Thursday, April 30, 2015

Corporates Want to Save the Planet: Now They’ve Got a Plan, Thanks to the WWF and Friends

Monica Richter
Monica Richter
by Willow Aliento, The Fifth Estate:

[ED: Opinions on this article would be very much appreciated].

WWF-Australia has launched a program to engage corporate giants such as Westpac, Nestle Oceania and IKEA in contributing to a zero carbon economy by mid-century, powered by 100% renewable energy.

The Australian launch of the “Road to Paris and Science Based Targets” initiative tomorrow (Friday) in Sydney will begin the conversation on how the corporate world can engage with global climate change initiatives and develop practical pathways towards zero carbon.

WWF’s business engagement manager Monica Richter said the initiative was the result of an international collaboration between WWF, CDP, the UN Global Compact and the World Resources Institute.

Ms Richter said the initial launch would bring together firms across sectors including property, major retailers, banking and consumer goods for a “very broad conversation” with a focus on peer-to-peer learning and information exchange.

She told The Fifth Estate the challenge lay in setting targets that ensured the economy moved to a zero carbon economy by mid-century in order to keep climate change within the two degree warming limit. “Part of that is moving towards 100% renewable energy,” she said.

Finding the opportunities to increase renewable energy purchasing

This was the basis of the second initiative, a corporate renewable energy buyers group, which WWF was soon to launch in Australia. A similar initiative in the US by WWF, Rocky Mountain Institute and World Resources Institute has so far attracted at least 24 major corporations including IKEA, Unilever, Adobe, HP, 3M, Johnson and Johnson, Cisco, Bloomberg, Facebook and Volvo.

The US collaboration has identified key principles the corporations believe will support the greater uptake of renewable energy. These include:
  • greater choice in procurement of renewable energy
  • cost-competitiveness between traditional and renewable energy tariffs
  • access to longer-term, fixed-price renewable energy
  • increased access to third-party financing vehicles
  • standardised and simplified processes, contracts and financing for renewable energy projects
  • opportunities to work with utilities and regulators to expand choices for buying renewable energy
The corporations also seek access to projects that are new or help drive new projects in order to reduce energy emissions outside of their business.
Ms Richter said the Australian network would initially have peer-to-peer discussions facilitated by WWF that would bring together people from different sectors to look at the business case for purchasing renewable energy, and practicalities such as contract negotiation, providers and choices.
The network will also identify and discuss the barriers.

“There is agreement on the barriers,” Ms Richter said. “We will be looking at areas of collaboration and opportunity, whether it is a group of companies in the CBD jointly investing in a renewable energy project, or something like a bulk purchase arrangement via a power purchase agreement,” Ms Richter said.

“The aim is to facilitate a conversation to look at renewable energy beyond the [Renewable Energy Target]. The feedback I have been getting is companies want to collaborate.”

She said while uncertainty around the RET had impacted on jobs and investment, this initiative was one way of being proactive and constructive.

The organisation is also actively assisting with the development of the business case for individual projects. Brisbane Airport is one of them, and Ms Richter said renewable energy was on the cards for the airport as it wants to be “the greenest airport in Australia”.

The property supply chain can do its bit

Ms Richter recently spent 12 months away from her Sydney-based WWF office working on supply chain issues across hard and soft commodities. The organisation internationally is looking to such issues as a means of fulfilling its core mission of conservation of species and reducing human societies’ ecological impact on the planet.

“That’s where our market transformation work around supply chain and renewables fits,” Ms Richter said. "If we improve land management, we protect the places that we love. And climate change is equally a risk [to places such as the Great Barrier Reef].”

In Australia the property sector should be looking at its supply chain for materials such as cement, timber, glass and steel in terms of negative impacts and positive opportunities, she said. “[The property sector] is only just starting to come to terms with supply chain.”

That also included aspects such greenhouse gas emissions and low-VOC materials in the supply chain.

On steel

One material that is currently being focused on is the supply chain of structural steel. WWF is involved with a steel stewardship forum comprised of a number of stakeholders, including Bluescope, on the development of a standard for responsible steel.

One of the recent innovations that could contribute to such a product is a CSIRO project in Victoria that piloted the use of biochar to replace 50 per cent of the coking coal used in the steel-making process.

