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Appropriate Civilization versus New Despotism, month 3, 21st March – 20th April 2017

Screenshot 2017-04-22 21.38.05  1. Climate action: Trump endeavours to dig a little coal  President Trump moved to dismantle President Obama's climate legacy with an executive order that seeks to dismantle the Clean Power Plan. Within a week, 17 US states filed a legal challenge. China immediately pledged to uphold its Paris climate commitments, including considerable efforts not to use coal, accusing the US of “selfish” behaviour. The EU joined the pushback. Miguel Árias Cañete, the EU’s climate action commissioner, said: “The continued leadership of the EU, China and many other major economies is now more important than ever. When it comes to climate and the global clean energy transition, there cannot be vacuums, there can only be drivers, and we are committed to driving this agenda forward.” Fine sentiments. But whereas China can point to policies consistent with its rhetoric, unfortunately the same cannot be said of much EU national policymaking, as things stand. Among EU states, only Sweden, Germany and France are pursuing goals consistent with the Paris target of 40% cuts in carbon emissions by 2030, according to a study by Carbon Market Watch. As ever, much will depend on industry, and one encouraging development this month was a pledge by Eurelectric, a trade body which represents 3,500 utilities with a combined value of over €200 billion, vowing no new investments in coal plants after 2020. Among the 28 EU countries, only Polish and Greek companies did not join the initiative. 2. Energy transition: Fast, but not fast enough Record new renewable power capacity was added in 2016, UNEP figures showed: 138 gigawatts of it, up 9% despite investment falling by a worrying 23%. Renewables now provide 11.3% of global electricity. New global solar capacity outpaced wind, IRENA reported, by 71 to 51 gigawatts. Solar in California exceeded 50% of supply, for the first time ever, causing a net market oversupply resulting in a short interval of negative wholesale prices. Costs of renewables keep falling. GTM Research predicts that solar will drop below two cents per kilowatt hour in 2017. Offshore wind is the latest renewable to defy predictions. EnBW and Dong won offshore wind tenders in the North Sea with the first subsidy-free bids. Moody’s reported that wind is now cheaper to install new than coal is to operate in 58 power plants across 15 Midwestern states, at $20 a megawatt versus $30. Trump told a rally in Kentucky that “the miners are coming back”. But they aren’t. Not even top US coal boss Robert Murray expects that, in the face of real contemporary economics. As for US renewables companies, they were professing this month that their industries will thrive even without the Clean Power Plan. Their confidence is rooted in record solar installation and above average wind installation in 2016, plus federally agreed tax credits that would be difficult for the Trump administration to dismantle. The news was also broadly good for EVs this month, with Tesla meeting production targets and its shares soaring to an all time high, for a while making it the most valuable car company in America. Meanwhile Big Oil, facing predictions of significant demand destruction by EVs within just years, is struggling to break even. Most of the oil majors didn’t even cover their costs in 2016, a Wall Street Journal analysis showed, despite a rising oil price. Some oil companies say American shale will help save them. But of the three main oil-producing shale belts, production has already peaked in two. The oil industry loves to taunt its critics with the mantra that “peak oil is dead”. For some players, it is clearly not the case. Mexico’s proved oil reserves have declined by more than a third since 2013. This month its National Hydrocarbons Commission country warned that the country will run out of oil in less than nine years if there are no new discoveries. What an incentive fast oil depletion like that must be to build a clean-energy economy fast, never mind climate change. (More on this in my keynote to the MIREC renewables congress in Mexico City on 10th May). And there are many other stand-out non-climate incentives around our troubled world, from air pollution to risk of stranded assets. But new figures showed that clean energy investment dropped 17% in the first quarter of 2017. 3. Tech for Good: Evidence of effort Advances in artificial intelligence and robotics outpace even those in clean energy, and continue to be used in many ways for the betterment of society. But evidence that they have profound downsides was everywhere this month. YouTube and Google’s use of algorithms to automatically match ads with content is the basis for widespread criticism that they fed the spread of fake news in the crucial months running up to both the Brexit vote and Trump’s election, much of it orchestrated by a well organised nationalist-right dark-propaganda network. The two companies ran into further, related, trouble, with big name advertisers boycotting them for posting ads next to racist and other offensive content. The boycotters included such diverse actors as AT&T, the BBC, the British government, PepsiCo, Starbucks, Verizon, and WalMart. Google responded quickly, saying it was in a race to ramp up its AI capability to deal with the problem. But that is no easy task. Nobody has pulled off such a feat of megadata sifting before. As part of their effort, they have begun to use outside firms to verify ad standards. They might want to hurry. The inventor of the web, Tim Berners-Lee, argues that concentration of power over information, such as Goggle and Facebook now possess, is dangerous for society. He is plotting, with others in the Decentralized Information Group at MIT’s Laboratory for Computer Science and Artificial Intelligence (CSAIL), means to decentralise control of data in his creation. The threat AI and robotics pose to jobs becomes ever clearer. More than 10 million UK workers are at risk of being replaced within 15 years, PwC calculated, some 30% of the workforce. The IPPR estimates a similar figure: robots replacing 1 in 3 UK jobs over the next 20 years. A report by the US National Bureau of Economic Research goes further, suggesting that large numbers of jobs have already been lost to robotics in America, and are unlikely to come back. Wages have been depressed in the process, they contend. The question arises, then, as to how much this has been fuelling populist rage, on both sides of the Atlantic, making it easier for nationalist demagogues to push their argument that "the other" - immigrants and anyone else who is not in what psychologists call their in-group - is entirely to blame. Whatever the answer to that question about the past, the additional stress just around the corner will clearly pose a dire threat to social cohesion if nothing is done. The imperative for government and business to act is obvious. 4. Truth: Liars under growing scrutiny As investigations into the conduct of the Trump election and the Brexit vote continue, it becomes ever clearer that the nationalist right is capable of extraordinary feats of voter manipulation. A group of UK academics warned this month that dark money is a threat to the integrity of British elections. The Electoral Commission is investigating whether work by Cambridge Analytica, one data firm at the heart of the controversy, constitutes an undeclared donation from an impermissible foreign donor. Cambridge Analytica is majority owned by the hedge fund billionaire Robert Mercer, a major bankroller of Donald Trump. Steve Bannon, Trump’s head of strategy, has been a major player in the development of the company and its capabilities. Filings of White House staffers’ interests this month show he has made millions shaping right-wing thought, via Cambridge Analytica and other organs. The pushback unfolding against this fast-emerging Orwellian narrative is often extraordinary to behold. The Los Angeles Times published a series of  essays by its editorial board this month. “Our Dishonest President”, the first was entitled. “Why Trump lies”, the second. They read like a science fiction novel of a dystopian future society. But they are about real-life America, today. New arenas of corporate responsibility are being stimulated, unsurprisingly. Google announced it will begin to display fact-checking labels to show if news it purveys is true or false. Facebook gave a green light to its employees to protest against Trump on May 1st. Dramas build slowly in the courts as truth and lies compete. A judge rejected Trump's defense against a claim he incited violence at one of his rallies. 5. Equality: Talk of cutting aid as famine rages Meanwhile, though you would hardly know it from mainstream media coverage, we are in the midst of the gravest humanitarian crisis since 1945 – since the creation of the United Nations. 20 million people face starvation and famine in Yemen, Somalia, South Sudan and Nigeria, the UN warns. Drought has descended on Kenya, triggering violence as displaced peoples migrate. Amid all this, populist nationalists continue to contend that aid budgets should be cut. The UK government, to its credit, is resisting this so far. As for the considerable potential role of clean energy in building equality and alleviating poverty, an international gathering of the Sustainable Energy for All organisation in New York this month called for more urgent action on progress towards global energy goals. In SolarAid, my colleagues and I could not agree more. Our work is based on the fact that if you burn oil in a kerosene lamp in Africa and it will cost you almost $80 a year, yet a solar lamp retailing at around $5 will give clean light for free, for 4 years. So if you were one of the poorest people in Africa, which would you rather do? Save $70 a year to spend on food and other essentials, in a time of famine, or burn a fistful of ten dollar bills each year, and risk your health breathing the fumes? This should be an obvious starting point for a massive programme to free up local money for the necessities of poverty alleviation, SolarAid contends. But sales of the most affordable of these lights are actually falling in Africa, and in fact the rest of the world too. In Malawi, for example, we are one of only a few organisations working to help. More on that subject, a microcosm of global challenges and opportunities in energy, in an e-mail in a week or so. 6. Reform of capitalism: Graphic evidence of the need The Bank of England has admitted to fearing, in the current febrile financial climate, that it may not be able to spot the next global crisis coming. Few who studied the forensics of the last one, and the response - or mostly lack thereof - can be surprised. There are obvious candidates for a trigger in the inflated stock market, and mountainous debt in car loans, credit cards, and mortgages. The Brexit gamble is also potentially on the list. The IMF professes that its unpredictable outcome poses a risk to global stability. Given the fact that regulators regard another crisis as inevitable, and see an unreadable multiplicity of potential paths to it, who can realistically contend that the unbridled 21st century version of capitalism is anything close to a satisfactory way to run a global economy today? Root-to-branch reform might take some mapping, but starting points are not too difficult to find. One involves the jailing of executives guilty of gross corruption. Until this starts happening, how there can be hope for wider reform, or the necessary adjustments of cultures? Shell offered up a perfect example this month. The company is under investigation for one of the most corrupt deals in the history of the oil industry.  E-mails show that top executives handed a billion dollars to the Nigerian government, knowing it would be passed to a convicted money-launderer,  in return for a giant oilfield. The CEO of the day, Peter Voser, knew of the deal. The current CEO, Ben van Buerden, described the evidence in e-mails as "really unhelpful", but "just pub talk." One might hope that if the forces of the law cannot sort out behaviour of this kind, then investors might be queuing to punish a company as wide of the ethical mark as this using their money and governance power. Not on recent evidence from Wall Street. The social media company Snap, owner of a popular photo exchange website, went public in February with investors queuing to pour cash into it. This despite the twenty-something co-founders specifying that investors would have zero voting rights. Far from failing, in the exodus of financial custodians that this dangerous first-of-a-kind should have been faced with, Snap raised $3.4 billion and achieved a valuation of $19.7 billion. What a gloomy precedent this now sets for the future. It raises the prospect, in principle, of a small cadre of almost unregulated and unconstrained tech billionaires calling the shots on how the AI and robotics innovations of the next few years are deployed. We had better all hope, if this is the way investors and regulators allow events to unfold, that said billionaires, and investors in them, are not friends of the the populist nationalist right. Yet the way financiers were lining up to engage with Marine Le Pen as the French Presidential election neared suggests we can far from rely on this. 7. Common security: If you elect nationalist demagogues, you will be more likely to experience World War 3 Let me be brief on this final point. In the Trump administration's handling of Syria and North Korea, where is there any evidence at all of basic statesmanship? Of rudimentary strategy even? Of any thought that there might be lessons to be learned in decades of diplomacy? Ahead of the election, Trump seemed to grasp the inadvisability of poking a hornets nest with a stick, let alone many millions of dollars worth of cruise missiles. "Again, to our very foolish leader", he tweeted at Obama (all in capital letters), "do not attack Syria - if you do many very bad things will happen." Suffice it to say that one particularly bad knee-jerk reaction from Trump and/or those he turns into his adversaries, and all bets are off on the balance of play I endeavour to summarise above. A message for my senior grandson, if he made it this far in this blog. Sorry fella, I have been trying for a quarter century. But I and all the people like me have pretty much failed, to date. Hopefully there is some comfort in the thought that we are still trying.
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Appropriate Civilization versus New Despotism, month 2, 20th February – 20th March 2017: Tech-for-good and truth take a pounding

