No clear theme this week. G-7 is still going on so I can only report on speculation rather than outcomes. We look at a potential pitfall of trade deals, analyse rain in Newcastle, I'll draw your attention to some events which look interesting and there is more, yes more, about bitcoin. In the Amazon region they have been living in harmony with nature for some 5,000 years. Then civilisation happened.
Hello I'm Anthony Day. Welcome to the Sustainable Futures Report for Friday, the 11th of June 2021, episode number 342.
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The G-7 conference of world leaders, chaired by the British prime minister, continues as you hear this, so at this stage all we can do is speculate. Recent press reports suggest that there is going to be more emphasis on the climate than the agenda initially indicated. Climate is being linked directly with the pandemic.
Following a statement from UNICEF, a number of celebrities have written an open letter to the G-7 urging world leaders to send vaccines to developing countries as soon as possible. Many Western countries have ordered far more doses than they are likely to need and have promised to donate the surplus. However, UNICEF points out that if all these supplies are sent out in a rush in a few months’ time there is a risk that many of them will be wasted. They urge that supplies should be sent out steadily, to those nations which so far have been able to vaccinate only a very small proportion of their populations.
Paul Polman, the former chief executive of Unilever and chair of the International Chamber of Commerce, said the two biggest global challenges were becoming increasingly, and dangerously, linked.
“We can’t have global solidarity and trust around tackling climate change if we do not show solidarity around vaccines,” Polman said. “Developing countries will not come with more ambitious targets [on emissions] if they do not see developed countries showing some solidarity on vaccines, and climate funding.”
The chances of success at Cop26, “will be significantly higher if we address this vaccine issue.”
The Big Smoke
I reported last week that since January 2020 the G-7 nations have poured significantly more money into the fossil fuels industry than into clean energy. Not a good start to a green recovery. Now a report from WWF headlines “UK finance is a high-carbon sector.”
The Big Smoke Report from WWF and Greenpeace shows that just a subsection of the UK Finance sector was responsible for financing 805 million tonnes of CO2 emissions in 2019 through their lending and investment activities. This equates to 1.8 times the annual net emissions of the UK putting at risk the government’s plans to lead by example at COP26.
Incidentally the government is already under pressure both in parliament and on the international stage as it becomes the only developed nation to cut foreign aid in this time of global crisis. It is spending nearly £400 billion on recovering from COVID and claims that it needs to cut £4 billion from the aid budget to offset this.
WWF and Greenpeace are both urging the UK government to take further action this year to ensure that financial institutions take greater responsibility for their financing activities to truly understand the impact the sector is having on the planet.
The Green Finance Institute exists to encourage sustainable investing and to call out examples of greenwash. In December 2019 the Bank of England launched a consultation on its proposals for stress testing the financial stability implications of climate change. This week the Bank published the key elements of the 2021 Biennial Exploratory Scenario: Financial risks from climate change.
Bank of England
The CBES, the Climate Biennial Exploratory Scenario, uses three scenarios of early, late and no additional action to explore the two key risks from climate change: the risks arising from the significant structural changes to the economy needed to achieve net zero emissions – ‘transition risk’ and risks associated with higher global temperatures – ‘physical risks’.
The Bank intends the CBES to be a learning exercise. Experience and expertise in modelling climate-related risks is still relatively immature, it says, so this exercise will develop the capabilities of both the Bank and the CBES participants.
Results of the study, expected in May 2022, will not be used by the Bank to set capital requirements. Instead, participants’ submissions may inform the Financial Policy Committee’s future approach to system-wide policy issues, and the Prudential Regulation Authority’s (PRA) future supervisory approach.
I can’t help feeling there’s no sense of urgency.
Climate Regulation - Restraint of Trade?
After Brexit and its departure from the European Union the UK is eagerly negotiating new trade deals. No doubt some of these will be discussed in the corridors and back rooms during G-7. Both sides will seek benefits.
Some years ago there was negotiation between the EU and the United States to set up what was to be called the Transatlantic Trade and Investment Partnership (TTIP). This included investor-state dispute settlement (ISDS) which I reported on in the Sustainable Futures Report episodes of 02/03/18 and 13/04/18. It’s a system which allows corporations to seek compensation from governments if legislation outlaws activities which would otherwise have allowed them to make profits. It was originally designed to protect companies against unstable regimes. For example, law firm Debevoise & Plimpton has recently won a $412 million award for Perenco oil and gas company, ending a decade-long arbitration dispute with the Republic of Ecuador over taxation of oil revenues.