Ms Richter pointed out that solid wastes from the urban environment could be converted to biochar and biodiesel via pyrolisis. The biochar could be used for making lower-emissions steel and fed back into the built environment, and airlines such as Qantas and Virgin were looking at ways to use biodiesel in jet fuels to lower emissions from air travel.

While the federal government has cut funding for the CSIRO research, Ms Richter said it was a clear example of how new industries could be created and how the property sector could take a more integrated view of materials.

“Different industry sectors need to be doing their fair share,” she said.

Saturday, April 25, 2015

A Community Resilience Take on The Great Transition

The 2015 update on planetary boundaries
The 2015 update on planetary boundaries
by Richard Heinberg, originally published by The Great Transition Initiative,

A review of Bounding the Planetary Future: Why We Need a Great Transition by Johan Rockström.

“Planetary boundaries” research constitutes an important advance in our ability to identify and quantify the components of global overshoot.

Permit me to suggest that all presentations on planetary boundaries should include a discussion of Liebig’s Law - an ecological truism that can be boiled down to “a chain is only as strong as its weakest link.”

We don’t have to wait for all nine boundaries to be transgressed before global calamity threatens; all it takes to shred the ecosystem web is for one boundary to be breached far enough, long enough. Seen in that light, the fact that four out of nine identified boundaries are already far behind us should be cause for profound concern.

Nevertheless, Johan Rockström’s exposition follows the familiar and necessary formula: industrial civilization is propelling us toward planetary collapse, but there is still time to change civilization’s operating system so as to ensure survival and well-being for everyone, even as population continues to grow.

I have used that formula in essays and lectures any number of times, and, each time I do, I catch myself feeling just a bit disingenuous. Yes, as public intellectuals, it is our job to prescribe the medicine we think will improve the patient’s (i.e., civilization’s) condition. But is our prescription really capable of curing the disease?

Let’s face it: our patient’s condition is worsening. Further, we have seen cases like this before (i.e., there have been previous civilizations that overshot their environment’s carrying capacity), and in all instances, the outcome was dire.

Nevertheless, following the discursive formula, a hypothetical treatment is proposed, consisting of energy substitution, massive resource efficiency improvements, wealth redistribution, and global governance; though it has never been tried, it seems to be our only hope.

A new school of environmentalist thought - sometimes labeled “doomerism” - holds that it is too late for such nostrums.

The patient has no interest whatever in taking our medicine (sustainability proposals have been tabled at least since 1972’s Limits to Growth, but global elites have shown themselves completely uninterested in any course of action that does not promise continuing GDP expansion), and the disease is too far advanced (we have set in motion self-reinforcing geophysical processes that cannot be reversed).

The most extreme doomers insist that near-term human extinction is now assured. Forget trying to save civilization, they say; think planetary hospice instead.

Doomerism has the virtue of willingness to look our predicament squarely in the face without flinching. But it has been criticized for underestimating the likely role of balancing feedbacks within both the environment and human society; further, it disempowers both its purveyors and its audience, who have a tendency to adopt an attitude of cynical, resigned apathy. Is there a third approach?

It seems to me we could start with a recognition that crisis is now assured. That does not mean near-term extinction is inevitable, but it does mean that this century will almost certainly see ecological, economic, and social upheaval on an unprecedented scale. The doomers are right in saying that it is late in the game, but wrong in simply giving up.

An alternative strategy would be to anticipate crises and use them to advantage. Such a crisis-led strategy would first seek to provide ways for people and institutions to adapt to coming changes in ways that create more community resilience and that meet basic human needs more sustainably over the long run.

That would almost certainly imply different adaptive tactics for societies in varying stages of industrialization (or de-industrialization, as the case may be).

A secondary strategy would be to widely and consistently publicize an ecological explanation for inevitable crises (overpopulation, depleting resources, pollution) that could at least partly reduce the social tendency to find scapegoats for declining economic conditions. This could avert a great deal of unnecessary conflict.

Crisis can be a teacher. All indigenous human societies eventually learned self-restraint, if they stayed in one place long enough. They discovered through trial and error that exceeding their land’s carrying capacity led to awful consequences.

That’s why these peoples appear to us moderns as intuitive ecologists: having been hammered repeatedly by resource depletion, habitat destruction, overpopulation, and resulting famines, they eventually realized that the only way to avoid getting hammered yet again was to respect nature’s limits by restraining reproduction and protecting other forms of life.

