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Green Opportunity

Leave a Comment / Climate Change, Green Economy, Technology / By Paul Watts

The world is changing. Over the next half century our use of fossil fuels will greatly diminish. The UK and most of the rest of the world will transition to using green energy sources. That means more electric vehicles and a shift to renewable energy.

Two undeniable realities are converging to force the pace of that change.

The first is the global climate emergency. To keep global warming in check we must reduce carbon emissions and, to do that, we must move away from using fossil fuels. The world has no real choice.

The second challenge is the simple fact that, sooner or later, the world will start running out of fossil fuels to burn. Up to now, this date still appears far off. New technologies and the discovery of new reserves means we are unlikely to run out any time soon. Nevertheless, the fact remains that fossil fuels are a finite resource. At some point or other, we will have to shift to alternatives.

Cost and Opportunity

Often, we see the shift to greener energy as a necessary cost, the price we must pay for preserving our environment and securing our future survival. Indeed, there is no denying that a shift to a greener economy does require investment over the short to medium term. Electric vehicles are still more expensive to buy new than conventional ones. Installing solar panels or geothermal heating requires an (often hefty) initial investment.

However, the shift to greener energy is also an opportunity. The whole world is changing – not only the UK, but every country is challenged with making the same transition. Such a radical shift requires significant investment, new technology, new infrastructure and all the ancillary products and services that accompany that. It is therefore also an opportunity. Those who lead the way and grasp that opportunity will be well placed to capitalise on it in the future.

Some of the world’s largest and most profitable companies today are oil and gas companies. Their wealth and success stems from the fact that they are central to supplying the world’s economies with energy today. It therefore follows that, in the long term, those businesses that lead the way in the green economy of the future, have similar success to look forward to.

Green energy in the UK

The process of transitioning to a greener economy is already well underway.

Today the UK generates 48.1% of its electricity from renewables. There is still a long way to go but when you consider that figure was only 21.3% a decade ago, things are clearly changing fast.

In the past year (up to the autumn of 2023), 55% of all new vehicles registered in the UK were either electric or hybrid. 16.4% were pure electric vehicles, up from a virtually negligible proportion (1.7%) only four years ago.

So, there is no doubt that the UK is making progress. However, we are not at the very forefront of change. If we consider the ten largest western and central European countries by population, the UK only ranks 7^th highest in terms of the proportion of our electricity requirement generated by renewables. Sweden is way ahead of us (77.5% renewables). Romania, Germany, Netherlands, and Spain are also significantly ahead (in all cases generating over 58% of their energy requirements from renewables).

Renewable Electricity Generation in the UK

Pie chart of the proportion of tk electricity generated by renewables.

Here in the UK, we don’t get much sun, so we can’t generate as much electricity from solar power as many other countries. However, the UK is quite windy. As a result, over half of our renewable energy is generated by wind turbines.

Our island coastline makes offshore wind a particularly appealing option. Indeed, the UK generates more electricity from offshore wind power than any other country except China. In terms of offshore wind power, the UK is well placed to lead the way.

Falling Behind

Despite all that has been achieved so far, a CBI report from January 2023 warned that the UK is in danger of falling behind. Investment by the UK government in tackling climate change is now beginning to run behind some of our key international competitors.

The proportion of government spending committed to climate change by country.

As a result, over the past two years or so, the UK’s share of emerging green markets has remained static or even gone backwards. Our share of the offshore wind cabling market is unmoved at 12%. 12% sounds a lot, until you consider that the UK accounted for 27% of global capacity for offshore wind in 2022.

By a similar token, our share of EV assembly has fallen from 6% to 5%; our share of EV batteries from 2% to 1% and of hydrogen electrolysers from 6% to 2%.

A recently published survey by EY warned that the attractiveness of the UK for clean energy investors has fallen from fourth to seventh in the international rankings.

