MORAL DIMENSIONS OF RENEWABLE ENERGY

In the recently held Clean Asia Energy Forum sponsored by the Asian Development Bank, speakers strongly recommended greater investments in clean energy and energy efficiency to meet rising Asian demand while limiting the impact of climate change. An optimistic view was taken by Bindu Lohani, ADB vice-president for knowledge and management and sustainable development. He pointed out that renewables are becoming more competitive as technology progresses but lamented the fact that the low hanging fruit of energy efficiency is not being sufficiently pushed in Asia. He told the audience not to be deterred by the current low prices of oil and other fossil fuels. Given the history of great volatility of oil prices in the past, he surmised that “low prices will end even if we do not know when.” On the other hand renewables continue to experience rapid development and prices can only go down in the long run.

A local group called the Philippine Solar Power Alliance (PSPA) shares the optimism of Mr. Lohani. The group, which consists of the country’s solar power developers, signified their intention to the National Renewable Energy Board (NREB) to build as much as 2,000 MW of solar power projects in the country over the long run. Predictably, the group has set as a condition certain innovations on the Feed-in-Tariff (FIT) scheme, a framework under which the Department of Energy offers long-term contracts and guaranteed pricing to renewable energy firms. One of their requests is for FIT not to be based on output since in some countries like Germany, with solar power becoming cheaper and more competitive, the government has shifted to incentivizing batteries for solar power storage, which can also benefit all sources of energy, whether renewable or not.

ADB announced that since the Asia Clean energy Forum started nine years ago, clear energy investments in Asia and the Pacific have risen to some $106 billion in 2013. It added that new mechanisms to spur clean energy have become more common. Among these are renewable portfolio standards, feed-in-tariffs, and concessional fundings for clean energy projects. ADB has increased its own financing for cleaner energy from only $280 million in 2005 to $2.4 billion in 2014. Despite these efforts, however, 600 million in Asia still lack access to electricity and dependency on fossil fuel remains high.

Worldwide the trend is no different. According to economist Martin Wolf of the Financial Times (June 24, 2015), the latest Statistical Review of World Energy of British Petroleum shows that global demand for commercial energy continues to grow, largely driven by growth of emerging countries, despite improvements in energy efficiency. Moreover, fossil fuels still meet bulk of the demand. In 2014, renewables contributed just over 2 percent of global primary energy consumption. Together, nuclear power, hydroelectricity, and renewable contributed merely 14 percent.

According to a report entitled “A Global Apollo Programme to Combat Climate Change,” written by a number of high-profile British scientists and economists, there is a need to generate a technological revolution. They argue that this will require rapid technological advances. Some progress is being achieved, notably the collapse in the price of photovoltaic panels. Much more have to be done, however. Publicly-funded research is under 2 percent of all publicly-funded R&D or only $6 billion, which is dwarfed by the $101 billion spent on subsidies for renewable production and the humongous $550 billion used to subsidize fossil fuel production and consumption. As Mr. Wolf wrote: “This is a grotesque picture. Far more money needs to go to publicly funded research. The public sector has long played a vital role in funding scientific and technological breakthroughs. In this case, that role is particularly important, given the agreed goal of reducing emissions and the fact that the energy sector spends relatively little on R&D.”

These considerations bring us to the recently published Encyclical Letter of Pope Francis entitled “Laudato Si” (On Care For Our Common Home). Contrary to the views of some conservative critics, this document does not purport to settle the issue on whether or not it is human behavior that is the main cause of climate change. It is still open to the view that climate change could be in large part explained by non-human causes. It nevertheless recognizes the obvious fact that at the micro level, there are decisions by business people that do not sufficiently take into account their adverse impact on the climate.

No one can argue with this fundamentally moral assessment of the actions of some industrialists: “An assessment of the environmental impact of business ventures and projects demand the transparent political processes involving a free exchange of views. On the other hand, the forms of corruption which conceal the actual environmental impact of a given project, in exchange for favors, usually produce specious agreements which fail to inform adequately and to allow for a full debate (par. 182)…Environmental impact assessment should not come after the drawing up of a business proposition or the proposal of a particular policy, plan or program. It should be part of the process from the beginning, and be carried out in a way which is interdisciplinary, transparent and free of all economic or political pressure.” (To be continued).

