Last week Business Green staged an important conference - Net Zero Nature. I share some of the insights I gained. In other news, some thoughts about G7 - the upcoming intergovernmental conference, a missed opportunity for green recovery, more reaction to the news about Shell, blowing hot and cold on energy storage, is public transport the way forward? And a bit of mining in the West Midlands.
Yes, I’m Anthony Day, it’s Friday 4th June and this your Sustainable Futures Report. Just the thing to listen to while you’re dozing in the sunshine.
No, don’t doze - pay attention!
Net Zero Nature
Last week the Net Zero Nature conference by Business Green was addressed by Sir Partha Dasgupta, Cambridge Economist and author of the Dasgupta Review, prepared for the British government. This document, entitled The Economics of Biodiversity, has been described as equally significant as the 2006 Stern Review. It runs to some 610 pages, although an abridged version is also available. In his conversation with James Murray, editor-in-chief of Business Green, Professor Dasgupta explained how he was examining the economics of the biosphere, not just biodiversity, and the consequences to it of economic life. He made the point that while biodiversity might be seen by some as just one more factor to consider in protecting the environment, the biosphere is all-encompassing and essential to us all. He complained that as an economist he was out of step with many of his colleagues who were stuck with views established in the mid 20th century. At that time economists began to take account of externalities such as technological advance, but they ignored the benefits of externalities such as nature. They assumed that land would always be available, with little thought of whether it could be damaged or degraded. They took little or no account of the availability of clean air or clean water or of the costs of polluting air or water, or how being able to pollute without penalty was a benefit to business. He believes their views have changed very little.
In examining the Economics of Biodiversity Professor Dasgupta drew on the expertise of ecologists in climate change, earth sciences and the behaviour of organisms. It was essential to found his economic model on solid science. He found that the business community and banks were more focussed on the issues than his academic colleagues. For all that, he believed that Joe Biden should involve economists in his climate taskforce.
Professor Dasgupta highlighted the shortcomings of the pricing mechanism in relation to nature, and the tendency to ignore and sidestep such valuations as too difficult. Hence nature has frequently been considered free or even with negative value. He recommends biodiversity balance sheets to monitor governments’ progress on preserving natural capital and an approach which distinguishes between income and wealth as measures of value. He thinks companies should come together and demand regulation. This could formalise best practice and eliminate competition from reckless organisations taking actions which could threaten the sustainability of all. He called for international bodies to manage global commons like the oceans and fresh air.
Citizens need waking up, he said, to work with business to demand government action.
Why Nature Matters
Tanya Steele of WWF spoke on Why Nature Matters. “Nature matters,” she said, “because natural resources are not infinite.” There is no natural capital accounting. Externalities are ignored. Regulation is inadequate and the value of nature is not counted in national economies. She quoted the report from Swiss Re, the insurance company, which says that a fifth of countries are on the verge of ecosystem collapse and the impact of this is accelerating. She spoke about the complexity of supply chains and their fragility and said they're only being considered now because this has become a threat. We need not just to halt, but to rebuild. Unlike Professor Dasgupta she thought that few businesses were stepping forward and in any case there was disagreement on the best way forward. Businesses should account for their own impact but what could an individual do? First, individuals could accept the facts and recognise that we are not immune. Then we should halve our emissions and then halve them again. We should halve our environmental footprint and aim to put something back.
Businesses should accept the cost of building resilience into supply chains to counter risks and ensure business survival. She spoke about the work of WWF with businesses such as Tesco, which aims to halve the environmental footprint of the average shopping basket. It will need to do this by leading the consumer towards a more sustainable diet. Sky is working to reduce its Scope 3 emissions – that's the emissions created by consumers as they use Sky products. Sky is also working to restore seagrass. The UK is apparently the 189th most nature-depleted nation.
Like Professor Dasgupta, Tanya Steele believes that businesses must help to draw up regulations. It is a real challenge and businesses must lead. At the same time it is an opportunity: it is enlightened self interest. We need science based targets. Nature-based solutions are a payback not an offset.
A session close to my heart was entitled Can carbon offsets be credible? Professor Natalie Seddon estimated that 10 Gt or 10% of global emissions could potentially be absorbed each year if we stop the destruction of ecosystems, if we restore ecosystems and if we improve the management of productive lands. This translates to a 0.3°C improvement in controlling global temperatures but we must not allow this to become an excuse for more fossil fuel use. The earlier we start with nature based solutions the greater the amounts of omissions that we will be able to reduce.
