As leaders from the world’s largest economies converge in Northern Ireland for the upcoming G8 Summit, we must focus on two interconnected subjects of vital importance: clean energy and clean cars. In so doing, we will pave the way for a cleaner planet.
Today, we rely primarily on fossil fuels to meet our growing demand for energy. Three hydrocarbons -- oil, coal and natural gas – provide 87% of global energy demand. The scientific community overwhelmingly agrees that overuse of fossil fuels has contributed to global warming. These fuels are finite and non-renewable; by definition, they will not last forever.
In addition to an environmental impact, reliance on fossil fuels has an economic cost. Last year, the European Union spent more than $500 billion to import oil -- more than the total Greek debt. The United States spent $430 billion, or more than 2% of its GDP. China spent about $220 billion, or 4% of GDP. India spent about $130 billion, a whopping 6% of GDP.
Combined, these four regions spent nearly $1.3 trillion to import oil in 2012, a year of economic uncertainty. How much will we spend in boom times if we continue on this trajectory?
To reduce risk associated with reliance on a single, non-renewable resource, many nations want to diversify their energy mix. They’re investing heavily in renewables such as solar, wind and hydroelectric power. These forms of energy create jobs and rely on local resources – not expensive imports.
China has made the boldest moves to diversify its grid. In August, China committed about $290 billion to clean-energy projects. Authorities want renewable energy to account for one-fifth of its total energy demand by 2015. China can already generate 6.2 gigawatts of solar power and 68.3 gigawatts of wind power – the equivalent of 50 coal-fired power plants – and has nine of the world’s top ten solar-energy companies. These companies together produce 65% of the world’s photovoltaic panels. China is using fossil fuel for 70% of its energy today, but it’s obvious that renewables will play a growing role.
In fact, most countries are busy adding local and renewable resources to their grids. The EU is likely to exceed its target of a 20% share of energy from renewables by 2020 – and the EU is targeting a 10% share of renewable energy specifically in the transport sector. Other nations are asking for greenhouse gas emission cuts of 25 to 40% within 15 years. More than half of America’s states have renewable energy targets; California (the eighth largest economy worldwide) aims for one-third of its power from solar panels, wind turbines and other renewable sources by 2020.
As our grids get greener, everything that we plug into the grid gets greener, too. In countries such as Norway, where almost all energy comes from hydroelectric power, people who plug in hair dryers, dishwashers and even cars consume locally produced, renewable energy. In Brazil, hydropower already meets two-thirds of energy demand. Germany, Italy and Japan are rapidly adding solar power to the grids, so appliances plugged into these grids are getting more “juice” from the sun. At the same time, these initiatives are creating green-energy jobs and advancing technology.
As policymakers chart a roadmap to a cleaner planet, the private sector must fully participate in the transition – and here I want to single out my own industry, the automotive industry. In the United States, the world’s second largest car market, scientists estimate that transport generates approximately 30% of America’s total global warming emissions. The transport sector must be part of the solution – or else we will only have partial remedies.
Fortunately, today’s petroleum engines are vastly more efficient than those a decade ago. And starting in 2010, we began producing mainstream, mass-market zero-emission vehicles – starting with the Nissan LEAF. We added another affordable zero-emission option this year -- the Renault ZOE. These vehicles consume no oil. Instead, they can use the growing percentage of locally produced, clean energy wherever they’re recharged – and they have zero tailpipe emissions.
It’s no wonder many countries encourage consumers to switch to electric cars. China – whose cities have reached record levels of smog in recent months, and whose public officials have been asked not to drive fossil-fuel-burning vehicles – is offering one of the highest incentives worldwide on EVs, about $8,000 per vehicle. The United States has a federal incentive of $7,500, and some states have additional incentives. Such measures demonstrate how serious world leaders are about cleaning up their grids and their transportation.
For the past century, we have developed a sophisticated, deeply embedded infrastructure surrounding petroleum. Our dependence on petroleum will not disappear quickly – and not without significant changes to national policies and infrastructure. To make the gradual switch to a diverse and renewable energy grid, governments and industry must keep working together – and in so doing, our cars will complement our greener grid.
The Renault-Nissan Alliance works closely with policymakers and non-governmental organizations at the local, regional and national level. We are all refining our long-term strategies -- geopolitical and industrial -- with a candid recognition of climate change. Fortunately, environmental and energy security policies are also moving more toward sustainability – and industry is contributing as an equal partner in this movement. Together, we can shift to a brighter future.
Carlos Ghosn
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