Screenshot 2017-03-25 17.18.18 This month evidence of the potential use of AI and robotics for social benefit continued to lag portentous developments. On the one hand, the prospects for improving healthcare systems continue to grow. Google plans a health record tracking system loosely based on the bitcoin concept and using its DeepMind AI, for example. It aims for real-time tracking of data by hospitals, health organisations and patients alike. Beneficiaries will have better treatment prospects. Lives will be saved. On the other hand, a Microsoft researcher warned openly this month that AI, even in its current state, is ripe for abuse by aspiring despots: perfectly suited to the centralizing of power, tracking of populations down to the last individual, the demonizing of outsiders, all while radiating authority via a faux neutrality. “This is a fascist’s dream,” said Microsoft’s Kate Crawford, pulling no punches. “Power without accountability.” All this before quantum computers have arrived on the scene, which they will within five years, Google is now saying. These machines will be significantly faster and more powerful than current computers. Ordinary mortals outside the campuses of Google, IBM and the like cannot imagine what will be possible with the algorithms that they will be using. “Artificial intelligence runs wild while humans dither”, read a headline in the Financial Times this month. It was a major understatement. With the integration of AI and robotics, the threats to social coherence compound. Google-owned robotics firm Boston Dynamics unveiled a hybrid robot easily capable of inducing nightmares. Though it is designed currently only for manual tasks, it resembles a Terminator riding on a hoverboard. This in a world where robots can be programmed, today, literally to read the minds of humans they interactive with, provided the latter wear electrodes on their heads. Thus connected, the robot can correct simple mistakes in manipulating objects by translating electrical patterns from the human brain into code. Warnings are proliferating of intelligent virtual helpers that would take away human jobs by default, in the near term, especially in customer-facing roles in banks and call centres. Large-scale deployment of such machines would quickly deepen the inequality gap, fuelling the very social divisiveness on which the new despotism feeds. It is not as though practitioners of AI and robotics are blind to the dangers. This month, 40 experts convened at Arizona State University for a workshop to plot Doomsday scenarios, and how to counter them. Tesla’s Elon Musk and Skype’s Jaan Tallinn funded the exercise. Bloomberg’s account of the meeting suggested that the experts were rather better at dreaming up the Doomsday scenarios than they were the countermeasures. Other initiatives include the creation of AI Now, an online research community researching social impacts of AI, and the idea of a tax on robots, to help finance social adjustments, supported among others by Bill Gates. Speaking of the Microsoft founder, clearly much will depend in this unfolding drama on the character and actions of the tech billionaires whose companies and technologies are located in the heart of the emerging drama. They will be increasingly unaccountable, on recent evidence. This month Snap Inc, the parent of Snapchat, went public in one of the most successful IPOs ever. It’s shares soared, valuing the company at $28bn. And incredibly, Snapchat founder Evan Spiegel successfully persuaded a critical mass of shareholders to invest without their being given any voting rights at all. This lack of governance and accountability - and investors’ willingness to tolerate it - sets a dangerous precendent in capitalism. If Snap rides on its IPO cash proceeds to rival Facebook, Google, and the others in scale, the world had better hope 26 year old Spiegel is a man with a heart and conscience. That question mark will also apply to the founders of new companies that will inevitably try to emulate Snap. Worryingly, experts on a recent conference panel on tech leadership professed that psychopaths are rife in Silicon Valley. Studies suggest that whereas the proportion of psychopaths in the general population is around 1%, it is 4-8% in the corporate environment. To see how this can play out in the tech world, consider the recent chronicle of alleged malfeasance and definite gross unpleasantness at Uber. It makes ominous reading for those of us who hope that tech and tech and tech companies can be a transformative force for social progression. And the whole saga is a manifestation of the leader’s character and values. Which brings us to the theme of truth. In a world where your tech is drifting almost unopposed towards being perfect infrastructure for despots, wherein a new elite of breathtakingly wealthy leaders might be in danger of enhanced levels of psychopathy, the approach of the populist right to use of propaganda assumes critical importance. And here too the news is bad. New research from Columbia University, analysing 1.3 million articles in the run up to the US election, has shown that the internet itself did not favour the creation and spread of fake news. Rather, it was deliberate use of the technology for this purpose by a Breitbart-led right-wing media ecosystem that created havoc with reporting of true facts. More evidence of how this lie machine works comes out by the week. The Guardian dug deep into the origins of Cambridge Analytica, the controversial company that claims to use personal data to swing elections, and which may indeed have delivered on this claim in the US presidential election and the Brexit referendum. More emerged on how it is funded, with big-data billionaire Robert Mercer, backer of Donald Trump, prominent in the story. The whole narrative raises profound questions about the state, and future, of our democracies. Again, tech does not appear to be helping the defenders of democracy, but abetting the aspiring new despots. Accusations that Google has been spreading fake news have intensified. It has been found to be repeatedly sharing falsehoods and conspiracy theories through its “featured snippets and search” functionality. There have also been major problems with its advertising this month, with organisations including the Guardian newspaper cancelling accounts because their ads had been placed next to extremist material. Amid all this chaos, the founder of the internet, Tim Berners-Lee, called this month for tighter regulation of online political advertising. This, among many other responses by society, is clearly going to be needed. Perhaps the British government can lead the way, for the current US government certainly will not. This is not as impossible a prospect as it may sound. The UK government was one of the organisations to pull its ads from Google because of proximity to inappropriate extremist content.
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Appropriate Civilization versus New Despotism, month 2, 20th February – 20th March 2017: Climate action holds ground and energy transition accelerates

