Climate crisis – some final thoughts

Climate crisis – some final thoughts

Back in June 2019, we began our series of blog posts on the climate crisis. Now that we have examined each of the PESTLE categories, it’s time to reflect on developments since we began and, overall, the range of outcomes that may yet come about.  We all know there is no one inevitable future, and predicting outcomes 30, 50, 100 years ahead can never be a precise science. But with the climate the uncertainties are immense and cover a very wide range of issues.

The Environmental issues are obviously most fundamental. The last six months have seen so many signals of environmental change that they are now impossible to ignore:

      • The unprecedented scale of bush-fires in Australia burnt through about 12 million hectares, an area about 1.5 times the size of Tasmania, with massive effects on wildlife: estimates of half a billion animal deaths and some species thought to be in danger of extinction. The smoke drifted to New Zealand where it contaminated glaciers, causing them to melt faster and creating another feedback loop.
      • Fires in California have been bad but through proactive planning and investments firefighters were successful in mitigating and fighting, blazes in extreme weather conditions
      • Ocean temperatures are repeatedly hitting record highs (the chart in the reference article is terrifying)
      • The Thwaites Glacier in Antarctica is melting fast and has already shed ice accounting for about four percent of global sea level rise. The entire Antarctic ice sheet is melting nearly six times faster than 40 years ago.
      • The UN Biodiversity chief warned of mass extinction of wildlife and destruction of life-supporting ecosystems.

However, some countries see benefits in global warming.  Russia identified “positive effects” such as decreased energy use in cold regions, expanding agricultural areas, and Arctic navigation with easier access to more oil reserves – another feedback loop. In Argentina, the government said the heavier summer rains seen in central Argentina have allowed agriculture to move westward into areas not previously considered productive.

Predicting the extent to which anthropogenic greenhouse gas emissions lead to global warming – and then to extreme weather events – is difficult.  The most in-depth work by the IPCC is careful to give a range of forecasts with confidence levels. A review of their models since the 1970’s however shows that they were “generally quite accurate in predicting global warming in the years after publication.” More recently some have suggested that the models don’t consider feedback loops and tipping points well enough and are consequently under-estimating the effects. Others argue that the IPCC “business as usual” case (predicting a 5°C rise) is too extreme because of reduced coal use, though we are still “on course for around 3 °C of warming” – which most think would be bad enough.

Technology continues to advance and remains the best hope for averting the worst effects of the climate crisis.  Costs of renewable energy continue to fall and will soon match those of fossil fuels. Electric vehicles are becoming more common – including even electric aircraft. Carbon Capture and Storage is becoming more viable too.  The key issue, however, is scale: can these technologies can reach critical scale in the timeframe required? Is their scalability limited by system limits, such as the availability of rare earth metals?

The Centre for Alternative Technology argues that achieving net zero emissions by 2050 can be achieved with the technology we have today.  Demand should be reduced:

      • Buildings: having high ‘Passivhaus’ standards for new buildings, retrofitting all existing buildings, and improving internal temperature control could reduce energy demand for heating by around 50%.
      • Transport: reducing how much we travel and changing how we travel – with more use of public transport, walking, cycling, switching to efficient electric vehicles and two thirds less flying – could reduce energy demand for transport by 78%.

and then the two-thirds of energy demand that is electricity can be met by renewables, and the remaining third by carbon neutral synthetic fuels.

The Economics of climate change may well be the key driver of change – renewables becoming cheaper than fossil fuels; electric vehicles at least price comparable with internal combustion. Arguments about the cost of mitigation being less than adaptation (as in the Stern report) haven’t had much success, but now we are seeing arguments in favour of adaptation rather than recovery.  The concern then is of “climate apartheid” where the rich countries can avoid the effects while the poor ones suffer.

When he was Governor of the Bank of England, Mark Carney argued that banks, building societies and fund managers needed to be aware of the risk of “stranded assets” – fossil fuel reserves valued at today’s rates, when in a zero-carbon world they were close to worthless. His appointment as economic adviser to the UK COP26 talks may be a positive signal.

Banks are increasingly coming under pressure from lobby groups to stop funding the fossil fuel industry. The decision by BlackRock – the world’s biggest asset manager –  to exit investments that “present a high sustainability-related risk” has been welcomed by environmentalists. In practice so far this only means divesting $500m from coal-related businesses; it still holds a 6.7% stake in ExxonMobil, 6.9% in Chevron, and 6% in the mining company Glencore, and substantial other tracking fund investments.

The IMF also warned that the climate crisis will affect economic growth. The increased frequency and intensity of weather-related disasters already endangers health and economic outcome, not only in the directly affected regions, but in others by contributing to cross-border migration or financial stress (for instance, in the insurance sector).

We considered the Societal and Political effects together. High profile actions by Extinction Rebellion and Greta Thunberg have raised awareness but may be limited in effect to already committed activists. Comments from the likes of David Attenborough may bring the issue more into the mainstream.  More politicians are talking about a “Green New Deal”, though there is resistance to the idea notably in the US, Brazil and Australia.  Media groups are also adding their weight to the debate. Copying action by a Swedish newspaper, The Guardian is refusing to take advertising from fossil fuel companies.

The World Economic Forum’s survey of global risks, as identified by business leaders, politicians and economists, put environmental issues at the top of its lists

and provided a platform for a debate broadcast worldwide.

How quickly activists win an argument for the need for action, and how quickly governments respond, is critical. The trend is not all in one direction, as the gilet jaunes and rioters in Chile showed – people’s personal economic circumstances may be a more powerful political force than their concern about weather events 100 years away.

Finally, we considered how the Law and Regulation might impact climate change mitigation. The first efforts at using the law to compel governments to act have been patchy – successful in the Netherlands (and by implication at least across the EU), less so in the US.  Regulation will be the practical way in which progress is made – for example banning the sale of petrol and diesel vehicles by 2035.  Regulation on buildings insulation could similarly bring down demand for energy, if there were the political will to do so.

So, there is uncertainty in many dimensions – there is no one inevitable future.  If we were to build a scenario cross, we might choose to examine high vs low levels of societal/political engagement; and high vs low levels of economically viable technology options.  Only one of the consequent four scenarios would save the planet – if we were lucky.

So where does this take us? Into – as SAMI’s tagline says, “uncertain times”. Governments were always going to take action too late – electoral cycles and 100-year projections do not mix – but the clear rise in damaging extreme weather events is now too obvious even for them to ignore. There will continue to be a fightback from old economy states with powerful lobby groups on behalf of traditional manufacturing and fossil fuel producers; and in the developing world, the need for energy will continue to drive the demand for coal.

But it is not impossible we are seeing the tipping point into sustainability – charismatic leaders like Greta Thunberg and David Attenborough, combined with regular shocking news around the world, will drive demands for change at exactly the moment that change is possible in renewables, electric vehicles and the like. For all our sakes, we must hope that our futures are within – or at least border, Scenario 4.

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Written by Huw Williams, SAMI Principal and Jonathan Blanchard Smith, SAMI Fellow and Director

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

SAMI Consulting was founded in 1989 by Shell and St Andrews University. They have undertaken scenario planning projects for a wide range of UK and international organisations. Their core skill is providing the link between futures research and strategy.

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