German CDU leader Friedrich Merz believes climate protection is overrated in politics. By saying this, he shows that he does not understand where the climate is blowing.


Arvea

German CDU leader Friedrich Merz believes climate protection is overrated in politics. &ldquo;It&rsquo;s not like the world will end tomorrow.&rdquo; By saying this, he shows that he does not understand where the climate is blowing. Economists and central bankers explain why. 
Putting the economy before the environment is an illusion. Italian President Sergio Mattarella said as much during a state visit to Kenya last March. 
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'In the face of impending catastrophe' limited action is unwise; &lsquo;faithless inaction will be fatal&rdquo;, he added, quoting his Kenyan counterpart Ruto.
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Today, no nation can find lasting security without addressing the climate crisis. Climate change is accelerating, and there is a growing realisation that the&nbsp;risks&nbsp;and economic&nbsp;costs&nbsp;of&nbsp;climate change&nbsp;have been grossly underestimated.&nbsp;
Suddenly, the world has discovered that nature is system relevant.&nbsp;
The international community is prompted to act. Decisions postponed for decades have been made since 2018. The Green Deal has set in motion a systemic transformation of EU industries, economies, and societies. China and the USA have followed suit. International treaties are redrawing the contours and operating limits of the economic model.
In March, states endorsed a historic agreement to forge an international legally binding agreement by 2024 to end plastic pollution. Last year, a historic accord to protect biodiversity was reached at COP25 in Montreal.
Humanity knows it must learn to respect the biogeochemical limits of the planet to operate within planetary boundaries. Eventually, life itself depends on the cycles of carbon, nitrogen, phosphorous, water and oxygen.
To ignore life&rsquo;s natural borders, the carrying capacity of the planet, and the value of life-supporting ecosystem functions provided to us, is a market failure.
<h2>Climate&nbsp;change involves a fundamental failure of markets</h2>
For decades, classical economic theory and econometric models have grossly underestimated the economic impacts of the crisis. Models do not capture the real cost of exhausting non-renewable natural resources, nor that of externalities. What&rsquo;s even worse is the fact that the models systematically ignored the risk of overshooting the tipping points that would impact all planetary sub-systems with fatal consequences. &ldquo;It&rsquo;s the economy, stupid&rdquo; someone famously said. Right, but the math was wrong.
Economist William Nordhaus won the Nobel prize &ldquo;<a href="https://www.nobelprize.org/prizes/economic-sciences/2018/nordhaus/facts/">for integrating climate change into long-run macroeconomic analysis</a>&rdquo;. While he was among the first to call for a carbon tax, his models are flawed.&nbsp;
For him, an increase of 3.5 degrees by 2100 might be an economically desirable outcome. The &ldquo;cost-benefit optimum&rdquo;, which is the optimal result of a cost-benefit analysis of the economy of climate change, would be reached with a global temperature rise of 4 degrees Celsius by 2150.&nbsp;
This might constitute a theoretical construct of the utmost elegance. Too bad that since 2018, with an increase of 1.2 degrees, Europe has been in a drought. A rise of over 3 degrees would make large parts of the world simply uninhabitable.&nbsp;
It is therefore rather unfortunate that the&nbsp;<a href="https://en.wikipedia.org/wiki/DICE_model">DICE model (Dynamic Integrated Climate Economy model)</a>, which is the basis of the Nordhaus Integrated Assessment Models (IAM), somewhat paradoxically concludes that a 6-degree rise would cause a limited loss of 10% of global GDP.&nbsp;
To put things in perspective, a 6-degree increase would turn the Earth into a scorching wasteland.&nbsp;
<h2>The true cost of failing nature&nbsp;</h2>
Then, what is the real social cost of carbon? Carbon prices need to reach $130/ton by 2030 to achieve the Paris objectives; how will economic systems cope with the change? As climate change intensifies, it will be the dominant factor shaping the macroeconomic variables. The idea of a design fault in the economic system is becoming increasingly established.
And when markets fail, the need for political action kicks in. In the face of climate change, &ldquo;the market won&rsquo;t save us, regulation will&rdquo;.&nbsp;These are the words of the Vice President of the European Commission, responsible for the Green Deal, Frans Timmermans.
This was unthinkable just a few years ago. Today, such a statement is almost mainstream. Economists and central bankers are changing the narrative.&nbsp;
Central banks spent a decade fixing the design faults of the financial system after the 2008 crisis. Today all eyes are on a challenge of far different existential magnitude, improving the climate resilience of the financial system and the global economy.&nbsp;
<a href="https://www.bis.org/review/r190930f.pdf">Stopping climate change &ldquo;requires strong political determination&rdquo; and commitment</a>. The responsibility lies with national governments, the only institutions that &ldquo;can incentivise &lsquo;green&rsquo; investments, levy taxes on carbon and impose limits on the amount of emissions that can be allowed&rdquo;, according to Ignazio Visco, Governor of the Bank of Italy.
US Treasury Secretary Janet Yellen recently warned that losses tied&nbsp;to climate change are already causing significant costs and could 'cascade&nbsp;through the financial&nbsp;system'.
Central banks must do their part to tackle the climate crisis while the ECB &ldquo;must adapt its macroeconomic models to integrate climate change risks into monetary policy&rdquo;, argues Isabel Schnabel, an Executive Board member of the ECB.
The first, historic climate risk stress test that the European Central Bank (ECB) conducted last year showed that most banks are not ready as they lack a climate risk stress-testing framework and do not include climate risk in their credit risk models, thus posing a risk to financial stability in Europe.
We expect &ldquo;greater information on the exposure of individual companies&rdquo;, as well as clarity on the &ldquo;sustainability of financial products&rdquo; to ensure that climate risks are &ldquo;adequately priced&rdquo;.
<blockquote>
"The 'true social and environmental cost of carbon' must be included in the prices paid by all sectors of the economy&rdquo;, said ECB President Lagarde.&nbsp;
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Companies, economists, and bankers will try to keep the price down. In the end, nature will dictate its terms.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Putting the economy before the environment is an illusion

Contrary to popular view, EVs do not represent a drain on our electric grids; but they are rather an opportunity that can be exploited while we proceed to decarbonise the power system.

