The Energy Conundrum

It seems that more people are now beginning to realise that, to be a real game-changer rather than just an expensive and unreliable contributor to energy needs, solar, wind and other sources of renewable, ‘free’ energy have to be used in conjunction with energy storage on a massive scale. Not only that, but this scale is far greater than anything we can currently conceive of. Even pumped storage, the best we currently have, could make only a very modest contribution in most geographies.

Batteries, including the Tesla Powerwall, are touted as an enabler of a true renewables revolution, but they can at best only cover such things as overnight domestic consumption or bridge local shortfalls over short timescales. They have their place, but not as a way to transform electricity supply grids. These sorts of issues are touched on in a recent article in the Times by the economics editor of Sky News, Ed Conway (Unlimited energy is more than a pipe dream).

He leads with a few paragraphs about the Californian start-up Ares, which is testing the use of trains on inclines as a way of storing energy; rather like pumped storage, surplus energy is used to power the train uphill and part of that energy is recovered when needed by running the train down again. This is unlikely to make a major contribution to the overall supply, but shows that a degree of ingenuity is needed to tackle this very important problem of how to use renewable energy as a despatchable source of electricity.

The article gives a fairly balanced view of the position, although verges on the optimistic at times. To quote, Indeed, one might envisage a world entirely powered by renewable energy. A few months ago the Lappeenranta University of Technology in Finland created a computer model which proved, in theory if not in practice, that the world could sustain itself on renewable energy at a price close to the cost of fossil fuel power today. As you might expect, the model involves some gargantuan leaps of faith: that Britons would be OK with tens of thousands more giant windmills carpeting the countryside; that if the wind were not blowing in one country it would always be blowing somewhere near by; that countries would be willing to sacrifice self-sufficiency for ever. But with every day that goes by, the model looks a little less implausible.”

However, it finishes on a somewhat more realistic note: It is easy when you read about trains that are batteries and batteries that are countries to forget that for now fossil fuels still provide more than 90 per cent of British energy. When you hear that Britain has just powered itself for a full day without any coal for the first time since the Industrial Revolution, you might not realise that we will nonetheless need carboniferous fuels for decades. That, for the time being, coal is still by far the cheapest source of energy. The real challenge in the coming decades is not just to aim for a future of green energy but to manage the decline of an industry which has powered Britain for the past two centuries. There is little sign, yet, that the government has realised this, let alone prepared for it.”

This seems a bit like putting the cart before the horse. There is no point in managing the decline of fossil fuel generation until the technology to replace it is available. The scale of the challenge is highlighted in a letter commenting on Ed Conway’s article by Sinead Lynch, chairwoman of Shell UK in the Times. Her key argument goes thus: Electricity counts for about 18 per cent of world energy use. Even if all electricity turned zero carbon overnight we would still have 82 per cent of the energy system to decarbonise. British’s power sector had a day without coal recently. A real milestone, but on that day cars still drove, planes flew, cargo ships sailed, and people cooked their food and heated their homes. Not much of that was done with electrons . . . not nearly enough, anyway. There is much work left to do.”

This is why slashing carbon dioxide emissions as radically as countries such as Germany and the UK intend is, with current technology, virtually impossible. Nearly everything we currently use energy for – domestic and commercial lighting and heating, computer centres, manufacturing industry and road transport in particular – would have to run on electricity. But not just any electricity; all of it would have to be generated without the use of fossil fuels.

The scale of the problem with the present electricity grid alone is quite apparent. Generators have to get that right first. Whatever computer models may tell us, observational evidence shows clearly that there will be quite long periods from time to time when the wind doesn’t blow over either in the UK or across vast swathes of Europe. Some of these will be during the winter, when the contribution to the grid from solar panels is very small. Carpeting the countryside with wind turbines and solar panels can never guarantee security of supply. And that’s just for the 18% of total energy that comes from electricity.

Then, the generating and transmission network has to be multiplied three- or four-fold to supply all the energy for heating, lighting, road transport and manufacturing and the cars, heating systems and manufacturing plant developed and installed. This is an absolutely massive task and one which we are nowhere near capable of undertaking yet. Imagine the task of converting all houses and offices from gas or oil to electric heating systems. Even the comparatively trivial task of moving to ‘smart’ meters is taking many years and costing an estimated £10 billion.

None of these arguments mean that there is no future for renewable energy or that the vision of an all-electric world is impossible. But they do mean that there is no point in trying to fulfil that vision without the right technology. At some stage, we will no longer rely on coal, gas or oil to power our societies. But the transition can only take place once there is an economically and technically viable alternative.

