Climate Daily Digest šš° 3-3-21
A snackable text version of a new Climate Clubhouse room
I recently started a Clubhouse room called Climate Daily Digest to experiment with a new form factor and give folks a way to listen to climate news bites without spending hours more in front of a screen (leave that one to me š© ).
Itās a work-in-progress and Iām still getting my sea legs on Clubhouse, but a member of the room recently suggested that I supplement with a quick email version thatās less ephemeral and more reference-able.
Disclaimer: this Substack version may not happen daily, but Iāll try. In the meantime, please consider joining the Clubhouse room so you can share your stories too š
Headline #1: The climate crisis can't be solved by carbon accounting tricks
A recent study by the UN has found that the world is on track for emissions to be just 0.5%Ā below 2010 levelsĀ by 2030, compared with theĀ 45% neededĀ on the road to net zero by 2050.Ā
But we have a bigger issue on our handsā¦ and thatās in HOW net zero itself is being calculated.
In a Guardian article titled āThe climate crisis can't be solved by carbon accounting tricks,ā Simon Lewis, professor of climate change science at University College London and University of Leeds, and co-author of The Human Planet: How We Created theĀ Anthropocene, says that thereās been too much weight given to so-called negative emissions and carbon offsetting in the carbon accounting equations that countries and companies are using to calculate whether or not weāre on track, emissions-wise (SPOILER: weāre not on track).
Professor Lewis goes on to say that our collective delusion takes three forms:
An unrealistic over-reliance on carbon removal to preserve the status quo. If you remember Climate Daily Digest from a couple of days ago, we talked about how Shell Oil published its new net-zero by 2050 plan that actually factored in HIGHER levels of oil and gas production than today, creating emissions that will magically be solved byā¦. trees! The hard truth is that there isnāt enough land for all the trees that would need to be planted.Ā
A push to offset rather than reduce. Mark Carney, the ex-governor of the Bank of England and unfortunately a climate adviser to Boris Johnson, called his own $600 billion Brookfield Asset Management portfolio ācarbon neutralā, even though it holds active investments in fossil fuels. Carney said: āThe reason weāre net zero is that we have this enormous renewables business.āĀ He went on to claimĀ that renewables avoid carbon emissions that would otherwise have happened, so they āoffsetā his investments in fossil fuel emissions. This is not net zero. It is an accounting trickā¦ which, I think those guys at Enron know something about that right? Just because youāre building a solar plant doesnāt mean itās also OK to build an oil refinery next door!
Finally, lack of true additionality in carbon markets. What is additionality? Itās basically the concept that what youāre doing is actually additive from a drawdown perspective versus what would have happened anyway. Legacy carbon credits (and the markets that trade them) are filled with credits that donāt actually fulfill additionality, because they were established before that principle became a widely known Thing. Buying these credits, which are still out there, is like burning money. Total, the massive global petro-energy company, recently burned a bunch of Climate Money in this way, and then actually bragged about it.
Professor Lewis does propose a few solutions though, primarily saying that these issues need to be brought out in the open at the upcoming United Nations Climate Conference, aka COP26, thatās set to begin on November 1, 2021.Ā
š” WHY IT MATTERS
I wanted to highlight this story as a reminder to ASS. Thatās an acronym, of course! It stands for, Always Stay Skeptical, my friends. In business, and in climate, we should be wary of anyone whoās fudging the math, or just being really, really optimistic with projections when convenient.Ā
We should also challenge some of the newly emergent assumptions around āeasyā carbon removal to solve all our problems, how much offsets can really do, and how additional those offsets really are in the first place.
Onwards to our second storyā¦
Headline #2: Fossil fuel emissions in danger of surpassing pre-Covid levels
In yesterdayās Climate Daily Digest Clubhouse, we talked about the Q4 2020 emissions increase in China as the Chinese economy ārecoveredā from the Covid shock by investing in infrastructure, largely based on emissions-intensive construction with cement and steel. We also talked about how the top level Chinese government is actually struggling to manage its local and regional managers, who are continuing to pursue high emissions construction projects even if theyāre out of step with national mandates and goals.Ā
Now, itās not just China. A new study out in Nature shows that while Covid restrictions led to a steep drop in CO2 emissions, they are now back on track to spike up even higher than they were pre-pandemic. In fact, some separate numbers just published in The Guardian showed that December 2020 emissions were actually 2% higher than December 2019.Ā
Why? Well, as with Chinaās pandemic economic recovery, a lot of this is based on the choices we make about infrastructure development and what methods and materials are used for it. Itās challenging to make decisions today for tomorrow, let alone for 10 years from nowā¦ but even as I say that, I personally think itās bullshit. We canāt even plan for 10 years from now? Say it with me, Yes we can!
I wonāt go into the science-y details of this story, but the headline here is that weāre back OFF track, significantly so, and itās thanks to the decisions weāre making on how exactly we ābuild backā ā is it going to actually be better?
Finally, Iād like to name a few names here. Itās not that ALL countries are building back worse, itās just a few of the biggest emitters who are, unsurprisingly, continuing to contribute a larger and faster growing share of emissions. Who are they?Ā
ChinaĀ
US
Brazil
India
Obrigado, Xie Xie and Thanks, but not exactly the type of leadership we need right now.
HEADLINE #3: Volvo Plans to Sell Only Electric Cars by 2030
Volvo just cut in line ahead of GM and other carmakers in the race to steal some of Teslaās limelight. The company just announced that it would make only electric cars by 2030, including converting its entire current lineup to battery powered electric vehicles within the next 9 years, and converting all sales to online-only sales.Ā
š” WHY IT MATTERS
This is one of the most ambitious plans from any carmaker, and feels both smart and strategic for them to get out in front and set the pace in the market. Interestingly, the New York Times reports that:
āelectrification strategy reflects Volvoās ties to China. Geely Holding is the largest shareholder in Geely Auto, which said last week that it wouldĀ cooperate more closely with VolvoĀ on electric vehicle technology. That will help spread the costs of the technology, and help Geely Auto catch up with Chinese rivals likeĀ Nio.ā
Now, one note about the āonline-onlyā aspect of this announcement. Some time last month, The Energy Gang podcast had a great episode where Katherine and Jigar talk briefly about the second order effects of transportation electrification, especially in terms of a fair economic transition (sorry, I canāt find the episode but if you know the one, leave it in the comments!).Ā
Some of the players left behind in the EV revolution will be not only gas stations, which could theoretically be converted into EV charging hubs but also dealerships. Dealerships make MOST of their money not from selling vehicles, but from selling financing and services. EVs still need financing, but they need a lot less ongoing servicing since there are fewer moving parts.
Does this mean dealerships get left in the dust?
Can you think of a better use for all that floodlit parking lot space?
Something to ponder.
Headline #4: Exxon Mobilās Chief Says It Is āSupportiveā of Zero-Emission Goals
In other company news, Exxon Mobilās CEO recently said ā publicly! ā that the company was āsupportiveā of zero emissions goals. We shouldnāt read too much into this, since we know how oil companies do (remember the Shell Oil story in Climate Daily Digest a couple of days ago), but at least theyāre using words now??
š” WHY IT MATTERS
Exxon is the most notorious of the oil and gas majors, and even a public acknowledgment of the need to take action can be considered a positive for the climate action movement. Baby steps.
The New York Times also noted this ārhetorical breakā from Exxonās previous leadership, and reports that Darren Wood, the Exxon CEO, actually promised that Exxon would try to set a goal for not emitting more greenhouse gases than it removed from the atmosphere, just without a timeline of course. And with the word ātryā in there. A for effort, Exxon!