More than 200 central bankers, G-20 countries, and top academics advocate the push for carbon-reducing energies and believe they will help ease the post-coronavirus weak demand crisis
What kind of green stimulus does the world need? Technologies that reduce carbon emissions are one of the most effective targets for the trillions of euros of spending linked to coronavirus relief programs, concluded more than 200 central banks, G-20 finance ministers, and top academics. in a study published last week.
There are three sets of clean energy technologies that policymakers can focus on, each at different stages of development. The most advanced are wind and solar energy, which are cheaper than conventional energy almost everywhere in the world and in many places are even cheaper than fossil power generators. The best way for governments to increase the share of wind and solar generation is probably to encourage the construction of transmission grids and reform markets to reduce the benefits of fossil fuels.
Lithium-ion batteries are in an early stage of development and are not very competitive with existing technologies. In most places, it still costs more to power the grid with a backup battery than with a gas turbine, and the cost of an electric car is higher than a gasoline one. It is the third technology that has the most potential here. Green hydrogen, produced by splitting water molecules with an electrical current of renewable energy, is in a similar stage of development to wind and solar in the mid-2000s.
Hydrogen has potential in a variety of industrial uses where traditional renewables are not suitable, such as steel, cement, and heavy truck manufacturing. If stored underground, it could even provide backup power for electrical grids. Bloomberg estimates that hydrogen could meet 24% of the world’s energy needs by 2050, with annual sales of $ 200-700 billion. At the highest end, it is almost half the size of the current oil market ($ 1.5 trillion or more per year). There is only one problem: a large amount of energy is required to produce it. Governments should provide aid to bring the cost of green hydrogen below conventional energy sources.
Green hydrogen won’t solve all of our problems. In the short term, stimulus money is probably best spent on routine activities that get the less-skilled workforce on the move, such as insulating houses with solar panels. However, in the long term, hydrogen offers a way out of our triple crisis of weak post-coronavirus demand, a declining energy sector, and climate change.