Horses were only displaced as the primary motive force for travel when steam and petrol engines had developed sufficiently. Fossil fuel energy will only become yesterday’s technology when energy storage becomes available on a massive scale or some new development leapfrogs our current attempts to harvest renewable energy. Highly efficient harvesting and storage of solar energy could be our best bet, but we’re a long way from that yet.

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Rethinking energy supplies

With the double shock (to most) of the UK vote for Brexit and the election of President Trump across the pond, many people predicted a further series of political upsets this year. That’s the way people’s minds work – we tend to expect a continuation of a trend – and it’s one reason why predictions are so difficult to make about almost anything.

In fact, the political ground across Europe has shifted comparatively little, with the notable exception of the UK, where the Labour Party leadership apparently has a death wish, believing that the country is ready to accept its hard left agenda. There’s certainly a case of false consciousness there, but not on the part of British voters. Across the North Sea, on the other hand, the insurgent Geert Wilders failed to make a breakthrough, albeit nudging Dutch politics slightly to the right in the process.

France looks in little danger of electing Marine Le Pen; her position in the run-off reflects the historical strength of more extreme parties in France (we tend to forget the appeal of Euro-communism a few years ago). Emmanuel Macron, seemingly on course for the Elysée Palace, is only an outsider in the sense of having no established party machinery behind him. As a graduate of two grandes ecoles and former Socialist minister, he is very much of the Establishment. And in Germany, Angela Merkel looks set for a fourth term as Chancellor. Even a surprise win by Martin Schultz would provide a large measure of continuity.

So, plus ça change, perhaps, but the realities of Brexit are likely to have long-term implications, not just for Brits, but for all their current co-members of the EU. One ostensible reason for the referendum result was the dislike of Brussels-made regulations, particularly given successive UK governments’ willingness to implement and enforce them rather more vigorously than some other Member States. And one area of competence (in the legal sense) for the EU is environmental policy.

This includes climate change and, to an extent, energy policy. Although member states can run very different energy networks, they are governed by overarching instruments such as the Large Combustion Plant Directive and agreed national targets on energy efficiency, emissions reduction and renewable energy generation.

There is an apocryphal (but believable) story that some heads of government agreed to a 20% contribution of renewables to total energy use in the mistaken belief that this referred to electricity rather than total energy.  Politicians are often happy to make policies which capture the headlines, without necessarily thinking of the consequences. A blind adherence to a renewables target fits into that category as, in the particular case of the UK, does the passing of the Climate Change Act.

In two years’ time, the British government may have the freedom to make its own energy policy again, without the need to conform to EU goals. Of course, there will still be plenty of constraints, not least the moral pressure to adhere to the (weak and non-binding) principles of the Paris agreement and the campaigning and legal challenges that will doubtlessly be brought by well-funded activist groups. There is also the threat that the remaining 27 EU member states will require the UK to adhere to its previously agreed policies on climate change as part of the divorce deal, although that is surely part of the necessarily hard-line starting position for negotiations.

In practice, France or Germany is unlikely to discriminate against a non-EU neighbour across the Channel because Parliament decides to make its position on renewable energy more flexible (or, in an ideal world, repeals the Climate Change Act). After all, the USA has for many years failed to participate fully in international efforts to mitigate climate change, and yet has cut its emissions quite significantly and at effectively zero cost to taxpayers by replacing coal by shale gas. The country’s failure to ratify the Kyoto Protocol did not lead to trade sanctions or diplomatic incidents. Neither have China’s rising annual carbon dioxide emissions, albeit tempered by the window dressing of a commitment to them peaking before too long.

The prescriptive energy policy obligations under current EU membership are little more than virtue signalling. If a country wants to reduce emissions as a precautionary approach to the potential dangers of global warming, it makes far more sense to set a minimum number of high-level targets and allow companies, public organisations and individuals to decide for themselves the best action to take. The apparently self-interested actions taken by individuals more often than not do more good collectively than any number of well-intentioned prescriptions, as Adam Smith so wisely pointed out. The current reappraisal of the sense of encouraging people to buy diesel cars is an excellent lesson, should anyone need it.

What could a UK energy policy look like, freed from the constraints of EU targets? Let’s assume that there is still an appetite for cutting CO2 emissions and that the Climate Change Committee continues to produce carbon budgets for the time being. Cutting energy use must come top of anyone’s list; ignoring emissions reductions, anything that saves money is likely to be welcomed. On the other hand, the ill-considered and expensive roll-out of ‘smart’ meters is of much more benefit to utility companies than consumers, so a more flexible approach is needed.