The past year has also witnessed Britishvolt, a UK flagship lithium-ion battery manufacturing venture, go into administration. The Australian owned Recharge Industries have been attempting to revive the project ever since. However, at the time of writing, its future still looks most uncertain.

The Future

The UK has made good progress in transitioning to a green economy thus far. We are still well placed to capitalise on the opportunities this transition will bring. However, there is no denying that things have stalled somewhat of late. Investment has levelled off and is being surpassed by international competitors. The UK has ambitious targets but there is little by way of any detailed long-term industrial strategy in evidence. The government’s recent back-peddling demonstrates a relatively lukewarm commitment to drive things forward.

All this recent reticence to make detailed plans or commit to significant further investment no doubt helps balance the books in the short term. However, short-term cost savings could lead to the UK paying a bigger price in the longer term (especially if short term becomes medium term).

83% of businesses at a Chamber of Commerce event at the Eden Project on 27^th September thought that recent government back-peddling on net zero policies were unhelpful for business. Indeed, only 2% thought they were helpful.

Opportunity

But let’s be positive. It is by no means too late to address these setbacks. The UK is still well placed to take advantage of the emerging green economy. Even as I am writing this piece, the UK government announced it will be increasing the amount paid for offshore power. This should help to kickstart an erstwhile stalled offshore sector. It’s a start at least.

However, whether the UK keeps pace with our international competitors or not, there is no doubt that the world is transitioning from the age of fossil fuels to the age of renewables. Those who lead the charge and remain at the forefront of this green revolution will be well placed to reap significant rewards in the future. The UK still has plenty of opportunity to capitalise on this. Let’s hope it does. It would be a great shame if these opportunities were squandered.

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Forest fire as an example of climate change effects

Climate Change in 2021

Leave a Comment / Climate Change / By Paul Watts

The Latest IPCC Report

On 9^th August, the IPCC released its latest report on climate change. Based on a detailed assessment of the available scientific evidence, it concluded that we are virtually certain to see global warming of around 1.5^oC over the next 20 years.

In the longer-term global warming could rise even further, potentially exceeding a 2^oC increase by 2050. And, if it does exceed 2^oC, that is bad news. At that level the report warns, “heat extremes would more often reach critical tolerance thresholds for agriculture and health”. Indeed, under one possible scenario we might be seeing a rise of as much as 4.4^oC by the end of the century.

The report warns:

“…unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach.”

Who are the IPCC and why does this report matter?

The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change. All 195 countries around the world support its work. Scientists from all around the world contribute to and assess its reports.

Every few years it publishes a detailed up-to-date assessment of where we stand. The first report was published in 1992 and this latest report (August 2021) is the sixth. As a result, its reports represent the most up-to-date, detailed and authoritative assessment of climate change available.

The impact of global warming

Delving into the detail of the report reveals some rather frightening statistics that bring home just how significantly climate change is impacting our world:

In 2019, atmospheric CO2 concentrations were higher than at any time in at least the past 2 million years.

Global surface temperature has increased faster since 1970 than in any other 50-year period over at least the last 2000 years.

Global mean sea level has risen faster since 1900 than over any preceding century in at least the last 3000 years.

Over the past century, our world has experienced an average temperature rise of around 1^oC. We have only taken action to curb that increase relatively recently.

Where are we now?

Many nations have taken action to drive down CO2 emissions over the past two decades. And, of course, the COVID pandemic temporarily forced a significant short-term reduction whilst much of the world was in lockdown. So, we have made some progress.

Between 2000 and 2010, global CO2 emissions increased by just over 30%. Between 2010 and 2019, emissions have continued to increase but, overall, at a much slower rate (10%). Indeed, since around 2014/2015 the rate of increase has flattened significantly.

However, although CO2 emissions are no longer rising by much, they are not yet falling. We are still a very long way from achieving anything approaching net zero.

What does the future hold?

Where we go from here will, of course, depend very much on what we do. Do we take dramatic action now? Do we aim for sharp and significant reductions in emissions and take the economic and financial pain that such action would surely demand?

