Listen to Jason Mitchell discuss with Vaclav Smil, academic and author of the New York Times bestseller How the World Really Works, what the energy transition by 2050 realistically means.
Listen to Jason Mitchell discuss with Vaclav Smil, academic and author of the New York Times bestseller How the World Really Works, what the energy transition by 2050 realistically means.
What does the data say about our net zero ambitions? Listen to Jason Mitchell discuss with Vaclav Smil, academic and author of the New York Times bestseller How the World Really Works, what the energy transition by 2050 realistically means; how energy transitions have evolved historically; and what are the real implications when people talk of a climate ‘earthshot’
Recording date: 22 September 2022
Vaclav is Distinguished Professor Emeritus at the University of Manitoba. Regarded as being among the most important thought leaders of our time, he’s the author of forty-five books and over 500 papers, including the New York Times bestsellers How the World Really Works and Energy and Civilization: A History. One of Bill Gates’ favourite authors, Vaclav has spent his career exploring new ground in the fields of energy, environmental and population change, food production and nutrition, technical innovation, risk assessment and public policy. He’s been named by Foreign Policy as one of the Top 100 Global Thinkers.
Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.
I'm Jason Mitchell, head of Responsible Investment Research at Man Group. You're listening to A Sustainable Future, a podcast about what we're doing today to build a more sustainable world tomorrow.
Hi, everyone. Welcome back to the podcast and I hope everyone is staying well. Here's a special holiday present to you from the team behind A Sustainable Future podcast. For context, I've been after Vaclav Smil for several years now to get him on the podcast. As one of the preeminent thinkers and authors on historical development and transitions, Vaclav has long been a go-to research source for me. I finally managed to interview him at a Man Group conference this past September, and I can confirm that he is indeed a force of nature. Frankly, that probably comes across best in his prolific body of work, rather than a live interview, which, at least in my experience, is always a bit challenging.
Add to the fact that I was almost surreally interviewing a 12-foot image of his disembodied head via Zoom, and you'll get what I mean. But because Vaclav does so few interviews, it's an immense privilege to be able to have this conversation with one of the leading thinkers of the energy transition. And I think his data-driven approach and his sometimes sobering candidness about the challenges we face are obvious in this episode. But I don't see this as pessimism. I read his message as a voice of uncomfortable but necessary truths.
With more than 10 books on energy, Vaclav's work is important because he brings a clear-eyed perspective on the implications of the energy transition. We talk about what the energy transition by 2050 realistically means. How energy transitions have evolved historically and why the analogy of a climate earthshot is fundamentally different from that of a moonshot.
Vaclav is distinguished professor emeritus at the University of Manitoba, regarded as among the most important thought leaders of our time. He's the author of 45 books and over 500 papers, including the New York Times bestseller, How the World Really Works and Energy and Civilization. Vaclav has spent his career exploring new ground in the fields of energy, environmental and population change, food production and nutrition, technical innovation, risk assessment, and public policy. He's been named by foreign policy as one of the top 100 global thinkers. Welcome, Vaclav.
Excellent. You have the books. The one thing I would say if you're not familiar with his work... My favorite quote is from Bill Gates. It's actually a tweet that he sent and he said that he looks forward to Vaclav books like some people look forward to Star Wars movies. So, it's sort of a testament to his influence.
Vaclav, let's start with some scene setting. There are a number of pervasive topics in your research. Two of them specifically. First, you talk about the almost incomprehensible immensity of the primary energy system, the fact that it's still 85% fossil-fuel based. And you also talk about the fact that energy transitions are nothing new. You've written about the fact that we've transitioned from wood to coal, from coal to oil, oil to natural gas. What does history teach us about these transitions? And I also want to be a little bit more provocative. Are we naive in thinking that we can compress and accelerate this current energy transition all while cutting carbon emissions 50% by 2030?
Some very simple calculations here so you could judge for yourself. Suppose you know nothing at all about the world energy system or energy consumption, you have never had a single course in engineering, you don't know any mark beyond simple algebra. But just think of these numbers. Basically, now people say by 2050 people... like these zero and five endings. So, 2050 there'll be zero carbon in the world. So, we have 28 years to get a zero carbon.
