Category Archives: Energy & emissions

Updates from McKinsey

Climate risk and response: Physical hazards and socioeconomic impacts
By Jonathan Woetzel, Dickon Pinner, Hamid Samandari, Hauke Engel, Mekala Krishnan, Brodie Boland, and Carter Powis – After more than 10,000 years of relative stability—the full span of human civilization—the Earth’s climate is changing. As average temperatures rise, climate science finds that acute hazards such as heat waves and floods grow in frequency and severity, and chronic hazards, such as drought and rising sea levels, intensify.

In this report, we focus on understanding the nature and extent of physical risk from a changing climate over the next one to three decades, exploring physical risk as it is the basis of both transition and liability risks.

We estimate inherent physical risk, absent adaptation and mitigation, to dimension the magnitude of the challenge and highlight the case for action. Climate science makes extensive use of scenarios ranging from lower (Representative Concentration Pathway 2.6) to higher (RCP 8.5) CO2 concentrations. We have chosen to focus on RCP 8.5, because the higher-emission scenario it portrays enables us to assess physical risk in the absence of further decarbonization.

In this report, we link climate models with economic projections to examine nine cases that illustrate exposure to climate change extremes and proximity to physical thresholds. A separate geospatial assessment examines six indicators to assess potential socioeconomic impact in 105 countries. We also provide decision makers with a new framework and methodology to estimate risks in their own specific context.

We find that physical risk from a changing climate is already present and growing. Seven characteristics stand out. Physical climate risk is:

Increasing: In each of our nine cases, the level of physical climate risk increases by 2030 and further by 2050. Across our cases, we find increases in socioeconomic impact of between roughly two and 20 times by 2050 versus today’s levels. We also find physical climate risks are increasing across our global country analysis even as some countries find some benefits (such as expected increase in agricultural yields in countries such as Canada).

Spatial: Climate hazards manifest locally. The direct impacts of physical climate risk thus need to be understood in the context of a geographically defined area. There are variations between countries and within countries. more>

Updates from Siemens

Digitalizing Energy
By John Lusty – Digitalization is transforming the global Energy & Utilities (E&U) industry, and the most exciting part is that it’s happening so differently in each industry sector depending on their unique plans and priorities. That’s because each organization has a slightly different digital legacy and is executing a different business model that is making them a leader in their respective sectors of the market. It’s also because E&U businesses are inherently non-uniform due to mergers and acquisitions, project mindsets, boom and bust business cycles, breakthroughs in technology, and sudden societal or geopolitical shifts that ripple through the global energy economy at the speed of light.

This blog is the first in a new series from Siemens Digital Industries Software, where we’ll discuss trends in digitalization that relate to the Energy & Utilities industry.  At Siemens, we have the privilege of working closely with industry leaders and people from an extensive range of manufacturing sectors with different degrees of digital maturity.  That lets us see what’s working great as well as some things that didn’t go quite as planned.

We’re also the software business unit within Siemens AG, a mega-enterprise of close to 400,000 colleagues that acts as a massive internal customer for our solutions. People usually look at us a little differently, knowing that as a global engineering and manufacturing organization that relies extensively on our software solutions, we truly have “skin in the game” as our supplier.

Much work has been done across the E&U industry to assemble and apply the “digital twin” of assets, projects and facilities to be more efficient, profitable, and operationally excellent. In this blog, we’ll review examples of excellence in these areas and speak with some of the people who made them happen. more>


Another year of living dangerously

Twenty twenty will be another year of living dangerously if short-term policies continue to be pursued at the expense of long-term vision.
By Isabel Ortiz – The year 2019 ended with widespread demonstrations, rising inequality and a crisis of representation in many countries. The world is sleepwalking toward recession and a new crisis, while depleting the environment. Governments, and ultimately people, can reverse these alarming trends in 2020.

Sixty-one countries will have presidential or parliamentary elections in 2020. Many citizens are tired of conventional orthodox policies; they want change, and they will choose new parties as a way to achieve this.

This is an important opportunity to redress the current situation, but many of the new emerging leaders are far-right demagogues who blame today’s problems on social-welfare policies, migrants and the poor, while aiming to remove all remaining constraints on capital. As in the United Kingdom, many whom neoliberalism has harmed will vote for these politicians, making the world a more unequal and riskier place.

A lot will be decided in the United States, still the world’s hegemonic power. How US citizens (many without much knowledge of global affairs) vote in the 2020 presidential election will have profound consequences for the rest of the planet’s citizens.

The US president, Donald Trump, has already had a big impact on the world, eroding multilateral institutions, trade agreements and global initiatives as part of his ‘America First’ agenda. Despite the populist rhetoric, Americans in the main have benefited little. more>

Updates from Chicago Booth

The tax that could save the world
Most economists agree on how to tackle climate change. Can politicians make it happen?
By Michael Maiello & Natasha Gural – It was, perhaps, the closest that the economics profession has ever come to a consensus. In January, 43 of the world’s most eminent economists signed a statement published in the Wall Street Journal calling for a US carbon tax. The list included 27 Nobel laureates, four former chairs of the Federal Reserve, and nearly every former chair of the Council of Economic Advisers since the 1970s, both Republican and Democratic.

