Lethal Heating: 10/13/17

13/10/2017

Using Technology To Fight Climate Change

Morgan Stanley

Entrepreneurs from around the world are creating innovations to mitigate climate-change impact from five key sectors.

While AgTech used to focus mostly on biofuels, seed genetics and water desalination, it now includes development of new technologies to reduce methane emissions from livestock—notably cattle. Morgan Stanley

A new report by Morgan Stanley’s Institute for Sustainable Investing, with The Economist Intelligence Unit, delves into five sectors closely tied to greenhouse gas emissions, and the technologies that governments, cities and companies are embracing to mitigate the impact. Here are some highlights for investors to explore in each sector.

Energy
Areas to watch:

Large-scale wind and solar power in the U.S., India, China and Saudi Arabia;
Small-scale off-grid solar where energy infrastructure is underdeveloped;
Efficiency technologies worldwide.

Energy consumption accounts for 35% of the world’s greenhouse gas emissions,¹ and industrial expansion in emerging markets will only increase that share if opportunities for climate change mitigation technology aren’t embraced.
The good news is that the use of renewable energy has reached a global tipping point, where the price competitiveness of solar and new technologies are raising demand for clean energy sources in emerging and developed markets alike. In fact, renewables are expected to become the cheapest form of new power generation by 2020, according to recent research by Morgan Stanley.
In the U.S, the solar industry already employs more workers than coal, oil and natural gas combined,² and the solar market alone is expected to grow almost 25% per year on average through 2022, to reach $422 billion.³
Across the globe, smart-grid and Internet-of-Things technologies are making energy grids more efficient, reliable and low cost. Energy storage technology is also reaching a point where renewables can finally become a dependable source of power on electricity grids.
China far outstrips all other countries in the Index in terms of total energy consumption and emissions. Yet its government is highly focused on reducing pollution and energy emissions. The International Energy Agency forecasts that nearly 40% of total renewable power capacity growth will come from China by 2020.⁴
India’s government is also actively expanding renewables use. In 2016, the country unveiled the world’s largest solar power plant. India is now on track to become the world’s third biggest solar market in 2017,⁵ behind the U.S. and China.

Agriculture
Areas to watch:

Livestock methane reduction innovations;
Efficient seeds and crop varieties in Sub-Saharan Africa and South Asia;
Mechanization of agriculture processes to reduce livestock emissions for small-holder farms.

After years of neglect, agriculture is beginning to capture the imagination of tech entrepreneurs and offer new investment opportunities. AgTech investments reached $4.6 billion in 2015, 95% higher than in 2014.⁶ Although agriculture accounts for 13% of global greenhouse emissions,⁷ the impact is substantial in countries that rely heavily on the sector for exports. In Argentina, Australia and India, for instance, agriculture accounts for more than a third of total greenhouse gas emissions.⁸ In Bangladesh and Rwanda, where agriculture plays a dominant economic role, the sector accounts for more than half of total emissions.
While AgTech used to focus mostly on biofuels, seed genetics and water desalination, it now includes development of new technologies to reduce methane emissions from livestock—notably cattle. In Argentina, for instance, scientists are developing methane-capturing backpacks for cows. Initial results show that the backpacks can capture enough methane from one cow in a day to power a refrigerator for 24 hours.⁹
AgTech also includes new technology to sustain crop growth in regions suffering extreme weather conditions, such as Nigeria and Bangladesh.
Governments in agriculture-heavy countries are also improving the investment landscape for AgTech startups. In Australia, the government has partnered with the National Farmer Federation to create SproutX,¹⁰ an AgTech startup accelerator. In Turkey, mitigation technology development is growing, as the government sets ambitious goals to be among the top five agricultural producers in the world by 2023.¹¹ In China, India and Brazil—the three largest global agricultural emitters—the focus is on technology investments that modernize the agriculture sector and increase crop production.