Screenshot 2017-03-24 13.22.41 Action around the world on climate and air pollution continued to offer cautious grounds for hope this month. The IEA reported that carbon dioxide emissions have not increased for a third year in row, despite the global economy growing. Fighting climate change requires that they begin to fall soon of course, but growth of renewables has much to do with the current freezing of emissions, and that trend will surely continue globally. The imperative of facing up to air pollution should ensure this, never mind climate considerations. In early March China vowed a new round of steel and coal capacity cuts as part of its national drive to eradicate its “airpocalyse”. In the UK, where carbon emissions have fallen to late-19th century levels, London's air nonetheless remains illegally toxic. Businesses are now pressuring a strangely pollution-tolerant government by acting alone. Increasingly climate- and air-pollution battles are being fought, and won, in court. The latest setbacks for governments have come in South Africa and Austria. One climate lawsuit, brought by a group of American schoolchildren against their own government, is a first of its kind. If successful, it could force even a denialist Trump government to act. Chevron became the first oil major to warn its investors that it faces risks that its business may be curtailed by climate change lawsuits. Nobody should be surprised. BlackRock, the biggest asset manager in the world with $5 trillion under management, announced that it intends to put businesses under pressure to explain how they will manage climate risks. And the divestment from fossil fuels implied, should satisfactory risk mitigation explanations not be forthcoming, continues anyway. In the UK, a government pension scheme became the latest notable investor to begin ditching oil and gas investments. The IEA and IRENA joined forces in a report to warn how far this could go, should companies fail to adapt their portfolios to climate risk: $1.3 trillion of oil and gas assets left stranded by 2050 But Earth’s temperatures are continuing to rise, and with them the sorry catalogue of impacts. The worst-ever episode of coral bleaching continues into its fourth year. Massive permafrost thaw newly documented in Canada foreshadows huge carbon release, scientists say. Every month now the drip of horrible news like this continues to depress everyone with eyes to see and ears to hear. Every reason, then, for the global energy transition to accelerate. Here too progress this month offers encouragement. Industry figures showed that solar power leapt by 50% worldwide last year, from 50 gigawatts to 76. Both China and the US almost doubled their capacity. There are now more than 300 gigawatts installed around the world, up from almost nothing in 2000. And this month an immense milestone was chronicled in an excellent report by Trusted Sources: solar has outstripped oil in terms of energy paid back for energy invested in production. The gap is widening all the time. It is only time before this inescapable fact begins to play in the marketplace. Wind is doing quite as well. Offshore wind is now joining onshore wind on a plunging cost trajectory. Costs fell fully 22% last year. An offshore windfarm now averages $126 for each megawatt-hour of capacity, according to Bloomberg New Energy Finance: cheaper than new nuclear at $155 a megawatt-hour, and closing fast on the $88 average price tag of new coal plants. It becomes easier by the week to see why the Saudis, in this new world order, would be kicking off a $50 billion renewable energy plan to cut oil use. Indeed, their move to join the global energy transition is widely seen as widening the appeal of Saudi Aramco’s upcoming initial public offering, which will be the largest ever. The solar component will open share sales up to a wider pool of investors, analysts say. Shell felt the need to move this month too. CEO ben van Buerden confessed that the oil and gas industry risks losing public support if they lag behind in the transition. He announced plans for a boost in renewables spending in his company. Shell also sold off the majority of their tar sands assets - the most carbon-intensive of their reserves - this month. Environmentalists were unconvinced about this new greenery, pointing out that Shell's clean energy budget would still be only $1bn out of $25bn total expenditure by the end of the decade, and that staying in the tar sands makes no business sense any more anyway, because it risks wasting capital and stranding assets. Big energy, it seems, is increasingly fearing that peak oil demand is looming, so fast has been the growth of renewable competitors to oil and gas, and electric vehicles. Shell suggests the peak could arrive by the late 2020s. Statoil professes between the mid 2020s and the late 2030s. Carbon Tracker, let us remember, argues that even this is too conservative: that worldwide demand for oil and coal could peak by 2020. Norway leads the way. 37% of the country’s new cars are now electric, and the transportation minister expects it to be 100% in just 8 years. In the USA, dozens of cities announced a plan to buy $10 billion worth of electric cars and trucks to demonstrate demand while making a statement about President Trump’s intended retreat from air pollution standards. Driverless cars will accelerate the switch to electric transport greatly, and California is on the verge of allowing fully autonomous vehicles on its roads, having proposed new regulations that free the way for vehicles with no steering wheels and no human backup, potentially to enter force this year. 27 companies await the green light, and analysts expect a revolution not just in transportation, but in the very way society organises. Batteries are increasingly not just about EVs but utilities and buildings. Last year the US installed enough batteries to power a city the size of San Diego for an hour. Most of them came in response to the vast Aliso Canyon gas leak in California. But the surge in demand is global. “The Age of the Giant Battery Is Almost Upon Us”, Bloomberg enthused. Those who worry about grid balancing are having an increasingly hard time finding a sympathetic ear. For example, National Grid and Google are now considering using of the latter’s DeepMind AI to balance supply and demand on the UK grid. Rarely are the modern political struggles far from the drama. Trump says he wants to put coal miners back to work, but he faces the small problem that more than 3 million Americans now work in clean energy, compared to the mere 53,000 now employed in US coal. California, the world’s fifth biggest economy, loses few opportunities to oppose Trumpist fossil-fuel advocacy. Governor Gerry Brown said this month that the state’s record boom, in which clean energy has been heavily involved, is sure to outlast Trump’s “noise”. The oil industry is at present celebrating a rebound in shale drilling, given higher oil prices. That is true, they are feasting on yet more debt to frack yet more barrels. But jobs are not rebounding they way production is. Between a third and a half of the 160,000-plus workers who lost their jobs since 2014 are not returning, analysts say. As one redundant worker put it, “pretty soon every rig will have one worker and a robot.” One wonders who will monitor the thousands of spills of liquids reported this month at fracked oil-and-gas drill sites. Perhaps it will be the robots, for it certainly won't be the US Environmental Protection Agency, under this eyes-tight-shut new US government and its reckless determination to ignore any downsides of fossil fuels. Which is where I turn to tech used for good or ill, and truth: the subjects of the next blog covering this eventful second month.
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How can renewables help to create a better civilization? Statement by Dr Jeremy Leggett, Executive Chair of SolarAid, to the Start Up Energy Transition Tech Festival, Berlin, 20th March 2017

Screenshot 2017-03-20 09.32.31

I speak today about the wider context of all the wonderful innovation and creative disruption we are hearing about from around the world at this inspiring event. My message is about how to maximise its impact, in the singular times in which we live. The first is to inspire allcomers with what that civilization - let us a call it a solar civilization - looks and feels like. The second is to fight as hard for that vision as fossil-fuel diehards fight to keep alive their ruinous status quo.

We bring alive the solar civilization with every kind of renewable and/or efficient carbon-reducing installation we develop, finance, and construct. Each one - whether as small as a watt-scale solar lantern or as large as a gigawatt-scale renewable-energy park - increases climate resilience, air quality, prosperity, health, community, and common security, among other things. We need to instal more and more of them, faster and faster.

We must fight for a solar civilization by recognising the malign forces that are gaining ground in modern liberal democracies and confronting them with our vision. These forces - of nationalist, populist demagoguery, often led by aspiring despots - tend to back fossil fuels, and are often financed by diehard fossil-fuel interests. They tend to make no secret of the fact that they see us as their enemies, and we in return should not seek to appease them.

The business case for refusing to normalise these forces, never mind the social case, is absolutely clear today. The populists ask us to back fossil-fuel technologies that either are, or soon will be, more expensive than most of ours. These technologies will not help the poor in the long term, they will only enrich an elite few in the short term, and then only temporarily.

The duty to shareholders is increasingly clear. The populists ask them to take impossible risks of wasting capital and stranding assets. 

The duty to wider stakeholders is axiomatic. When the vast majority of scientists warn the populists that their actions risk the very liveability of the planet, they exercise perverse denial, reject and mock expertise, and deploy what they call alternative facts and we call lies.

SolarAid will be seeking to collaborate with any and all who agree with these sentiments in the battle ahead. We would love to hear from you if you think like us.

Posted in Blogs

The business case is clear: renewables companies must openly resist the new despotism


Picture: Google employees protest against Trump immigration policies.

Blog: A slightly extended version of my latest column for Recharge:

By building on the explosive growth of clean energy in recent years, and triumphs of multilateralism led by the Paris Agreement, a renaissance of civilisation can realistically be envisioned in the decades ahead. So I have argued in my writing since 2013. But how quickly our world can shift on its axis. While my analysis remains feasible, a potential disruptor of it is on the rise in society. A new class of aspiring despot is seizing political ground in America and Europe. This is happening just as it becomes clear that misuse of fast-emerging new technology, notably artificial intelligence and robotics, holds the potential to create the perfect infrastructure for police states.

 To ensure such an authoritarian assault does not sweep away liberal democracies, it will be essential for the business world to engage in resistance more than it has been so far.  More business leaders must come to the view that fighting for a civilization appropriate for doing good business in is now a matter of responsibility to shareholders, never mind citizens. For their part, shareholders and citizens must pressure companies more, via their investment and purchasing power, to confront the new despotism and otherwise act in favour of appropriate civilization. Increasingly the business case is clear. Ratings agency Fitch has argued that the Trump presidency poses a threat to the global economy, for example.