So, let's back 28 years back to 1994. In 1994, the global primary energy consumption, all fuels, all primary electricity was 86% fossil fuel. 1994, 86% fossil. 2022 is 82% fossil. So, we've gone down 4% relatively, but in absolute terms actually we have massively increased fossil fuel consumption because of the rise of China and rise of India, actually. But relatively speaking, we've gone down 4% in last 28 years. Now I ask simple question, how likely it is that we will go down 82% in next 28 years, right?
As simple as that. We can go home basically after this statement, right? Because the acceleration needed in still going 4% down in 28 years to 82% down in 28 years, I just don't know any historical parallel to that. As you noted, I never start telling people how massive the system is... And we could spend the rest of the day reciting the numbers. More than eight billion, all these tons... 10 to nine, 10 to... more than eight billion tons of coal, more than 4 billion tons of crude oil, more than 4 trillion cubic meters of natural gas, and so, down the road.
When you do these numbers like that, you cannot just simply say like an old telephone, a new mobile. Well, billions and trillions necessarily the infrastructure, simply the material behind it, steel, concrete, copper behind it, you just simply cannot say by 2030 or 2035. Maybe just one example of which we have been largely deprived in past two years, and has been flying. By 2019 we reach this [inaudible 00:05:57], eight trillion revenue passenger kilometers. Eight trillion.
More than eight billion people traveled. Basically every person statistically speaking, traveled on a jetliner. These are massive machines which can get 300, 400, 500 people and they can fly also for 17 hours, thanks to what? Thanks to fossil fuel. Because the energy density of kerosine, which has this airplane is 12,000 watt hours per kilogram. The best better is today at 300 watt hours per kilogram. That's 40 times more in kerosine. So, how can you change this massive things rapidly? It's just simply impossible. So little bit of basic engineering, scientific literacy would go a long way to say that we just cannot do it that rapidly. Just it's easy to say 2035, 2050, but to accomplish that practically, not so easy.
So Vaclav, there's a temptation to analogize the energy transition to other human-
... We talk about a moonshot and we also talk about an earthshot in the context of rearchitecting the energy system. Why is that comparison problematic given all the systems?
It's another example of missing basic numbers because we actually have excellent numbers... I've heard recently about is comparing it to the big sort of do or die projects. One of the scores, the developing the nuclear weapon during the second World War to be Germans. As it turned out, Germany didn't have to be beaten because the [inaudible 00:07:31]. But in three years Manhattan Project spent in today's monies, something like $25 billion. This is nothing. $25 billion over three years, so it worked out to about 0.2% of GDP in the US at the time. That's nothing. Mind you, most of the people didn't even know that there is a Manhattan Project going on. It was so secret when Truman was vice president after Roosevelt died, they had to tell Harry Truman, the vice president, "Sir, we are working on this thing called nuclear bomb project." While energy transition, every person of eight billion people that would be affected by that.
Now the next is the moonshot, right? We didn't have to go to the moon, but it was the [inaudible 00:08:08] beating the Soviets, right? We have detailed accounts of the moonshot, 12 years between 1960 to 1972. Divided by those 12 years, it cost again about 0.2% of America GDP per year. And it costs about 250 billion in today's dollars. While nobody knows the total cost of energy transition to 2050, 2060. But McKinsey took a stab at it last year and they came up with something like $275 trillion, right? The global GDP's now about 90 trillion and they came out as estimate $275 trillion.
So again, this is all the [inaudible 00:08:43] of magnitude above and it's so-called moonshot or nuclear shot or whatever. So again, totally incomparable and it shows you the magnitude because if you would think you know about investing 275 trillion only into that thing while we still having growing population and expectations of economic growth, we would have to be devoting all the other like whatever, 5, 10, 15, 20% of annual GDP just to that thing alone, just to that thing alone.
There's a propensity to conceptualize transitions as abstract, as linear, as smooth. And as we all know over the last nine months, the energy transition has been anything but that. And I'd like you to respond to a provocative quote that Dan Yergin, the economic historian and energy expert asked... And mind you that he asked this last winter just after COP26. So, this is when we saw a price volatility. We saw in the UK more than 25 wholesale energy providers go bankrupt. And he asked, "Is this energy shock a one-off resulting from a unique conjunction of circumstances or is it the first of what will be several crises resulting from straining too hard to bring 2050 carbon reduction goals rapidly forward? Potentially prematurely choking off investment in hydrocarbons, thus triggering future shocks?"