“By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future,” the economists noted. All revenue from the tax should be paid in equal lump-sum rebates directly to US citizens, they added.

Not all economists agree that the tax should be revenue neutral in this way, but the profession has been coalescing in recent years around the idea of a carbon tax. Most prefer such a tax to the most prominent alternative policy for tackling carbon emissions, cap and trade, according to a recent poll of expert economists.

But a carbon tax seems to be a political nonstarter in the United States. The bipartisan call for action from economists over the years has been echoed by a failure to act by presidents from both parties. President Donald Trump denies the need to confront man-made climate change. But although Barack Obama, his predecessor, in 2015 called a carbon tax “the most elegant way” to fight global warming, he didn’t push strongly for one to be introduced. “One of my very, very few disappointments in Obama when he was president is that he did not come out in favor of carbon tax,” Yale’s William D. Nordhaus told the New York Times last October, days after winning the 2018 Nobel Prize in Economic Sciences for his work on economic modeling and climate change.

US states have shown that they, too, can reject a carbon tax. more>


Why the idea that the world is in terminal decline is so dangerous

By Jeremy Adelman – From all sides, the message is coming in: the world as we know it is on the verge of something really bad. From the Right, we hear that ‘West’ and ‘Judeo-Christian Civilization’ are in the pincers of foreign infidels and native, hooded extremists. Left-wing declinism buzzes about coups, surveillance regimes, and the inevitable – if elusive – collapse of capitalism.

In fact, the idea of decline is one thing the extremes of Left and Right agree upon. Rome’s decline looms large as the precedent. So, world historians have played their part as doomsayers.

It is almost part of the modern condition to expect the party to be over sooner rather than later. What varies is how the end will come. Will it be a Biblical cataclysm, a great leveler? Or will it be more gradual, like Malthusian hunger or a moralist slump?

Our declinist age is noteworthy in one important way. It’s not just the Westerns who are in trouble; thanks to globalization, it’s the Resterners too. In fact, we are all, as a species, in this mess; our world supply chains and climate change have ensured that we are poised before a sixth mass extinction together. We should worry less about our lifestyle and more about life itself.

One dissenting voice in the 1970s was Albert O Hirschman’s. He worried about the lure of doomsaying. Dire predictions, he warned, can blind big-picture observers to countervailing forces, positive stories and glimmers of solutions. There is a reason why: declinists confuse the growing pains of change with signs of the end of entire systems. Declinism misses the possibility that behind the downsizing old ways there might be new ones poking through. more>

Updates from Georgia Tech

Tiny Magnetic Particles Enable New Material to Bend, Twist, and Grab
By Josh Brown – A team of researchers from the Georgia Institute of Technology and The Ohio State University has developed a soft polymer material, called magnetic shape memory polymer, that uses magnetic fields to transform into a variety of shapes. The material could enable a range of new applications from antennas that change frequencies on the fly to gripper arms for delicate or heavy objects.

The material is a mixture of three different ingredients, all with unique characteristics: two types of magnetic particles, one for inductive heat and one with strong magnetic attraction, and shape-memory polymers to help lock various shape changes into place.

“This is the first material that combines the strengths of all of these individual components into a single system capable of rapid and reprogrammable shape changes that are lockable and reversible,” said Jerry Qi, a professor in the George W. Woodruff School of Mechanical Engineering at Georgia Tech. more>


The Greatest Balancing Act

Nature and the global economy
By David Attenborough and Christine Lagarde – In nature, everything is connected. This is equally true of a healthy environment and a healthy economy. We cannot hope to sustain life without taking care of nature. And we need healthy economies to lift people out of poverty and achieve the United Nations Sustainable Development Goals.

In our current model these goals sometimes seem to collide, and our economic pursuits encroach too closely on nature. But nature—a stable climate, reliable freshwater, forests, and other natural resources—is what makes industry possible. It is not one or the other. We cannot have long-term human development without a steady climate and a healthy natural world.

The bottom line is that when we damage the natural world, we damage ourselves. The impact of our growing economic footprint threatens our own future directly. By some estimates, more than 50 percent of the world’s population is now urbanized, increasing the likelihood of people losing touch with nature.

With the projected rise in ocean levels and increase in the average temperature of the planet, large swaths of land, even whole countries, will become uninhabitable, triggering mass climate-induced migration. Never has it been more important to understand how the natural world works and what we must do to preserve it.

A necessary first step is to recognize that waste is the enemy. Wasting food, energy, or materials flies in the face of sustainability. Producing plastics fated to end up as litter is a waste, especially when these plastics pollute our oceans. If we could live by the simple injunction to “do no harm,” both individually and as businesses and economies, we could all make a difference. Overconsumption and unsustainable production have put the planet in peril.

Since the natural and economic worlds are linked, similar principles apply to both.

