A Long Time In Finance The Price Is Wrong: Why Free Markets And Climate Don't Mix
Feb 9, 2024
Brett Christophers, an economics professor from Uppsala, and author of 'The Price is Wrong,' dives into the perplexing contradiction between capitalism and climate action. He explores why the drop in renewable energy costs hasn't led to a surge in adoption. The discussion reveals major oil companies pulling back on green investments due to disappointing returns and examines the economic complexities hindering the transition to clean energy. Christophers also critiques government messaging around decarbonization, highlighting the need for a broader perspective on energy security and sustainability.
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Profitability Hurdles in Renewables
- The falling cost of generating electricity from wind and solar hasn't led to a massive renewable energy takeover.
- Profitability and expected revenue stability, not just generation cost, are crucial investment factors.
Renewables' Hidden Delivery Costs
- Renewables are often sited where land is cheap, increasing delivery costs and reducing profitability.
- Geography and grid connection costs make some renewables less economically competitive despite low generation costs.
Volatility Barrier to Investment
- Electricity price volatility deters renewable investments as developers seek revenue stability.
- Mechanisms like long-term contracts or government tariffs help mitigate volatile market prices.