We have forgotten that lesson, because our civilization was built by people who successfully conquered, colonized, then moved elsewhere to do the same thing yet again - and because we are enjoying a one-time gift of fossil fuels that empower us to do things no previous society ever dreamed of.

We have come to believe in our own omnipotence, exceptionalism, and invincibility. But we have now run out of new places to conquer, the best of the fossil fuels are used up, and the environmental consequences of burning them are starting to catch up with us.

We can learn from crisis; cultural anthropology shows that. But, in this instance, we need to learn fast, and perhaps some organized effort to aid that process would be well spent. Planetary boundaries discourse could help explain to frightened masses why the world seems to be falling apart around them, while community resilience-building could help them adapt to changed conditions.

For the time being, most environmental activists will (and probably should) continue publishing new reports saying, “If we don’t change policies, terrible things will happen,” and, “If we do change policies everyone can live in peace and sufficiency.”

I am merely suggesting that some of us might also be thinking strategically about what to do if world leaders do not adopt policies to drastically cut carbon emissions and redistribute wealth. Crisis-led community resilience seems to be the logical fallback plan.

Friday, April 24, 2015

10 Things We Learned … About Abbott’s Contempt for Climate

© Guerito 2005
(Photo credit: Wikipedia)
by , Renew Economy:

April has been an extraordinary month for climate and clean energy policy in Australia. Even more extraordinary than the previous months.

As the rest of the world accelerates their individual and collective push towards globally agreed climate targets, Australia is stubbornly refusing to budge, or even to acknowledge that there is an issue at all.

In the Orwellian world of the Abbott government, coal is good and has a great future, even when analysts call for nearly all reserves to be left in the ground; a cut in the renewable energy target is not a cut at all, it is actually an increase; and spending one-quarter of its carbon budget on just 15% of its target is not so much a failure as a resounding success and a blueprint for the world to follow.

So, to help with your understanding of the issues at hand, here’s a brief summary.

1. Direct Action in action

Thursday delivered the results of the first auctions by the government’s Emissions Reduction Fund, the centrepiece of the Direct Action plan. The first auction blew one quarter ($660 million) of its total budget ($2.55 billion) to buy just 15 per cent of its 2020 target (nearly half the abatement “bought” will not be delivered until after 2020).

Analysts such as The Climate Institute and Reputex say it is proof that the ERF will not meet its targets, is incapable of meeting any more ambitious target, and will not send a price signal for decarbonisation.

Labor is even more damming, dismissing it as a “slush fund” and noting that the $14 price is higher than any emissions trading scheme. Greens leader Christine Milne said it was a “sham”, and “just an excuse to do nothing about global warming.” While the government is paying one lot to plant trees, she said, it is opening the way for others to cut down forests.

2. The Government response

Hunt, a former university debater of note, and arguing for the positive, was undeterred. The first auction was a “stunning success”, he insisted, and a triumph that would provide a blueprint for the world to follow (an echo of his comment last year that Australia’s climate policy was a great “gift to the world.”

This, despite news this week that most of the world’s major economies had lodged formal queries with the UN, which, broadly summarised, amounted to …”This Direct Action program, wtf?”
Hunt forged on.

The abatement price, he said, was not double the price of a market scheme, it was one/90th the cost of labor’s $26 carbon price (we asked them to explain this but they didn’t, but it probably came from counting costs - $15 billion - not revenue).

Hunt said the European carbon price would achieve just 1 per cent abatement from now till 2020 (well, that would be because the targets have already been largely met).

3. Renewable Energy Target

The government wanted it removed, and then it wanted it cut. After a more than six-month long impasse following the Warburton Review, Labor has (reluctantly) suggested the 41,000GWh target be cut to 33,500GWh (and raised again if they get elected).

The Abbott government is not having a bar of it, insisting on a further cut to 32,000GWh. This, say Ian Macfarlane and Hunt, is actually not a cut at all, it’s an increase! Hooray! Huh?

That’s because the renewable energy target was so successful it was going to deliver way more than the “at least” 20 per cent it was designed to. So that makes the scheme an abject failure, because it was working beyond expectations. And if you don’t understand that then you are all a bunch of sillies. 