Built Environment
Areas to watch:

Green building retrofits in major cities;
Vertical farming;
Remote sensing systems to monitor deforestation.

The built environment refers to greenhouse gas emissions that stem from the conversion of land for new agricultural, industrial and urban development—including buildings, as well as what’s referred to as “land use, land use change and forestry” (LULUCF). About 40% of the world’s greenhouse gas (GHG) emissions come from buildings,¹² and another 10%-12% from LULUCF, which includes deforestation.¹³
Deforestation for agriculture can be a major contributor to greenhouse gas emissions in some emerging countries—70% in Indonesia’s case¹⁴ and 51% for Brazil.¹⁵ The latter has focused on technology to monitor and reduce the destruction of the Amazon rain forest by using remote-sensing systems that detect deforestation, and other systems to alert authorities to illegal logging. Advances in more efficient agricultural techniques, like vertical farming, can also offset deforestation emissions.
The energy-efficiency movement in buildings, meanwhile, is becoming a global business in its own right. Growth in green-building certifications—such as Leadership in Energy and Environmental Design (LEED)—is burgeoning in developed countries, as commercial real-estate owners realize they can unlock greater returns with green buildings than with portfolios of less efficient real estate. The number of LEED-certifications in the U.S. has jumped, from 296 in 2006 to 36,300 in 2016.¹⁶ And it's not just the U.S.; Poland, for example, saw a 60% increase in green buildings from 2014 to 2015.¹⁷
New technologies move well beyond solar panels and green roofs. Energy efficiency now happens behind the scenes, with automated building management systems detecting usage patterns of lighting, heating and air conditioning. Lighting technology is also an area of opportunity, as are innovations in window insulation, which trap heat in winter and keep out the sun in summer.
The nonprofit Business and Sustainable Development Commission estimates that energy-efficient buildings, clean vehicles, urban public transport and green building in cities could represent an opportunity of more than $1.1 trillion globally by 2030, with more than half coming from energy-efficient buildings.¹⁸

Transport
Areas to watch:

Growing electric vehicle demand in developed markets;
Public transit and biodiesel innovation in Brazil and Argentina;
Low-emission transport in low-income economies.

It’s been a while coming, but the transportation industry’s long-promised electric future is now within grasp. The electric vehicle market is expected to account for 75% of global car sales by 2050,¹⁹according to the International Energy Association. There are even efforts underway to create solar-panel equipped vehicles.
Tighter regulations for clean air are leading policymakers to think about transportation in new ways. Increasingly public transport is being upgraded to be more energy efficient. Initiatives to expand green public transportation will underpin strong demand for clean transport technologies in the UK as well as the U.S., according to the report.
Clean transport technology is needed most particularly in fast-growing emerging markets. In India, vehicle demand is expected to almost double by 2020.²⁰ Underpinning the demand for clean transportation in Brazil is the country’s culture of individual car ownership and a large and well-established biofuel market. Authorities are also exploring the construction of cleaner public transport in cities like Sao Paulo.²¹

Industry
Areas to watch:

Carbon capture and storage technologies;
High-efficiency industrial power generation in Bangladesh;
Innovations that decouple industrial production from emissions growth in advanced economies.