Energy efficiency could be encouraged via a ‘carbon tax’ if necessary and this would also be a simple and effective way to drive low-cost emissions reduction. Forget pouring money into never-ending subsidies for renewable energy or struggling to demonstrate that carbon capture and storage can ever be implemented on a large enough scale to be of any significance.  A technology-neutral tax would encourage development of new technology which could, for example, eventually provide an economic way to store the vast amounts of energy necessary to allow wind and solar farms to provide a reliable supply of electricity.

In the meantime, the focus would surely turn to the one safe, proven, despatchable source of low-carbon energy available: nuclear.  And, who knows, in not too many years, the UK may find itself a world leader in energy technology once again.

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Measuring up to emissions targets

The extent of the human race’s impact on climate is not known with any degree of certainty, although the prevailing message in much of the media is that, to all intents and purposes, it is. Along with this message often goes the view that there is a relatively small clique of people who, for whatever nefarious motive, continue to oppose this apparent consensus. The Trump presidency takes a far more sceptical view of this consensus than its predecessor, and the scientific establishment is seriously concerned about what may happen between now and the next election. However, at least one of the public faces of science in America sees the longer term trend going against scepticism (Bill Nye is hopeful that climate deniers will eventually die off).

To quote from his interview, “[In] the case of climate change, I think the people who are in denial about it will age out. There are very few millennial aged people who aren’t concerned about climate change. There are a few, but very few. So as the electorate ages, climate change will be taken very seriously.” Given the consistency of the messages received by young people, he may well be right, but that doesn’t make the prevailing view 100% correct.

We should never forget what Einstein said about scientific proof: “No amount of experimentation can ever prove me right; a single experiment can prove me wrong.” But what passes for received wisdom may often lag behind any change in scientific paradigms. For now, policy is made on the understanding that carbon dioxide emissions need to be drastically cut. Given that, the objective should now be to go along the least regrets path, with a policy that achieves the aim as efficiently as possible but which does not leave us with a white elephant of inadequate infrastructure in the event that the impact of carbon dioxide on average temperatures and weather patterns turns out to be less than currently expected.

Mainstream believers in the threat of dangerous manmade climate change are never going to agree – or even have a profitable debate – with those who are sceptical of the magnitude of the problem and are thereby tarred with the brush of ‘denialism’. But an effective no regrets energy policy ought to be something that all reasonable people can agree on. It should be good, then, to read headlines such as Nation proves economy can expand while emissions fall.

This piece is on a study by the Energy and Climate Intelligence Unit , run by the former BBC environment correspondent Richard Black, funded by organisations such as the European Climate Foundation and the Grantham Foundation for the Protection of the Environment and with an impressive Advisory Board of the great and the good (for more about funding of groups such as the ECIU, see the recent newsletter Undue Influence). This is, in effect, a snapshot of part of the climate change establishment, committed to putting out positive messages to support emissions reduction policies.

At the same time as the study was released, (Lord) Michael Howard (former Conservative leader and a member of the ICEU’s Advisory Board) had a piece published on the Guardian’s comment website: Climate change is good for the economy – and Britain is the proof. Political support for this message is important, and the fact that it comes from the centre-right shows how much the whole political establishment is part of the climate change establishment.

As the ECIU puts it in its tagline, this is ‘informed debate on energy and climate change’. This is not a million miles from what we in the Scientific Alliance try to promote – ‘challenging and informed scientific debate’ – but unfortunately there is very little opportunity to engage in debate, since the kind of heretical views expressed in this newsletter put us beyond the pale to many of those who support current policy.

The thrust of the ECIU study is that cutting emissions does not jeopardise economic growth. To quote from the Times report “The Energy and Climate Intelligence Unit said in a study that as a result the average Briton’s carbon footprint is now 33 per cent less than in 1992 and people are more than 130 per cent richer. It pointed to a number of reasons for the shift, including the 1990s ‘dash for gas’ power, a switch to a more services based economy, policies since the Climate Change Act was introduced in 2008, energy efficiency schemes and cutting methane from landfill sites.”

This should not really be a surprise to anyone. There is a long-established trend for energy intensity – the energy consumed per unit of economic output – to decline with growth. There will doubtless have been some contribution from specific climate change policies but, for example, World Bank figures show that per capita energy consumption declined from 3,597 kg of oil equivalent in 1990 to 3,020 in 2012. This is a fall of over 16% and likely to be greater by 2016. So, reduced energy use alone accounts for at least half of the quoted 33% reduction in the carbon footprint.