Villegas, B. M. (November 16).  Moral dimensions of renewable energy (Part I). Manila Bulletin. Retrieved from http://www.mb.com.ph/moral-dimensions-of-renewable-energy-part-i/

Whenever business people or policy makers justify the use of fossil fuels like petroleum or coal in the generation of electricity, there is always the major argument that these sources of energy are still the cheapest way of producing goods or services and of generating employment, especially for a developing economy.  These arguments, however, do not take into account the following moral guideline contained in Laudato Si:  “In the face of possible risks to the environment which may affect the common good now and in the future, decisions must be made ‘based on a comparison of the risks and benefits foreseen for the various possible alternatives’.  This is especially the case when a project may lead to a greater use of natural resources, higher levels of emission or discharge, an increase of refuse, or significant changes to the landscape, the habitats of protected species or public spaces.  Some projects if insufficiently studied, can profoundly affect the quality of life of an area due to very different factors such as unforeseen noise pollution, the shrinking of visual horizons, the loss of cultural values, or the effects of nuclear energy use.  The culture of consumerism, which prioritizes short-term gain and private interest, can make it easy to rubber-stamp authorizations or to conceal information.”

Implicit to these guidelines is the very important moral principle of double effect.  Whenever there are actions which are good in themselves (such as producing certain goods or services to meet the needs of consumers) but which have negative side effects (such as pollution), a number of conditions have been specified by moral philosophers to determine whether such an action with a negative side effect is ethically licit. One of the leading business ethicists in the world, Dr. Domenec Mele of the IESE Business School, has written several books in which these conditions are enumerated (Business Ethics in Action, Palgrave, Macmillan, 2009).

These conditions are:  (1) There is no better acceptable alternative.  At times, with a little creativity and professional competence, the decision makers can come up with a better alternative than “do this” or “do nothing.”  (2)  There is a just cause for the decision.  This is generally present in any legitimate business involved in the production of goods or services for the market.  (3)  The action itself is not intrinsically wrong.  Again, this condition is easy to comply with in any legitimate business.  (4)  The bad effects are proportionate to the necessity of the action or decision.  Are the goods produced by the polluting technology really of greater human value to the public than the damage to the environment now and in the future.  Basic goods such as food, water, education, health for the masses may warrant the toleration of some environmental pollution.  On the other hand, if most of the goods produced are for the satisfaction of non-basic and frivolous consumption of the affluent, this condition may not be fulfilled.  An analogous case involving the destruction of the environment is the production of sophisticated personal care products for the higher-income markets from palm oil produced by cutting virgin forests.  (5) Reasonable means will be employed to minimize negative secondary effects. This is especially applicable to the renewable energy sector.  As discussed above, both the private sector and the Government must do everything possible to fund research on sources of energy that do not lead to the destruction of the environment.  (6)  “The purpose of monitoring and evaluating the situation periodically.  Circumstances can change and, inasmuch as there are negative effects, practical wisdom requires period monitoring and evaluation to establish whether the situation has persisted and to ensure that the means to minimize negative effects are being implemented correctly, or whether they might be enhanced, perhaps, by technological updates.”  Without doubt, this fits to a T the issue of solar in which, as mentioned above, prices of photovoltaic cells are dropping precipitously and enhancing technologies like battery plants for the storage of solar energy are becoming more sophisticated.  (7) Take steps to find some alternative that avoids actions with double effects in the future.  This again reiterates the need to devote more funding to Research and Development into renewable sources of energy.

We need more leaders in the energy sector who are really committed to the common good of society, over and above pursuing profits for the investors and higher salaries for themselves.

We also need policy makers and regulators in the public sector who truly understand the delicate balance between the advantages of a market approach to the delivery of electricity and other energy products to the public and the indispensable role of the State in incentivizing the appropriate investments (for example, in batteries for the storage of solar or wind energy) and in ensuring that there is no monopoly or oligopoly power that existing players are able to capture in any of the stages of energy production, transmission, distribution, and retail. The energy sector is too crucial in attaining integral human development to leave completely in the hands of free market forces.

Villegas, B. M. (November 16).  Moral dimensions of renewable energy (Part I). Manila Bulletin. Retrieved from http://www.mb.com.ph/moral-dimensions-of-renewable-energy-part-i/

Villegas, B. M. (November 23). Moral dimensions of renewable energy (Part II). Manila Bulletin. Retrieved from http://www.mb.com.ph/moral-dimensions-of-renewable-energy/