In recent weeks I went on vacation. As soon as you get some distance from daily work-related activities – as well as social media – you start to notice how much energy the climate debate within the Netherlands consumes. Obviously, in almost all countries there is a debate on how to act to meet the Paris Climate Agreement goals. This debate has also dominated the discussions among policymakers at the COP2 conference in Madrid. Still, especially within the Netherlands, it sometimes feels like you are only allowed to debate climate policy with like-minded people.
“A healthy planet for future generations. Who cannot agree with that?”
During my vacation, I had an extensive conversation with the owner of the Bed & Breakfast. He was talking proudly about his new solar panels which were just installed. He indicated that he is an active member of a climate activist network, and that he is trying his best to leave the planet healthy for future generations. Who cannot agree with that? I asked him why he didn’t opt for insulating the cottage. After all, all the heat produced by his electric heatpump is wasted because of a lack of insulation. He admitted that he simply had not thought about it, partly because it did not seem necessary because of the abundant solar energy. He seemed to appreciate looking at the energy transition and his own ways of tackling it with a fresh pair of eyes. He most likely ignored my teasing remark that if he really wants to do something about climate change, he should also consider whether he should be encouraging travellers from all over the world to come to his cottage. And maybe just as well. After all, it is a beautiful cottage in a beautiful location.
“For the climate, Europe is not especially relevant”
In the Netherlands we somethings think that we have the luxury to choose the measures most optimal for our own climate policy. There is constant pressure to speed up the energy transition, and rightly so. However, suboptimal or in-between solutions – like biomass and blue hydrogen (hydrogen made from natural gas in which the carbon emissions are captured and stored) – are most often seen as frustrating the energy transition. I think that these kinds of solutions are in fact crucial in order to be able to meet the final goals. It is impossible to win the marathon without running 42 kilometers first…
The International Energy Agency stresses in its latest World Energy Outlook that the European impact on climate change is limited, and declining. Does this mean that we should not act? Of course not. However, it does mean that we should pay careful attention to the effectiveness of some of our choices and the costs that come with it. And preferably, we should see our actions in a broad – or global – perspective, instead of only focussing on our small country.
“The three lessons I learned from Han: Don’t go with the flow, remain brave and stay positive”
This month, my manager and Chief Economist at ABN AMRO Han de Jong left the bank. I have always enjoyed working for and with Han. That was partly possible because he gave me the opportunity to organize my position into what it is today, and he also gave me the confidence that you sometimes need to bring up difficult subjects. I learned three important lessons from Han. The first lesson is that you should not just walk with the crowd. As an economist and/or analyst, you can come to the same conclusion as the consensus market view. But if the vast majority of economists, analysts or scientists agree upon something, it does not relieve you of your duty to continue to explore the alternatives or the other side of the story. The second lesson is that you should have the courage to look further ahead than financial markets if you want to beat these markets. The last lesson is to remain positive, or as Han always says: “Apocalyptic predictions are almost always incorrect.” You must cherish such good advice, and I will continue to do so.
“Invest and innovate, but keep some room to manoeuvre”
If I translate these three lessons to the energy transition, I see the following conclusions. We should keep an eye on technological developments. What may currently seem to be the best carbon neutral solution to replace the existing fossil-fuel based energy techniques, may prove to be temporary solutions in our transitions towards a full carbon-neutral energy mix. So, continue to invest and innovate, but keep some room for manoeuvre if necessary.
Looking ahead is something we do already. In fact, if anything, we seem to look ahead a bit too far. In the recent climate debate, the focus is all on the endpoint, while the transition towards it is underexplored. However, to end with the third lesson, there are also many good things happening. Sometimes we tend to forget in our daily business from where we have come, and the results we have already achieved. The good thing about getting distance from the daily debate regarding our national climate policy is that you can see with a fresh pair of eyes how things really are. So, all batteries are charged to enter the new year with new positive energy. Something I can wholeheartedly recommend!
This blog was published earlier in Dutch on Energiepodium.nl