January 26, 2013, by Paul Brown
EMBARGOED until 0001 GMT on Saturday 26 January Burning fossil fuels like coal, oil and gas adds significantly to global warming and will in time exhaust finite reserves. It also wastes resources which the world urgently needs to conserve for other purposes, according to a study released exclusively to the Climate News Network. LONDON, 26 January – Burning fossil fuels for energy is a disastrous waste of natural resources preventing their use for the manufacture of fertilizer, medicines, clothing and other vital goods, according to a German think tank. A study by the World Future Council, based in Hamburg, has attempted for the first time to put an economic price on the consumption of oil, gas and hard coal to produce energy when they could be used instead for making useful things. While it is well known that fossil fuels are used to make all sorts of everyday objects like plastics, carbon fibre, soap, aspirins, solvents and dyes, it is a new idea to consider how this might affect future generations when the fuels run out. A report – The Monetary Cost of the Non-Use of Renewable Energies – by Dr. Matthias Kroll, released today to the Climate News Network, claims the cost of these important natural resources runs into trillions of dollars a year, but does not appear in economic calculations of the costs of generating energy.
Counting the gains
It should, he argues, be factored into cost comparisons between renewables and fossil fuels, otherwise people will have a false impression of their relative appeal. He argues that, because the use of renewable energy to replace fossil fuels saves natural resources for future generations, this gain should be added to the reckoning in assessing the benefits of switching to wind energy and solar technologies. Dr Kroll says it is often claimed that renewables are still too costly and not yet competitive with conventional energy. Yet the cost of depriving, say, the petro-chemical industry of an irreplaceable resource for making plastics when fossil fuels are burnt is not considered. So large is the use of fossil fuels in other industries, and so important to the world economy, that Dr Kroll’s calculation of the annual losses to industry as a result of simply burning this natural resource is vast – between US$3.2 and 3.4 trillion.
“Not just the current cost of various renewable energies, but also the costs of not using them, need to be taken into account.”
He says the costs of fossil fuel electricity generation must reflect the value of the oil, coal and gas burnt and of the machinery needed to harness the energy, whereas “the sun and the wind are free.” The cost of renewable electricity is simply the equipment needed to generate it. “The difference between renewables and fossil fuels is not only the zero cost of renewables but also that the ‘fuel’ they use will never be exhausted.” Dr Kroll argues that since renewables can be substituted for fossil fuels, every tonne of fossil raw material that can be replaced by renewables retains its value as a raw material to be used in future for making necessary items and therefore should be counted as a financial gain. The study uses Germany as an example because a large number of sophisticated industries in the country use fossil fuels as their raw material, particularly the chemical manufacturers. Surprisingly, 13.5% of the crude oil in the country is not burned for energy but is used to manufacture other products – for natural gas the figure is 4.1% and for hard coal 0.7%. Even that small percentage still totals 10,318 tonnes. Although Dr. Kroll concedes that Germany, because it is an advanced country, uses a higher proportion of fossil fuels in manufacturing than most, he argues that developing countries will need these resources later for their own industries. He therefore concludes: “Protecting the use of increasingly valuable fossil raw materials for the future is possible by substituting these materials with renewables. Every day this is delayed and fossil raw materials are consumed as one-time energy. a future usage loss is created of between US$8.8 and 9.3 billion. “Not just the current cost of various renewable energies, but also the costs of not using them, need to be taken into account.” – Climate News Network
Paul Brown, a founding editor of Climate News Network, is a former environment correspondent of The Guardian newspaper, and still writes columns for the paper.