In the financial world, for example, we would not eat into capital to the point of depletion because that would bring about financial ruin. Yet in the natural world, we have done this repeatedly with fish stocks and forests, among many other resources—in some cases to the point of decimation. We must treat the natural world as we would the economic world—protecting natural capital so that it can continue to provide benefits well into the future. more>

The Adaptive Age

No institution or individual can stand on the sidelines in the fight against climate change
By Kristalina Georgieva – When I think of the incredible challenges we must confront in the face of a changing climate, my mind focuses on young people. Eventually, they will be the ones either to enjoy the fruits or bear the burdens resulting from actions taken today.

Our efforts to reduce greenhouse gas emissions through various mitigation measures—phasing out fossil fuels, increasing energy efficiency, adopting renewable energy sources, improving land use and agricultural practices—continue to move forward, but the pace is too slow. We have to scale up and accelerate the transition to a low-carbon economy. At the same time, we must recognize that climate change is already happening and affecting the lives of millions of people. There are more frequent and more severe weather-related events—more droughts, more floods, more heat waves, more storms.

Ready or not, we are entering an age of adaptation. And we need to be smart about it. Adaptation is not a defeat, but rather a defense against what is already happening. The right investments will deliver a “triple dividend” by averting future losses, spurring economic gains through innovation, and delivering social and environmental benefits to everyone, but particularly to those currently affected and most at risk. Updated building codes can ensure infrastructure and buildings are better able to withstand extreme events. Making agriculture more climate resilient means investing more money in research and development, which in turn opens the door to innovation, growth, and healthier communities.

The IMF is stepping up its efforts to deal with climate risk. Our mission is to help our members build stronger economies and improve people’s lives through sound monetary, fiscal, and structural policies. more>

Nature’s Solution to Climate Change

A strategy to protect whales can limit greenhouse gases and global warming
By Ralph Chami, Thomas Cosimano, Connel Fullenkamp, and Sena Oztosun – When it comes to saving the planet, one whale is worth thousands of trees.

Scientific research now indicates more clearly than ever that our carbon footprint—the release of carbon dioxide (CO2) into the atmosphere where it contributes to global warming through the so-called greenhouse effect—now threatens our ecosystems and our way of life. But efforts to mitigate climate change face two significant challenges. The first is to find effective ways to reduce the amount of CO2 in the atmosphere or its impact on average global temperature. The second is to raise sufficient funds to put these technologies into practice.

Many proposed solutions to global warming, such as capturing carbon directly from the air and burying it deep in the earth, are complex, untested, and expensive. What if there were a low-tech solution to this problem that not only is effective and economical, but also has a successful funding model?

An example of such an opportunity comes from a surprisingly simple and essentially “no-tech” strategy to capture more carbon from the atmosphere: increase global whale populations. Marine biologists have recently discovered that whales—especially the great whales—play a significant role in capturing carbon from the atmosphere (Roman and others 2014).

The carbon capture potential of whales is truly startling. Whales accumulate carbon in their bodies during their long lives. When they die, they sink to the bottom of the ocean; each great whale sequesters 33 tons of CO2 on average, taking that carbon out of the atmosphere for centuries. A tree, meanwhile, absorbs only up to 48 pounds of CO2 a year.

Protecting whales could add significantly to carbon capture because the current population of the largest great whales is only a small fraction of what it once was. Sadly, after decades of industrialized whaling, biologists estimate that overall whale populations are now to less than one fourth what they once were. Some species, like the blue whales, have been reduced to only 3 percent of their previous abundance. Thus, the benefits from whales’ ecosystem services to us and to our survival are much less than they could be.

But this is only the beginning of the story. more>

The planet is burning

By Stephen J Pyne – From the Arctic to the Amazon, from California to Gran Canaria, from Borneo to India to Angola to Australia – the fires seem everywhere. Their smoke obscures subcontinents by day; their lights dapple continents at night, like a Milky Way of flame-stars. Rather than catalogue what is burning, one might more aptly ask: what isn’t? Where flames are not visible, the lights of cities and of gas flares are: combustion via the transubstantiation of coal and oil into electricity. To many observers, they appear as the pilot flames of an advancing apocalypse. Even Greenland is burning.

But the fires we see are only part of our disturbed pyrogeography. Of perhaps equal magnitude is a parallel world of lost, missing and sublimated fires. The landscapes that should have fire and don’t. The marinating of the atmosphere by greenhouse gases. The sites where traditional flame has been replaced by combustion in machines. The Earth’s biota is disintegrating as much by tame fire’s absence as by feral fire’s outbreaks. The scene is not just about the bad burns that trash countrysides and crash into towns; it’s equally about the good fires that have vanished because they are suppressed or no longer lit. Looming over it all is a planetary warming from fossil-fuel combustion that acts as a performance enhancer on all aspects of fire on Earth.

So dire is the picture that some observers argue that the past is irrelevant. We are headed into a no-narrative, no-analogue future. So immense and unimaginable are the coming upheavals that the arc of inherited knowledge that joins us to the past has broken. There is no precedent for what we are about to experience, no means by which to triangulate from accumulated human wisdom into a future unlike anything we have known before. more>