Well that's already happening, has been actually the investment into development of oil and gas has been very constrained for past decade and especially for past five years. So, we already are getting into a sort of deficit situation. But it's only part of the problem. Even before the Russian invasion, people always forget that we think too much about us. And us I mean the affluent, rich countries. And unfortunately we don't matter that much anymore. There's another number which everybody should know. Let's throw the Britain in after that. So, EU and Britain is less than 6% of global population. So, what does it matter if there's an energy crisis in Europe? What does it matter if Europe is worried about all of it? China is doing quite well. China is buying record numbers of liquified natural gas, coal, oil from around the world. So is India.
And let's be clear that Africa will develop whatever Africa will need to develop economically, which means lot more oil and lot more natural gas. Africa is not into transition to zero carbon unless we would pay for it. And let's be clear also that out of another billion plus people coming between now and 2050, 90% of them will come in sub-Saharan Africa. So again, unless we are offering to invest these trillions of dollars for them to become green, they will do what we have done to develop ourselves, to build our cement factories and our steel and our ammonia for fertilizers.
They will just simply use as much fossil fuel as they can really. So in a way, the question is [inaudible 00:11:37] what we say we will do, what other people will do is very different. Because you see other people feel totally unconstrained. As I speak, China has underdevelopment and has a 100 gigawatts of coal-fired power capacity. Coal is booming in China. Coal is booming in India and coal will be booming in Africa. So again, reality is versus somebody saying something.
Yeah, I was going to ask, I mean to what degree does the Ukraine/Russia conflict change the calculus of the energy transition? And specifically you mentioned the EU. Is the EU energy transition plan which they've rolled out over the last half year, is it a blueprint or is it an irrelevant outlier?
It's relevant and irrelevant. It's relevant in the sense that of course they don't have to postpone whatever they wanted to do because now they have to scramble to get just enough fossil fuel, right? So right now it's not a question, although they say that we will re-double and triple our goals forever. But right away they have to ensure that there'll be some heating over winter. And heating over winter will not come from more wind turbines because you cannot build them that fast. And there is whatever, 200 million people in Europe will [inaudible 00:12:47].
So in a way it's very relevant but in a way it's irrelevant because they simply cannot move as fast as they can. Let me give you just one example which is really fundamental in all of this. Suppose they will move very rapidly into electricity, which they need to do. It says by 2035, 100% zero carbon electricity. And of course it will have to come mostly from what? From mostly wind and solar. But wind is far more important in Europe because large part of Europe is not that solar, not that sunny, really. Northern France, Northern Germany, Britain, whatever.
So, wind is the number one thing. I've been just engaged recently in writing my latest book about materials in calculations comparing the material demand of the number one energy converter in the world today in terms of efficiency, and it's a gas turbine. It's a small thing. Basically you take a turbine, a jet line from the jet engine and just reground it and you've got yourself a great generator of electricity.
That turbine needs about six tons of materials, steel, aluminum, titanium alloy, six tons per megawatt. Wind turbine needs about 200 tons per megawatt installed and another 200 tons for massive foundations. That gas turbine, you just put it on a little concrete pad and that's it, really. That wind turbine, you have to anchor it massively because it's a tower, 100 meter tower, plus, and will be subject to also some strains and stresses by the blowing wind.
So, now you are replacing one form of energy which requires, let's say, 10 tons of materials per megawatt of electricity by something which requires 400 tons of megawatt of electricity. How do you do that in a hurry? How do you replace all that [inaudible 00:14:37] of your electricity? And the best thing is to... And moreover, the comparison is not strange because the best wind turbine will be working about 40% of the time and will be about 40% efficient. Where the gas turbine can work on command, on demand. Within eight minutes you can start it up and it's more than 60% efficient. So it's superior qualitatively, and in terms of materials you cannot beat it, really.
