Why waste oil burning it when we can use it to make things?

The cost of <em>not</em> switching to renewables.

Grist's David Roberts highlights a really important piece of research by the World Future Council, examining the non-climate-change-related cost of not switching to renewables.

The reasoning is simple: fossil fuels can be burned to make energy, or used as a raw material (e.g. for production of plastics). Every barrel of oil we burn for energy is therefore a barrel which we can't use as a raw material. Thus:

Their burning — whenever they could have been replaced by renewables — is costly capital destruction.

The report concludes that the "future usage loss" resulting from current consumption is between $3.2trn and $3.4trn a year.

Roberts writes that "the exact numbers here are, like numbers in all economic modeling, probably going to turn out to be wrong," and he's definitely right. At first glance, the most important thing absent from the initial paper is no discussion of the difference between present and future value.

This isn't just the problem that resources worth $3.2trn at today's prices might not be worth that at tomorrow's; its also that rigorous economic analysis always discounts the future.

Consider it this way: if you had the option to be paid £100 now or £100 in a year, you would clearly choose the former. The money in the future is less valuable, even though it is nominally the same amount. That's partially because people want things now, of course; but it's also because if you took the £100 now and put it in a savings account, it would be worth more than £100 in 12 month's time. (And let's not even begin on the discussions of how new technology will change the value of fossil fuels as raw materials in ways we can't begin to predict. How will things change, for instance, if conductive plastics take off?)

The same thinking needs to be applied to the question of the "destruction" of potential resources. Their value today — and thus the degree to which they ought to encourage us to switch to renewables — is lower the further into the future we are going to use them.

But really, the discussion of the actual value is slightly moot. Unless we're doing a massive overview of the costs of climate change mitigation — a second Stern report — then we can't properly weigh those costs against all the others. What we can say is that this is an under-discussed benefit of switching to renewable technology sooner rather than later, and of promoting climate change prevention rather than mitigation.

Incidentally, the research also provides a counter-point to the claim that it's not safe to leave fossil fuels in the ground. That's the argument that:

If we build enough renewable energy capacity to supply our entire system, there are still fossil fuels ready to burn. The people who built the renewable capacity may not want to burn them – but what about the next government? Or the next generation?

One option is to prevent future irresponsibility by burning fossil fuels today but with carbon capture and storage, ensuring that the carbon goes back underground. But another option is to switch to renewables and then continue using the fossil fuels for material production, locking up carbon not in vaults underground but in plastics.

In that analysis, even landfills get an image rehabilitation. They become gigantic carbon sinks, encouraging further use of fossil fuels as raw materials, removing more and more potential atmospheric carbon from circulation. There's hope for everyone yet.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.