Blow, blow thou winter wind

The planet can no longer sustain our oil addiction. Renewable energies, meanwhile, hold the key to e

The best technology does not always win through. We type on Qwerty keyboards designed more than a century ago to slow us down, and for years we have watched videos in the inferior VHS format. Such mistakes can be merely inconvenient. But if we make the same kind of errors with energy we risk jeopardising economic stability, human well-being and the climate we depend on.

In the energy-supply industry, the inferior technology is a global economy increasingly addicted to fossil fuels. The result? We are hooked up to devastating climate change, and, because of the imminent divergence between peak oil production and rising energy demand, we face a lasting economic shock. Waiting in the wings, too, is a resurgent nuclear industry still grappling with unsolved problems of immortal waste, pollution, high costs and security demands that are both oppressive and vulnerable.

Energy economists are fond of saying that, with energy, there is no such thing as a free lunch. True, there are costs involved in tapping clean, renewable energy sources such as the sun, the tides and wind. But they are, in important senses, free. They are free of greenhouse-gas emissions, free from the threat of depletion, and free of the risks and authoritarianism associated with nuclear power. While there is no getting round the fact that it takes energy to make energy, the energy gain from renewables is much greater than other sources of power. The energy gain from coal, for example, can be as little as five times the energy expended, whereas a windfarm can generate 80 times the energy input.

So why on earth don't we make better use of renewables?

In 2001 coal, oil and gas accounted for roughly 80 per cent of the global primary energy supply and renewables approximately 13 per cent. For the rich countries of the Organisation for Economic Co-operation and Development (OECD) the fossil-fuel proportion was higher and renewables less. This is because developing countries depend more on fuel wood for their energy. But in almost all regions, the cleanest renewable forms account for a very small share of total renewable supply: in Africa 0.2 per cent, Latin America 1.5 per cent and Asia, excluding China, 3 per cent.

Yet the potential of renewables is sky-high, ocean-deep and bright as a summer's day. There is far more energy available from renewable sources than human society needs today, or will do in the future, even allowing for the technical problems of capturing it. On available estimates, we could increase our use by roughly 120 times. Given the abundance of renewable resources on the doorstep of rich nations such as Britain, and the appropriately low-tech flexibility of many applications for the majority world, something big must be holding renewables back. A large part of the answer lies in the weird world of energy economics. Oil, gas and coal have for decades benefited from huge government subsidies, while renewables have remained the poor relation.

One solid estimate put fossil-fuel subsidies in advanced OECD nations at about $73bn (£40.1bn) per annum in the late 1990s, with a further $162bn (£89bn) subsidising fossil fuels in non-OECD countries. By these figures, the OECD annual subsidy for fossil fuels is 170 times greater than the paltry $0.4bn (£220m) per year pledged by rich nations to help developing countries adapt to the extreme weather events triggered by climate change.

The institutional bias towards oil, coal and gas runs as deep as one of Shell's exaggerated reserves. In Britain, roughly £40m of taxpayers' money a year goes towards research into fossil fuels. Instead of investigating issues of environmental impact, most of this money goes into discovery and extraction of oil and gas. Other indirect subsidies include tax incentives and the high pollution cost of burning fossil fuels.

The government's support for fossil-fuel projects in the developing world makes a mockery of Britain's target of generating 10 per cent of its electricity from renewable sources at home. Much of this support goes in the form of export-credit guarantees to underwrite large-scale energy projects undertaken by British companies in the developing world. According to Greenpeace, the UK has supported, on average, £1.76bn worth of fossil-fuel and nuclear-power generation projects every year since the UN Framework Convention on Climate Change was signed in 1992. This is a pattern repeated by export-credit agencies across the industrialised world. Between 1992 and 2002, the two major US-based agencies, the Overseas Private Investment Corporation and the Export-Import Bank of the United States, invested about $32bn (£17.6bn) in the developing world's fossil-fuel sector.

For many poor countries, it is the World Bank that holds the key to money for development. In 2003, fossil-fuel projects represented 86 per cent of the Bank's energy spending, while renewables projects accounted for just 14 per cent. Between 1992 and 2003, World Bank lending for fossil-fuel projects such as the Chad-Cameroon and Baku-Tbilisi-Ceyhan oil pipelines exceeded $10bn (£5.5bn). Perversely, according to one study, about 80 per cent of all oil projects that the Bank invested in between 1992 and 2003 were for exporting fuel and profits back to western countries.

Such subsidies confound international commitments to tackling poverty and halting global warming. Ending hunger and handling health crises are equally impossible when ecological and economic winds are blowing at hurricane force.

The situation is even more ridiculous given that renewable energies can help both to eradicate poverty and build sustainable energy systems. At the moment, 1.6 billion people globally have no access to electricity (four-fifths of these people live in rural areas). The International Energy Association predicts that the figure will decrease slightly, to 1.4 billion, by 2030. But the number of people relying on wood and dung for the bulk of their cooking and heating needs is expected to increase from 2.4 billion to 2.6 billion.

The combination of indoor and outdoor pollution is already a major environment-related health threat, claiming three million lives per year. Smoke trapped inside homes from cooking with wood and poor-quality coal accounts for 2.2 million deaths (mainly of women and children), and is responsible for 5 per cent of the total burden of disease worldwide. A simple switch of subsidies and investment from fossil fuels to renewable energy could bring about one of the fastest acts of poverty alleviation in history.

No one can say they didn't know. Just this month, the annual Ashden Awards for Sustainable Energy highlighted proven and adaptable technologies. These range from an eco-friendly Hindu crematorium which is supported by religious leaders in India and saves precious fuel wood used in funeral pyres, to a pilot project in Bhopal providing cleaner and cheaper lighting for street vendors with solar lanterns, as well as projects for clean stoves in Nicaragua and Pakistan which save energy, money, lungs and eyesight.

Analysts have noted that, in sub-Saharan Africa, "the capital requirements of renewables are generally lower than those of conventional and centralised investments".

But there is a problem. Many poor countries have an abundance of cheap coal on their doorstep. The northern hemisphere got rich burning fossil fuels, so how can we reassure poor countries that they will get their fair share of the shrinking carbon cake? One solution is a "contraction and convergence" framework, which would cap global emissions and then hand out per capita entitlements that would equalise over time. Because entitlements could be traded, everyone would have an incentive to shift to renewables.

Small-scale renewables are the key to ending poverty and saving the planet. Living in energy-profligate Britain, we could set an example by remembering the words Ivan Illich wrote in Energy and Equity after the 1973 oil shock: "A low-energy policy allows for a wide choice of lifestyles and cultures. If, on the other hand, a society opts for high energy consumption, its social relations must be dictated by technocracy and will be equally distasteful whether labelled capitalist or socialist."