Or do we prioritise protecting the economy as far as possible and aim for much more gradual reductions? Depending on how fast (or how slowly) we act, the IPCC has calculated five possible scenarios. Everything from a best-case scenario, based on what is likely to happen if we take drastic action fast. Ranging through to a worst-case scenario, where CO2 levels continue to rise until late on in the century before finally seeing any reduction.

IPCC Climate Change Forecasts - 5 possible scenarios

Drastic Action

If we take drastic action now and achieve a global wide net zero for CO2 emissions by 2050 then the best-case scenario will apply. However, so far, only 137 out of 195 countries have published a target of achieving net zero by 2050 (and even this is still under discussion in 72% of these countries). Also, China (the world’s largest source of CO2 emissions) has set its net zero target for 2060, not 2050.

So, at present, the best-case scenario is unlikely. Indeed, even under this scenario we are still almost certain to see a mean global temperature rise of 1.5^oC relative to the average temperature of the world in the period 1850-1900. It is now already too late to prevent that.

Given recent trends and current government targets around the world (and assuming those targets are all met), we are more likely to be looking at something similar to Scenario 2 or 3.

In Scenario 2, we would need to see a more gradual but sustained reduction in emissions, achieving global net zero by around 2070 or 2075. If we achieve that, we can just about avoid a temperature rise of 2^oC.

Scenario 3 would assume a very limited/modest rise in CO2 emissions, gradually flattening as the century wore on, followed by a steady reduction in emissions from around 2060 onwards. In this scenario we would not achieve net zero until the end of the century. If this happened, we would see a rise of over 2^oC by 2060, approaching a potentially catastrophic 3^oC by the end of the century.

How will global warming affect us?

Depending on where you are in the world you are likely to experience different effects from global warming.

Global warming has led to significant Artic ice melt but less significant melt in the Antarctic. So it is not affecting us all equally.

However, places that have seen problems with extreme heatwaves leading to wildfires will see these events become increasingly common. Places that have experienced more spells of torrential rain, leading to serious flash flooding will see such problems become a more frequent occurrence in future.

For northern Europe, global warming is likely to mean more heat waves in summer and fewer cold snaps in winter. It will also mean more rain, especially in the winter, and more flash flooding following heavy downpours. We can also expect to see more coastal flooding in those areas that have experienced such problems in the past twenty years or so.

For southern Europe and the Mediterranean region droughts, increased aridity and an increased incidence of wildfires in summer are very likely if global warming hits 2^oC. Agriculture in these areas is likely to become a lot tougher and the threat posed by wildfires will mean scenes like those in Greece in the summer of 2021 will become increasingly common.

Right now, we stand at a crossroads. We can, if we so choose, act and limit the impact of global warming to something closer to that forecast in Scenario 1 or 2. However, if we decide to act more slowly and opt to place short term economic and financial concerns before the longer-term environmental impacts, we may well be facing a serious crisis situation by the middle of the century.

In the light of this report, the decisions made at Cop26 this autumn will have a critical impact on our future.

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Sources

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Deforestation – how concerned should we be?

Leave a Comment / Climate Change, Green Economy, Market Research / By Paul Watts

We all know that our world has been suffering from the effects of deforestation. If this continues unabated, we will see not only a significant loss of biodiversity but also a potentially significant negative impact on global warming. Whilst we often read about this in the press, I thought it would be useful to pull together some numbers that help to illustrate the scale of the problem.

Tropical forests are important

Tropical rainforests only cover about 2% of the earth’s land mass, so on that basis you might imagine they can’t be that important. However, this relatively small environment contains 50% of all the life on the planet’s land surface. This includes an incredible variety of different animal and plant species.

Tropical forests also absorb a huge amount of carbon from the atmosphere and therefore play an important role in slowing global warming. Tropical forests currently hold more carbon than humanity has emitted over the past 30 years by burning coal, oil, and natural gas.