If we also take into account the move from coal to gas, these two factors probably account for most of the total reduction. The costly programme of expansion of wind and solar energy will have made a modest contribution, but at the expense of grid security. And, as has been pointed out numerous times, any future large scale replacement of despatchable gas or nuclear energy by renewables would be extremely difficult without cheap energy storage on a massive scale. Which brings us to one of the other reasons quoted for carbon footprint reduction: the ‘switch to a more services based economy’.

To put it another way, the UK (in common with other industrialised countries) has continued to lose manufacturing jobs. Those jobs, as is well known, are now being done in China and other emerging economies, but Brits still consume the products. In other words, no matter how good the country’s performance may look on paper, global carbon dioxide emissions continue to rise. Our economic growth would have been reduced considerably if we had not been able to import so many manufactured goods from countries with higher emissions than our own.

It is these sorts of issues that need to be brought out into the open. If we are to have precautionary emissions reduction policies, we need to make sure that they are well designed so that they contribute to global reductions (the only ones that count) as well as being as economically efficient as possible. There’s certainly scope for debate there.

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The Tesla bubble

Markets are prone to bubbles as the herd instinct takes over from cool common sense. This is not a new phenomenon – witness the South Sea bubble in the early 18th Century, and the even earlier Tulip Mania in the Netherlands – but markets seem to be as prone to these as ever. The dot-com bubble of 1995-2001 saw money pouring in to internet start-ups, most of which have since disappeared.

IT may have transformed our lives, but for every Amazon or Google, there are hundreds of companies that never made a profit. There are of course always commentators who will point out the dangers of such investments, but the temptation to put money into a sector that has shown exceptional growth in expectation that the growth will continue seems irresistible to many.

There are also warnings of a different sort; that a company or sector is overvalued because of structural factors and that it’s time to cash in. There have been many warnings over recent years of the overvaluation of conventional energy companies because of the problem of stranded assets. The argument goes that, to meet carbon dioxide emissions targets, a large proportion of the reported proven oil, gas and coal reserves will have to remain in the ground. Since an energy company’s stock market valuation is based in part on the value of reserves, this means that current share prices are too high.

The benchmark FTSE 100 index this morning stands at just under 7300, compared to around 6200 a year ago. For comparison, over the same period, the price of BP shares has risen from 350p to 466p, and the oil and gas sector as a whole has risen by 32%. There have been inevitable ups and downs with fluctuations in the price of oil, and BP is to some extent a special case because of the legacy of the major Gulf oil spill (the Deepwater Horizon disaster) in 2010, but there is no sign of investors taking the message of stranded assets to heart. Some would argue that this is a sign of wilful blindness, but the more likely explanation is that investors continue to believe that the conventional energy sector will remain productive and profitable for many years to come.

Those who talk about the inevitable decline of oil, gas and coal (in a way akin to capitalism bearing the seeds of its own destruction, perhaps?) point to the rosy future for renewable energy. Given the commitment from governments and the healthy subsidies on offer, this is not surprising. But cautious investors might want to look twice at a sector that requires ongoing subsidy to be viable, and the available data shows a less optimistic picture.

For example, if we look at the S&P Global Clean Energy Index, the value has moved from 569 to 541 over the last twelve months, with little volatility and no consistent trend. This has all the hallmarks of a stagnant market, with little investor interest. Looking further back, however, we see a classic bubble. Ten years ago, the index stood at 2,600 and rose as high as 4,000 by 2008. But the crash came at the end of the year, with the index losing 75% of its value and never rising above 1,500 since.

Now, we may be witnessing a further bubble, as we read that Tesla’s market value overtakes Ford. On April 2, Tesla, committed entirely to all-electric cars, was valued at $49bn compared to Ford’s $46bn. Tesla has been growing fast, but from a small base. It sold 25,000 cars in the first quarter of the year, up by two-thirds over the same period last year. Most people in the UK and many other European countries will have seen several sleek Tesla model S cars on the road, but total deliveries in 2016 were just 76,000. The figure for Ford was 6.7 million.

Tesla’s financial report shows income of about $4bn in 2015, with a net loss of $888 million. Net losses per share were just under $7. In the same year, Ford reported revenue of $140bn and a pre-tax profit of $10bn. Nevertheless, some investors clearly see Tesla as the future and are prepared to bet that it will become the Google rather than the Alta Vista of the personal transport market.

