The economics of the transition from fossil fuels to clean energy in transport
Ben Birch
It has become very clear that climate change and global warming from the enhanced greenhouse effect has become a hugely pressing problem in recent times. In the UK alone, the production of energy via the use of fossil fuels (natural occurring materials such as coal, oil and natural gas) accounted for 331.5 million tonnes 1 of carbon dioxide production in 2022 alone. Of this, 107 million tonnes of carbon dioxide is emitted annually from transport alone which accounts for 24% of all carbon dioxide emissions in a year. 2 This means transport accounts for the largest percentage in one sector of carbon dioxide emissions in this country and is hugely harmful to the environment, air quality and much more. It is vital to find a solution to reduce these emissions and to look at alternative methods of powering transport. In the Stern Review (Sir Nicholas Stern 2005) it is stated that the global cost of climate change is 5% of a country’s GDP per annum and that dealing with climate change will cost just 1% of a country’s GDP. This shows that it is not only imperative to deal with the problem of climate change on an environmental level but also arguably financially beneficial. It is important to understand clearly the definition of ‘sustainability’ in order to fully answer this question. According to the Oxford Dictionary, ‘sustainability’ is defined as the ‘ability to be maintained at a certain rate or level’. In addition, we can understand economic sustainability as the ‘ practices designed to create the long-term economic development of a company or nation while also managing the environmental, social, and cultural aspects of its activities. It is about balancing economic growth and generating profit with the impact on the environment and people. ’ 3 With this information, we can infer that in order to achieve economic sustainability while switching to a cleaner energy source, there also needs to be consideration of the money spent on the switch, potential damage to the environment and impact on local inhabitants, social or cultural, all the while keeping an eye on long-term economic development. This suggests it will be impractical or even impossible to switch immediately, as there could be many other consequences, such as short-term elevated prices of travel for example. Any switch needs to be approached in a controlled and considered manner and implemented slowly so allowing people and infrastructure to adapt to the change.
1 ‘332.5 million tonnes’ - provisional emissions statistics: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147372 /2022_Provisional_emissions_statistics_report.pdf 2 See https://www.gov.uk/government/statistics/transport-and-environment-statistics-2022/transport-and- environment-statistics- 2022#:~:text=Provisional%20data%20(%20BEIS%20%2C%202022),107.5%20million%20tonnes%20in%2020 21. 3 Insight, Pysmarian group magazine: https://www.prysmiangroup.com/en/insight/sustainability/economic-
sustainability-what-is-it#:~:text=Economic%20sustainability%20refers %20to%20practices,on%20the%20environment%20and%20people.
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