Trying it On
On the other hand, some corporates have simply been trying it on. Australian mining firm, OceanaGold alleged that when valuable deposits of gold and silver were discovered in El Salvador, the government, for political reasons, withheld the permits it needed to begin digging and the company claimed $284m in compensation. El Salvador countered that the company not only lacked environmental permits but also failed to prove it had obtained rights to much of the land covered by its request: many farmers in the northern Cabañas region, where the company wanted to dig, had refused to sell their land. The claim failed.
Hearings are organised by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) and are frequently held in secret without appeal. It is partly due to opposition to ISDS investor-state dispute settlement by France and Germany, itself pursued by Swedish corporation Vattenfall, that TTIP failed.
ISDS v Climate
Now, a new study from the London School of Economics reports that ISDS, Investor-State Dispute Settlement, is being used to attack climate legislation. At least 13 climate-related ISDS cases filed between 2012 and the present were identified. While these cases do not always contain explicit references to climate change, they all relate directly to the introduction, withdrawal or amendment of a policy measure explicitly developed to meet a country’s climate goals.
Some of the cases seek compensation, such as the energy companies challenging the Netherlands government for phasing out coal-fired power stations. Others have attacked the reduction in subsidies for renewable power generation. A third group involves environmental conditions or the withdrawal of permits, such as the action of the Obama Administration over the Keystone XL pipeline. The Trump Administration reversed the decision on that: we wait to see whether Biden reverses it again. The size of potential compensation claims can make governments think hard about how committed they are to their climate policies - or any other policies, for that matter. Will the peat industry sue if it’s prevented from marketing horticultural peat? Will the manufacturers sue if the government outlaws gas boilers?
This story emphasises that there are many ways to frustrate climate regulations and many organisations that will seek to do so; Bank of England studies and Green Finance Institute notwithstanding.
And in Other News,
Rain in Newcastle
Sharing their findings in a new ScienceBrief Review, published on 7th June, scientists from Newcastle University, the University of East Anglia (UEA), the Tyndall Centre for Climate Change Research and Instituto Nacional de Pesquisas Espaciais (INPE), São Paulo, Brazil, analysed over 170 peer-reviewed scientific papers. Their headline conclusion was that climate change increases extreme rainfall and the chance of floods.
Climate change, they say, increases the frequency and intensity of extreme rainfall because a warmer atmosphere holds more water vapour that can rain out, sometimes over a short period. The movement of water vapour through the atmosphere, in storms, is also modified. Increases in extreme rainfall have been observed in many parts of the world. Extreme rainfall, in turn, can increase the chance of floods occurring and their magnitude in small and in urban catchments, severely impacting local populations and infrastructure. Extreme rainfall and associated flood hazards are projected to increase as global temperatures continue to rise.
Meanwhile, in Earth Systems Dynamics, scientists warn that interacting tipping elements increase risk of climate domino effects under global warming. They say,
“With progressing global warming, there is an increased risk that one or several tipping elements in the climate system might cross a critical threshold, resulting in severe consequences for the global climate, ecosystems and human societies. While the underlying processes are fairly well-understood, it is unclear how their interactions might impact the overall stability of the Earth's climate system. As of yet, this cannot be fully analysed with state-of-the-art Earth system models due to computational constraints as well as some missing and uncertain process representations of certain tipping elements. Here, we explicitly study the effects of known physical interactions among the Greenland and West Antarctic ice sheets, the Atlantic Meridional Overturning Circulation (AMOC) and the Amazon rainforest using a conceptual network approach. We analyse the risk of domino effects being triggered by each of the individual tipping elements under global warming in equilibrium experiments.”
And CNN reports that despite a massive reduction in commuting and in many commercial activities during the early months of the pandemic, the amount of carbon in Earth's atmosphere in May reached its highest level in modern history, according to Scientists from the National Oceanic and Atmospheric Administration (NOAA) and the Scripps Institution of Oceanography at the University of California San Diego. Atmospheric carbon dioxide measured at NOAA’s Mauna Loa Atmospheric Baseline Observatory peaked for 2021 in May at a monthly average of 419 parts per million (ppm), the highest level since accurate measurements began 63 years ago,
News this week that humans have inhabited the Amazon basin for more than 5,000 with having any effect on the environment. Then came civilisation.