Elon Musk, the company’s chief executive, is certainly ambitious and, so far, has been very successful. Having made his fortune with PayPal, he has bet much of this on Tesla, and SpaceX, which is developing reusable rockets for space travel. More recently, the company has invested $5bn in the so-called Gigafactory, producing lithium batteries on an enormous scale and thereby hoping to cut their cost. As well as going into cars, these batteries are being used in the Powerwall product, intended as a domestic energy store to smooth out the supply of renewable energy. SolarCity, a major supplier of solar panels, and Hyperloop, a proposed high speed transport system using air pressure to push capsules along dedicated tubes, are two more of his projects.

To some people, Musk has the Midas touch and can do no wrong. Certainly Tesla has developed the best all-electric car yet available in the model S, but its price makes it a popular choice for prosperous first adopters rather than a replacement for the internal combustion engine in the mass market. They are aspirational and now have the same position in the market as the Toyota Prius did when it was first launched.

Since then, Toyota has sold millions more Prius models, but this truly is a replacement for conventional cars, albeit a more expensive one. The company also makes a whole range of other models, and its overall strong market position and success comes from this mix. Although a relative late-comer to the sector, Ford also has a significant involvement in hybrid and electric vehicles as part of its product mix. Tesla, on the other hand, is committed to a single technology and its future will surely depend on the new model 3, its first mass market model which will be launched in the USA soon.

This is the point at which the bubble may burst. People who can afford the very-desirable model S would surely have other transport options for the long journeys all-electric cars are not appropriate for. The middle market, on the other hand, will be asked to pay a premium for a no-doubt well designed car that will have distinct limitations. This may work in some parts of America, at least in big cities such as Los Angeles that are dependent on private cars. But whether this is a business model that can ever justify the current stock market valuation is a moot point. A canny investor might be more inclined to go with Ford or Toyota.

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Trumping the Paris climate deal

Most people said that Donald Trump could not get the Republican nomination for President. He did. Most people thought he would never be elected President. He was. Most people expected him to tone down his rhetoric and become more like a conventional politician after he was elected. Apart maybe from his acceptance speech, he has shown little sign of doing this.

President Trump will try to do many of the things candidate Trump promised. Not everything: he is no longer encouraging people to lock Hillary Clinton up, now that she no longer poses a threat to his plans, for example. His attacks on her during the campaign arguably served their purpose, but hounding her further would be a distraction.

And not everything he pledged to do will come to fruition. Already, his plans to roll back President Obama’s healthcare package have foundered in Congress. Although, in typical fashion, he lashed out at the House Democrats for failing to break ranks and provide any support, the real reason for the defeat was the opposition of a minority of Republican congressmen (interestingly, a mix of those who thought we was going too far and some hardliners who thought we wasn’t being radical enough).

This early major defeat nicely illustrates the limits of the powers enjoyed by someone who is often described as the most powerful man in the world. The checks and balances in the Constitution can lead to temporary shutdown of government services when the executive and legislative branches fail to agree on a budget, but they also moderate the actions of a radical president.

Often, this is because the President is not from the party that has a majority in either (or both) the House or Senate. Currently, the Republicans have a majority in both the House of Representative and Senate, and President Trump was their candidate. The truth, though, is that Trump is not really a Republican. Nevertheless, many of his policies are much more attractive to Republican than Democrat voters, and focussing on these will bring him more success with the legislature than did his first attempt to implement controversial changes to healthcare insurance.

A key message in his campaign – and one that clearly establishes him as a maverick in the normally-consensual world of global politics – is an intention to reverse President Obama’s commitment to measures intended to mitigate climate change. The Donald’s personal beliefs on the issue are not exactly crystal clear. Having at one stage described climate change as a scam cooked up by the Chinese, he has more recently acknowledged that burning fossil fuels has an impact, although in his view not as severe as the IPCC suggests.

In this, he is expressing a point of view shared by many who are sceptical of the party line that catastrophe awaits unless we take drastic action. These sceptics are often labelled as ‘deniers’ but the term ‘lukewarmer’ is a more accurate one. In keeping with his style, his public statements are often less measured and coherent, but this quote from a late 2015 radio interview, while he was still seeking the Republican nomination, perhaps gives some insight into his real view: “I’m not a believer in man-made global warming. It could be warming, and it’s going to start to cool at some point. And you know, in the early, in the 1920s, people talked about global cooling…They thought the Earth was cooling. Now, it’s global warming…But the problem we have, and if you look at our energy costs, and all of the things that we’re doing to solve a problem that I don’t think in any major fashion exists.”