 Nowhere is this imperative for engagement clearer than in the renewables industries. If renewables companies elect to keep a low profile, and in doing so become complicit in a creeping normalisation of Trumpism, the task of aspiring despots everywhere becomes easier. For their part, rightist populists can be sure that the fossil-fuel diehards that tend to support them will be neither quiet nor inactive. We already see this in the cast of White House appointees, and their early actions in power.

 Early indicators of resistance are encouraging. A hundred tech companies joined US states taking Trump to court over his Muslim travel ban. Among them were Tesla and major renewables users Apple, Google and Microsoft. Thousands of their employees rallied against the ban in Silicon Valley. Individual companies have spoken out. Siemens employs more than 50,000 people in the US, and  has invested more than €30bn there over the past 10 years. But still its CEO felt compelled to criticise Trump’s unpresidential “noise”,  attacks on the press, and proposed Mexican wall, making the obvious point that “America has become great because of immigrants”. Individual investors have also spoken out. Trump bludgeoned through the North Dakota Access oil pipeline with an executive order. But major investor Nordea simply banned its fund managers from investing in it.

 Others must speak out and use their money like this. There is safety in numbers, and great danger for all in taking the easy option of silence. Down that road lies diminished talent pools, shrivelled business prospects, wasted investment capital, and much worse.

 Some readers may think I am overstating a bit of demagoguery in modern politics. But people in the heart of the Establishment share my view. Martin Wolf, Chief Economics Editor at the Financial Times, is among those warning how easily Trump the demagogue can morph into Trump the despot. George Soros calls Trump a “would-be dictator”.

 Consider the worrying people the President has appointed around him. Stephen Bannon, his chief strategist, is a far right thinker with an apocalyptic vision of the future who now finds himself and his nationalist, anti-Islamic, views on the National Security Council. He is backed by a “weaponised AI propaganda machine”, as journalists at Scout call it, demonstrably able to manipulate beliefs  on an industrial scale. One of the figures Bannon is prepared to cite, as he did in a speech skyped into to a fringe Vatican conference in 2014, is a long dead  Italian philosopher named Julius Evola, a man revered as a godfather by many Italian fascists. Evola broke with Mussolini and his supporters because he considered them too tame.  His vision involved a bourgeoisie-smashing new order of white supremacists that he called - wait for it - the Solar Civilization.

 These days, so much of real life is stranger than the inventions of fiction. And how strange it is indeed to read the tenets of the fascist philosophy of a man known to and cited by the chief strategist of the President of the United States. This is how fast we are all having to relearn the narratives relevant to anchoring our world views in 2017.

 The Solar Civilization indeed! That is a most wholly unsuitable label for a hate-filled fantasy of racial purity.

 I call upon all citizens in the renewables industries - leaders, employees, and investors alike - to articulate a clear vision of what a true Solar Civilization would look like. And then to fight for it hard in the year ahead.

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Appropriate Civilization versus New Despotism: State of Play on 20th February 2017, one month into the Trump presidency