So again, [inaudible 00:15:02], the famous American author, he was ahead of us, he anticipated his wokeness and this disconnect from reality. Early in the year 2000 he wrote, "There are no criteria there, just opinions." And still that time he just exploding. There are no criteria. So materials don't matter for wind turbines. That's every single wind turbines in 2035. The fact that is cost 30, 40, 50 times more material than the gas turbine, who cares. So, let's go all ways to basic and let's examine some basic numbers.
I want to talk about your work around growth. You have a book called Growth: From Microorganisms to Megacities and I'm wondering how it informs your thinking around energy and energy consumption. There's a thread around energy use. We talk about energy efficiencies, we talk about technological innovation, we talk about top-down technocratic behavior change as ways to curb growth. On the other side of that, you've got something like the Jevons paradox historically where we make these efficiency gains over time but they are negated by the fact that absolute consumption use keeps coming up. Are we bound by this dynamic going forward?
Jevons is one of the great jewels of British empire and it probably will endure forever. Very simple insight, very powerful and it applies to just about everything you look at, really. And it goes even to fact, and in terms to what I'm writing about, it's called dematerialization, that we use less material per dollar of GDP product. That's true. But on the other hand we have something like eight billion mobile phones out there. Just think about the rare materials and all that glass and all that plastic for that. The point is this, that in the western world... and this where most people don't realize it, per capita energy consumption has actually come down in past 20 years, in US, in UK. Because UK is so much deindustrialized, most people will find it shocking that UK is now consuming less energy per capita than China. And that's a fact as of last two years because nothing is made in Britain.
Britain is more deindustrialized than Canada and we never made anything. So, while the energy per capita consumption has been declining in US, Japan, Europe, it declined to what I call comfortable but still very high level. So, we consume energy at that level which is still four to five times higher than energy consumption in India and which is 10 to 20 times higher than energy consumption in sub-Saharan Africa. So again, you see this thing that even if you decline our consumption, cut it down even more than we do... Although we are [inaudible 00:17:45] thinking because you may cut it on one end but increase on the other. So I say we'll make, or still making more efficient. We'll make our industry more efficient, but we'll buy more SUVs. And SUV's two ton's car instead of my Honda Civic which is a one ton car. So, the Jevons paradox in different ways always traded in that.
But again, as I say, the ball is out of our court because this is the court of the people who consume 10 gigajoules per year, where even Britain consumed 110 and US consumed 260. So, there is an almost infinite demand for more energy consumption per capita. And even China at about 110 strike rate of Britain, they probably would like to go on Japan 150. So, even China is not done yet with its increased energy consumption. So yes, we are far, far from a point where we say we are done, with per capita energy consumption. Still a lot more room to increase it.
Yeah, I guess I would add on to that because it's incredibly easy to listen to this and hear about the immensity of the system and the raw numbers and feel very fatalistic. If rapid decarbonization isn't feasible, what is the next best option? Are we frogs in a pot of boiling water? Is the answer adaptation? Do we bunker down?
No, we just simply work on it, do these little drop, little drops. And one of these little drops, I mentioned mobile phones several times. We have billions and billions of them. Their average lifespan now is two years. In many countries, even less. What happens to them. Don't even try to guess what percentage gets recycled. It's just absolutely minimal. That's just thrown away. [inaudible 00:21:38]. If you make a little pile of mobile phones, nowhere in the world you can find a mineral ore which has so much silver, gold and other special metals as in that pile of mobile phones. We just simply throw them away, throw them away by billions.
Now we are running into electric vehicles. Every electric vehicle with 400, 500, 600 kilogram battery pack. What will happen when we have tens on hundreds of millions of electric vehicles? We need battery to recycle these batteries. We are not recycling them at all. So we need recycling. We need to plan what we'll do with things, not just simply... in England, you can see this giant plates of these wind turbines. What happened to these plates? Are we recycling them or we are digging big trenches and burying them underground? Because that's so difficult to recycle because that component of several materials.
So, we are generating more waste instead of thinking ahead and minimizing waste and then they minimizing energy. So just simply, it's not one big bowl, it's not hydrogen or wind turbines, it's thousands of little things because the system is composed of thousand little things from cars to ammonia to mobiles to heating your house. So, unless we do thousand little things all the time at the same time, we will not get anywhere. It's no one big bowl, thousand little things all the time. It's not defeatist at all, just simply very practical.
