Climate change and fossil fuels: Heat pumps are the ultimate climate technology, but not a silver bullet

Russia’s invasion of Ukraine has shown once and for all that we must get rid of fossil fuels – fast. Heat pumps are an important part of the solution to preventing burning them in our homes. Heat pumps will not stop the war in Ukraine.

These seemingly contradictory statements are all true. And they’re a microcosm of the much broader environment and clean-tech debates going on from sector to sector and country to country.

Electric heat pumps are truly a superior solution for heating one’s home. They are the key components in the engine that electrifies everything. In fact, they are so efficient at converting electricity to heat that even if the grid runs entirely on gas, the heat pumps connected to it will use less energy than furnaces that run on gas. direct gas. But the clean energy transition doesn’t stop with electrification. Decarbonization in the grid is an important part of the equation. So the house insulation is to reduce the need for heating and cooling in the first place.

Heat pumps aren’t the only solution, but they’re pretty close to common repair technology for home and commercial heating needs around the world. The International Energy Agency estimates that they “can meet 90% of global heating needs with lower carbon emissions than gas-fired condensate boilers”.

They are particularly prominent in regions with colder climates, well received by the Nordic countries, where the potential for emissions reductions is particularly high. But there’s still a long way to go. Heat pumps currently heat less than 10% of buildings globally. That gap promises huge market opportunities focused on deploying an existing technology at scale. Doing so will help cut carbon emissions as well as reliance on gas, Russian or otherwise.

Just saying that, in about how many words, is likely to cause an outcry. Environmental activist Bill McKibben called for a “Heat Pump for Peace and Freedom” shortly after Russian President Vladimir Putin’s invasion of Ukraine and is accused of famously focusing on a silver bullet when it comes to excluding Another, more systematic solution. Usually, sparks fly the other way: Environmentalists call for a more systematic approach while business leaders tend to point to a “simple” (preferably) tech fix. their own).

Nothing surprising. But it doesn’t need to — and shouldn’t — be framed as an / or.

There can’t be a “typical” approach. Taking Europe away from Russian oil and gas, like taking the world out of oil, coal and gas, goes beyond any single solution. And there is no answer for any given technology.

There is a need to rapidly scale up commercial production of heat pumps — several U.S. senators introduced a bill on Wednesday to provide tax credits to manufacturers — but it alone is not enough. It also needs to (re)train workers to be able to install them and educate consumers about their benefits to indoor and outdoor climates, as well as their pocketbook.

All of that means that supportive policies are needed at every step of the way, including deployment subsidies to avoid installing an extra gas furnace anywhere. And yes, that started with the cessation of subsidies for gas furnaces. For example, Austria subsidizes heat pumps at €10,000 each, which is good. Meanwhile, some Austrian provinces still offer €1,000 for gas furnaces. That should have ended years ago.

It is precisely the interplay between business and policy, between technological repair and broader societal transformation, that is needed. Rich Lesser, global president of Boston Consulting Group, spoke at a Columbia Business School climate and business conference last Friday about how climate leaders gain a competitive edge and personally he spends 60% to 70% of his time on climate issues. The leader profits from this, and so he should. A core assumption underlies an analysis BCG conducted with the World Economic Forum to support this view: the explicit or implicit price per ton of CO₂ is around €75 by 2030.

Such price-commensurate climate policies will not happen alone. That implies that business leaders are actively pushing them, or at least not getting in their way. Meanwhile, even 75 € in 2030 will not be enough, in any sense of the term. Perhaps the best guide? The European Union currently has such a price, which includes half of the bloc’s carbon emissions.

Decarbonization will involve meaningful, constructive collaboration across a variety of technologies, policies and interventions. Heat pumps are just one small step in this broader puzzle, and no, they alone won’t end this current war anytime soon. But they can only help prevent the next.

Gernot Wagner writes Climate Risk column for Bloomberg Green. He teaches at Columbia Business School (New York University on sabbatical). His latest book is Geoengineering: the Gamble (Pority, 2021). Follow him on Twitter: @GernotWagner. This column does not necessarily reflect the views of Bloomberg LP and its owners.