Screenshot 2017-02-26 15.31.07 Suddenly believers in the possibility of a better civilization, one rooted in increasing human co-operation and harmony, find ourselves in a world where demagogues can now realistically plot the polar opposite: a new despotism rooted in rising isolationist nationalism and human conflict. The more we dig into how the demagogues and their supporters have organised their recent successes, in particular in using technology to manipulate voter beliefs on an industrial scale, the more terrified many of us find ourselves. Yet at the same time, tantalisingly, our visions of a better civilization, one appropriate for common security and prosperity among nations in the 21st century, seem more feasible today than they have ever been, at least in some of their component parts. In this struggle between two vastly different world views, a kind of global civil war seems to have broken out in the last 9 months or so. I am changing this blog to reflect these changed times. For years now I have been chronicling only two relevant themes: climate and energy. Starting with this blog, I will be covering seven. After the evidence of Donald Trump’s opening month as US President, I no longer think it is valid to consider climate and energy separately from the bigger global picture. I invite the reader to consider my seven chosen themes as dials, each of which will need to be turned up near to full positive in the next decade. They are labelled climate action, energy transition, tech for good, truth, equality, reform of capitalism, and common security. This list is not comprehensive in capturing the struggle between appropriate civilization and new despotism. But I contend that if most of these particular dials are turned down anywhere near full negative, demagogues will have found their road to new despotism, and we can expect a future based on unbreakable police states. Let me summarise my sense of the global setting of each of the seven dials in turn, as things stand. First, climate action. Turning this dial up requires being on course for the Paris Agreement target of under 2 degrees of global warming. Without this, an increasingly runaway global thermostat is likely to wash away all civilizations - appropriate, despotic or otherwise – as it slowly renders the planet unliveable. Recognising this imperative, or some version of it, all nations renewed their pledges to the Paris goal at the Marrakech climate summit in December 2016. They called their collective action “irreversible”.  Key states, cities, companies, financial institutions, faiths and communities lined up in support. For example, California has targets stronger than many nations. More than a thousand cities are committed to 100% renewable power. So are more than 80 of the world’s biggest companies, in Google’s case as soon as this year. More than 600 financial institutions worth more than $5 trillion are pulling their capital out of fossil fuels. Other investors are pressuring fossil fuel companies to invest more in clean energy, and their numbers are set to grow. The G20 Financial Stability Board’s Taskforce on Climate Related Financial Disclosure involves companies with market capitalisation of $1.5 trillion and financial institutions responsible for assets of $20 trillion. It aims to build a market in transition to a sub-two-degree world. There is a long list of serious efforts like this, across multiple relevant sectors, in most countries. The action list doesn’t yet amount to a collective outcome under 2 degrees. But it represents a clear and robust direction of travel. It has caused PWC, among others, to conclude that President Trump’s impact on global greenhouse emissions - despite stacking the White House with an unprecedented crew of fossil-fuel defending billionaires and their supporters - will be “pretty small”.  I set the global score on the climate dial as slightly positive. It would be more positive, had the scientific news from the climate itself not been so bad in 2016. Second, energy. Turning this dial up requires being on course for a clean energy future both in order to address climate change and to escape the multiple ways that fossil fuels err humankind towards societal problems, including mass killers like air pollution, terrorism, and war. The good news here is that a global energy transition from fossil fuels to clean energy is unfolding before our eyes, and fast, and not just because of serious intent in climate action. Solar and wind power will be the cheapest option in most countries within just a few years, and in some sectors and countries already are. Cheap batteries will soon be storing their electricity on a massive scale. Electric vehicles are on course to knock an entire category of oil use, diesel, out of the markets within ten years. They all bring a catalogue of social benefits with them, including in health, freedom from expensive imports, and consequent reduction in international tensions. Meanwhile, as fast as the prospects for clean energy rise, those for fossil fuels fall. China has just cancelled more than 100 coal power plants, dozens of them already under construction. India says it needs no more coal in the next five years. The oil industry is struggling under a multi-trillion dollar collective debt mountain, with analysts increasingly giving up hope of long term profitability, even if oil prices rise. Investors unconcerned by climate change are abandoning them, and oil-rich Gulf states are drawing up plans for an an end to oil within five decades. Trump may want to dig coal, but how can he do so when it is uneconomic compared to solar and wind? One in 50 new US jobs is now in the solar industry, and the growth rate is accelerating: up a record 25% in 2016. Is he going to axe those jobs somehow? When 73% of his own voters support more solar and wind, according to a recent poll? Accordingly, I set the dial on energy as distinctly positive. I summarise many more reasons for doing so in my blogs spanning 2016 and my book The Winning of The Carbon War. Third, tech for good. Turning this dial up will require artificial intelligence and robotics to be applied with appreciable net benefits for society as a whole. The development of AI and robotics is evolving even faster than clean energy. On one hand, profound social benefits are in prospect. Medical diagnosis is a good example. Computers machine-learning while using global databases are providing life-saving diagnoses that elude human medical experts. They are making it less difficult to hold criminals to account. The UK’s Serious Fraud Office used a crime-solving robot to plough quickly through the libraries of information necessary to prove systemic corruption in Rolls Royce. Control of electricity demand by AI in data centres is achieving remarkable emissions cuts in what is a large global point source of carbon dioxide. Such examples are plentiful. But on the other hand tech leaders are openly worrying about the effect of exponential AI and robotics on jobs. In Japan, the government is looking to robotics to boost the national economy, and robots already outnumber humans in the kitchen of one restaurant. In the UK, banks are preparing to roll out robot tellers aiming to improve customer service via machine-learned empathic responses. In the US, the world’s largest hedge fund is working to replace managers with AI, including in HR and strategy roles. Wired, the magazine of choice for many in the digital world, concludes as follows: “The AI threat isn’t skynet. It’s the end of the middle class.” Concern over job losses is fuelling a significant component of the anger expressed by the populist right. Meanwhile, the potential downsides of AI and robotics when it comes to authoritarian regimes do not need much imagining. In the wrong hands, uncontrolled, they can quickly amount to the perfect infrastructure for police states. Thankfully, these dangers are being recognised by both scholars and practitioners. In 2016, Prof Steven Hawking and other luminaries published a letter pledging to ensure that AI research benefits humankind. In January 2017, hundreds of AI and robotics researchers developed 21 principles – the Asilomar Principles – for use of the new technologies. Principle 23 involves Common Good, and reads: “Superintelligence should only be developed in the service of widely shared ethical ideals, and for the benefit of all humanity rather than one state or organization.” To ensure that, a global convention on the use of AI would seem like a good idea. It would offer an opportunity to build on the renewed confidence in multilateralism engendered by the Paris Agreement. The Asilomar Principles would be a good starting point for a draft. The fact is that we are wiring the world way faster than any consideration of public policy, legal, ethical, and human rights implications, and doing so just at the time demagogues are on the rise. All this being the case, the net global score for the tech dial should probably be set slightly negative. This assessment excludes the role AI plays in the next theme. Including that would drive the score much higher.  Fourth, truth. Turning this dial up will require tech to be used for improving the processes of liberal democracy, including quality and verifiability of information, and the transparency thereof. The rise of demagogues has been much assisted by the explosion in 2016 and 2017 of so-called fake news, otherwise fairly describable as systemic lying in mass media. Famous examples of the falsehoods pushed on populations include Pope Francis supporting Donald Trump, and the UK Brexiteers’ insistence, contradicted by the UK Statistics Authority among others, that Britons “send the EU £350 million a week” that could be spent instead on the NHS. Analysis of both the UK Brexit vote and the US Presidential election shows how pervasive the problem has become. As Wired put it, in 2016 “the Mainstream Media melted down as fake news festered.” By August fake news about the US election was increasingly outperforming the top stories at the 19 major US news outlets. One of the best forensic analyses of how this happens comes from journalists at Scout, who describe how AI has been “weaponised as a propaganda machine” by organisations owned by conservative and alt-right interests, such as Cambridge Analytica, and leaders of the far right such as President Trump’s chief strategy advisor, Stephen Bannon. They are able manipulate beliefs  on an industrial scale, using four methods. The first involves the marriage of big data surveillance and computational psychology. Cambridge Analytica has created a model on this basis that compiles individual predictive personality profiles on a massive scale. Predicting a subject’s behaviour better than their partner could requires analysis of just 300 Facebook likes, so one expert professes. This before considering many other easily available analyses of online behaviour, and numerous sources of megadata that can be bought. The second involves automated engagement scripts that prey on human emotions. The practitioners call this “behavioural micro-targeting” and it allows them to change behaviour on an industrial scale. In the US election, personally targeted ads were used extensively in key swing areas. These included Facebook “dark posts”, visible only to those targeted. Cambridge Analytica were able to monitor peoples’ responses, such as sharing on Facebook, and assess which messages were resonating, tuning advertising accordingly. The third involves creation of propaganda networks that rapidly accelerate ideas. The purveyors of fake news have spent years building websites, and these now operate on a scale that allows gaming of search engine optimisation, including crucially at Google. The fourth involves use of an army of bots - computer programmes that talk like humans on fake social media accounts - to echo fake news and police public debate, including by intimidating and suppressing the voice of the opposition. The problem is going international, fast. Brexit-backer and Trump ally Arron Banks plans to launch a “news” site in the UK that aims to repeat the successes of US lie machines like Breitbart, the news agency founded by Stephen Bannon. It will be pro-Brexit, pro-Farage, pro-Trump, anti-establishment, anti-open borders, and anti-corporatism. In the US, where rightist billionaires outnumber those openly supportive of liberal causes, figures like fossil-fuel tycoon David Koch are funding campaigns to smear prominent potential champions of counter views like Elon Musk. This is all happening today. Tomorrow? Silicon Valley guru Peter Diamandis warns that within four years - by the time of the next US election - AI will be ten times more powerful, and will be being applied to 50 billion devices and a trillion sensors. Digital avatars will be photorealistic and fully programmable, able to have instant conversations with citizens. Picture standing in a taxi queue having a conversation with an avatar of a candidate on a screen. The operators of the sensors in the screen, having auto-identified you from facial recognition databases, will know from your profile if you are susceptible to any of their candidate’s arguments. They will know more about you than you do yourself. The candidate’s avatar will ask you a leading question, targeting your emotions. You respond. The candidate responds back in real time, with libraries worth of machine learning picking the answer used. All this manipulation will be unfolding in a world becoming inexorably more permissive of mass surveillance.  In November, the UK legalised - barely noticed - the most extreme surveillance powers in the history of western democracy. As Edward Snowden commented at the time, the Investigatory Powers Act goes further than many autocracies. It was passed despite the fact that only a few weeks earlier the Investigatory Powers Tribunal had ruled that UK security agencies have been illegally collecting data for 17 years, in violation of the European Convention on Human Rights. So much of this drama focusses on the creations of Silicon Valley, where company founders and employees have tended to favour the Democrats over the Republicans. What is the response there? The pushback has begun, but it hardly amounts to a resistance consistent with the scale of the problem yet. Over 100 Silicon Valley firms have filed a legal brief opposing President Trump’s executive order banning travel from seven mostly Muslim countries. These include Apple, Facebook, Google, Microsoft and Tesla. Employees of tech firms rallied in their thousands against the ban. Customers projected an intense displeasure in the marketplace: tweets protesting Uber’s links to Trump pushed competitor Lyft ahead in downloads for the first time. Uber’s CEO felt the pressure so strongly that he resigned from Trump’s economic advisory council. Individual companies have spoken out. Siemens employs more than 50,000 people in the US, and  has invested more than €30bn there over the past 10 years. But still its CEO felt compelled to criticise Trump’s unpresidential “noise”,  attacks on the press, and proposed Mexican wall, making the obvious point that “America has become great because of immigrants”. Individual investors have also spoken out. Trump bludgeoned through the North Dakota Access oil pipeline with an executive order. But major investor Nordea simply banned its fund managers from investing in it. But none of this has addressed the processes by which Silicon Valley’s innovation with megadata is being hijacked by the far right yet. Facebook founder Mark Zuckerberg is aware of the problem. In a 5,700 word Facebook post, he has endeavoured to chart a responsive course for his creation. It was met with scepticism. “Mark Zuckerberg’s Answer to a World Divided by Facebook Is More Facebook”, Wired concluded. Guardian tech correspondent Alex Hern, wrote a withering paragraph-by-paragraph dissection of it. Nikki Usher, Professor of new media and technology at George Washington University, concluded: “He might be in denial, because a lot of the rest of us are.” Some readers may think I am overstating a bit of demagoguery in modern politics. But people in the heart of the Establishment share my view. Martin Wolf, Chief Economics Editor at the Financial Times, is among those warning how easily Trump the demagogue can morph into Trump the despot. George Soros calls Trump a “would-be dictator”. Consider the worrying people the President has appointed around him. Stephen Bannon, his chief strategist, is a far right thinker with an apocalyptic vision of the future who now finds himself and his nationalist, anti-Islamic, views on the National Security Council. One of the figures Bannon is prepared to cite, as he did in a speech skyped into to a fringe Vatican conference in 2014, is a long dead  Italian philosopher named Julius Evola, a man revered as a godfather by many Italian fascists. Evola broke with Mussolini and his supporters because he considered them too tame.  His vision involved a bourgeoisie-smashing new order of white supremacists that he called - wait for it - the Solar Civilization. These days, so much of real life is stranger than the inventions of fiction. And how strange it is indeed to read the tenets of the fascist philosophy of a man known to and cited by the chief strategist of the President of the United States. This is how fast we are all having to relearn the narratives relevant to anchoring our world views in 2017. All this considered, the global score for the truth dial, as things stand, must surely be set at net severe negative. Already. Far worse is eminently conceivable, in relatively short order, unless resistance can be marshalled effectively. Fifth, equality. Turning this dial up will require significant narrowing of the income gap, both within the developed and developing worlds. Many analyses of the rise of the new demagogues show that rage over a widening income gap strongly influences those prepared to vote for them. The figures are shocking in America. Between 1970 and 2014, average income grew 77%, but almost all of these gains went to the top 1% of earners. Elsewhere, elites have also allowed disproportionate self enrichment to run rife. Globally, the 8 richest people own the same wealth as the poorest 50% and the richest 1% own more than the other 99%. Every year at the World Economic Forum, attendees openly worry about the unsustainability of these figures, and the social divisiveness they create. Yet each year they do precious little about it. Efforts to reduce inequality have seen some limited success at the bottom of the wealth league table. The percentage of people in extreme poverty - those earning under $1.90 a day - is falling in all regions of the world. But it must fall far faster if the World Bank is to hit its target of eliminating extreme poverty by 2030. The global score for the inequality dial as things stand, must be set at a clear net negative.  Sixth, reform of capitalism. Turning this dial up will require much more attention to market failures.  The need for significant reform of capitalism has been widely acknowledged since the financial crisis of 2008. The absence of it has been the subject of rage even in the conservative press. One Daily Mail headline in June 2012 exhorted “Put Bankers In The Dock”. The virtual absence of legal redress for financial malfeasance, even in the case of companies and executives with hands caught jammed in the till, has undoubtedly contributed to the rise of the populist right and the demagogues they support. In the US, the Dodd-Frank Act went some way to introducing checks and balances on Wall Street. Having railed against the excesses of bankers in his campaigning, Trump in office wants to roll back even that. With the advent of the VW “dieselgate” scandal, and the prospect of multiple executive jailings for the systemic fraud involved, it may be possible that the tide could beginning to turn. But many of the proposals put forward for re-engineering of modern capitalism in the wake of the financial crisis, even by pillars of the capital markets, have gone by the wayside. Bonuses in the UK today are even bigger, in real terms, than they were before the financial crisis. World debt has been allowed to balloon to more than $150 trillion, a record. Out of control bonuses and mountainous unsecured debt were two of the main triggers of the 2008 global financial crisis. The global score for the reform dial, as things stand, must accordingly be set at clear net negative. Seventh, common security.  We live in a world where superpowers are fighting wars by proxy. Russia & Syria stand accused of deliberately “weaponising the refugee crisis” - as one NATO official has put it - in an effort to destabilise Europe. Meanwhile the superpowers are probing each others’ cybersecurity with increasingly sophisticated malware. Pointers to the pervasiveness of this new form of conflict bubble to the fore from time to time. In January 2016, hackers shut down the Ukrainian power grid. Kiev accused Russian special forces. The malware involved had previously infected power suppliers in the US and Europe, without shutting down supply. It is widely suspected that malware sits waiting to be triggered throughout infrastructure in the superpowers. Given the fragility of US electricity grid infrastructure this should be a particular concern. The three US grids are aged, with large power transformers on average 40 years old. The US suffers more blackouts than any other developed nation.  Centcom Commander General Lloyd Austin has said of the grids’ susceptibility to attack: “it’s not a question of if, it’s a question of when.” The CIA, NSA and FBI have all concluded that Russia tried to influence the US presidential election in an effort to get Trump elected. We can only imagine what they know of Russian hacking of trojan horses into the US power grid. For their part the Russians have to fear American capabilities too. An attack on Russian bank Sberbank in late 2014, for example, hints at the vulnerability of their capital markets. It spooked depositors into withdrawing $20bn in one week. Other states would appear to be playing the same kinds of games. Saudi Arabia has blamed Iran for serious cyber attacks on its aviation authority and on four other unnamed bodies. Dangerously destabilising as these proxy conflicts are, the potential for cyberattack on the world’s nuclear weapons, and their aged software support, hardly bears thinking about. The reduction in global warhead inventory from around 70,000 in the mid 1980s to some 15,000 today has been a somewhat positive feature of the years since the cold war. Yet both Putin and Trump have recently said they want to “strengthen” their nuclear weapons stockpiles. The global score for the conflict dial, as things stand, must be set at a manifest net negative. This completes my survey of the state of play on 20th February 2017. I will continue to review the evolving drama periodically from here on. In a subsequent blog, I will examine options for an integrated global plan aiming to tip all the seven dials into net positive territory, en route to an appropriate civilization, and away from the new despotism. I need hardly add that the challenges involved in so doing will be without precedent. But there is nothing in the sum of human affairs that is more important.   This blog was edited on 26th February in the light of crowdsourced wisdom, for which the author is very grateful.
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Two heart-warming competitions aiming to accelerate the revolution

