This year, the stakes for action on climate change — the number one threat to humanity — jumped tenfold.

There was good news: coal companies folded, Shell moved into wind, Europe’s renewable transition picked up speed, the Paris agreement — a marvel of negotiation — came into force in record time, and, most remarkably, for the third year in a row, growth in carbon emissions flatlined.

But 2016 is almost certain to be the hottest year ever recorded, the third year in a row the record has been broken. Swathes of Great Barrier Reef are dead, an oil-sands town burned in Canada, and the Himalayas are warming at double the global rate, leading to dramatic glacier melt and threatening the water supplies of 1.3 billion people in India and China. Donald Trump’s squadron of corporate-backed deniers will likely do everything possible to stop the Paris agreement. Brexit has brought climate slow-pedalling back into vogue in Britain. And the right-wing populist surge shows no sign of slowing. France may be the next to fall. Merkel’s Germany — the linchpin of Europe’s accelerating renewables push — is also under threat from the far right.

Populism, it’s safe to say, has little truck with co-ordinated international action on climate change. At the very moment that we’ve overcome corporate-sponsored delay tactics, at the very moment that technology and economics have, at last, given us viable alternatives — the new threat of populism threatens all that’s been achieved.

So is it over? Is the reef dead? Will the Pacific Island states sink, Bangladesh become uninhabitable, and the first true water wars and refugee streams begin?

Not just yet. I’m pinning my hopes on one thing alone: cost. The plummeting cost of renewables will be what causes the real shift.

In 2009 — the year the Copenhagen climate summit all but failed — solar was around twice the price it is today. Twice. Solar has finally reached the point where it will become ubiquitous. Regardless of go-slow approaches from the Coalition, regardless of attempts to make the Carmichael coal mine financially viable, solar and storage will simply out-compete every alternative. If, that is, we let it.

Sceptical? Consider. Australia has the highest rooftop solar install rate in the world at 16% of households, double the next highest nation. That’s 1.5 million houses. And almost all installed since 2009. What happened?  The high cost of power and early government incentives turned rooftop solar from a hippie novelty into a clear financial decision with a good ROI.

[Wonder why the Coalition dislikes renewables so much?]

Last week, as Abbott’s delcons forced Environment Minister Josh Frydenberg into a backflip on a possible emissions scheme, we were given a glimpse of a better future. A remarkable report released by the CSIRO and Australia’s network operators made clear that we could get to 90% renewables by 2050 and save $100 billion in doing so. Every household would save between $400 and $600 a year on power. Cheap, clean energy can easily replace our retirement-age dirty coal plants.

How is this happening? Cost. The economics of renewables have changed dramatically in only a few years since Julia Gillard’s effective but unpopular carbon tax. In his 2016 book The Switch, British author Chris Goodall argues that solar costs will continue to plunge according to a well-established economic principle: the experience curve. Put simply, for every doubling of installed solar capacity, the price drops 20%. And solar is doubling every 2.2 years.

This law has held true ever since the 1970s, when solar cost around US$100 per watt. Now it’s around 50 US cents per watt. Looking forward, that means that within a decade and a half, solar will be a third of the cost it is today — and will be far and away the cheapest form of electricity in the world. Wind is dropping too, by almost 20% a year. So, too, are lithium batteries. Put that together, and you’ve got a new game: solar, wind and storage.

If you squint, you can already see the signs. Solar is picking off high-cost electricity first. Tesla recently converted an island in American Samoa from diesel (expensive to ship in) to solar and batteries. Businesses and homes across sub-Saharan Africa are switching from diesel generators to solar. Spurred by millions of deaths from air pollution, India and China are moving strongly into renewables. And ARENA, the Australian Renewable Energy Agency, is trialling ways of powering mines, islands and remote communities with renewables, slashing huge ongoing diesel bills.

In September, a reverse power auction in oil-rich Dubai was won easily by a solar developer at 2.4 cents per kWh — setting a new low for the cost of electricity. By contrast, consider that average costs for energy from any new source in the US runs between five and six cents per kWh. In sun-rich regions, solar can now dramatically undercut fossil fuel. And the cost continues to drop, year on year. New records are being set on a monthly basis in Chile, Peru, Mexico and even oil giants Saudi Arabia.

Fossil fuels are cheap, energy-dense marvels. That’s why they’re so hard to replace. But their downside is that you have to keep extracting them — digging up and transporting coal, pumping and shipping oil and gas. In the very near term, free-fuel energy will simply out-compete all other forms of energy. Large solar and wind can already beat any new fossil fuel plant across much of the world. The challenge remaining is how to best to pension off old coal plants. Many are well beyond retirement age, but they’ve been kept in service because they’re cheap now they’re paid off. But they cannot last much longer. And their replacements must be renewable.

[Chris Uhlmann joins Barnaby in blaming wind energy for SA’s blackout. They are dead wrong.]

And as the Coalition dithers, caught between denier delcons and Malcolm’s moderates, the states and territories are acting. Victoria, South Australia, Queensland, the ACT and now Liberal-controlled NSW have all set strong renewable targets. The ACT has pioneered the use of reverse auctions to get lowest-cost offers on large scale renewables.

What will we see once we embrace cheap renewables? An end to the internal combustion engine, for a start. Cheap batteries mean cheap electric cars. Fast accelerating, cheap to maintain, and free to refuel from your rooftop solar. How can petrol cars compete?

Do not give up hope. Yes, high-level politics is increasingly paralysed by infighting or populist insurgencies. But cheap renewables is the game changer we so desperately need. And subnational responses — cities, councils, states and territories — are willing to act. Let’s keep pushing.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey