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In my last blog, I discussed the two major global problems humanity is currently facing: the Coronavirus pandemic and climate change. I described how there are lessons we can learn from each global problem that can help us solve problems associated with the other.
Both these global problems will cost billions, if not trillions, of any major currency to solve.
The IPCC (Intergovernmental Panel on Climate Change) have stated that we need to decarbonise society by 2050 at the latest. They also state that we need to reduce our carbon emissions such that atmospheric CO2 keeps below 450ppm by 2030.
Year on year this looks like an increasingly difficult target. Carbon emissions have been rising each year. However, due to the global pandemic it is likely that 2020 will have the lowest annual carbon emissions since the global recession of 2008. That being said, it is important that we do not become complacent in our decarbonisation efforts. If we take no action when the economies are revived, we will have lost at least 2-3 years of potential decarbonisation investment, which increases the difficulty of the decarbonisation task.
I am not an economist but based upon my observations our governments have failed to deal with both global problems, compounding the problems created by both the coronavirus and climate change.
However, it is important that a government reacts to solve an economic problem. The Global Financial Crisis (GFC) of 2007/08 saw banks being bailed out by governments around the world. It was equivalent to a financial pandemic.
The coronavirus is having a very different, but even more serious, impact on the global economy than the GFC. The coronavirus pandemic was immediate and immediate actions were taken by a number of governments.
So how should governments solve the current problems in their economy? By investment or long-term thinking – or preferably both.
For example, when the magnitude of the pandemic on the UK economy was realised, the UK government found £350bn to prop up the UK economy. Now, since the GFC, the UK has had an ‘austerity’ policy to help rebuild a resilient economy which has meant much less public finances being available.
What this has meant is that the UK Government has been underfunding public bodies such as the National Health Service (NHS).
A consequence of austerity underfunding is that the NHS was poorly resourced to deal with something such as the coronavirus pandemic. We will reflect at the end of this pandemic, ‘How many lives could have been saved if the NHS had been properly funded to deal with such problems?’ We can only speculate.
What is done is done, and governments cannot prepare for every contingency. However, when the battle against the coronavirus is won, what will governments do to help their economy recover?
I expect governments can try a variety of ways to stimulate their economy. However, there is an obvious way to stimulate the economy that would be a massive benefit in both the short and long term and potentially save governments around the world billions of dollars in the future.
If governments decide to invest in decarbonisation to pull themselves out of recession, this would have the double benefit of not just rejuvenating the economy but would also help to solve climate change through decarbonisation. This focused investment could create an opportunity for millions of new jobs throughout the world while simultaneously preventing us entering into the abyss caused by climate change.
At the time of writing, it does not appear there will be any economic recovery until the global pandemic is under control and, right now, no one knows when the pandemic will be brought under control. Until this happens, it is unlikely that any significant decarbonisation investment strategy could be implemented. However, the longer we do nothing, the more expensive and difficult it will be to decarbonise society.
Again, I will emphasise that am not a global economist so this is what I think, not what I know. However, I want to make a case for rebuilding the global economy and investing in decarbonisation to help meet the 2050 target set by the IPCC.
There are three potential constraining factors on the rate by which we can globally decarbonise:
On any project, in any country, and at any time, the constraining factor will be the ‘lowest’ of the three factors described above. It is this constraining factor that will limit the rate of decarbonisation. At this moment in time, the constraining factor is investment. It is worth noting that the constraining factor could vary from time to time in the same country and also in the same site.
Let us consider the horizontal dashed line in Figure 1. It is assumed that the dashed line represents the maximum available annual level of global investment, limited by the constraining factors, to maintain progress towards the 2050 decarbonisation target that has been set.
Figure 1: The horizontal line is the amount of investment required each year to decarbonise by 2050
If this calculation had been done six months ago, the constraining factor would have been the number of experienced people that are required to complete the decarbonisation process. Today it would be the availability of investment.
So, let’s consider several global decarbonisation strategies.
Scenario 1: Global collaboration
The theory behind this scenario is that it will take a couple of COP meetings to successfully get all countries to agree to decarbonise by 2050. They set up their plans and identify the resources they need and the necessary investment required for each country. It is important that each country has contingency planning such that they can work within the constraining factors.
So, by 2023 the process starts and all the people that need to be trained are trained, the funding, equipment and resources are available. This scenario would be operational by 2025. See Figure 2 below.
By 2050, with secure investment, the process is complete with a little ‘tidying up’ for a couple of years and the investment drops to ‘maintenance’ levels.
This is an ‘idealised’ solution that requires global co-operation, co-ordination, oversight and monitoring. Organisations such as the UNEP and the IPCC could monitor the process and ensure all countries are meeting their commitments.
Figure 2: Global Cooperation on decarbonisation
In this scenario, there are three assumptions:
This is the logical approach but is highly vulnerable because it depends on each country being able and willing to perform their part of the decarbonisation process.
However, based on what we have seen from the COP meetings and the coronavirus pandemic, it is likely that each country will follow its own path. Most countries have applied their own ‘strategy’ with respect to the pandemic and it has caused many more deaths than if a coherent global collaborative plan had been agreed and implemented.