4. Climate targets

The Climate Change Authority, the independent body that the Abbott government wishes was neither independent, nor a body, delivered its assessment of where the country’s emissions targets should be.

It has already said that the 5% target for 2020 is pathetic, and should be 19%. Now, it says the 2025 target should be 30% and the 2030 could be anywhere from 40-60%.

Hunt is not keen, saying such a target would be “onerous” - presumably for Direct Action, and the government’s budget. The mining council says the world, or at least the thermal coal industry it lobbies for, would come to a halt if such targets were imposed. 

5. Carbon budgets

Hey, by a stroke of coincidence, that is exactly what most experts say should happen. If the world is going to meet the 2°C target, then it has to realise that it cannot go on emitting ad infinitum. Hence, the concept of a carbon budget.

New research this week suggested that Australia would have to leave 90% of its coal reserves in the ground as part of its share of the global carbon budget. Australia’s response? Introduce a “safeguards” mechanism that allows emitters to continue emitting, and even increase their emissions, without penalty. 

6. Don’t mention the 2°C target

Bjørn Lomborg (right) with federal trade minister Andrew Robb

The best way to protect against action to achieve a 2°C target is to not mention a 2°C target. This, the government has managed to do in its own discussion paper about the targets, that it will take to the Paris climate talks which are designed to agree on collective action to meet a 2°C target.

The 2°C target was also not mentioned by Australia at the Major Economies Forum, hosted by France, because it didn’t attend. The scenarios entertained by the government point to global warming of 4°C, which would be a bit of a sweat for a PM in lycra.

The energy white paper made the same assumption, and the intergenerational report got around the whole issue by not mentioning it at all, which means it doesn’t have to try and calculate messy concepts such an intergenerational debt, unless it’s about Medicare and pensions.

7. Independent advice

So, where is the government getting its advice? From people like Bjørn Lomborg, who is to receive $4 million to establish his notorious think-tank at the University of Western Australia.

Lomborg’s recipe for success: stop solar, push nuclear, pretend climate is not an urgent issue. Hunt, though, is full of praise, noting Lomborg is a very nice man who once compiled a report with a bunch of like minded people that concluded that emissions trading schemes are not very good. 

8. Senate wind inquiry

The Abbott government wants to “end the uncertainty” about renewables by striking a deal on the RET with Senate cross benchers. But they have been very busy recently, along with some Coalition Senators, nodding gravely while clearly distressed residents near wind farms explain why they can no longer complete Sudoku puzzles, and have to lift their dog into the ute.

Senator Bob Day, who runs this show, says the testimony of impacts to humans and animals is “harrowing”, and he is very happy to let the renewable energy industry stew in its own juices for another six months while he comes up with a plan for what to do about it. 

9. Technophobia

Or should it be the fear of new technology, apart from those that are “over-the-horizon”. Joe Hockey doesn’t like wind farms - at least, he is offended by the sight of them - and Industry minister Ian Macfarlane says he is not a fan of electric vehicles, choosing instead to hop into a fuel-cell vehicle and declare it to be the “perfect melding of industry and science,” and deliverer of a better future for all.

Macfarlane, as we have noted in the past, is at his most comfortable when championing technology that is unlikely to disrupt the status quo any time soon. Hence his endorsement of hydrogen fuel cell vehicles over EVs, and his well documented admiration of Carnegie Wave Energy’s CETO systems - a fine technology but, unlike solar and wind, not one that will bother the incumbents in the next decade.

It also explains the Coalition’s support for ARENA (the $3.2 billion Australian Renewable Energy Agency) - which grants funds to R&D and admirable early-stage projects such as Carnegie’s - but not for the CEFC, which grants money for commercialisation technology. The US Republicans have a similar approach. Bjørn Lomborg is their most brazen advocate.

10. Eco-charities are bad

While the government is keen to hand over money to like minded folks like Lomborg, it has pulled funding from un-like-minded folks such as the Climate Commission. And it wants to stop other people from funding people who may disagree with its environmental agenda.

Hence an inquiry into the tax-deductible status of environmental groups who, shock horror, have dared to oppose government policy. If you can’t beat ‘em, de-fund them.
So, let’s just summarise. If something is a success, like the renewable energy target, it’s a failure. If something is a failure, like Direct Action, then it’s an outstanding success. If something is cheap, like a market price for carbon, then it is expensive. If something is more expensive, like purchases by the Emissions Reduction Fund, then it is really cheap. If something is bad, like coal, then it is good for humanity. And if something is good, like wind turbines, it is not just bad, it is offensive.