Speaking at a conference last week, Dallara CEO Andrea Pontremoli sharply criticised the pressure to transition to electric power trains in the automotive industry. His statements, taken up widely and uncritically by the Italian press, are not new. But above all, they are based on wrong figures and data. I take this opportunity to set the record straight and correct misinformation.
For prudence&#x27;s sake, before writing, I consulted a number of authoritative experts, including Maurizio Maggiore, who works at the European Commission&#x27;s Directorate General for Research and Innovation.
Pontremoli said: &#x27;Let me give you a number: electricity consumption in Italy is 310 terawatt hours per year. If tomorrow morning the 32 million cars we have in Italy all became electric, they would consume another 310 terawatt hours per year. So we have to double our energy production. We are creating a problem for ourselves&#x27;.
The statement is simply wrong. Electric cars would lead to a mere 12-17% increase in annual electricity consumption. Using the available data, we can do some simple calculations. Today we consume around 7 million tonnes of petrol a year, which equates to around 10 billion litres. If one litre of petrol is equivalent to 8.9 kWh of energy, we arrive at approximately 89 billion kWh, or 89TWh (versus the 310TWh stated by Dallara).
Of course, the consumption of diesel cars must also be added to the calculation. This leads us to multiply by two (the fleets are more or less the same), giving a total of about 40 million vehicles, and not 32 as Pontremoli stated. This results in a consumption of about 180 TWh (not 310TWh).
What the public is not told is that electric cars today consume (conservative figures) only 20%-30% of the energy of a petrol car. This range varies greatly depending on the size and weight of the vehicle. Simple maths therefore results in a total of somewhere around 35-45TWh.
Errors are always possible. Below I provide the sources of my data for ease of verification.
<ul><li>​<a href="https://www.anfia.it/data/studi-e-statistiche/automobili-cifre/statistiche-italia/circolante/gruppo-a/12avalimannoimm.xlsx">Associazione Nazionale Filiera Industria Automobilistica (ANFIA): Passenger Cars in use by Fuel and Year of First Registration in 2021​ </a></li></ul>
<ul><li><a href="https://www.statista.com/statistics/643769/monthly-petrol-consumption-in-italy/">Statista: Monthly consumption of petrol in Italy from November 2018 to December 2021</a></li></ul>
We are therefore a long way from doubling our annual electricity consumption. The expected growth, instead, is quite limited and it will happen gradually, as it will be spread over twenty or thirty years.
We shouldn’t forget that EVs batteries can help stabilise the electricity grid and increase its capacity to absorb renewables. Peak shaving and load shifting are well-known terms in the energy industry that have existed long before electric cars. Smart EV charging solutions are being developed with V2G (vehicle-to-grid) being the one of the first of the emerging industry buzz names.
With the improvement of public transport and car sharing in cities, a reduction in car use is also foreseen. According to the long-term strategy published at the end of 2020 by the Italian government, we will go from 40 million cars today to 24 million by 2050.
In sum, EVs do not represent a drain on our electric grids; but they are rather an opportunity that can be exploited while we proceed to decarbonise the power system.
To take a glimpse of the future, look at China. The question is whether we are not putting our industrial capacity at risk while fighting rearguard battles.
While in Europe we cling to the past, our car industry is losing market shares to international competitors. EU companies are struggling in the Chinese market, while the Chinese newcomers (and Tesla) are gaining ground here. Last week, the car rental company Sixt announced the purchase of 100,000 electric vehicles made in China (the manufacturer is BYD) for its European fleet between now and 2028. This is self-inflicted harm.
A final point on eFuels, which Pontremoli (like others) considers a miracle solution. These are his statements: “If you watch Formula 1 you will notice a sponsor that appears more and more, Aramco. The Arabian American Company, among other things, has a photovoltaic field in the desert in Arabia measuring 120 kilometres by 120 kilometres that produces a few million kilowatt hours of electricity that is used to separate hydrogen from oxygen using sea water. They then combine the hydrogen with CO2. They put this synthetic fuel into normal pipelines so they can distribute it over traditional oil channels. Even now there are canisters of synthetic petrol that can be used in today&#x27;s engines: only the injection has to be changed. You can also use it on ten or twelve cylinders and during combustion you re-introduce into the atmosphere the CO2 that you used for production: so from a carbon dioxide point of view it is neutral”.
Assuming that the photovoltaic field exists (and that would be good news indeed), if you understand thermodynamics even a bit, this is energy blasphemy.
The simple truth is that eFuels are highly inefficient. In fact, they consume five times more electricity than an electric car for the same number of kilometres driven. This should suffice to close the argument. eFuels are far from being a viable solution to the many concomitant problems of the transition to sustainable mobility and transport systems. Perhaps they might have a role in aviation, which is a difficult sector to decarbonise.
Moreover, and I will spare quick calculations, the production of synthetic fuels would divert valuable clean electricity from primary uses and channel it into extremely inefficient ones. The simplest and most energy-efficient solution is always to use electricity directly without conversions, which cost money and waste precious energy. The war in Ukraine has made it clear how important it is to avoid wasted energy. These days - and in the midst of a worsening climate and ecological emergency - we certainly cannot afford it.
Another sore point is the cost. We are talking of several euros per litre, without profit and tax. I challenge Pontremoli and others like him to present this as a truly sustainable and affordable market solution for all.
Of course, motor racing is another matter. I doubt, however, that the average person would embrace the logic as applied to Formula 1 cars.
And these costs will always remain significantly higher than those of electric cars. That being the case, synthetic fuels are a transition dead end – and a red herring – rather than a solution for the mass market.
Interestingly, even <a href="https://www.youtube.com/watch?v=SgH9rsnLgrA">Dallara&#x27;s founder, the iconic Gian Paolo, also seemed to agree when he was asked for his two cents on sustainable mobility in an interview</a> a few years ago. The gist of his reasoning was simple. If you wanted to continue to race and pollute, he said, you had to be willing to pay €4.5 per litre for petrol. Dallara probably already thought at the time that eFules could become a &#x27;rich man&#x27;s&#x27; fuel for niche products, &#x27;pour faire rouler&#x27;, forgive my French, Oldtimers and luxury cars.
Issues of competitiveness and resilience of the European industrial system deserve some final thoughts. While we debate, China is forging ahead towards its climate goals. Europe could be left behind in every transition critical sector. Here, I would like to give you one last thought-provoking number. In 2022 alone, Beijing is installing a record 156GW of new renewable capacity (wind and solar PV), building on the total of 635GW installed in the country as of 2021.
Europe is trailing behind. Perhaps we had better do the maths, stop talking and finally DO what we need to secure a future beneficial to everyone in Europe.
Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

The Biggest Arguments Against Electric Cars - and How They're Completely Wrong

We all need a chance to present ourselves, to assert our ideas. To prove ourselves. Women are less likely to be given this opportunity than men.