Corporations are increasingly taking up the battle against industrial pollution as part of their own sustainability efforts. Late last year, for instance, a conglomeration of oil companies – including Saudi Aramco, Royal Dutch Shell and BP - announced a $1 billion investment in carbon capture and storage (CCS) technology development over the next 10 years.²²
Public outcry against industrial pollution is also driving governments in advanced and emerging economies to take action. In South Korea, the government has launched a carbon emissions trading scheme, and called for a legal framework for CCS, in spite of resistance from some industrial groups who believe the crackdown could hurt the country’s international competitiveness.²³
The biggest opportunities for tech investment in this sector lie in emerging economies, namely China and India, where the industrial sectors are expected to grow by 25% and 40%, respectively, through 2020.²⁴ This raises the urgency for innovations that reduce what are already dangerous pollution levels in both countries.
China, where air pollution is a highly political issue, has sought to position itself as a climate leader, pushing a progressive agenda, including plans to implement a cap-and-trade program in 2017.²⁵ In its most recent five-year plan, China announced that it would seek to reduce factory emissions by 25%.²⁶
Meanwhile, India’s government has targeted a 20% reduction in the country’s emissions by 2020,²⁷after its air pollution levels surpassed even China’s in 2016.²⁸ Indian corporations have also embraced clean-air tech innovations. In early 2017, for example, a plant in Tuticorin, southern India, installed technology that captures and converts carbon dioxide from its coal-powered boiler into baking soda. This is the first industrial-scale carbon capture venture that has turned carbon emissions into a commercial opportunity.²⁹

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A Shift To Clean Energy Will Come But Politics Remain Vile Until The Next Election

The Guardian - Simon Holmes à Court*

The Coalition is fighting battles against each other, the opposition, consumers, facts and future. It can’t end well for them or for us

Energy minister Josh Frydenberg and prime minister Malcolm Turnbull during question time in the house of representatives in parliament house, Canberra 12 September 2017. Photograph: Mike Bowers for the Guardian