If a target can be met, like 41,000GWh of renewables, or even 33,500GWh, then it can’t. And if a target can’t be met, like 5% emissions reduction by 2020 with Direct Action, then of course it can. And if you are a politician in Australia, then … the next election will be interesting.

Thursday, April 23, 2015

‘Leave it in the Ground': The Stark Message for Coal

rsz_bxy55gzq-1429613134by , Renew Economy:

In the same week that the Abbott government came under international pressure to lift its game on its climate policy and emissions reduction targets, a new report has warned that 90% of the nation’s coal reserves must stay in the ground - or risk blowing the world’s carbon budget.

Released on Thursday, the Climate Council Report - Unburnable Carbon: Why we need to leave fossil fuels in the ground - argues that new investment in coal, oil and gas need to be reduced to zero as soon as possible in order to keep global temperature rise below the internationally accepted 2°C warming threshold.

This is because, in order to stay within the world’s carbon budget - the well accepted, scientifically-based method to determine how much carbon humanity can “spend” - the majority of the world’s fossil fuel reserves must stay in the ground: 62% of it, for just a 50% chance of meeting the 2°C limit; and 77% of it for a 75% chance.

These figures are not new, but they bear repeating. Particularly to Australia, when you consider that for coal alone, 88% of global reserves are currently considered unburnable. As the report notes, this translates to over 90% of Australia’s coal reserves being redundant, even under the most generous carbon budget.

“When it comes to coal use, it’s reached a point where we really have to tighten our belts,” former BP Australasia president and Climate Councillor Gerry Hueston said. “New coal development in Australia doesn’t add up anymore economically, socially or environmentally.”

Of course, the Abbott government’s energy and environment policies are still nowhere near to factoring in this reality.

Mind you, they’re not the only ones with their heads down a coal mine. A report in the Guardian this week noted that the carbon locked up in coal, oil and gas reserves owned by the world’s biggest fossil fuel companies had grown by 10% in the last five years, despite the repeated warnings that most existing reserves cannot safely be burned.

And if these companies and the governments which support them are “skeptical” about the science, they’re ignoring the current economic wisdom, too.

Earlier this week, global banking group HSBC released just the latest report warning that fossil fuel assets will become “non-viable” or “unburnable” - not just because of climate action, but also due to changing economics and the impact of new technologies, such as solar and storage.

Meanwhile, in Australia huge new coal mining and export developments, like in Queensland’s Galilee Basin, are being waved through by both federal and state governments, while Canberra continues to push the line is that coal is “good for humanity.”

Of course, that is precisely the opposite message to that which scientists have been trying to get across. As the report notes: “A 2°C rise in global temperature will have serious impacts on the lives and livelihoods of many people world-wide, and could trigger major changes in the Earth System.”

Just this week, Norwegian researchers have come across some of the “largest waves ever”, generated as melting ice in polar regions results in more open water - creating a feedback loop that could doom the Arctic ice cap.

Here in Australia, NSW has this week endured nearly two days of cyclonic winds and torrential rain that has claimed three lives and left 200,000 homes without power, in the latest “once-in-a-decade” storm.

“We are already at a global temperature rise of almost 1°C and climate change is making many extreme weather events in Australia significantly worse,” said report author and Climate Council Councillor Professor Will Steffen.

“A 2°C rise in global temperature will have very serious impacts on people worldwide, and could trigger major changes … like the eventual melting of the Greenland ice sheet. “If we want to meet our international obligations to keep below the 2 degree target, not only can we not develop any new coal mines but we also have to have a planned phase-out of our existing fossil fuel extraction and usage.”

To this end, the report finds that replacing Australia’s ageing coal fleet with modern renewable energy capacity would help us meet our share of the carbon budget with little or no economic cost - in fact, probably with economic benefits.

“If we want a decent chance (75%) of meeting the 2 degree target, we will blow through the carbon budget in less than two decades at the current rate,” he said. “Energy policies that support substantial fossil fuel use, such as government investment in new coal infrastructure, are simply inconsistent with tackling climate change.”