Women are often not given it at all. Leadership, it is commonly thought, is not a feminine quality.

Instead, as an old boss and real mentor of mine - a great innovation sage, long-time head of the Fiat Research Centre - used to say: 'when the going gets tough, the toughs get going. And more often than not, they are women'.


In June, I was grateful for the opportunity to join the journey to the European Innovation Area. I owed this chance to Knowledge 4 Innovation (K4I) and Jara Pascual, that I thank for the invitation.
The K4I Forum Governing Board consists of <a href="https://www.knowledge4innovation.eu/k4i-political-members">Members of the European Parliament</a> (political members) and <a href="https://www.knowledge4innovation.eu/k4i-management-board">members of the K4I Management Board</a>.
What follows is the text of my speech.
We all need a chance to present ourselves, to assert our ideas. To prove ourselves. Women are less likely to be given this opportunity than men.
Women are often not given it at all. Leadership, it is commonly thought, is not a feminine quality.
Instead, as an old boss and real mentor of mine - a great innovation sage, long-time head of the Fiat Research Centre - used to say: &#x27;when the going gets tough, the toughs get going. And more often than not, they are women&#x27;.
For women, more than men, having someone to count on, and share the burden of work is fundamental to thrive and to be successful. To be successful, as women, we need to believe in ourselves.
Often, we need to be reminded by trusted friends, business partners, mentors, that we can do it. That we are capable. I had the chance to meet, along my journey, some amazing mentors. I owe them for all I am. I love them deeply for that. These were men who were never afraid of promoting women; men who never felt they would be overshadowed by a capable woman. These are true leaders.
True leaders are not afraid of change. True leaders are not afraid of excellent collaborators who challenge their ways. Because they are self-confident. True leaders use the qualities of their co-workers because they know that the team is always stronger than the individual.
Today I wouldn’t be able to say what I have to say if I didn’t have a trusted friend and business partner who is here, to read to you, my thoughts.
Thierry is a French entrepreneur and the treasurer of BuildingSMART MEDIACONSTRUCT, the French chapter of Building Smart International. BuildingSMART is the industry body driving the digital transformation of the building asset industry. I work as an advisor for them. Together, we promote solutions to accelerate the ecological transition in the building and construction sector, which is one of the most carbon intensive. The building and infrastructure sector generate 39% of GHG emissions and cause 50% of global resource consumption.
Bold leaders enable innovation. Today, more than ever, innovation germinates best in open ecosystems. We need to cross the boundaries of sectors, work across regions, connecting the dots of solutions. Trans germination, and miscegenation of cultures, technologies, nature-based solutions, traditional knowledge, and practices. We need openness. These are feminine qualities. We also need concreteness.
Today is indeed a time for concrete solutions. Everyone must do their part. There are many things we can do to make a change. For women, and for the challenges of the energy and ecological transition, the possible solutions lie in cooperation, co-creation, and the actions of SMEs, which are the backbone of European industry.
One example of a concrete, bottom-up innovation is provided by the RED II Directive, which introduced the renewable energy communities. This term refers to an association of citizens, businesses, local public administrations, or small and medium-sized enterprises that decide to join forces to equip themselves with one or more shared facilities for the production and self-consumption of energy from renewable sources.
In my country, Italy, the Directive has been transposed. But unfortunately, the necessary implementing decrees have not yet been adopted. This slows down the deployment of renewables! while we need them so urgently to decrease gas consumption.
The Directive is an important step towards an energy scenario based on distributed generation, which will favour the development of zero-kilometre energy and smart grids. It will make it possible for individual citizens and groups of companies to join forces and co-finance the installation of renewable capacity that supply energy to multiple users. This is the kind of system innovation that we need. In the Nordics, energy communities have produced tangible economic advantages to consumers. Sweden enjoys the lowest electricity prices in Europe. Consumers became prosumers. The post fossil economy needs a new organisational paradigm.
At the Regenerative Society Foundation, for which I serve as Technical Director, we are applying the concept of energy communities to a new agricultural regeneration project we are developing in Kenya.
“Sustainable ecosystems of connected and prosperous communities” aims at improving the livelihoods of rural populations in Kenya through implementing innovative, regenerative supply-chain agriculture and direct access to market. The project brings nature positive consequences in terms of climate mitigation and consumption habits. This is a key enabler for the transition to a regenerative socio-economic model in Low Income Countries as well as in Europe. This project is built upon an existing platform of 25000 farmers. More than the half of the payments made through the platform go to women. Women are key to social wellbeing and sustainable development in Africa. The project seeks also to establish a carbon accounting pilot, on the way to the implementation of the Paris Rulebook, finally agreed upon at COP26 in Glasgow. We are seeking investors.