Indeed, overall, the world’s forests absorb one-third of the annual CO₂ released from burning fossil fuels.

But deforestation is accelerating

We have been aware that deforestation is threatening these habitats for a long time but, unfortunately, the problem is getting worse rather than better.

Between 2000 and 2015, deforestation saw an average of 3 million hectares of tree cover disappear every year. But since 2016 that average has increase to around 4 million hectares a year.

Deforestation accelerated by a further 12% in the year 2019/2020, so there is no sign of any respite.

We are now in a situation where 30% of all the world’s forests have been cleared and a further 20% seriously degraded.

The Amazon Rainforest in Brazil is under the greatest threat

Deforestation as a problem is largely concentrated within a small number of countries that have large areas of tropical rainforest.

In 2020 around 40% of all global deforestation occurred in Brazil. In fact, Brazil has been consistently destroying around 1.5 million hectares of rainforest every year since 2016.

The next most serious problem can be found in the Democratic Republic of Congo, which has accounted for around 10-15% of deforestation in recent times.

Bolivia and Indonesia are the next most significant contributors, although, in the case of Indonesia the rate of deforestation has recently declined.

What causes deforestation?

We lose trees every year to a variety of causes, both natural and unnatural.

A major World Resources Institute study found that between 2001 and 2015 tree loss could be attributed to the following sources:

26% was lost as part of managed forestry. This is where trees in managed plantations are cut down for commercial timber. Most of these trees will be replaced over time, as the plantation owners would always replant after harvesting a timber crop.
23% are lost to wildfires. These may become more widespread with global warming but they are a natural phenomenon. Trees lost in this manner will also regenerate over time.
24% are lost to shifting patterns of agriculture. This is where forests are cleared and burnt, usually to free land for use in subsistence farming. In some cases the forests may grow back, in others the loss is permanent.
Over 27% of forestry loss is the result of either urbanisation or commodity-driven deforestation. This kind of loss is the most serious and is almost always permanent.

Whilst growing urbanisation creates a demand for land that can threaten forests, the growth of human urban centres actually accounts for very little deforestation (just 0.6%).

So forests are not being cut down because people need space to live.

A far more serious problem is commodity driven deforestation, where forests are being cleared simply to allow us to grow commodity crops such as soy, palm oil or rear cattle. This accounts for 27% of forest loss and is a major cause of deforestation in countries like Brazil.

In Brazil the dominant form of deforestation can be attributed to commodity driven deforestation to clear land for cattle ranching (accounting for 63% of all Amazon deforestation between 2001 and 2013). Other significant culprits include commodity crops such as soy but cattle ranching for industrial meat production is by far and away the greatest threat.

What can be done?

The big question we face is what can be done about all this? How can we save our forests?

In the case of the Brazilian situation we can all make a limited impact by reducing our intake of processed meat. But ultimately real change can only be made if the Brazilian government can be persuaded to act. Unfortunately, at this time, with other priorities such as covid taking up so much political time, we are unlikely to see much positive action.

Now the Brazilian government have argued that the management of their own resources is their own affair. However, 10% of all the world’s wildlife species live in the Amazon and the Amazon rainforest accounts for 54% of all the world’s rainforests. It can therefore justifiably be viewed as an important global resource and we should all encourage our own governments to work more closely with countries like Brazil and Bolivia to stem the tide of deforestation in this region.

We might do this individually or by supporting organisations such as the World Wildlife Fund or Rainforest Alliance which are actively campaigning to help preserve these crucial environmental resources. But, whatever we do, we should all remember that we don’t have the luxury of time to solve these problems and, every year, a further 4 million hectares of forest are likely to disappear.

About Synchronix

Synchronix is a full-service market research agency. We believe in using market research to help our clients understand how best to prepare for the future. That means understanding change – whether that be changes in technology, culture, attitudes or behaviour.

We offer market research services and opinion polling to clients actively campaigning on behalf of the environment and engaged in the green economy. You can read more about this on our website.