Wednesday, April 22, 2015

Keep Wilderness Free of Roads

Keep wilderness free of roadsby Zoltan Kun, European Wilderness Society:
A recent article in New York Times calls the attention to the different view of economists and ecologists on roads. 
While roads are seen as important tool to economic growth, they often open a Pandora’s box of environmental evils.

There are many examples, which proves that human infrastructures open up the opportunity for misusing and abusing our natural resources. The article in New York Times lists two important examples of roads leading to environmental destructions:

95% of all forest destruction occurs within five kilometers of a road in the Amazon region. The BR-163 highway that cuts deep into the heart of the Amazon is visible at night - even from the Moon - as a thousand-kilometer-long slash of forest fires. This is why our European Wilderness Quality Standard considers light and noise pollution as important indicators of wilderness character!

Opening up tropical forests in the Congo Basin had largely contributed to gunning down two-thirds of all forest elephants in the last decade. A road-building spree by industrial loggers has inadvertently promoted a massive influx of poachers and an epic slaughter of forest elephants, killed for their valuable ivory tusks. So wildlife also needs wilderness free of roads.

Taking the above into account, our Society wants to highlight an important initiative entitled Roadless Area Initiative. The Society for Conservation Biology launched the  Roadless Areas Initiative, which “represents an innovative complementary approach to the traditional mitigation and compensation measures in road ecology.

One of the new aspects is the No-Net-Loss of unfragmented lands. Additionally, it combines conceptual considerations, including ecological theory and conservation policies, with practical aspects and methodology developed to identify areas free of road disturbance.”

In short: in order to preserve wilderness for future generations, we must keep our land free from roads.

Tuesday, April 21, 2015

Fossil Fuels to be Stranded by Economics, Innovation and Climate

Image result for fossil fuels
by , Renew Economy: 

HSBC says fossil fuel companies, or some of their assets, will become “non-viable” or “unburnable”. 

That’s not just because of climate action, it is also due to changing economics and the impact of new technologies, such as solar and storage.

Fossil fuel companies face an increasingly “acute” risk of becoming “stranded assets”, as a result of climate change policies, changing economics such as plunging commodity prices, and the impact of new technologies such as solar and storage.

That’s the assessment of global investment bank HSBC in a new report titled “Stranded Assets, what next?” The report notes that the concept of stranded assets has been developed because climate science and the development of carbon budgets would make those companies, or some of their assets, “non- viable or unburnable.”

This risk is now being accelerated by a number of factors. One is the dramatic fall in energy commodity prices, in particular oil benchmarks, which means that many fossil fuel assets and fossil fuel reserves are becoming increasingly unprofitable and uneconomic.

And there is also the threat from changes to technology. This includes gains in energy efficiency, and other technology drivers such as solar and battery storage that increase supply and reduce demand from fossil fuel assets.

“Climate science and the launch of a carbon budget fuelled the first wave of discussion around the risk of stranded assets,” the HSBC analysts write.

“The concern was that assets would be stranded by climate change regulation, which has already been witnessed to an extent, for instance with coal-fired power in some geographies.

“Oil price falls turned the debate from policy to economics, as many unconventional oil sectors, such as oil sands, shale oil and Arctic drilling, have become loss-making in a relatively short period of time.

“We expect innovation in efficiency and technological advancements, including in renewables, battery storage and enhanced oil recovery, to alter the energy mix and pricing in the energy economy, potentially resulting in further stranding of high carbon and high cost fossil fuels.”

HSBC notes that climate policies have been accompanied by tough new regulations, in the US and Europe with the EU Plant Combustion Directive and the US Clean Air Act, which have targeted coal-fired power generation, and also in China, as it seeks tor reduce levels of pollution.
hsbc carbon budget
The carbon budget, which would limit the amount of fossil fuels to be burned, is becoming an increasingly important measure as the world moves towards a global climate agreement in Paris.

The plunge in oil prices have given producers a choice between operating and taking losses in the hope that prices will recover, or cut losses and shut down facilities. Oil types such as oil sands and shale oil break even at $US80 per barrel or higher and the market value of oil and gas companies has dropped by over $US580 billion in the last nine months.
hsbc oil costs
“The ability and timeframe to withstand losses will depend on the type of producer (e.g. state owned or private) and diversification of reserves across the cost curve,” the report says.

