How to reverse climate change? The current discussion focuses on reducing carbon consumption. But the policy instruments and tools available today are neither efficient, nor realistic. Both cap and trade and carbon taxes are variations of coercive systems. They can work if they are coercive enough. But who wants to live in Green Stalinism? So if the stick doesn't work, better try the carrot. It is time to turn the creativeness of financial innovation into something useful.
Following the diplomatic success of the Paris agreement, we will need an economic success in the years to come. After the time of diplomacy, future advances now depend on firms and researchers. And it will not happen if the economic or legal signs are in conflict with the ambition of the agreement of December 12th.
The Paris Agreement shows the willingness of all nations to combat hand-in-hand the challenges of climate change. However, willingness per se is easily defeated by harsh realities. More than ever, cooperation is needed. But sacrifices will also be asked. How to negotiate them?
"With the growing risks of assets becoming stranded by responses to climate change, it might seem necessary to ask whether not adjusting your investment strategy is wise, let alone affordable." These words were spoken by a person well-versed in economic diplomacy, with an unmistakably British sense of understatement: last September, Prince Charles was making these declarations on climate change in front of the financial community (including Ban Ki Moon, Leonardo DiCaprio, Al Gore...). This issue is the focal point of regular inquiries within the financial community itself. What risks and assets are we talking about? This issue deserves some in-depth explanation, beyond the media aspects.
The COP21 provides an opportunity to review the development of carbon capture and storage (CCS). The International Energy Agency expects this technology to contribute to the global effort to reduce CO2 emissions by 15-20%, in line with the Copenhagen target to keep global warming below 2° C by 2100. In its 2014 World Energy Outlook report, the Agency presents a 2° C scenario where, in 2040, global emissions would be reduced from 46 GT, including 21 Gt from the electricity sector (business as usual), to 20 Gt, including 4 Gt from the electricity sector. Combining the use of coal with global climate objectives requires the implementation within the next 25 years of an industry with a size comparable to that of the oil industry. Expectations, hopes and obstacles are briefly presented before we examine the three phases of the complete chain of capture, transport and storage of CO2. Finally, we will offer an outlook regarding the measures that need to be undertaken.
Burning of fossil fuels constitutes the main source today of greenhouse gases. It is also the principal vector of anthropic action on the climate. But the relationship between energy and climate is far more complex that it seems initially. Scientific knowledge is advancing constantly and what is now noteworthy is that the players, whether they are private individuals, national and local authorities or business companies are becoming increasingly aware of the challenges that lie ahead. Where does science stand today and how can we use the available knowledge?
Ecologically speaking, coal is the worst energy source around. But it nonetheless possesses some almost irresistible features. It is still abundant, easy and cheap to mine. Promising technologies could allow cleaner, healthier ways to burn it. Let's have a look.
Fifteen years ago, with the advent of the “new economy”, brick and mortar businesses embodied the ancient world. But the energy transition has just turned the tables: the construction sector is going through a phase of unprecedented innovation. And the industry of brick and tile is at the heart of this revolution – a revolution which focuses on the energy performance of buildings but also on the life cycle of materials.
In the field of rail transport, climate change raises very concrete challenges. The infrastructure is already under heavy stress and suffers from waves of heat that distort the rails and from floods that can disrupt traffic. Passenger comfort raises additional problems. How can we adapt to these changes? How can we anticipate them? Major rail companies have been thinking about these problems for several years and are beginning to design new strategies of action on the short, medium and long term.
With such a range of possibilities, wherein lies the best approach to the goal of reducing global CO2 emissions? Might shifting perspectives on both lifestyle and technology come to be seen less as a constraint and more as the key to ever greater progress? The response to the current challenge depends as much on the emergence of disruptive innovation as on fresh perspectives toward current modes of energy production and consumption.
The green energy boom has opened up cracks in the electricity sector to force to the surface problems which until recently were of only marginal interest. Wind power in particular has provoked forceful debates. Among the subplots are questions over how to manage intermittency. The result is a multiplicity of paths to innovation, one of which leads directly to electricity storage.
To build a sustainable economy, consuming fewer natural resources, we need to think in terms of growth, not otherwise. The issue of sustainability should be tackled in a dynamic way. By setting a new model for the lifecycle of materials, we can project what the future's economic model could look like.
Micro-algae are driving a small technological revolution. Their cultivation marks a new era in the production of biofuels, reinventing industrial processes as well as economic models. In the United States and Europe, several projects are now moving from an experimenting phase to actual operation.
The global electricity sector is facing three major challenges: the security of supply to keep up with ever-mounting demand, the fight against climate change, and the global trend toward massive urbanization. Electricity will play a key role through low-emitting energy-generation technologies that reduce greenhouse gas emissions. These technologies already exist. Success will depend on how public policies are used to encourage innovation.
Nuclear energy is once more on the defensive, thanks to Fukushima. But day to day, fossil fuels are far riskier in the toll they take on people, not to mention their effect on global warming. And some renewables like ethanol and hydropower carry their own substantial, if underrated, risks. If Germany's move to shut down its nuclear plants turns out to be the start of a trend, what does it mean for our safety?
Green Information and Communication Technology (ICT) is no longer a distant dream. GreenTouch, a global consortium organized by Alcatel-Lucent Bell Labs, is spearheading an initiative to innovate and create technologies that will allow networks to achieve an increase in energy efficiency by a factor of 1000. The hope is that the energy required to power today's communications networks, the internet included, for one day will eventually be enough to last... three years.
The failure of the Copenhagen climate change summit to formulate a successor to the Kyoto Protocol has cancelled hopes for the foreseeable future for any enforceable regulatory framework to deal with the global warming issue worldwide. Commentators have pointed the reticence of emerging economies along with recalcitrance of the US administration and the lobbying of powerful industrial interests. In Europe, Tax commissioner Semeta's proposal for a future EU carbon tax was placed on the backburner due to uncertainties on its economic effects. Observers have thus been left with three overriding questions: Where are we in the theoretical debate? What could be the next steps in the development of a low carbon fiscal model? What will be the economic impact of any future changes?
The combined challenges of energy and environmental security pose important national security questions and risks that, with few exceptions, remain poorly formulated and understood today. This article, adapted from a keynote address given by Carol Dumaine at the 8th International Security Forum in Geneva, Switzerland, shines light on these issues and calls for a common security framework to strengthen our ability to cope with global change.
The scientific jury may still be out on the causes of global warming (though most polls suggest roughly 11 of 12 climatologists see fossil fuel consumption as the literal smoking gun), but for non-experts, the large number of record-breaking high temperatures, floods, and other extreme weather events in 2010 has shifted the debate from asking is the weather changing to what will happen next.
Since the beginning of the industrial era, human activities have added new sources of climate variation to the above natural causes, which bring about atmospheric change.