact that coal yields high quantities of greenhouse gases, and will continue to do so until such time as carbon-capture and storage is implemented. China may have a rapidly growing capacity for generating electricity from renewable sources, but we are still many decades away from being able to say that the electricity used to charge car batteries in China is ‘low-emission’ let alone ‘zero-emission’. This same argument also applies to most other countries in the world, unless one believes in a nuclear future.

This brings us to the second case. The Province of Ontario in Canada relies on nuclear power for 50% of its electricity. A number of its plants are coming to the end of their lives and new plants need to be built. The nuclear industry appears, at first sight, to be attractive. It can produce vast quantities of stable power supply at relatively low operating costs and produces no greenhouse gases during power generation. Further, the fuel used to run the plants does not appear to be prone to potential supply disruptions – though this may be wishful thinking.

Aside from concerns relating to the safety of nuclear plants and to the proliferation of nuclear materials, the main uncertainty in planning a new nuclear plant is that of cost. The construction of new nuclear plants continues to be plagued by time and cost over-runs. Further, the future cost of nuclear waste disposal is also quite unknown.

In the past, governments , or rather tax payers, have paid the financial penalties of costs exceeding the initial estimates and thus these costs have been almost invisible, being paid out slowly over a long period of time and without complaint. As one commentator expressed it: if you boil a live frog slowly, it does not jump out. These days, with tight government budgets and more liberalised energy sectors, governments are less willing to take on future commitments and want to see all risks being borne by the companies.

The problem is that the governments do not like what they see: just as a frog will jump out if placed into water which is already boiling, so will a government tend to be shocked if presented with the true cost of nuclear power.

Exactly this has happened in Ontario. The Provincial government put a nuclear construction project out to tender and required that the construction company bear all the risk for cost over-runs. The government was “surprised” that only one of the three tenders was fully compliant with the conditions of the tender and that the total cost was more than three times higher than expected. This tender has brought a much needed reality check to the nuclear expansion plans of many governments around the world. Nuclear may be “low emission”, but it is not cheap.

The final example also comes from the nuclear industry, this time in China. Of all the different energy industries, the nuclear power industry generates the most fear and distrust: fear of poor construction, fear of poor management practices, distrust of secretive management and government, and fear of illegal sales or other means of proliferation of nuclear materials. The senior management of nuclear power companies, in any country, require the highest level of integrity and credibility, not only to manage their companies effectively but also to be seen to do so.

China has the fastest growing nuclear power industry in the world, and plans to have more than 40 GW of capacity by 2020. It has therefore been a great disappointment to read that the General Manager and Party Secretary General of the China National Nuclear Corporation is under investigation for “grave violations of discipline”; or, in other words, for corruption. If the national nuclear industry cannot be protected against the irregularities of corporate governance in China, then the rapid growth of this industry is indeed a deep concern for us all.

These are just three random recent examples of poor leadership. But, sadly, they are not isolated. The public debates relating to energy and climate change are rife with limited understanding, inadequate or distorted communication, and the pursuit of individual interests.  It is no wonder that societies around the world are unconvinced about the need to change or about the way to change. The cynics will reply that these are the unavoidable characteristics of politics and that we cannot expect climate change to trigger any change in behaviour. In which case we should accept that we are unable to do anything significant to offset climate change and instead focus on adaptation. But even adaptation to climate change will need leadership for the changes are forecast to be quite rapid and require decisive responses. Don’t bring on the clowns, bring on the leaders!

Philip Andrews-Speed is Director of the Centre for Energy and Mineral Law and Policy at the University of Dundee, Scotland

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