Eron Bloomgarden of the Emergent Forest Finance Accelerator said that we must change incentives in order to stop deforestation. His business involves the sale of verified emission reductions to corporates and these need to be truly verified because the reputational risk is immense. The payments received are reinvested to reinforce conservation. A $1 billion turnover is planned for the future.
Christian Kroll of Ecosia, the largest second search engine in Europe (with 1% of the market) is the biggest tree planting organisation in Europe. So do such schemes work? Yes, as they grow they absorb carbon. Success depends on holding warming in check and avoiding wildfires. There is no point in investing in short-term plantations which are commonly offered as offsets. For Ecosia the plantations must be high quality, long-term and prioritise biodiversity.
What about unscrupulous intermediaries in this market? There has to be a coalition approach following the Paris accreditation. There must be quality on the supply-side and integrity on the demand-side. Profit on resale should always go back to the forest. Tree planting is good. Destruction of forests is a huge source of carbon. Mark Carney’s task force is working on voluntary carbon markets. Integrity in the whole offset space is critical. Supply chains are becoming more resilient and must become even more so. Of course it's not just about trees, the oceans are a massive natural resource but the difficulty of managing the high seas is immense. As Professor Dasgupta suggested, we need a global regulatory body but it's a huge challenge.
Do offsets distract from the need to take action? We all must understand the offsets alone will not solve the problem. We need to clean up historical emissions and there is no reason to stop at zero.
I didn't manage to attend all the sessions of the event but I am gradually catching up with them on demand. It's an excellent selection of topics available, I'm afraid only to those who were signed up for the event. I’ll certainly look out for more conferences like this organised by Business Green.
And in Other News
The G7 conference takes place next week, when the leaders of the UK, USA, Canada, Japan, Germany, France and Italy, plus the EU will meet in Cornwall, southwest England. According to the conference website, “We are in unprecedented times. The Prime Minister will use the first in-person G7 Summit in almost two years to ask leaders to seize the opportunity to fight and build back better from coronavirus, uniting to make the future fairer, greener and more prosperous.”
Last week Chancellor Rishi Sunak called on G7 members to take collective action towards securing a green and global economic recovery.
Meanwhile The Guardian reports that “as the UK prepares to host the G7 summit, new analysis reveals that the countries attending committed $189bn to support oil, coal and gas between January 2020 and March 2021. In comparison, the same countries – the UK, US, Canada, Italy, France, Germany and Japan – spent $147bn on clean forms of energy.
The support for fossil fuels from seven of the world’s richest nations included measures to remove or downgrade environmental regulations as well as direct funding of oil, gas and coal.
So how will the green and global economic recovery, the fairer, greener and more prosperous future be realised?
The Climate and Environment Group of Ministers met during May to focus on six policy priorities:
- a net zero G7 by 2050 at the latest
- supporting the transition to a low carbon economy
- resetting our relationship with nature
- driving action to halt and reverse biodiversity loss
- ocean action
- tackling illicit threats to nature
Presumably the detailed results of their deliberations will be published as the conference closes on 13th June. I’ll keep you posted.
Talking of green recovery, Phillip Inman writing in The Guardian complains that the government has missed a trick in handing out money to support businesses during the Covid crisis but imposing no commitments to build back greener in return. A report by the development charity Tearfund, the International Institute for Sustainable Development and the Overseas Development Institute shows the impact of the Treasury’s failure, and of other country’s finance ministries, to extract commitments to be greener from the worst offenders.
Commenting on the greater investment in fossil fuels than renewables, Tearfund argues that the contrast in cash terms is bad enough, but is made worse by politicians who yet again missed an opportunity to speed up the transition to net zero with some rules governing what polluting businesses must do to cut emissions.
Maybe public transport should be part of building back greener.
The campaign for better transport is launching The Way Forward, encouraging the government to build a greener transport network as part of the recovery process from the pandemic.They point out that a single full double-decker bus or train carriage can take up to 75 cars off the road and that a quarter of households in England do not have access to a car. For low-income households the figure is 45 per cent. Given the congestion we already have, giving everyone a car is clearly not a solution. There’s a link below to the campaign website - https://the-way-forward.org
In Energy News
As I reported last week, Royal Dutch Shell has found itself on the wrong side of the law. The court found that Shell’s policy is inadequate to meet the requisite standard of care under Dutch law, and ordered that the carbon emissions of the Shell group’s global activities be reduced by 45% by 2030 relative to 2019. Further, it held that this obligation relates to Shell’s entire energy portfolio and required that it cuts its operational emissions while making best efforts to reduce the emissions of its suppliers and emissions of its end users or customers by 45%. This is huge: Shell not only has to clean up emissions created by extracting oil and gas, but also has legal responsibilities in relation to the emissions produced by burning those products.