In a mid-January op-ed, former prime minister Tony Abbott gushed about Australia’s bountiful “clean coal”. I fired off an email to Abbott’s office asking for more information about this promising new form of coal — I mean, if “clean coal” exists, all our problems are solved, right?
After sending nine polite emails over four months, all unanswered, I called Abbott’s office and spoke to a lovely, yet understandably haggard, office manager, who explained that the former prime minister’s priority was his Warringah electorate. I asked if I could speak with his energy advisor and was told that, as a backbencher, Tony Abbott doesn’t have the luxury of an energy advisor.
A further five emails were ignored, and I reached the conclusion that many start with — Tony Abbott is not interested in rational discussion about energy, instead preferring to lob home-made logic bombs and run.
In an echo of the “cultural cringe”, still alive and well in Abbott’s circles presumably, the “member for Warringah” — apparently too busy with local constituent issues to discuss his nationally published opinions — flew to London to deliver the annual address at a climate-science denial thinktank and in the process launch a missile directly at its intended target, the Australian energy debate.
Abbott’s speech is arguably the most ideological contribution to our energy debate yet, a mixture of historical revisionism (facts and consistency irrelevant), homage to the “triumph of the Western liberal order” and an expression of deep regret for the emergence of a “post-Christian nostalgia” akin to goat sacrifice by “primitive people”. Almost every sentence is outrageous and one could dissect every one of them in an attempt to set the record straight. That, however, would be entirely missing the point.
Abbott’s bomb — designed to shock and destroy, not contribute — landed right on target. In a week when energy minister Josh Frydenberg tried to reassure us that “the good news is that we have learned the lessons of the past, we know where we are going and we have a comprehensive plan to get there”, never has it been more apparent that the Coalition has learnt nothing, has no idea where it is going and literally has no plan.
The biggest news of the week is not Abbott’s speech, but the message it underscored: that the clean energy target (CET) is dead.
For a brief moment in June there was hope that the Coalition and Labor might find a common ground through chief scientist professor Alan Finkel’s technology agnostic proposal to solve the energy trilemma — affordable, reliable and lower-emissions electricity. In the intervening period the Coalition has decided energy will be where they find their point of difference with ”blackout Bill’s” Labor as we gear up for a prolonged campaign into the next federal election.
Frydenberg’s signalling on Monday confirmed that the chance of bipartisan energy legislation passing before the next election just went to zero. Without long term, stable energy policy, renewable investment will slow, the fossil fuel power investment strike will stretch into its second decade and the unsolved trilemma will bite deeper.
Frydenberg and Turnbull both understand the energy system and they know that Finkel got it basically right, yet a backbench with abysmal energy literacy and extraordinary power has given them no choice but to drop the Finkel plan, even before an alternative has been put on the table.
Sometime soon Frydenberg will deliver an “energy investment framework”. Nothing can come of it while the world view of the backbench — currently more powerful than cabinet — is based on a couple of great big lies.
The first is the misconception that renewable energy is heavily subsidised, based on gross miscalculations (misinformation?) driven hard by Australia’s “merchants of doubt”, the Minerals Council of Australia and the Institute of Public Affairs. While there’s now a chorus demanding the end of “renewable subsidies”, few understand that major renewables projects (including two wind farms totalling 980 MW) are now being contracted with an effective subsidy of $0.
Far from no longer being needed, the renewable energy target provides the impetus for retailers to write long term purchase contracts, essential to securing project finance. For an increasing number of projects, the RET costs retailers literally nothing; in fact every expert analysis, including the centrepiece of Abbott’s Warburton review, shows the RET lowers costs of capital and introduces cheaper energy into the market to the consumer’s benefit.
For all the same reasons, the CET would enable a lower cost and more orderly energy transition than relying solely on extreme prices to new signal investment.
The second major misconception is that we have a major reliability problem caused by renewable energy. We don’t. South Australia did have a state-wide blackout a little over a year ago. The wind energy that shut down the grid was not wind turbines, but a series of tornados that toppled 22 pylons. Protection equipment kicked into action, yes, some of it at wind farms, and disconnected enough of the grid for it to “collapse”. The reasons behind the collapse are of great interest to power system engineers, but it was the failure of the generators contracted to restart the grid in this eventuality that impacted South Australians the most. Even with massive network damage and failure of emergency procedures, service was restored to many households in just three hours.
But what of all the other blackouts in South Australia? Apart from a transmission line failure in December, storm damaged power lines after Christmas, gas generators that sat idle when needed to run in February — all minor incidents blown out of proportion to suit a narrative — reliability in SA has been the same as elsewhere in Australia: excellent.
Try telling a Coalition MP that we don’t have a reliability crisis and they’ll laugh in your face. Presumably none are aware that the Australian Energy Market Operator announced earlier this week that the hole left by Hazelwood’s closure has been filled. We’re entering summer better prepared than at any other time in history.
As long as the backbench’s grasp on the facts is so poor, they will keep fighting a battle they can’t win.
Renewable energy is wildly popular with the public. 20% of all Australian households have installed solar on their rooftops — the highest in the world — and the pace of installation is only increasing. Poll after poll shows that Australians, regardless of their political stripes, want more renewables.
Yet, oddly, renewable energy would appear to have no friends in the Coalition. Even among the many in Abbott’s party room who can’t stand the man – who within the party has stuck their neck out to counter his lies?
We won’t see another coal fired power station built in Australia. Anyone who believes it’s going to happen doesn’t comprehend the economic, engineering and political barriers that stand in the way. Now that the economic case has been won, the shift to clean energy is locked in; however, it is now certain that politics will remain vile through to the next election and beyond.
It is almost as if the Coalition is planting landmines in front of their own army — this cannot end well for them, or for Australia. As a young, ambitious minister, Frydenberg must be praying daily for a reshuffle.
On energy, the Coalition is fighting battles on many fronts — against each other, the opposition, consumers, the facts and the future.
Renewable energy has won the war, but it has yet to win the peace.

*Simon Holmes à Court is senior advisor to the Energy Transition Hub at Melbourne University

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Liberal Statesman Tells Malcolm Turnbull To Stand And Fight Tony Abbott On Climate

Fairfax - Mark Kenny

A former Liberal leader has urged Malcolm Turnbull to defy Tony Abbott in the party room over climate and energy policy, saying that by "drawing a line in the sand" he could deliver better policy and save his prime ministership.
In a searing assessment of the Coalition's chances of recovery, John Hewson told Fairfax Media that Mr Turnbull looked weak for failing to assert his past commitments on climate change, tax policy and marriage equality, and for refusing to call out Mr Abbott despite the growing absurdity of his arguments.