When we think about the energy trilemma, it's been a pretty powerful model, particularly recently, the fact that policymakers are always trying to balance price affordability, energy security and decarbonization. And I'm wondering how you think about, particularly in this transition, the role of markets and the role of policy makers? In the past with past transitions, markets have obviously always played a role and to some degree energy security. How do you see top down technocratic policy making really driving or affecting this transition?
I just focused on one thing, which I think is the worst thing for us, and it's twofold about energy and food. Food being of course the most important form of energy. We got used to cheap food prices and cheap energy prices in rest of the world. In the room are people of certain generation like myself, who might remember in 1950s, early 1950s, food was rationed in England and average family spent 40, 45% of his disposable income on food. Now in Europe it's a little bit more than 10% before this inflation. Let's say 13, 14, 15%. In US and Canada, eight to 9%. And the same for energy.
So, both for gasoline and electricity and heating and whatever, and on top of it all, food less than [inaudible 00:24:25], which is historically just incredible because it used to be energy and food like 80%. Food alone used to be 50% [inaudible 00:24:34].
Now it's extremely difficult for politicians to tell people to save energy, to moderate our consumption. We should double the prices or we should triple the prices. But that surely wouldn't the takeaway because the elasticity is not such it's gasoline, so it's food. You will not get any reduction when you increase pricing by 5% or 10%. You've got to double them at least then you will get your elasticity. But that is totally impossible. So I think this is one thing you have caught in our technical success, our managerial success made our food and made our energy so bloody cheap that we have difficulty to rationalize it and say, "No, we are just giving it away." For the sake of the environment, for the sake of future generation, you should pay a lot more for it. Who will say, "Oh, I'm all for it"? So that's I think our basic fundamental problem is where we are in this dilemma.
I guess my last question back to the solutions point is that we've seen an array of different technologies, many high cost, whether it's blue hydrogen, green hydrogen, many still nascent. New markets, you mentioned ammonium. I mean those markets outside of agriculture even need to be created. So there's a question mark. How do you think about solving this on a long-term basis and applying, frankly, discount rates on these different types of technologies and their kind of feasibility at mass scale?
Well, you see, I think in the first place, again, we must make some basic decisions because we just cannot continue this hodgepodge we have. Let me mention say cars because there's about 1,4 billion vehicles on the planet and our internal combustion engines, and now we are trying to electrify them, right? There is actually some people trying, so everyone going to tell you everything should be electric vehicle. This is the best way to go.
Number one or number two large car maker in the world that's Toyota, no you can't, it's very... No, no, no, the best way is to have fuel cells in hydrogen fuel cars. Elon Musk calls them fool cars, not fuel cars because he absolutely hates it. Then you have the people who say no, there should be direct hydrogen fueling, not hydrogen to fuel cell, but direct hydrogen combustion, which is possible.
Then you have people say, well ammonia, ammonia is not so difficult to make. You can make ammonia and you can actually burn ammonia in your car and generate ammonia. So, which one it will be? Electric car, fuel cell car, direct hydrogen car, ammonia car, four different types, four different infrastructures? So we have to settle on something. And now we are opted for electric cars.
But electric cars, again the materials going into it, graphite, lithium, copper, rare metals, and we have around the world about 16 million of them right now. We need 1,4 billion of them. 1,4 billion. And by the time we get there in 2050, it will be more like 1,6 or 1,7 billion and now we have 16 million of them. So again, thinking about the scaling problem in terms of materials, all that graphite, all that copper, all that winding of these electric motors to do that thing. So, first we have to settle down and then we'll say this, we'll start moving in the direction and by 2031 we say, "Oh, maybe we made a mistake. Maybe that hydrogen was a better way to go." Because actually it's easier to make from whatever green way or whatever.
So, we are still in that period where everything is so unsettled that we cannot even say what the future will look like. It's still emerging, yet we are making this vision as if it has already emerged.
Okay, thank you very much, Vaclav.
Thank you. Okay, bye-bye.
I'm Jason Mitchell, thanks for joining us. Special thanks to our guests and of course everyone that helped produce this show. To check out more episodes of this podcast, please visit us at man.com/ri-podcast.
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