An article in the Proceedings of the National Academy of Sciences says, “Our data support previous research indicating that considerable areas of some Amazonian tierra firme forests were not significantly impacted by human activities during the prehistoric era. Rather, it appears that over the last 5,000 years, indigenous populations in this region coexisted with, and helped maintain, large expanses of relatively unmodified forest, as they continue to do today.”
“Some [researchers] propose that human influences played strong roles in the enrichment of “hyperdominant” trees, which are disproportionately common elements in the modern flora. Some even argue that prehistoric fires and forest clearance were so spatially extensive that post-Columbian reforestation upon the tragic consequences of European contact was a principal contributor to decreasing atmospheric CO2 levels and the onset of the “Little Ice Age”….Our data indicate that forest resurgence and fire decrease upon the tragic consequences of European contact were not so widespread as to have been principal contributors to the onset of the “Little Ice Age.”
So ancient peoples had little effect of the ecology of the forests. The report does not comment on the effect of humanity today.
Events and Publications
Before I go, here is some information about documents just published and events coming up shortly which you may find of interest. I make no recommendation and nobody is paying me to bring these to your attention, but I thought they might be useful.
Cross-Sector Insights: Smart Solutions for Sustainability
The IEMA Fellows Working Group on Disruptive Technologies & the Digital Economy has developed a thought piece which offers practical recommendations, across different sectors, on how professionals can carry out the seven key actions in its 2019 Thought Piece. From adopting a circular approach to supporting collaborative cross sector data exchange models they aim to ensure that disruptive technologies can support a transformation towards sustainability.
The document contains many practical recommendations extracted from case studies submitted by IEMA members, corporate partners and technology experts that are all working in their organisations to support sustainable outcomes.
There’s a link below.
Utility Week has a webinar on Changing consumers’ behaviour to use less water - an increasingly pressing concern for water companies.
Expert speakers include:
- David Hartwell, Head of Business Development, Creative EC
- Dr Heather Smith, Senior Lecturer in Water Governance, Cranfield University
- Jeremy Heath, Innovation Manager, SES Water
- Soren Lau, General Manager EMEA IoT Sales, Microsoft
Register now and find out what new ideas are at your disposal and how AI-technology can help change consumers’ behaviour to use less water.
Net Zero: The Benefits of Understanding your Climate Risk is a webinar from Anthesis.
In this webinar, Anthesis experts will discuss how understanding your climate risk at or before the point of setting a Net Zero goal will allow your organisation to secure senior engagement, demonstrate resilience, seize opportunities, and integrate your climate response into your strategy.
This week the Ellen MacArthur Foundation, the Circular Economy experts, offer Summit 21: TRANSFORMATION. Although it will be over by the time you hear this, there is a link below and you should be able to find it on YouTube.
Cryogenic Energy Storage
By the way, I spoke last week about cryogenic energy storage and the plant under construction near Manchester by Highview Power. They tell me that their Carrington plant is scheduled for completion at the end of 2023.
Cryptocurrency and Bitcoin
I've mentioned bitcoin a number of times and now there is news that Norton, the antivirus and computer security company, will offer Etherium cryptocurrency mining in its next release. There is no information on Norton's website yet, but the speculation is that users will pay a subscription and when their computers are not in use their computers will mine for cryptocurrency. It is expected that users will operate as a group and share any currency which is created. Commentators suggest that any profits earned are likely to be extremely small and not enough to offset the cost of the electricity to run the computer.
However, if you want a way of wasting electricity along with its associated carbon emissions, watch out for further announcements from Norton.
And that’s it for another week.
I’m Anthony Day.
That was the Sustainable Futures Report.
Until next week.
Share vaccines or climate deal will fail, rich countries are told
UK banks to reveal exposure to climate crisis for first time
Frustrating Climate Legislation
The obscure legal system that lets corporations sue countries
And in Other News,
Raining in Newcastle
Climate tipping points could topple like dominoes, warn scientists
CO2 at highest level
Events and Publications