The way energy investors react to the financial analysis that describes up to 80% of fossil fuel reserves as “unburnable” will determine whether or not the world successfully tackles climate change, according to a leading green entrepreneur.
Jeremy Leggett, founder and chairman of solar developer Solarcentury, told delegates at last Thursday’s Transformational Business Conference, organised by the Financial Times (FT) and the International Finance Corporation (IFC), that the investment community will ultimately “define how this drama plays out”.
Analysis by Carbon Tracker, the non-governmental organisation that Leggett chairs, suggests that the vast majority of oil, gas and coal reserves cannot be burnt if the world wants to stay below 2C of global warming – the point at which scientists say would trigger runaway climate change.
In this scenario, investments in such stocks are described as “stranded assets” – meaning they are essentially worthless. Using this analysis, high-profile investors such as Storebrand and Rabobank have divested from fossil fuels, with the campaign also spreading across universities and religious institutions.
But Wim Thomas, chief energy adviser at oil giant Shell, argued at the FT/IFC event – sat alongside Leggett in a panel discussion at London’s InterContinental Hotel on Park Lane – that such claims were perhaps overstated.
“The announcement of the death of oil and gas is a bit of an exaggeration, because when we do our long-term energy scenarios, which really goes up to the end of the century, we still need oil and gas”, Thomas said.
“Why do we need them? Because you can’t do everything with renewables. Renewables are mainly electrons, and the world also needs a lot of molecules in the energy system for chemicals, transport and other applications. Hydrocarbons, if you like it or not, are here to stay… You can electrify around 65% of the global system; the rest – 35-40% – still has to come from molecules.”
He added that Shell’s own analysis into long-term scenarios showed that the world could “practically [decarbonise the] global energy system” with technologies like carbon capture and storage (CCS) – used in power stations to capture carbon emissions and store them underground.
Responding to Thomas’s comments, Leggett said, “Wim’s stated what Shell’s bet is. Basically, there’s a bet on the future that fossil fuels are going to be that important to us way into that future. Others in the oil industry have a different view.”
Shell initially entered the renewable energy market in the early-2000s, with investments in technologies like wind and solar. However, it sold its solar business to German firm SolarWorld in 2006 and in 2009 said it would no longer be investing in solar, wind or hydropower because they were uncompetitive.
Leggett described the firm’s current involvement in renewables as “marginal”. He added, “Investors are going to have to back [Shell’s business model]. The more people look at how bullish we are in the cleantech industry – despite the setbacks we’ve had since the honeymoon period of 2006, as we describe it – we’re now bouncing back big time.”
He said the renewables industry was “locked in a civil war with the energy incumbency – not just oil and gas, but coal and nuclear. It often feels to me literally like two warring tribes”.
Leggett concluded, “This, I think, will set us back collectively… It may ultimately – I hope this is wrong – not enable us to get to a coherent energy infrastructure of the kind we could have that would promote our prospects of defeating the terrible threat of global warming, but also the air quality threats, the social threats, the geopolitical threats of overreliance on oil and gas in far-off places.
“Investors are going to be vitally important to this, and how you react to the bet that Shell is placing… how you react to this massive overhang, this carbon bubble as we call it, this amount of fossil fuel resources that literally is not going to be able to be burnt, much of it, if we’re going to have a fighting chance of staying below the danger threshold of 2C. That, I think, is ultimately going to define how this drama plays out.”
Photo: Zero Emission Resource Organisation via Flickr
Will Self-Driving Cars Be Better for the Environment?
Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?
But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?
The Big Picture
The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.
That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.
One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.
There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.
As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.
Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.
Make and Model of Car
Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.
On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.
The Bottom Line
Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?
Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.
- Energy2 weeks ago
How Much Energy Does Bitcoin Use, Really?
- Environment4 weeks ago
Biggest Tip to Eco-Friendly Car Ownership (Which May Surprise You)
- Energy4 weeks ago
Top 5 Changes You can Make in Your Life to Reduce Your Carbon Footprint
- Energy4 weeks ago
4 Energy Efficient Home Upgrades that You Can Install Yourself