“Where the decision is taken not to produce from a proven reserve or to cease production which was underway, then the asset can be said to be economically stranded - non-viable given the current energy economy. Whether assets are stranded permanently or only in the short term depends on the costs of mothballing versus abandonment.”

HSBC notes that renewable energy costs have come down and contrasts the trend with oil, where harder-to-access reserves are more costly to develop.

“If this trend continues or were to accelerate dramatically, this would trigger an economically driven decarbonisation of the power sector, the section of the energy economy which contributes most towards carbon emissions,” it writes.

HSBC notes that onshore wind is already competitive with fossil fuels in some regions and its costs are still coming down, driven by technological advances including the size of wind turbines, cables and offshore substations.
hsbc solar costs
Solar prices have also fallen quickly in recent years and further cost falls in renewables would be positive for more widespread adoption. “In our view, increasing the share of renewables in the energy mix also largely separates the cost of energy from the volatility of energy commodity markets, which is attractive to energy importing nations in particular. “

But it notes that the energy economy could be completely transformed given a dramatic advancement in battery technology, such as more efficient use of lithium or advances in aluminium battery technology.

“Storage also has important implications for the transport sector. Currently, batteries are an expensive and bulky component in electric vehicles (EVs). A step-change would clear an important hurdle in their ability to take significant market share from traditional petroleum-burning engines, would significantly change the demand profile for oil (the transport sector currently uses oil for 95 per cent of its energy). “

Another interesting technology the report cites is enhanced oil recovery, where new technologies allow more than 60 per cent recovery from an oil well. This includes gas injections involving pumping CO2 from industrial processes into wells.

Up till now, this has been very expensive. But should it become cheaper, then this would in turn increase the stranding risk for higher breakeven oil categories.

So what should investors do about the risk of stranded assets?

HSBC argues that identifying assets most at risk from stranding would be the first step in devising an investment strategy. Then there are two options.

One is divesting fossil fuel stocks. This removes assets but dividend yields may suffer and portfolios could become more concentrated.

The second option is to hold onto stocks, allowing investors to engage with companies and encourage best practice. But the flip side here is that there are reputational as well as economic risks to staying invested.

“Coal assets face the greatest regulatory risks, given the high associated emissions and substitution possibilities. Oil reserves with a high breakeven oil price are also at risk - oil sands, shale oil, Arctic and some offshore assets".

Explainer: The Models That Help Us Predict Climate Change

Image result for climate prediction models
by Kamal Puri, Australian Bureau of Meteorology; Aurel Moise, Australian Bureau of Meteorology; Robert Colman, Australian Bureau of Meteorology, and Tony Hirst, CSIRO, The Conversation:

What will the weather be like next week, next season, or by the end of the century? In the absence of a second Earth to use in an experiment, global weather and climate model simulations are the only tools we have to answer these questions.

Having access to this information is vital for the community, government and industries to make informed decisions - this includes sectors like tourism, natural resource management, agriculture and emergency services to name a few.

Weather and climate may never be completely predictable, but the science has now come far enough for us to be more confident when it comes to knowing whether it will rain this afternoon and for projecting what Australia’s climate may look like many decades in the future.

We’re also getting better at predicting the next season or two, so that we can be more prepared to respond to the extremes in weather like cyclones, heatwaves and flooding rains that already impact Australian communities.

Climate modelling from CSIRO on Vimeo.

Looking ahead

General Circulation Models (also referred to as global climate models) are built using mathematical representations of the dynamic Earth system. Their fundamentals are based on the laws of physics including conservation of mass, energy and momentum.

These models represent, in three dimensions, the large-scale circulations of the atmosphere and ocean, such as the progression of high and low pressure systems and large-scale oceanic currents. Models also include the cryosphere (snow and sea ice) as well as the land surface.

Climate models help us to understand our present weather and climate, and also allow us to consider plausible future scenarios of how the climate might change. They generate simulations to tell us what happened or what might happen under a range of different scenarios, such as for greenhouse gas concentrations .

Although models used for weather prediction and climate applications share the same fundamentals, they are a little different.

Weather models are run at higher spatial “resolution”, and incorporate the very latest set of satellite and ground measurements using advanced data assimilation methods. This defines the starting point from which the model predicts the evolution of weather events over the next week or so.