This summer, the second Summer School for Female Leadership in the Digital Age – jointly organised by Huawei and the European Training Foundation - is being held in Prague. The aim of the school is to enhance the immense untapped potential of female talent, empowering girls to lead the tech revolution.
High-level representatives from business, politics, and science, will share their experience and knowledge with the 29 participants. Among them, there are many leading members of K4I. You and I, Jara, will also be there.
Today, only one in five ICT specialists are female. More women are needed at all stages of the tech product and policy development process to prepare for a digital future that works for all.
And today I bring an example of another bottom-up, concrete action. A step towards engaging more women in traditionally male sectors.
Many companies today are looking for female professionals to hire, especially in technical areas. The French company BEAM CUBE, a highly innovative SME is one of them. BEAM CUBE has two vacancies for a project manager engineer and a technical designer. We will make them available after this panel.
Together, we propose building a network to match supply and demand for female professionals within an EU-wide network of companies, vis the important network of K4I, Collabwith, and any other partner.
We speak on behalf of buildingSMART MEDIACONSTRUCT France. We also speak on behalf of FNTP (Fédération Nationale des Travaux Publics), the French National Federation of Public Works, who is committed to actively support the proposal.
FNTP represents 8,000 public works companies of all sizes. The companies that make up the FNTP have 0.4% women! FNTP, and its members, are aware that this must change, and they are open to do so. They have recognised that there is a need for training and for strengthening a pipeline. This is especially so on construction sites.
More than 5,000 of the companies are also small, local, and agile, so they can be fabulous accelerators for the evolution of the shift in mentalities and culture needed. I have the pleasure to work with them to accelerate the ecological transition So, I asked them, why not work together and try to find a solution to attract more women?
They embraced the proposal. Together with BEAM CUBE and buildingSMART, they have made it their own.
Beyond the French Federation of Public Works, small companies are the ones who make innovation and push for change.
In France, and in Italy, we find more and more women in these companies, often family-owned businesses, who bring their imagination, their pragmatism, their logic, their persistence. Much more than many men, women bring diplomacy and listening skills that are so essential to the complex process of change. Women break barriers and are agents for change. They normally look at a bigger picture, at a more comprehensive understanding of “result”, profit and welfare. This is a shift we need for a more ecological economy. We need to redefine “value” for a more sober economy. In France, the CEOs of EDF, Engie, Total are calling to save energy. Female economists are revolutionising their field by questioning the meaning of everything from &#x27;value,&#x27; and &#x27;debt,&#x27; to &#x27;growth&#x27; and “consumption”.
Far from old masculine reflexes that often cling to their habits to assert their powers and territories, women will bring voluntary and innovative visions and explain them.
In our societies, the professions of social work, support, and people management are mostly female. In a context like ours today, where we have to innovate and transform ourselves, including technologically, to save our planet, we have to rely on all the traditionally recognised female qualities and skills. Above all we need to make people aware that women are also excellent technicians, excellent project leaders, excellent company managers. As my friend Thierry says, in his experience, women excel in running a small business, which is often organised like a family. Women have nothing to prove as managers.
But they also have nothing to prove in terms of their technical skills, their natural qualities in logic and science. Having women in a design office, project managers supervising men and women, often assures the application of bright ideas and common sense, of peaceful, constructive and serene dialogue within a team.
Unfortunately, women often do not dare enough, because of a largely male environment concerned with its usual prerogatives. And this regularly starts in primary and secondary school. This is a handicap – we need to change this type of stereotyping.
It is necessary to go to the heads of companies, including small companies dominated by males, because these men can at least be facilitators, or provide additional driver to give women all the places they deserve in recognition of their qualities.
This article was first published in <a href="https://brusselsmorning.com/next-generation-women-leaders-for-a-sustainable-economy/26036/">Brussels Morning</a>. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Next Generation Women leaders for a Sustainable Economy