But whatever the sometimes confusing rhetoric, President Trump has this week made his first step in the area. On the same day as Theresa May fired the starting gun for Brexit negotiations, we read that Trump signs order undoing Obama climate change policies. The Energy Independence Executive Order suspends a number of measures and is intended to support fossil fuels. To many, this means boosting domestic coal production and use, in part to fulfil campaign pledges made in depressed mining states. In reality, if he keeps his word to ‘reverse government intrusion’ then it will be shale gas producers that will benefit more than coal miners. Voters in Virginia may not be so pro-Trump by the 2020 elections.

A key Obama policy now rescinded is the Clean Power Plan, so freeing states from the obligation to cut emissions. At the same time, the Environmental Protection Agency, the primary government department making and enforcing rules on carbon dioxide emissions, is having its budget cut by one third and will now be headed by Scott Pruitt, an avowed climate sceptic.

Although it sounds simple, signing an Executive Order doesn’t change things overnight. Not only is there tremendous inertia in the EPA and the whole machinery of government, but the battle over the Clean Power Plan will be fought out in the courts over years to come. Indeed, it has been delayed by legal actions since its introduction. The new Executive Order guarantees that the impasse will continue but, more importantly, it gives a very clear signal about the direction this administration will take.

The EU, China and India have already pledged their continuing commitment to the Paris agreement even if, as looks increasingly certain, America drops out as soon as it legally can. But the agreement is effectively toothless, since signatories have pledged to make pledges rather than being held to account centrally. For the world’s two major emerging economies, the pledges simply mean continuing to foster economic growth while their emissions rise to a plateau in a decade or so. The EU, on the other hand, takes the whole thing very seriously, but even then Germany’s increasing difficulties in achieving its energiewende are putting sustained emissions cuts in doubt.

Meanwhile, the reality in the US may be rather different from the disaster envisaged by the environmentalist lobby, as argued in BBC piece shortly after the election – Trump: the best thing ever for climate change? When the country stayed outside the Kyoto Protocol, very significant emissions cuts were made as natural gas began to displace coal. As argued in this piece, the fear of American rejection of the agreement actually spurred other countries to ratify it in record time (although cynics might think this was because it in fact made no fixed obligations necessary). Another argument is that fulfilling the new president’s pledges to invest in infrastructure and job creation could mean that more money was spent on energy efficiency measures such as insulation, which would benefit everyone, whatever their views on climate change. Beyond that, economics dictate that domestic gas will continue to displace coal for electricity generation so emissions will continue to fall for the foreseeable future.

So, while American CO2 emissions continue to decline driven almost entirely by economics, Europe will continue to spend large amounts of money on increasingly ineffective measures to cut emissions, in the absence of technological breakthroughs. The main effect of President Trump’s action may be to spark some serious thought on this side of the Pond about future energy policy by any policymakers willing to take their heads out of the sand.

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Transports of delight

‘Transports of delight’ will remind those UK readers of mature years of the London buses lauded in the Flanders and Swann song (others may find it meaningless, for which I apologise). In the 1950s, when the song was written, public transport was king and car ownership much lower than today. Since then, things have moved on considerably. Car ownership in developed countries is almost universal and has essentially peaked as more people in an increasingly urban population choose not to buy one.

The private car is the default mode of transport for very many people, and global numbers are continuing to rise as prosperity and purchasing power in today’s and tomorrow’s emerging economies grow. The increasing sophistication of vehicle technologies is very apparent in industrialised countries but will soon impact the market in India and China. Change is coming and coming fast.

The inefficient, dirty, unreliable and rust-prone cars available only a few decades ago have evolved into today’s much safer, cleaner, faster and more economic models. But, despite the advances, some intrinsic problems remain. Not least of these are road congestion and air pollution. In fact, cars are already far cleaner, but more technology to make a difference to both of these issues is continuing to be deployed.

Whereas the enormous changes we have seen in cars in our lifetimes have all been essentially evolutionary, we are now on the brink of some more revolutionary ones. Over time, these could be almost as significant as the replacement of horse-drawn transport by the internal combustion engine a century or so ago. Perhaps we should be talking about the future of personal transport rather than simply the car mark 2.

This is because there are several strands that come together, in particular: control (whether autonomous or with human control), propulsion (internal combustion, electric or fuel cell) and ownership (private or shared).