Climate models do not seek to forecast the exact “weather” on a particular day months or years ahead (which is impossible), but rather predict the “statistics” of the weather (i.e. the “climate”), such as the average conditions, over a season or trends over decades.

Climate happens on a regional scale Marcus Greig/AAP

While General Circulation Models simulate large scale Earth system processes, there are some processes, such as cloud formation and rainfall, which occur at small scales and make changes in the Earth system difficult to predict perfectly.

Despite these challenges, continuous improvement of models (e.g., higher resolution, better representation of physical processes and improved use of data particularly from satellites) over the past three decades has improved our ability to predict weather and to make climate projections.

There are now over 40 global climate models run around the world. These modelling groups use a common set of greenhouse gas and aerosol scenarios, called Representative Concentration Pathways. This co-ordinated approach permits ready comparison of projections across the many thousands of model simulations for which data are available.

Likewise, weather prediction centres verify daily weather forecasts using internationally defined metrics that enable ready comparison of predictions made by the centres.

The Representative Concentration Pathways fall into three categories:
  • high: greenhouse gas emissions continue to rise over the 21st century without abatement, with a decline in aerosols
  • intermediate: greenhouse gas emissions peak then decline
  • low: greenhouse gas emissions peak quickly and then decline rapidly to very low values (a strong mitigation case).
No matter which model or greenhouse gas scenario we use, a substantial and robust warming signal is evident in the projections of future climate, larger for high emission scenarios. Models also project differences in the timing and magnitude of warming and a range of changes in rainfall and other elements.

So rather than one single climate future, we need to consider a range of possible futures.

Which models are best?

All climate models go through rigorous evaluation to determine the extent to which they can represent daily weather, and past and current climate.

There are many tests carried out to assess a climate model’s performance. For example, scientists can assess how well the model simulates historical climate (such as average Australian rainfall over the last 20 years), or the model’s ability to represent or predict specific features such as monsoon onset, El Niño, or the paths of tropical cyclones.

Researchers investigating the effects of future climate change might decide to select a subset of models based on performance. However, selecting the “best” model or subset of models depends on what performance measure you use.

For example, recent evaluation of climate models for Australian conditions showed that there is no fixed “subset” of climate models that can represent all important aspects of climate better than simply using the full set of available models.

Climate projections often come with a measure of confidence, based on physical understanding, robustness of model projections, and consistency of projections with observed trends or past changes.

The performance of climate models with respect to past climate is a critical factor in establishing our level of confidence in future projected changes. The confidence ratings provided for Australia’s latest projections are a novel and useful feature of assessing the range of projected changes in Australia’s future climate.

Australia’s world leading climate model

Time series for Australian average temperature for 1910–2090 as simulated in CMIP5 models, relative to the 1950–2005 mean. Bureau of Meteorology observations are shown in thick brown and a series from a typical model (ACCESS1-0) are shown into the future in light purple. The shading represents the spread amongst all the models for the historical period (grey shading) and future period (purple-high emissions; blue - intermediate; yellow - low emissions). For further details on projections see Chapter 7 of the NRM Tech Report: ( Climate Change in Australia

Australia’s own climate model, the Australian Community Climate and Earth System Simulator, or ACCESS, is consistently shown by national and international groups to be among the top performing models across a range of climate features important to Australia.

ACCESS was developed jointly by the Bureau of Meteorology and CSIRO through their research partnership, The Centre for Australian Weather and Climate Research. It was developed in collaboration with Australian Universities and the UK Met Office with support from the Department of Environment. ACCESS is specifically designed to be used for both weather prediction and climate simulation.

In “weather mode” ACCESS is used by the Bureau of Meteorology to provide Australia’s weather forecasts. Thanks to ACCESS, the Bureau’s four day forecast is now as accurate as the three day forecast was just ten years ago. Comparisons with forecasts from overseas operational centres show ACCESS to be among the top performing models in the world.

The “climate” version of ACCESS was used to generate climate projections that were submitted by Australia to recent co-ordinated international climate change experiments and in support of the recent 5th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).

ACCESS will continue to be developed and improved, encompassing and modelling the Earth’s component systems with greater detail and precision.

This is the final article in a series on climate change in Australia, to coincide with the launch of new climate websites by CSIRO. Read more:
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