The decision marks several legal firsts with global implications. It is the first time that a court has found that a company has a legal duty to reduce its greenhouse gas emissions in line with the goals of the Paris climate agreement. It is also the first time that international human rights standards have been used to inform a binding emissions-reduction obligation for a company.
First but maybe not the last.
No C in Hinkley
Hinkley C is the U.K.'s newest nuclear power station under construction in North Somerset. I've commented on the project many times, as well as on its sister plants in northern France and Finland. All of them are over budget and way behind schedule and the one in France at least has been beset by endless technical difficulties. When it comes to spelling, there is no C in Hinkley. Let's hope that's not an omen. I must admit that since the nuclear option discussion which took place on the Sustainable Futures Report a few episodes ago, I'm beginning to believe that nuclear has got to be part of our low carbon future. Now the BBC is presenting a documentary series on the construction of the plant. Catch it on iPlayer. There is a link below.
Nuclear power stations generally run at a constant output all the time regardless of demand and support a constant base load. Sometimes there’s just too much electricity so the best thing to do is to store it wherever possible. It’s not easy, but I've recently come across cryogenic energy storage which apparently has been around for some time. Last November, Highview Power began construction of a 50 MW liquid air energy storage facility (with a minimum of 250MWh) in Greater Manchester, United Kingdom. The CRYOBattery™ will be one of Europe’s largest energy storage systems.
How does it work? It uses surplus off-peak energy from nuclear or renewables or any other source to compress, cool and liquefy air. When energy is demanded the air is brought back to ambient temperature and expands some 700 times, driving a turbine as it is released. The turbine drives a generator and electricity is produced. Like a pumped storage scheme, it can provide large amounts of energy to stabilise the grid with a very short spin-up time. Unlike a pumped storage scheme it can be installed almost anywhere. The Highview system can use waste heat from industrial processes as part of its inputs. It puts heat released from the liquefaction process into thermal stores for later use. Equally, the cooling from the gasification process is stored in cryogenic units.
The company makes much of the fact that it is using well-established technologies and components which are common in the oil and gas industries and are therefore available off the shelf. There are no emissions. I've mentioned before that a number of commentators have said that we already have the technologies we need to tackle the climate crisis. It may be a question of finding new and imaginative ways to use them, and the Highview system looks like an example of this.
Of course, if we get weeks with no wind and little sun we will need much more storage than the current Highview project, if we are to rely on renewables alone. Nevertheless, nobody said there was a silver bullet, and the solution to the climate crisis is going to come from a wide combination of good ideas. I will try and find out when the Manchester unit will be operational.
Last time, I mentioned that bitcoin mining was creating an excessive and unsustainable demand for energy to run the computing power needed. This week West Midlands Police raided an industrial unit where they expected to find a cannabis farm, but instead found a bitcoin mining operation. It was powered by stolen electricity. No one was on the premises at the time and it's not clear whether the police have been able to arrest anybody. At least they switched it all off and impounded the computers.
I also mentioned last time that Elon Musk had been accepting bitcoins in payment for his Tesla cars for a time but was no longer doing so. One of the reasons, I said, that he decided to stop accepting bitcoin was the fossil-fuel emissions generated by bitcoin mining. A recent article on Medium by Jared A. Brock - link below - suggests that there’s more to it. He claims that without profits from bitcoin trading the Tesla corporation would be showing a loss because it's making no money on selling its cars. He also points out that the current valuation of Tesla, equivalent to all the major carmakers and major airlines combined, is a total nonsense and a bubble waiting to burst. Tulip mania anyone? Watch this space.
And that’s it…
…for this week. You’d think that writing that phrase would give me a warm, satisfied glow, but the truth is I haven’t written the first part yet, but of course I will have by the time you hear this.
So, before I disappear down a wormhole between time and space or enter an infinite temporal loop, let me assure you of three things.
- I’m Anthony Day.
- That was the Sustainable Futures Report
- There will be another next week, next week, next week, next week.
Net Zero Nature
G7 nations committing billions more to fossil fuel than green energy
The Treasury missed a green trick when it handed out Covid cash
Shell’s historic loss in The Hague is a turning point in the fight against big oil
Police find bitcoin mine using stolen electricity in West Midlands