Prime Minister Malcolm Turnbull. Photo: Andrew Meares

Dr Hewson cited Mr Abbott's claim this week that global warming could be good for the world saying the statement had laid bare the former prime minister's role as a wrecker while further isolating him from mainstream Australian voters.
He said Mr Abbott had adopted every position on climate change from "it being a significant issue to being crap".

Former Liberal leader John Hewson (pictured centre) says Malcolm Turnbull needs to stand up to Tony Abbott in the party room. Photo: Andrew Meares

"In those circumstances, I'd call him out," he said.

But he said while Mr Turnbull failed to implement a proper policy that drove new energy investment it would be Mr Abbott's attention-grabbing statements from the conservative right that would define the government to voters.
"It's a bit ironic but they [voters] elect governments to take the hard decisions and when you don't take them you look really weak," he said.
But a senior minister defended the Prime Minister's restrained handling of the Abbott-led climate insurgency, saying the policy, which is expected to go before cabinet within days or weeks, would aim to deliver reliability, affordability and to achieve emissions reductions consistent with Australia's Paris commitment as a by-product.

Former Liberal leader John Hewson. Photo: Alex Ellinghausen

It was suggested that the policy, likely to adopt a hybrid approach, could even land in a political "sweet spot" by forcing Mr Abbott to choose between falling in behind it, or perhaps voting with Labor in opposing it.
Labor has floated the idea of backing a clean energy target but is unlikely to support a policy that falls short of that mechanism.
Energy Minister Josh Frydenberg hinted that the government will sidestep the final outstanding recommendation from chief scientist Alan Finkel for a clean energy target, in favour of a clutch of other measures.
However, Dr Hewson believes Mr Abbott is not Mr Turnbull's biggest problem, which is more the Prime Minister's reluctance to openly confront his predecessor.
He said Mr Turnbull should draw a line in the sand in the full knowledge that adopting a progressive clean energy target would spark a reaction from Mr Abbott and his small coterie of supporters.
He said Mr Abbott would "make a bit of noise" and there would be "a few that would back him", but ultimately mainstream voters would applaud a Prime Minister who stood up for his beliefs.
Dr Hewson said the alternative facing Mr Turnbull was to accept that his government would be defined as much by Mr Abbott as himself.
"How long do you want to sit back and be beaten up, because that's what Abbott's doing," he told Fairfax Media.
"Abbott's taking every opportunity, you know, day in, day out, to undermine Turnbull, it doesn't really matter what the issue is."
Dr Hewson who unsuccessfully led the Coalition to the 1993 election, said voters wanted to believe in the Turnbull government but needed to see the Prime Minister stand up to critics and stand up for its principles.
"It's time for Malcolm to just take a stand and I think the electorate is looking for him to show leadership on so many issues. I think the the electorate would cut him a lot of slack for doing so," he said.
Addressing a climate sceptics meeting in London on Monday, Mr Abbott railed against climate change dogma, suggesting it had done more harm to the world than global warming itself, which was probably a net benefit because more people died from cold snaps than heatwaves.
A former close ally of Mr Abbott, Mr Frydenberg rounded on his former boss's London comments.
"We take our advice from the scientific experts. We believe we need to reduce our emissions. That is why Tony Abbott signed up to the Paris agreement. I point out that, at the time, Tony Abbott said that the agreement Australia struck at Paris was a definite commitment and that it was economically responsible and environmentally responsible. They were Tony Abbott's words," he said.
But while Mr Turnbull was being urged to stand up to Mr Abbott, another longstanding MP, speaking on background, said Mr Abbott had a right to speak out because there was a multiplicity of views on climate change across the party and the community, and because, "there is always going to be a response when you tear down a first-term prime minister".

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