This is an idealised scenario, which is unlikely to happen any time in the near future.
There are two problems with this scenario: an ongoing problem and a project end problem:
Scenario 2A: Business as Usual (BAU) – Theoretical
The expectation is that, no matter what is said about decarbonisation, very few governments will regard it as an immediate problem, or their problem. This will result in a slow gradual growth in investment: the private and public sectors, plus householders, will not make the necessary investment required for total decarbonisation.
Figure 3: Business as usual plan
In this scenario, insufficient investment is made, the 1.5°C rise in global air temperature is passed and we head towards a 2°C rise in global temperature. It will become clear in the 2040s that we will not be able to decarbonise before 2050. I would expect the IPCC and UNEP will be advocating action and there will be a degree of panic as the impact of climate change becomes even more apparent. By 2045 there will be a massive investment available for decarbonisation.
The concept will be that, with sufficient investment, we could decarbonise by the 2050 target. However, investment needs to be input over five years rather than over twenty-five years. The constraining factors will be finding and training a decarbonisation workforce that is at least three times larger than required in Scenario 1. If there was sufficient revenue, then both the other two constraining factors would kick-in and it is unlikely that we can decarbonise by 2050.
This takes us back to a key lesson learned from the coronavirus pandemic: you need to flatten the peak.
The peak investment in this scenario shows that you can provide the investment but you cannot provide the trained staff and physical resources necessary to decarbonise in the required period. It will be impossible to train up at least three times the number of people that would be working in the decarbonisation sector.
Once we pass the 2050 date I would expect both investment and staff will slowly drop until about 2055 with the slow decline in investment to see the decarbonisation process complete in 2060.
This would be ten years later that the current plan i.e. decarbonise by 2050. Obviously, there will be higher atmospheric levels of CO2.
The extra time taken for the implementation of this scenario could result in potential trigger points/events being reached i.e. a new source of carbon emissions is released and the decarbonisation process needs to restart.
The scenario will fail based upon the lessons learned from the coronavirus pandemic:
This scenario would also result in a much higher global air temperature than the IPCC is recommending.
This is a hypothetical solution because it will not happen due to the constraining factors. However, there are people who see this ‘last minute’ investment as a credible scenario.
Scenario 2B: Business as Usual (BAU) – Probable
If the previous scenario will not work, this is the ‘probable’ scenario that would happen if we continue to delay the decarbonisation process.
This scenario has a slow increase in investment until 2045, as scenario 2A. Then panic sets in and massive amounts of investment are made available. The scaling up of the decarbonisation sector will follow the previous example until it reaches its constraining factor – probably trained people and/or delivery of equipment and materials. This will be where the Peak of the previous scenario will need to be flattened.
Figure 4: Probable delayed investment plan
This level of investment will need to be maintained through the 2050s and into the mid-2060s. This will result in much higher CO2 levels and increased global air temperature. The concern is that the longer the CO2 levels remain high, the greater the chance that a tipping point/event will be met and some uncontrolled source of carbon emissions is released. This may require another 10-20 years of the same effort to help mitigate the massive new source of carbon emissions.
This scenario will also suffer unemployment mid-2060s as the decarbonisation process falls to maintenance levels.
We should try to avoid this scenario as much as possible.
This means we need to flatten the investment curve much earlier.
Scenario 3: Investing out of recession
There is a fourth scenario to consider, which is the most ambitious, but it provides the most contingency to meet the 2050 decarbonisation target.
We are in the midst of a massive global recession. Each country will want to kick-start their economy. Governments have various methods of investing in their economy to get it restarted and create jobs.
If the UK government found £350bn to help protect the UK economy, I believe other countries must also be able to find the funds to kick-start their economy.
As I understand the process, governments will create several ‘vehicles’ to provide access to funding.
By putting the planned investment into the decarbonisation of their country as part of an ‘accelerated’ investment programme will have several major benefits:
This ‘project’ could start whenever a government set up the financial rules and makes the investment available. Investment for this could be freely available from 2022 to give governments enough time to put the investment strategy and safeguards in place.
By investing heavily in this sector following the fall out from the current pandemic, a whole range of new jobs can be created to help kick-start economies.
Figure 5: Accelerated investment
We must learn from the history of decarbonisation so far and the failings in trying to stop the coronavirus. We investigated several scenarios and there is only one that is acceptable from a Climate Change perspective - Accelerated Investment.
Figure 6: All scenarios
We now know that, when faced with a major and immediate threat, our governments can make funding available where it is needed. Undoubtedly, there are a number of paths they might take to address the decarbonisation issue, however I strongly believe we must urge governments to consider making the necessary investments in decarbonisation sooner rather than later. This is particularly vital considering the three constraining factors outlined that will be key for any strategy locally, nationally or globally.
If there is one way we can come out of this pandemic stronger, surely a programme which revives our economies while simultaneously addressing the next major problem humanity faces is the way to go? Let’s push our governments to make the right decision before we find ourselves in the midst of another catastrophic global event.