In an address to his ministers, which, exceptionally, was broadcast, French President Emmanuel Macron called on the government and the nation for 'unity' in the face of the 'great upheaval' - marked by the end of 'abundance', the 'evidence' of the impact of our habits and “insouciance'. Strong decisions await the government. It is normal business for a government to manage serious crises. The moment we live in goes beyond this.

In an address to his ministers, which, exceptionally, was broadcast, French President <a href="https://www.linkedin.com/in/emmanuelmacron?miniProfileUrn=urn%3Ali%3Afs_miniProfile%3AACoAABt6Ew4Bq_m-hahX5ocf321ZyqZy7FpQlig">Emmanuel Macron</a> called on the government and the nation for &#x27;unity&#x27; in the face of the &#x27;great upheaval&#x27; - marked by the end of &#x27;abundance&#x27;, the &#x27;evidence&#x27; of the impact of our habits and “insouciance&#x27;. Strong decisions await the government. It is normal business for a government to manage serious crises. The moment we live in goes beyond this.
In the era of globalisation, the logic of comparative advantage and capital&#x27;s pursuit of profit prevailed. Moving forward, profit must be supplemented by environmental protection and security of resource. This changes the whole economic paradigm.
What we are experiencing is different - entering &#x27;the order of major upheavals&#x27;. The word Macron uses is bouleversement. In this perspective, the war in Ukraine, which has triggered concerns over security of resource, is an example of what climate change as a structural trend, will bring about in terms of resource prices.
In Italy, we experience cognitive dissonance.
While some still waste time croaking about the causes of climate change, the ongoing electoral campaign is disconnected from reality. Climate change, along with its impacts, is accelerating. The “vital signs” of the planet, as NASA puts it, are deteriorating at an alarming rate. Mario Draghi, in a recent speech, recalled the adverse impacts of accelerating climate change on Italy. But he failed to grasp how essentially disruptive it is, not recognising that climate change calls into question the viability of current economic models.
The drought of summer 2022 is significant and prolonged worldwide, from Europe to China, the United States to Africa, and has brought with it serious knock-on effects on energy production, entire industrial sectors and food security. Drought, warns a UN report, has increased by 29% in a generation. And it will get worse.
At the same time, concurrent ecological crises are happening, and they are threat multipliers. Across the world glaciers are receding. The lives of over a billion people are dependent on the annual melting of those in the Himalayas, and this is just an example. As I write, unprecedented floods have destroyed almost 50 per cent of Pakistan. More than 1000 dead and a massive economic loss of $4 Billion has left the already underdeveloped parts of Baluchistan and Sindh under complete destruction.
Rainwater is no longer drinkable anywhere in the world. The cause is a class of industrial chemical compounds, perfluorinated PFOS and PFOA, which never decompose in the environment.
Humanity is “at a crossroads” and action must be taken “urgently, using every possible tool” (UN). At risk ‘the ecological systems on which the survival of all life, including our own species, depends’. Facit, climate change is an existential threat. For the militaries of major countries, it is an ‘immediate and direct’ threat to national security.
Italy is not well placed. The Mediterranean and the Balkans are becoming a hotspot for climate change.
Projections made with the most advanced models indicate that significant changes will occur in the region. From 2021 onwards, we are seeing substantial warming and a decrease in precipitation of around 5 per cent. Heat waves and fires are doing the rest, and desertification will increase further. Unfortunately, worst-case scenarios seem to be correct.
The current situation is already critical. The minimum threshold of water required to meet the water needs in a region is 1,700 m³ per capita/year. In the southern and eastern Mediterranean, 180 million people live in &#x27;water poverty&#x27; with only 1,000 m³ /year. Of these, some 80 million survive under severe water scarcity (500 m³/year). A growing pressure that will contribute to social instability and to the migration of millions of people. This is a campaign memo for the right-wing parties in Italy.
In many areas of the Mediterranean, 80 per cent of available freshwater withdrawals are for agricultural purposes. Most of the water for irrigation is needed in summer, when demand is highest and water least available.
Technological and biotechnological innovation in crops will help, but it will not be enough. Intensive production models that deplete the soil and water resources in a vicious circle will have to be changed. This is why the EU aims to decarbonise agriculture and reduce the use of chemical fertilisers by 30 per cent by 2030. However, the consumption of certain foodstuffs and products will also have to be reduced.
The same applies to energy. A few days ago, the President of an Italian energy think-tank, Davide Tabarelli, certainly not a green romantic, acknowledged that a savings plan for gas and energy is urgently needed.
What he forgot to say is that these are measures that must become structural. Energy and resource efficiency are tools of resilience in a changing world.
In China, an intense heat wave and drought in the south around the Yangtze river basin is drying up rivers. Water levels in dams are falling, limiting electricity production in power plants, just as demand for air conditioning is increasing. To avoid power outages, the authorities in the province of Sichuan - which relies on hydropower for about 80 per cent of its energy needs - have ordered factories to stop operations. The drought is also weighing on energy production globally.
In a world which is deeply interconnected, the backlash on the global economy of a Chinese slowdown could be severe.
Without water, power stations stop. Even nuclear ones. These need large amounts of water for cooling processes. For example, France, for the first time this year, was forced to import electricity from its European neighbours due to nuclear plant shutdowns.
As the era of abundance comes to an end, economic sobriety will become the rule of the game. Moving away from fossil fuels will deliver us a different, leaner and more essential world.
The world today is organised on the strength of infrastructure and production capacities that are the result of several centuries of investment involving very long life cycles.
Changing this system and transitioning to new energy sources, while maintaining as much as possible what fossil fuels have helped to build, requires method and planning, the operational model of the Chinese system.
And “this”, Mauro Petriccione told me in 2019, “is the vision behind the European Green Deal.” Mauro Petriccione, who unexpectedly passed away this week, was the European Commission&#x27;s top official, Director-General of the Directorate-General for Climate Action, leading the Commission’s effort to fast-track the transformation of the EU economy.
In European countries, the only way to have a plan that survives political change, is if there is a very strong consensus among voters and civil society, which transcends the person in office at the time.
