How not to see red in green energy

For decades, climate change activists have called on governments, consumers, and industries to move away from fossil fuels to save the planet. That transition has finally reached a watershed. Global investment in renewable energies reached parity with capital for hydrocarbons in 2022 and is poised to blow past it, according to BloombergNEF.

In crossing that threshold, the world may now be focusing more on the quality of “green” energy projects. Do they cause other environmental harm? Do they upset local communities? A good example of this focus is a decision in Chile to hit the pause button on a massive project to produce hydrogen as a fuel by relying on renewable energy.

Hydrogen is the post-carbon dream fuel. It has the potential of powering long-haul land, sea, and air transportation, solving the limitations of electric vehicles while emitting only water in its use. Although global investments in hydrogen accounted for only a small fraction of the $1.1 trillion put into renewables last year, hydrogen is the world’s fast-growing part of the energy sector.

To be commercially viable, however, the cost of producing hydrogen needs to drop. And for the fuel to be called “green,” or climate friendly, the power source must be fully renewable. Last week, the European Union, which has allocated $5.2 billion for hydrogen projects, sought a way around that limitation by designating nuclear power an acceptable source.

Few countries are better endowed than Chile in tapping renewable energy sources. The country’s southern landscape is sparsely populated and buffeted by near-constant winds. The government promises to become one of the world’s top hydrogen exporters by 2040. It already has 41 green hydrogen projects underway, including a $74 million pilot that makes synthetic gasoline from hydrogen with a single wind turbine. The plant’s foreign investors are planning a second, larger operation.

But the project is on hold to address local concerns. Environmentalists worry about the impact of more wind turbines and busier shipping lanes. Residents have raised concerns about Indigenous land rights and the cohesion of their communities. “We realized there was still more dialogue to be had” with residents and officials, Clara Bowman, chief operations officer at HIF Global LLC, the project’s lead developer, told Bloomberg.

Solving climate change, notes Terry Yosie, former president and CEO of the Washington-based World Environment Center, poses societal challenges at least as large as economic ones. That is also an opportunity. “Whether for selfish or moral reasons,” he wrote in Greenbiz in December, “the greater mobilization of coalitions that can yield climate progress is an essential reaffirmation of our common humanity and the ability of people to govern themselves.”

Managing the green transition means not repeating the kind of mistakes that led to global warming: a low regard for others living on Earth. On Chile’s windy southern pampas, a pause in pursuing renewable energy shows a new emphasis on the bonds of a caring society.