Markets are an unreliable guide for navigating a problem as large and complex as climate change.
By Katharina Pistor – How can one make wise decisions about a perpetually unknowable future? This question is as old as humankind, but it has become existential in light of climate change. Although there is sufficient evidence that anthropogenic climate change is already here, we cannot possibly know all the ways that it will ramify in the coming decades. All we know is that we must either reduce our environmental footprint or risk another global crisis on the scale of the ‘little ice age’ in the 17th century, when climatic changes led to widespread disease, rebellion, war and mass starvation, cutting short the lives of two-thirds of the global population.
The British economist John Maynard Keynes famously argued that investors are driven ultimately by ‘animal spirits’. In the face of uncertainty, people act on gut feelings, not ‘a weighted average of quantitative benefits multiplied by quantitative probabilities’, and it is these instinct-driven bets that may (or may not) pay off after the dust settles. And yet policy-makers would have us trust animal spirits to help us overcome the uncertainty associated with climate change.
Humanity has long sought to reduce uncertainty by making the natural world more legible, and thus subject to its control. For centuries, natural scientists have mapped the world, created taxonomies of plants and animals, and (more recently) sequenced the genomes of many species in the hope of discovering treatments against all imaginable maladies.
What maps, taxonomies and sequences are to chemists and biologists, numbers and indicators are to social scientists. Prices, for example, signal the market value of goods and services, and the expected future value of financial assets. If investors have largely ignored certain assets, the reason might be that they were improperly measured or priced. more>
By Justin Worland – For scientists, the havoc wreaked by the extreme winter weather that hit Texas in mid-February dropping several inches of snow and leaving millions without power did not come as a surprise. Ten years ago, in 2011, energy regulators warned the state’s electric-grid operators that they were ill-prepared for an unprecedented winter storm. And for decades before that, climate scientists had cautioned that a warming planet would cause climate chaos, raising the average global temperature while driving unusual weather events like this one. For Texas, it was always just a matter of time.
By Dickon Pinner and Matt Rogers – The new federal administration has arrived in Washington with ambitious plans to address the climate crisis—and in so doing, revitalize the US economy and reclaim a leadership position on the international stage. During their campaign, President Joe Biden and Vice President Kamala Harris highlighted “the opportunity to build a more resilient, sustainable economy—one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide by no later than 2050 […] and, in the process, create millions of good-paying jobs.”
By Jay Agarwal, Lapo Mori, Fritz Nauck, Johnathan Oswalt, Dickon Pinner, Robert Samek, and Pasley Weeks – Metals and mining companies are adapting to an operating environment in which water is highly regulated, experiences unforeseen supply shocks, and carries substantial social value. By 2024, water-operating expenses for these businesses are estimated to increase by a 1 to 4 percent compound annual growth rate (CAGR), with a 4 to 7 percent CAGR expected for water-capital spending. Consequently, these metals and mining companies have made significant investments—an estimated $15 billion in 2019 alone—to reduce water withdrawal and increase water efficiency in operations, as well as mitigate reputational risk.
By Thomas Hofstätter, Melanie Krawina, Bernhard Mühlreiter, Stefan Pöhler, and Andreas Tschiesner – Electric mobility, driverless cars, automated factories, and ridesharing—these are just a few of the major disruptions the auto industry faced even before the COVID-19 crisis. Now with travel deeply curtailed by the pandemic, and in the midst of worldwide factory closures, slumping car sales, and massive layoffs, it’s natural to wonder what the “next normal” for the auto sector will look like. Over the past few months, we’ve seen the first indicators of this automotive future becoming visible, with the biggest industry changes yet to come.
By Moran Frenkel-Pinter, Nick Hud, Loren Williams – It’s a question older than science: How did life begin? In modern biology, life depends on life to live. But how did the mutualistic relationship between different molecules – which led, eventually, to complex biological systems, like human beings, for example – actually come to be?
By John Blyler – The much discussed 1 million-mile (1.6 million kilometers) battery may now be a reality. As the name suggests, these batteries would last for 1 million miles without breaking down. Tesla, along with China-based Contemporary Amperex Technology (CATL), have announced such a battery that not only lasts longer but also costs less than $100/kWh and uses cobalt-free materials. Why are these two features important?
By Vassili Apostolopoulos – Deconstructing the New Era, is a formidable task. As I am writing these lines, the world has nearly stopped, with more than 180 countries fighting the Coronavirus, imposing different forms of social distancing and lockdown measures. The pandemic of COVID-19 has changed the world in ways and to lengths that we can still not begin to fathom.