Petriccione realised the need for consensus on decarbonisation, which means that the plan must be forged with the actors who will have to implement it. The more environmental catastrophes happen, the greater the awareness. A responsible policy means avoiding going to the edge of the abyss.
Today, for example, no French presidential candidate would propose abolishing healthcare or social security because the French are viscerally attached to it.
&quot;Despite the growing signs of hope, there is no doubt that the road ahead is fraught with difficulties, as we are building something completely new.” Continued Mauro. “Today, nobody knows how a decarbonised economy will work. Right now, there is broad public support for green policies. In the EU, I see that today the socialist, liberal and Christian-democratic parties have embraced greener policies than the Greens proposed a few years ago. This is a radical change. Until a few years ago, and I think 2018 can be considered a watershed, no one in the EU, neither the Commission, nor even most Member States, was doing enough on climate policies. Climate change and environmental protection were important goals but second to other political priorities, often more important or more urgent. The situation has changed. In part, this is due to changing public opinion. Fridays for Future, which is the first continent-wide mass political youth movement since the protests of the 1968 generation is impressive. They are more constructive, they have a vision of what they want to achieve. In Europe, they really pushed politicians to act. However, I wonder whether these young people fully realise what they have triggered; whether they are aware of the momentous changes that lie ahead”. But we cannot afford not to act.
What he knew for sure is that if we don&#x27;t support our economies and our people during the transition, if the choice for our workers comes down to protecting the environment or losing their jobs, then we won&#x27;t make it. And the Green Deal will only become a lost cause.
In the end, it will be the voters who will make the difference between success and failure&#x27;. But public opinion is shifting.
My first, long conversation with Mauro in the summer of 2018 began with these words. More would follow. Always too few until the news of his death.
The Italian-born, pragmatic, no-nonsense jurist had worked for the European Commission since 1987. Wherever he went, his reputation preceded him. As deputy director general of the EC’s Directorate-General for Trade, he led the negotiations that led to the EU-Canada Comprehensive Economic and Trade Agreement, or CETA. He also was part of the negotiation team which led to the Economic Partnership Agreement with Japan, of which he was very proud.
“The EU is integrating climate objectives into international trade agreement”, he said to the writer, commenting on the Brexit deal (with London). Similarly in regard to the CAI -- Comprehensive Agreement in principle on Investment (with Beijing). Both accords were announced in December 2021.
He believed that the alignment on climate and environment could become a convergence tool to ensure the “level playing field” necessary in Brussels and Beijing.
He will be remembered not only for the results he achieved, but also for the network of friendly and trusting relations he had managed to build during various negotiations. This was an approach he felt it was essential to preserve when he took up a new climate-related post, fraught with difficulties, and involving engagement with complex partners.
He followed a similar path to negotiations with China from the very beginning of his new assignment. Petriccione was open and deeply curious. Despite initial difficulties in understanding the rules of his new colleagues and their system, he had internalised the underlying mechanisms and was able to create trust, speak clearly and be heard within a few months.
For Petriccione, China was an inevitable partner. Relations with Beijing on climate and environment have become solid, he told me recently.
But more needs to be done globally to adequately respond to the urgency and speed of climate change.
Petriccione believed it was time to move to a “transformative” approach within the global community, with Beijing as well as with other international partners.
Unlike many, he had the intellectual means to imagine how this transformative framework could be designed. The toolbox came to him from his education, intelligence and experience.
Before 2018, his career had dealt with everything but climate, ranging from trade, defence, standards, investment and competition to agribusiness, WTO, dispute settlement, relations with EU member states, and Asia and Latin America ties.
A stranger to the clique of the usual faces on the climate negotiations arena, Petriccione embodied a fresh perspective on the process of global work streams, brought in new concepts and learnt the jargon fast.
His experience allowed him to approach thorny issues that had remained unsolved for decades, mostly for a lack of political will, from angles traditionally not associated with environmental negotiations, even though they were intrinsically relevant to the process of change.
It is therefore not surprising that he was appointed to the EC’s top climate post when the commission decided it was time to get serious about the Paris climate accord.
It is nowadays commonly acknowledged, and Petriccione agreed, that the lack of multilateral alignment on energy, industrial and trade policies had led to the repeated failures of various international climate change conferences right up to the COP25 event in Madrid, Spain, in December 2019.
A turning point that came during the COP26 summit at Glasgow, United Kingdom, in 2021, and the recent landmark US climate legislation are due to a fundamental shift in perspective that is now accepted, though not yet realised.
The urgency of the threat is pushing the global community to action, and protection of climate and natural systems have now become the focus of government policy and action.
The EC climate action chief believed “that the Paris Agreement, even with all its flaws, gave rise to an original and potentially very effective mechanism of process obligations, which leave room for national choices of substance, but once those choices are made, give them a degree of de facto obligation”.
Petriccione could imagine, he told me once, seeing the United Nations Climate Change Secretariat in Bonn, Germany, acquiring a stronger role.
As he often emphasised, the global challenge of climate change requires policies both to reduce the carbon intensity of the economy and to enhance natural carbon sinks, with initiatives covering energy, industry, transport and agriculture sectors, along with relevant fiscal policies, including taxation and incentive systems.
In short, the climate change challenge is a matter of industrial, economic and social policies.
One last point. Petriccione could have retired earlier, but he stayed on at the request of the political leaders. It is due to a spirit of service, but also because he had a mission — to save the planet’s climate.
I hope that his legacy will be carried forward in a fitting manner.
This article is also published on the <a href="https://www.linkedin.com/pulse/end-abundance-my-tribute-mauro-petriccione-arvea-marieni-%25E5%25AE%2589%25E8%2596%2587%25E8%2596%2587-/?trackingId=PBt9hCatTDe6DS2yzQZIVA%3D%3D">author&#x27;s blog</a>. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Macron announces the "End of Abundance"​ - My Tribute to Mauro Petriccione

