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.
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.
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.
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.
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