screenshot-2017-01-08-11-20-14 In an era of populist leaders prepared to ignore both the clean energy revolution and the imperatives for it, favouring wilful denial and incumbents that are uneconomic or soon to be, companies and governments with eyes open face much greater leadership responsibilities than they would have in a world unified by respect for the rational. One of their options in this role is the staging of competitions to reward front-running revolutionary innovators. Let me describe two such competitions, under way at the moment, that I am exciting by and involved in. DSM is a global science-based health, nutrition and materials conglomerate which began life as a miner of coal, among other things - DSM originally stood for Dutch State Mining - and is now one of the world’s front-running transnational corporations not just on climate change but sustainability across the full spectrum. That journey in itself is an inspiring story, but if you want to be truly inspired (and based on my own experience, shaken up emotionally) watch this short film of what DSM believes science can do for the state of the modern world. I am proud to be a consultant to this company, and that two solar organisations I founded, Solarcentury and SolarAid, are partnered with them and others in the Bright Minds Challenge. This is a competition that seeks to reward entrepreneurs with renewable energy solutions that are ready to scale, with a specific focus on solar and energy storage solutions. Applications close on 1st February and the winner is announced in June. The prize is in kind: a basket of expert help aiming to turbocharge the winner. Here is what innovators at Solarcentury have to say about it all. The Start Up Energy Transition Award is an initiative of the Germany government. This competition seeks to create a platform with a clear focus on scaling up innovation to make global energy transition a success while speeding up efforts against climate change. It aims to identify the most promising start-ups worldwide working on energy transition, and offers a different prize model: 5-digit prize money in each of the 5 categories. Applications close at the end of January, and the winners will be awarded at the Berlin Energy Transition Dialogue in March 2017. This is a key event in the climate calendar for the coming year, especially given Germany’s chairmanship of the G20. It is organized by the Ministry for Economic Affairs and Energy (BMWi) and the Federal Foreign Office (AA). I am proud to be an ambassador for it, and for SolarAid to be a partner. So if you are a clean energy innovator reading this, or if you know of someone who is, you have three weeks to get applications in, if you haven’t already. And of course, the great thing about these competitions is that positive outcomes can transpire even if you don’t win. The key thing about revolutions is to act. If you do that, you create the space for good things to happen. We are all going to need a lot of good things to happen, to countervail the bad that we seem locked into, in the year ahead. As such, both these competitions are microcosms for hope.
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State of The Transition, December 2016: As fossil fuel diehards take over The White House, the evidence of a fast-moving global energy transition has never been clearer

screenshot-2017-01-03-08-47-43 As captains of the fossil fuel industries and their lobbyists prepare to take over the White House - appointed by a President elected by a minority, claiming to represent the people on an anti-elite ticket yet possessing by far the highest cumulative wealth of any cabinet ever – they will face evidence breaking out all around them of a fast-moving global energy transition threatening to strand the fossil fuels they seek to boost. “World energy hits a turning point”, a Bloomberg headline read on 16th December. “Solar power, for the first time, is becoming the cheapest form of new electricity,” the article marvelled. Analysis of the average cost of new wind and solar in 58 emerging-market economies - including China, India, and Brazil – showed solar at $1.65 million per megawatt and wind at $1.66. Google leads the giant corporations eagerly going with this flow. The largest corporate buyer of renewable energy announced on 6th December that it expects to hit its target of 100% renewable power in, wait for it, 2017. Google is a huge consumer of power, and going solar means deep emissions cuts, especially when solar infrastructure is hooked up with all the digital efficiency-enhancement fandangoes that Silicon Valley giants are zeroing in on in the fast emerging era of artificial intelligence in an internet of things. Google's emissions reductions will be meaningful even considering full product life cycles. Solar panels made today pay back the energy used to make them in little more than a year, a Belgian research team from the University of Louvain reported in December. “For every doubling of installed photovoltaic capacity", Atse Louwen and his colleagues write, "energy use decreases by 13 and 12% and greenhouse gas footprints by 17 and 24%, for poly- and monocrystalline based photovoltaic systems, respectively." This means that solar panels now return more energy than American oil: an average energy-return on energy-invested of around 14 (and rising) versus around 11 (and falling). This is excellent news not just for rich Californians but for the developing world, where “solar lanterns and rooftop photovoltaics are becoming the energy of choice", so Bloomberg reported. In India, "the millions not connected to the grid may never connect" now, dooming much coal to be stranded underground in the process. The cumulative market of new Indian households accessing small-scale energy is potentially 200 gigawatts, with only a tiny fraction currently served. In Myanmar the government needs no further persuasion: it announced plans to bring solar to all as soon as 2030. The technical advances in batteries and electric vehicles also became ever clearer in December. “Diesel faces global crash as electric cars shine”, the Financial Times announced. According to a UBS report, this whole category of oil use will be gone from the global market within ten years. The positives of EVs synergise with the negatives of air pollution to create a perfect storm for diesel. At the C40 cities summit, Paris, Mexico City, Madrid and Athens all vowed to ban diesel vehicles by 2025. In China, the worst air pollution this year put 24 cities on red alert, with schools shut and flights grounded. Half a billion people were affected by this "airpocalypse". In Chengdu, protestors took to the streets, putting smog masks on statues in the city centre. A heavy handed response by the police suggested that the government is super-sensitive to this issue. Which is not to say that the Chinese authorities aren't trying to abate the problem at source. I have summarised their rapid advances in renewables in earlier monthly reports. This month, a presentation in London by Zhang Gang, Counsellor of the State Council of China, revealed that China's efforts to use electricity more efficiently, cutting the need for coal, now involve 317 million smart meters in operation across 100% of urban areas and 70% of rural areas. These are hooked up in smart co-ordination, spanning all aspects of grids, at all scales, in a vast project involving 230 million users. Part of this co-ordination involves China’s first expressway fast-charging EV network, stretching for 1,262 km between Beijing and Shanghai. No other country comes remotely close to this kind of smart-grid deployment. On 12th December, the International Energy Agency issued a report concluding that China's coal fired power plants "make no economic sense". Small wonder. India is on a similar rapid transition path. On 12th December the Central Electricity Authority announced that India does not need more coal-based capacity addition until 2022. The Authority now plans for non-hydro renewables to meet 43% of electricity as soon as 2027. Such an ambition would have been inconceivable until recently. On 20th, Bloomberg analysed the widening gap between projected and actual demand in the world’s third largest emitter, and put their conclusion in an encouraging headline: “India’s energy forecasts are falling short and climate could win." What are investors to make of all this? Well, it is rare for a report to hold the potential to change the world. But one published on 14th December did. The Recommendations of the Task Force on Climate-related Financial Disclosures  (TCFD) aim to give investors, lenders and insurers visibility of how climate-change risk will affect individual businesses, and a roadmap for reacting to it. The report presents the results of a year of deliberations by 32 representatives of companies with market capitalisation of $1.5 trillion and financial institutions responsible for assets of $20 trillion. Their intention is for the capital markets to behave consistently with the aims of the Paris Agreement on climate change, which is to say progressively retreat from fossil fuels, and increasingly favour clean-energy investments, not least renewables.