Cop26 delegates are upbeat while they pass from one event to another. Never in the history of climate conferences has there been so much energy. In Glasgow, tech billionaires – the likes of Gates, Musk, Bezos – take the stage alongside the stars of world politics. But behind the scenes of this show, is anything good happening for the planet?

Cop26 delegates are upbeat while they pass from one event to another. Never in the history of climate conferences has there been so much energy. In Glasgow, tech billionaires – the likes of Gates, Musk, Bezos – take the stage alongside the stars of world politics. But behind the scenes of this show, is anything good happening for the planet?
The answer is probably yes. One of the reasons to trust that something of substance is happening in Glasgow is that all the stakeholders are taking a step towards reforming the economic system, seeking to be rule-makers rather than rule-takers.
Yet, markets alone won’t save us from the twin crises of nature and climate. Regulation and good policies will. In September, EU Commission Vice-President Frans Timmermans said as much, noting that it “may come as a really big surprise to many who were very much committed to the neoliberal economic model.” Today, many economists have described climate change as the greatest market failure in history. Is this the dawn of a new economic model?
As we write, China is moving towards an ecological civilisation. Europe aims to become the first climate neutral continent in the world.
<h1>A failure of governance</h1>
The focus in Glasgow is on how to mainstream innovation in order to accelerate the transition to a post-fossil economy. The first step, however, is to build the new system of rules for the ecological industrial system. That’s a whole new game. New policies are to be designed to ensure the scalability of solutions and the transformation of markets. A whole-economy carbon (and resource) price is what we need. This, will transform our societies and the way we all live.
A key dimension of this failure is political. Today we know that climate is “the” issue at the heart of industrial and social systems.
Still, negotiations under the UN Convention on Climate Change have been managed since the early 90s by the Ministries for the Environment of the Parties to the Convention. And while Ministers for the Environment made commitments to reduce carbon emissions, their colleagues in Energy, Agriculture and Finance promoted policies to support the production and consumption of fossil fuels. This contradiction has marked the entire long journey of the COPs, albeit in different ways, over the years. The other elephant in the room is energy security.
The global environmental challenge of climate change requires policies both to reduce the carbon intensity of the economy as well as to enhance the natural carbon sinks: energy, industry, transport, agriculture, taxation/incentives, are the main sectoral policies to be involved in addressing climate change. In short, the challenge of climate change marginally involves the “classic” environmental policies.
For anything that makes a difference, look to Ministers for Energy, Agriculture, Industry, and Finance. To address environmental challenges, environmental management needs to shift towards social and industrial systems. Our society needs to use carbon less intensely, while we bolster the resilience of the environment by enhancing carbon sinks.
Some do see the opportunity along with the challenge. US Special Climate Envoy, John Kerry, views the building of this bright new world as the biggest economic opportunity in the history of humankind.
<h1>Reforming the Economy, on the double</h1>
In Glasgow, it is clear what the challenge is perceived as global. That is why 100 countries have committed to halting deforestation by 2030, a goal in line with the objective of another major UN conference (Cop15 on biodiversity) that was recently and successfully concluded in China.
The tone has changed, says Youssef Nassef, director of the UN Adaptation Division of the UNFCC in Bonn. In the history of the COPs “there has never been such a large number of voluntary initiatives.”
But the question is whether this consensus is also reflected in global determination to substantially reform the economic system. That is a different order of challenge — nothing less than “civilisational,” as the Italian Prime Minister noted during the G20 Summit in Rome, right before Glasgow.
“We are changing the economic system”, Mario Draghi said.
The rules of the new economy are simple: to mainstream climate regulation, you need to internalise the external environmental damage. “Cheap” or “expensive” should be a calculation that involves extraction, production, and consumption.
Once these externalities are integrated in the market system, energy producers and national economies will have a “level playing field.” Without such a system, the world risks plunging into permanent conflict. And this industrial, economic, and social revolution needs to happen quickly and globally.
There is a sense of urgency. Germany’s Environment Secretary Jochen Flasbarth notes that “the new normal” in Glasgow is speeding things up. China’s top climate negotiator, Xie Zhenhua, believes that a broad deal on carbon markets is becoming possible.
Biden’s infrastructure package and China’s Belt and Road projects can set a different regulatory benchmark, affecting the global market.
Eventually, how we build forward – not back – better, will make or break the success of the ecological transition. What will be the environmental cost of Biden’s infrastructure package or that of the China-funded projects along the Belt and Road? Even more than before, truly ecological standards are needed.
There is a sense of urgency.
In Glasgow, 20 states are committing to end public subsidies for fossil fuel investments abroad by 2022. That is now. And that is complicated because many oil and gas companies – such as Italy’s ENI – are state-owned.
The question is whether governments can convince stakeholders to assume the cost. The growing concern over stranded assets looms large in the minds of politicians worldwide.
And rightly so. What we need is an orderly transition. If rich states are unwilling to assume a fair share of the cost, in their own interest, we will all fail. In Glasgow, some steps have been taken to show support. To date, Glasgow has dealt with everything from green infrastructure for poor countries to the end of coal in South Africa to the water crisis.
According to Prime Minister Draghi, money is not the issue here. True, to finance the transition, multi-trillion-dollar investment is needed over the next few years. The biggest industrial and social transformation in history will cost loads. And international institutions such as the World Bank will have to loosen the purse strings. But the main task lies with private and green finance. New mechanisms are needed to address this demand. Today, even the US Congress is talking about a carbon price.
Even technical negotiations, which revolve around clauses of the Paris Agreement, are moving on in Glasgow, says German State Secretary for the Environment Flasbarth. “The new normal of COP26 is speeding things up”.
China’s negotiator Xie Zhenhua believes a broad deal on carbon markets is possible.
And despite President Xi Jinping’s absence, China plays an active role is in Glasgow.
This is the opinion of European Commissioner Timmermans, who declared “I had a long meeting with the Chinese negotiator, Minister Xie in London, which gave me reason to be optimistic about the results we can achieve”. The Chinese “are ambitious on the transition to renewables”.
Beijing has put a concrete programme on the table, and it has already been converted into law. If internal and geopolitical conditions allow, it will be improved.
The EU is banking on collaboration. For years, the Eu and China have been converging towards common industrial and regulatory standards. At COP26, the Chinese central bank and the Commission launched a common taxonomy for green finance in China and Europe, which can become the basis for a new global standard for financial products.
But geopolitical tensions can undermine collaboration and the common fight to save the planet’s climate. Relations among powers are not at their best and this affects complex negotiations about how to ensure that emissions are reported transparently and correctly. This is one of the toughest nuts to crack for negotiators willing to finalise the so called “Paris Rulebook”.
But even on this, things may be moving on.
During the G20 meeting in Rome and on the eve of COP26, the EU and the United States announced that they had reached a deal over their dispute on steel and aluminium. The agreement presents some interesting and innovative features linking climate policy, capacity and dispute settlement under WTO rules.
Under the agreement, transparency will be ensured by forming a technical working group to confer on methodologies for calculating steel and aluminium carbon-intensity, among other issues, and on sharing relevant data.
Could this small but significant breakthrough be a blueprint for a broader operational model?
After the injection of optimism in Glasgow, it’s time to move from words to deeds. It is not yet clear how much of the commitments made by the countries will be realised.
The clock is ticking. The US plan is still in Congress; Europe Fit for 55 plan is still a policy agenda rather than binding law. China, for its part, often under-promises and over-delivers.
This article is also published on <a href="https://brusselsmorning.com/glasgow-is-about-the-global-environment-but-also-about-global-power/18410/">BrusselsMorning</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Glasgow is about the global environment, but also about global power

The market won’t save us from the twin crises of nature and climate, regulation will.
Commission Vice-President Frans Timmermans said as much in his opening address to the IUCN World Conservation Congress, which was held in Marseille last week. “This may come as a really big surprise to many who were very much committed to the neoliberal economic model”, he added.