Any one of these could bring about a major change to personal transport. Taken together, they are truly revolutionary. At the same time, we need to think about managing the transition, so that this combination of disruptive technologies brings general improvements as quickly as possible rather than simply gives us more of the same.

Arguably the most significant of these strands is control; do we leave cars under the control of a driver, or do we aim to make them completely autonomous? Such a choice is independent of the mode of propulsion and could conceivably be retro-fitted to some vehicles. The involvement of major IT companies has already brought the technology to a stage where it is essentially ready to be rolled out.

Companies have been working on concept self-controlled cars for many years, but the real breakthroughs have only come since IT has become sufficiently developed. It is (at least conceptually) easy enough to program a car to go from point A to point B if the exact route is known. Making it capable of driving in all conditions and in all places that a human driver can is many times more difficult.

Route planning is no longer a problem now that GPS systems are ubiquitous. Traffic sensing is now also quite sophisticated, so that in-journey rerouting can be done to minimise delays.  Much more demanding is awareness of, and response to, other road users, road markings, traffic signals and miscellaneous hazards.  A range of small sensors, including radar and cameras can collect the data and are already used to a limited degree in safety systems such as adaptive cruise control and lane departure warnings.

The real difficulty comes in using the output of these sensors as the basis for complete control of the car. Modern IT systems have the capacity to process the enormous amounts of data generated and can react to hazards faster and more predictably than human drivers. The extended testing undertaken by Google, Uber, Tesla and others gives a degree of confidence that such automated control should be significantly safer than human control.

The problem comes when, inevitably, accidents happen and people are killed. Generally, we are less concerned about the results of accidents caused by human error (the vast majority of them), but do worry about those that are outside our control. So, for example, travellers demand extremely expensive safety measures to reduce the already tiny number of fatalities in rail accidents, while tolerating the much greater number of people killed on roads every year.

That is a difficult one to call, and is one reason why a human driver will be expected to be ready to take the controls when self-driving cars first appear on the roads in any numbers. Not that this will necessarily improve safety much; people are likely to intervene most effectively if they are constantly monitoring what is happening on the road, but as automatic control proves effective, less and less attention will be paid and driving skills will themselves inevitably wane. The solution to this conundrum can only emerge with time.

Truly autonomous vehicles should not only make road travel safer, but should be able to make better use of road space by reducing the current active competition for it. The difficulty, as others have already pointed out, is during the transition period when conventional and self-driving cars share the same road. Again, we cannot tell how much benefit will accrue at this stage. Perhaps some routes could be restricted for use by self-driving cars only during busy times.

Quite possibly the short-term future of self-driving technologies will be in shared urban transport systems – perhaps akin to the Uber model – which will chime with the move away from personal ownership in cities.

As for how these vehicles will be powered, the smart money seems to be on fully electric cars taking over from petrol and diesel engines. However, at the same time, conventional engines continue to become even more efficient and cleaner (yes, including diesels) and it is unlikely that the continuing problems of cost and making long journeys under battery power routinely possible will produce a full transition in the foreseeable future. Electric cars may have a great future in cities, but even then it will become clearer that they are not a complete solution: tyres and brake wear and emissions from gas boilers are also significant contributors to air pollution. Hybrids may in practice become the norm.

The ownership issue also has big implications for transport in cities. If autonomous cars are safer and make better use of road capacity, and city dwellers do not need fulltime access to a car, then why not move towards a common ownership or pay by the hour model that gets people around conveniently without them needing to buy their own vehicle? Uber and others appear to be thinking along these lines. In the longer term, maybe this would even make bus and tram networks redundant. It’s quite possible that some cities in emerging economies could be the first to adopt this approach, leapfrogging other traffic management approaches in a similar way to mobile phones avoiding the need for countrywide fixed phone lines.

We cannot be sure what will happen, but a mix of advanced IT, engineering skills and human ingenuity will surely bring welcome improvements to transport for the next generation.

Posted in Newsletter, Pollution, Transport | Leave a comment

Undue influence

Last week’s newsletter – Carbon dioxide, pollution and energy policy – quoted from a recent article posted on the Carbon Brief website: Analysis: UK carbon emissions fell 6% in 2016 after record drop in coal use. Carbon Brief (tag line ‘Clear on climate’) nails its colours to the mast quite clearly by featuring stories reinforcing the still-dominant narrative of impending dangerous, anthropogenic climate change and the need to take urgent action.

