The social and economic consequences of the fossil fuel supply chain
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REVIEW The social and economic consequences of the fossil fuel supply chain
Carol Olson and Frank Lenzmann, Energy Research Center of the Netherlands (ECN), Solar Energy Unit, 1755LE Petten, The Netherlands Address all correspondence to Carol Olson at [email protected] (Received 25 April 2016; accepted 6 June 2016)
ABSTRACT The premise of this Viewpoint article is that the sustainability of the electricity supply is very often addressed in narrow frames of reference, which sets up incremental decision-making. To more fairly compare the economic, social, and environmental aspects of renewables, such as photovoltaics, to fossil fuels, a broader view is required which needs to take into account the impacts of the fossil fuel supply chain. February 2016 was the warmest February since record keeping began in 1880, and was the warmest month in recorded history (in terms of its deviation from average). May 2016, the warmest May on record, was the 13th consecutive record-breaking month. The Paris Agreement signed in December 2015 has solidified agreement that the world must address climate change, and has resounded the warning that inaction on climate change carries potentially catastrophic risk for the global economy. Electricity generated from renewable energy sources is often compared to fossil fuel energy in terms of economics. Recently there have also been increased calls to incorporate the external costs of electricity generation into the price of electricity. Fossil fuels are largely responsible for global warming (as 85% of the CO2 emissions come from fossil fuel combustion). This Viewpoint article looks at fuel supply chains for oil & gas, coal, and nuclear in terms of their economics, environmental and social consequences. This reflection upon the historical and present fossil fuel supply chain gives a perspective useful in avoiding limited frames of reference when addressing the consequences of the business-as-usual operation of fossil fuel supply chains. Keywords: economics; environment; photovoltaic
DISCUSSION POINTS • Historical issues associated with market control through a cartel, the tension between enclave operations and resource nationalism, and the support by national security frameworks, still linger. • The entanglement of the fossil fuel supply industry, banks, and commodity traders, and the financialization of commodities currently allow fossil fuel supply transactions to be made in non-competitive ways. • The immense capital available to those operating the fossil fuel supply chain affords not only economic advantages, but also allows them to side-step regulation.
Introduction The elephant in the room The issue of climate change has repeatedly made the news: April 2016 was the fifth consecutive month in which the global monthly temperature was more than 1.0 °C warmer
than average with March having the most deviation (1.23 °C) from average of any month recorded since 1880. 13 out of the 15 highest monthly temperature departures since 1880 have occurred since February 2015.1,2 It was announced t
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