A reminder of the background. The target of the Paris Agreement, agreed by every independent nation on the planet in December 2015, is to keep global warming at less than 2˚C. If society is to do that, most reserves of fossil fuel will have to stay underground, unburnt. Since companies view all reserves as having financial value, this means a risk - should governments do what they promised to do in Paris, or some it - of what investors call “stranded assets”: having money invested in a resource that you then can’t realise.  Investing any more money to add to this stock of potentially unburnable reserves creates what can be thought of as a “carbon bubble”. The risk of stranded assets is growing with every decision made by fossil-fuel companies to invest in yet more unnecessary fossil fuel projects: new coal mines, new oil and gas fields, new fracking, new fossil fuel power plants, and so on and so on.

The Bank of England awoke to this issue as a systemic risk in September 2015.  After listening to arguments by Carbon Tracker, a financial think tank I chair, and other worried financial experts, they came to fear that fossil-fuel asset-stranding would risk wasting a lot of investment capital, and might even threaten global financial stability.

The effort to stop this threat soon went international. The G20’s Financial Stability Board set up a taskforce in December 2015 with a brief to specify the information investors need to be provided with in order for them to avoid stranded-asset risk. It is chaired by no less a figure than Michael Bloomberg. As soon as his Task Force's report came out out, more than 30 organisations - including Aviva, Axa, BHP Billiton, JPMorgan and Daimler – announced their support for its conclusions. Many more will surely follow, because the starting point in the TCFD’s proposed roadmap is that companies should include climate-related financial disclosures in their public financial filings.  Not to do so would be to ignore material risks to organisations, the Task Force professes.

Those disclosures should span the core elements of how organisations operate: governance, strategy, risk management and the setting of metrics and targets. Crucially, the TCFD advocates, companies should align business models with a 2°C future. Remuneration of chief executives and boards should be linked to the extent to which their companies are hitting targets aimed at a sub-2˚C world.

Even before the Paris Agreement was adopted last year climate risk was high on the agenda of the world’s largest institutional investors and asset managers. Resolutions asking oil and gas companies to stress test their business models against a 2°C-consistent climate outcome were generally opposed by boards, but received record-high support levels from shareholders. Now there will be no hiding place. The TCFD report provides a template for best practices and a road map for better disclosure. Neither fossil fuel companies nor asset managers investing in them will easily be able to ignore it.

Some investors have not waited for the G20 Task Force’s advice. By the time of the December 2015 Paris climate summit, investment funds with collective assets of $3.4 trillion had either divested from all or some fossil fuels, or announced their intention to. This movement has continued to grow in 2016. On 12th December the value of funds divested passed $5 trillion. 80% of the funds involved, spanning 688 institutions, are managed by commercial investment and pension funds. This shows that the campaign is now mainstream in the capital markets. Capital is fleeing fossil fuels just as the fossil fuel industries manoeuvre their capos into the White House for the first time.

What damage can a Trump administration do to this analysis? According to a PWC report this month, the impact they can have on global greenhouse emissions will be “pretty small”, if others hold course. With the trends I have chronicled each month in 2016, and the declaration by all governments in Marrakech in November that the Paris process is "irreversible", a holding of course seems a more than a reasonable assumption.

Trying to derail Paris, and revive coal, Trump will have to somehow suppress the progressive American states. His problem is that 33 states and the District of Columbia have cut carbon emissions while expanding their economies since 2000, including some Republican states. How do you persuade officialdom in those states to revert to a failed economic model that seeks essentially to recouple economic growth and fossil fuel use? Fifteen of the states, led by California, New York, Virginia, Vermont and New Mexico, have already told Trump that if he tries to kill US climate plans, they will see him in court.

How has Big Energy coped on the transition frontier as 2016 came to a close? Two snapshots. The utility industry continues to be split into companies seeking to defend the fast shrinking status quo, and those now rushing to be part of the new world. One of the latter, Engie (formerly GdF Suez) announced that it sees the oil price falling to $10 as a result of current trends in energy markets, and the wave of clean-energy investments it and other major corporates are making. That would be interesting, should it transpire. For example, on 1st December BP gave the green light to a $9bn investment in a deepwater oilfield, rather appropriately named Mad Dog 2, due onstream (cue laughter, based on the industry's record of delivering major projects on time) in 2021. Good luck to them in recouping their investment if Engie's view of the world comes to pass.

My conclusion, as the new year begins, is that the global energy transition is progressing faster than many people think, and is probably irreversible. Trump's prospects of resurrecting coal, and giving the oil and gas industry the expansionist dream ticket most of it wants, are very low.

There is a caveat, of course: that he doesn't manage to blunder into a world war. All bets would be off then.

In 2017, I will consider this wider security question in my summaries, plus the issues of cybersecurity and fast-emerging artificial intelligence and robotics. For they have all now become clearly relevant to the ultimate outcome of the great global drama in the energy-climate-data nexus.

Posted in Blogs

State of The Transition, November 2016: Steps forward continue to outnumber steps back, notwithstanding the Trump election. But.