Their stated purpose suggests a degree of objectivity. On the ‘about us’ page of the website, we read “Carbon Brief is a UK-based website covering the latest developments in climate science, climate policy and energy policy. We specialise in clear, data-driven articles and graphics to help improve the understanding of climate change, both in terms of the science and the policy response.” However, the director and editor is Leo Hickman, previously of the Guardian and ex-chief advisor on climate change to WWF-UK. They are unlikely to publish anything that even hints at questioning the party line.

This is a professional operation, with a well-designed website and a team of seven employees, supported by a number of eminent academics (plus Peter Stott, acting director of the Met Office Hadley Centre for Climate Science) as editorial consultants. None of this is cheap, and Carbon Brief declare that they are funded by the European Climate Foundation to the tune of over £400,000 (in the tax year 2015/16).

Which of course, raises the question of what exactly this foundation is and, if it funds this activity in the UK, what does it do in other member states? Its vision is clear: “A low-carbon society for prosperity and energy security”. “The European Climate Foundation (ECF) – a ‘foundation of foundations’ – was established in early 2008 as a major philanthropic initiative to help Europe foster the development of a low-carbon society and play an even stronger international leadership role to mitigate climate change”.

Its key components of the vision are

  • Supporting the development of a low-carbon society
  • Staying below 2°C of warming relative to pre-industrial levels
  • Balancing climate protection, energy security and economic growth

This ‘foundation of foundations’ has offices in The Hague (19 staff), Brussels (25 staff), Berlin (16 staff), London (13 staff), Paris (5 staff) and Warsaw (4 staff) plus five employees in Turkey and elsewhere. It lists 14 funders on its website, including the Grantham Foundation (UK), the KR Foundation (whose chair, ex-commissioner Connie Hedegaard, is on the board), the ClimateWorks Foundation (US), the Children’s Investment Fund Foundation (UK), the McCall MacBain Foundation (Switzerland), Villum Fonden (Denmark) and the Dutch National Postcode Lottery.

According to the 2015 annual report, the ECF made 349 grants totalling €25.6 million to 204 grantees, including the Carbon Market Initiative, Carbon Market Watch, the Institute of Environmental Economics, Friends of the Earth Europe and WWF. The total programme costs were €34 million, with €4.8 million going on administration and in-house projects. Without going into the details of the projects, these clearly involve lobbying and spreading the word. The ECF is also part of the ClimateWorks Foundation network, which works ‘to stimulate climate-related policy work worldwide’.

ClimateWorks itself is a charitable body that in 2025 distributed $68 million in grants (and $115 million the previous year). It coordinates the funding activities of some large private donors: “ClimateWorks helps philanthropic donors who share a deep commitment to addressing global climate change work together more closely and more effectively.” I could go further into their activities, but the point is that there is some serious money going into a network of organisations to push the message on climate change.

For those working in this bubble, questioning the orthodoxy is essentially taboo. The European Climate Foundation doubtless has an open door to key influencers in the Commission and Parliament, who themselves are virtually all committed to the cause. Senior staff in other European capitals will also have the ear of government ministers and top officials.

There is nothing remotely like this on the sceptical side of the argument. For all we hear about the influence of Big Oil, funding for those who want to air other views is scant. Probably the biggest single contributor from the critical side is the Heartland Institute. Their latest annual report declares funding of $4.7 million in 2015, with expenditure of $6.3 million. 30% of this went on running costs and fundraising, leaving maybe $4.5 million to spend on a range of issues, of which climate change is but one (Heartland is a free market, libertarian think tank, not a single-issue group). This is less than the running costs of the ECF alone.

This is in one country. In other countries, those trying to redress the balance of the one-sided ‘debate’ are either volunteers or receive funding much smaller than even a single website such as Carbon Brief. The surprising thing is that sceptical voices are heard at all, given the resources aligned against them, compounded by editorial policies in some major media outlets (with the BBC as a prime example) who consider the matter closed.

In face of this situation, we might wonder why it is even worth trying to put forward alternative points of view. Fortunately, human nature is such that many people are prepared to fight to have their voice heard rather than see countless billions of taxpayers’ money going on projects that have little if any chance of success.

And things do change. If realisation grows that continued expansion of renewable energy programmes such as Germany’s energiewende in its present form or the UK’s usage of imported wood pellets to generate electricity are costly blind alleys, policies may begin to shift. There is also the unknown global impact of the new American administration’s intention to roll back the country’s climate change mitigation policies. But for now, it behoves us to continue to speak truth to power.

Posted in Climate change, Lobbying, Newsletter | Leave a comment