screenshot-2016-12-04-15-37-29 The global energy transition remains in a state of net forward momentum as of the end of November. However, evidence that the society is in danger of reaching its eventual target of complete or near-complete energy decarbonisation too late to save the planet from runaway global warming was particularly clear this month. As if we didn't know it before the events of November, this is going to be a tight race. The Paris Agreement, a global decarbonisation pact adopted by every independent nation on Earth, entered into force on November 4thI summarised the state of play in international climate politics, as it stood after the Marrakech climate summit, in a blog on November 21st. In essence, every government but the Trump regime-in-waiting sees the Paris process as “irreversible”. In the Marrakech Declaration 195 of them essentially told the climate-denying President-elect that he will lead a rogue state in a minority of one on the climate issue if he walks away from the treaty. 360 US companies wrote to Trump adding that withdrawal from the Paris accord would put US prosperity at risk. Corporate front runners around the world this month performed consistently with such an analysis. In Europe, notably, Dong Energy profits soared in the third quarter as a result of successful offshore wind projects and the selling off of their gas grid. The company began life as Denmark’s national oil company. This month their CEO, Henrik Poulsen, announced Dong’s intention to divest all remaining oil and gas assets and focus just on renewables, mostly offshore wind. The company sees “strong investor demand”, Poulsen said. One example of that was HSBC’s UK pension scheme investing £1.85bn in a fund recently established by the UK’s largest fund managers, LGIM, with no coal, reduced oil and gas exposure, and a focus on low carbon investments. Said LGIM’s head of sustainability, Meryam Omi: “This is a powerful message that we are sending to companies that they need to step up to meet the challenges of moving to a low carbon economy.” The chief investment officer at HSBC’s UK pension scheme, Mark Thompson, added that this would be “the new normal.” Another mover in this general direction is the UK’s National Grid, which is disposing of its UK gas grid, recognising the rapid expansion of renewables, and making investments in batteries and smart meters accordingly. CEO John Pettigrew says that “2015 was the last year we operated the system in the way it has operated for the past 50”, with coal power plants being paid to meet peaks of demand. Now adjustments focus on paying companies to reduce demand. Soon, in a country where solar generation has exceeded coal for months at a time of late, batteries and smart meters will add to the capability to keep lights on and emissions down. In America, Tesla shareholders voted through a $2.6bn merger deal with SolarCity, approving CEO Elon Musk’s vision by an 85% majority, despite Wall Street scepticism. Musk has now created the world’s first EV-battery-solar conglomerate. Others will not be far behind, I predict. In October Mercedes-Benz unveiled its latest EV at the Paris Motor Show, and parent Daimler announced it will be building a €500 million battery factory in Germany. In November Mercedes-Benz announced plans to introduce a residential energy storage product to the US market in 2017, and set up a new energy company, Mercedes-Benz Energy Americas, to market it. The writing on the wall when it comes to electrification of road transport can be seen in a regular flow of announcements these days. Notably this month, Daimler joined with VW, BMW and Ford to announce a €1 billion project to build 400 EV charging stations, a staging post to the thousands they and other EV converts envisage across Europe. As for where the electricity comes from for EVs going forward, renewables seem set to win on simple economics. In some southwestern American states, new wind farms can be built today for just $22 a megawatt-hour and solar projects are less than $40 a megawatt-hour. The average lifetime cost for US natural gas plants is $52 and for coal $65. Trump may want to dig coal, but who is going to pay to burn it? All this may seem obvious to converts to renewables in the utility industry. But most of the oil and gas companies continue to dig in and try to find ways to justify and defend the status quo. Shell boss Ben van Beurden is among the oil leaders who are lobbying for a major role for gas far into the future. He came out with a remarkable example of tunnel vision this month. The ability to make money from renewables “has been remarkably absent”, he told a conference in Paris. In attendance was the CEO of Saudi renewables developer Acwa Power, Paddy Padmanathan. “I did talk to him for a few minutes as he was leaving to point out that we are investing and we are making profits,” Padmanathan said. “And we are making profits with solar energy priced at $0.05 per kWh.” Sometimes one has to wonder about the kind of advice people like van Beurden are getting. Why would he discount the developments at Dong Energy, for example? That former-oil-and-gas now-renewables company undermines every oilman who likes to say that oil companies cannot profitably entertain major changes in their business model. And of course the oil industry hardly stands up to close inspection when it comes to profitability, as my blogs spanning 2016 have chronicled. As the Wall Street Journal has put it, oil companies are “binging on debt” - not least Shell - and often borrowing money just to pay dividends. As well as increasingly unattractive economics, the oil and gas industry faces a burgeoning catalogue of environmental problems. Previous blogs this year amount to a depressing story, notably when it comes to gas leakage. In November, one little noticed development was particularly instructive of the winds of change, I would suggest. In Monterey county, California, the citizens voted on November 9th to ban fracking completely. There have been other such bans, both in the US and abroad. Two things made this one singular. First, Monterey is a county long extolled as a major oil target. Second, the oil and gas industry engaged in a multi-million dollar lobbying blitz to defeat the proposed ban. My prediction is that there will be ever more of this kind of adverse citizen reaction to their routine operations around the world, as the clean energy transition becomes ever more tangible and credible to the public, and as the environmental problems routinely associated with oil and gas operations become ever more exposed. But now comes the fate-of-civilisation question. Will the continuing collage of progress that we have seen in November, as in all the other months of 2016, be enough to beat the climate change clock? This month the North Pole reached a scarcely credible 36 degrees F (20˚C) warmer than normal for the time of year, with the extent of Arctic ice at an unsurprisingly record low. This sits most uncomfortably alongside UNEP’s warning to the world this month, in its Emissions Gap report, that nations will have to go much further with emissions reductions plans than they have, before 2020, if there is to be any chance of keeping below the 1.5˚C global warming that the Paris Agreement aims at. Even 2˚C, the upper limit of ambition, is very questionable. Yet China is still burning way too much coal, according to reports in November by Bloomberg, Carbon Tracker, and others. At the same time, it has scaled back solar and wind ambitions. With Trump in the wings, the world needs Chinese leadership badly. As I describe in The Winning of The Carbon War, there has been much evidence of that since 2014: China has worked very closely with Obama's America both in delivering the Paris Agreement, and shepherding it into force. Now they have to go it alone. The same disparity between Paris commitments and policy action can be found in Europe, where, for example, officials are mulling removal of priority access for renewables to the grid ahead of other forms of energy. In the UK, the numbers of civil servants working on climate has been cut, even as the government bends over backwards to support shale drillers and waste billions attempting a nuclear renaissance.  
Posted in Blogs

State of The Transition post-Marrakech: Unity is strength as the “irreversible” climate train rolls towards Trumpism


My latest for Recharge:

Donald Trump’s would be climate saboteurs might have hoped that merely the mention of their intention to quit the Paris Agreement would be enough for the climate talks to fall apart at the annual climate summit in Marrakech. Exactly the reverse happened: the rest of the world pulled together. In the second week, with ministers and some heads of state in attendance, nations strengthened their collective resolve to decarbonise global energy. 195 countries issued a Marrakesh Action Proclamation reaffirming the Paris Agreement, the urgent imperative for it, and the speed of the energy transition in the real economy. They spoke of their “urgent duty to respond” to the threat of climate change, and agreed that “momentum is irreversible – it is being driven not only by governments, but by science, business and global action of all types at all levels.”

 Key countries pledged their commitments in similar vein. China spoke of a “a global trend that is irreversible”. Russia said they will stick the treaty “even if others don’t.” No major country disagreed, not even Saudi Arabia. Eleven countries elected to send the clearest of messages to Trump Tower by ratifying the treaty during the summit, including two that could easily have used the incoming Republican regime as an excuse for foot dragging, the UK and Australia. A group of 48 countries known as the Climate Vulnerable Forum, determined to shoot for a 1.5˚C ceiling to global warming, pledged to meet 100% of their energy from renewable sources as soon as they could.

 “Marrakesh sends out strong signal on climate change” read the headline in the Financial Times on the final day. “UN delegates determined to push through Paris accord despite Trump vote”.

 The Paris summit in December 2015 was about targets. Marrakech was about plans. Germany assumed leadership with a sector-by-sector plan for decarbonisation by 2050. “By 2050, the whole German economy will be fully renewable”, Jochen Flasbarth, State Secretary at the Environment Ministry announced.

 The US, Canada, and Mexico joined Germany in tabling plans for deep cuts by 2050: the US and Canada by 80% from 2005 levels, and Mexico by 50% from 2000 levels. They are the vanguard of a “2050 Platform” group, launched at the summit, who have pledged to follow with plans through 2050 soon. They include Colombia, Costa Rica, Peru, UK, Marshall Islands, Sweden, EC, Chile, Norway, Mexico, Italy, New Zealand, Japan, Ethiopia, Switzerland and France.

 Trump may simply drop the US plan, but many of his states and companies won’t. This is the big difference from the previous time the US became a rogue climate state, in 2001, when George Bush pulled out of the Kyoto Protocol. Then, many big businesses remained to be persuaded that climate change was a significant threat. Not so today. 360 US businesses urged Trump not to back out of the Paris agreement. DuPont, Hewlett Packard, Kellogg, Mars, Nike, Starbucks and other well known brands all agreed that “failure to build a low-carbon economy puts American prosperity at risk”. 196 companies joined governments in the 2050 Platform. Over $100 trillion in investor assets now acknowledges the reality of climate change.

 As for the states, California, Vermont and Washington state all sent delegations to Marrakech. California, the sixth biggest economy in the world, is considering applying to join the Paris Agreement should the federal government pull out. 10-12 US states, representing 30% of the US economy, are set to actively oppose Trump’s plans to quash climate laws, according to a Californian delegate.

 Trillium Asset Management CEO Matt Patsky summed up the Marrakech summit well. “The train has left the station”, he said, “and to stand in its way is folly”.

 Will Trump commit such folly? We will see. The renewables industries will be among the many on the train looking down at him on the tracks, should he and his appointees choose to stand there.

Posted in Blogs
Appropriate civilization includes environmental balance, sustainable capitalism, empathic societies, racial and religious harmony, poverty alleviation at home and abroad, common security, and use of tech for social good.

New despotism includes environmental sabotage, reckless capitalism, isolationist nationalism, incitement to racial and religious hatred, retreat from aid, war mongering, and the use of tech for social harm.

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