The market won’t save us from the twin crises of nature and climate, regulation will.
Commission Vice-President Frans Timmermans said as much in his opening address to the <a href="https://www.iucncongress2020.org/">IUCN World Conservation Congress</a>, which was held in Marseille last week. “This may come as a really big surprise to many who were very much committed to the neoliberal economic model”, he added.
Indeed, many economists have described climate change as an example of market failure. Those who, like Sir Nicholas Stern, have been updating the impact of the latest climate science on economics, realise that the consequences are far more devastating than were previously thought.
And when markets fail, the need for collective action kicks in. Democratic policy, as Timmermans notes elsewhere in his speech, must reflect a “collective responsibility” for society as a whole.
Such a stark statement might have raised eyebrows only a few years ago whereas now it is accepted as almost completely mainstream. Economists and central bankers are on the same page. Central banks spent a decade fixing the faults of the financial system after the 2008 crisis. Today all eyes are set on a longer-term challenge, improving the climate resilience of the financial system and the global economy.
<a href="https://www.bis.org/review/r190930f.pdf">Stopping climate change “requires strong political determination” and commitment</a>. ”Responsibility” lies with “national governments”, the only institutions that “can incentivise ‘green’ investments, levy taxes on carbon and impose limits on the amount of allowable emissions”, according to Ignazio Visco, Governor of the Bank of Italy.
Central banks must do their part to tackle the climate crisis while the ECB “must adapt its macroeconomic models to integrate climate change risks into monetary policy”, Isabel Schnabel, an Executive Board member, argues. European banks are not ready for the upcoming, historic, climate stress tests. We expect “greater information on the exposure of individual companies”, as well as clarity on the “sustainability of financial products” to ensure that climate risks are “adequately priced”. As <a href="https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210125~f87e826ca5.en.html">Christine Lagarde, head of the ECB</a>, pointed out in a speech on 25 January 2021, the “true social and environmental cost of carbon” must be included in the prices paid by all sectors of the economy
The European experience proves that regulation is a key driver of environmental innovation. Technology, however, is a part of the solution. Nature is our best ally. The Commission is to present a new environmental package by mid-December, including proposals to protect biodiversity.
For decades, classical economic theory and econometric models have grossly underestimated the economic impacts of the crisis. Models do not capture the real cost of exhausting non-renewable natural resources, nor that of externalities. What’s even worse is the fact that the models systematically ignored the risk of overshooting the tipping points that would impact all planetary sub-systems with fatal consequences. “It’s the economy, stupid” someone famously said. Right, but the math was wrong.
Economist William Nordhaus won the Nobel prize “<a href="https://www.nobelprize.org/prizes/economic-sciences/2018/nordhaus/facts/">for integrating climate change into long-run macroeconomic analysis</a>”. While he was among the first to call for a carbon tax, his models are flawed. For him, an increase of 3.5 degrees by 2100 might be an economically desirable outcome. The “cost-benefit optimum”, that is the optimal result of a cost-benefit analysis of the economy of climate change, would be reached with a global temperature rise of 4-degrees Celsius by 2150.
This might constitute a theoretical construct of the utmost elegance. However, the science is clear. A rise of over 3 degrees would make large parts of the world simply uninhabitable. It is therefore unfortunate that the <a href="https://en.wikipedia.org/wiki/DICE_model">DICE model (Dynamic Integrated Climate Economy model)</a>, that is the basis of the Nordhaus Integrated Assessment Models (IAM), somewhat paradoxically concludes that a 6-degree rise would cause a limited loss of 10% of global GDP.
To put this into perspective, a 6-degree world is a scenario so extreme that it’s almost unimaginable. Thus, not many studies have addressed it.
Then, what is the real social cost of carbon? The question is still hotly debated. One thing we know for sure: “if everyone lived as we live in Western Europe, we would need three planets”, according to Timmermans.
Every year we consume 100 billion tonnes of resources. Water and food security are also at risk. This is the rationale behind the shift towards a more circular economy. Use fewer resources; and use them better. Reduce waste. In China, where the principle of the “ecological civilisation” was inscribed in the constitution in 2018, food waste is now severely punished. Single-use plastic for food delivery has been banned since January.
For the EU, access to resources and raw materials – primarily for energy transition – is tantamount to strategic autonomy and security.
Adaptation measures are needed for food and water systems. <a href="https://www.eea.europa.eu/highlights/climate-change-threatens-future-of">Multiple crops and livestock production are set to decrease, and may even disappear in parts of Southern European regions</a>, the European Environment Agency maintains. <a href="https://www.nature.com/articles/s41558-021-01000-1">Agricultural productivity’s growth has been slowed by climate change globally</a>.
In January, the Dutch Parliament approved a law to curb emissions and nitrogen levels from the agricultural sector. Politicians are now considering forcing farmers to cut their livestock by 30%. In Germany, 34 university canteens in Berlin have gone vegetarian. Meat and fish can still be found in only 4% of the dishes served. It was student demand that led to the shift.
The fight against climate change is a societal – and generational – issue and not “just” a technological problem. It touches upon important factors, ideas, models of consumption and ways of life.
Climate deniers can’t be dismissed as a nuisance and a danger anymore. After decades of fighting the damaging lies, the science has finally won the battle. The risk today comes from fatalism –there’s nothing left to do; the catastrophe is inevitable scenario– born of resignation, apathy and economic insecurity.
The lessons from the yellow vests in France must not be forgotten. We need education, plus communication that showcases success-stories, while providing for accessible, convenient, alternatives to services and products that will be phased out. Above all, we need a structural approach to rebalancing national and global fiscal systems.
The almost inevitable, temporary increase in the cost of electricity in the EU needs to be offset by removing improper tax burdens that aren’t directly related to energy production and shifting the burden to carbon-intensive factors.
Rising fuel prices will have to be met by improving public transport. By 2024, Germany will invest 1.25 billion in electric buses and charging infrastructure. With the EU’s blessing, this is the way to go, the only way to go.
This article is also published on <a href="https://brusselsmorning.com/urgent-need-to-re-energise-europes-approach-to-climate-change/17261/">BrusselsMorning</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Urgent need to re-energise Europe’s approach to climate change

Europe and the United States are formulating a plan to engage the MENA (Middle East & North Africa) region in the energy transition, turning oil producers into renewable energy providers. Producing clean energy from the desert to power the European grid would provide a roadmap for peace and sustainable development in the “enlarged Mediterranean”.

Europe and the United States are formulating a plan to engage the MENA (Middle East &amp; North Africa) region in the energy transition, turning oil producers into renewable energy providers.
“Today’s fossil fuel producers can become tomorrow’s clean energy champions to accelerate a net-zero transition. The MENA region is central to that shift”, tweeted the U.S. Climate Envoy John Kerry on Thursday, at the end of his visit to the United Arab Emirates, Saudi Arabia, and Egypt. 
Kerry’s efforts have a twofold objective. In the great new game of the clean energy and eco-transition, Europe has a technological edge and a geopolitical vision. The US needs to stop playing “catch up” to remain a leader, economically and politically.
Producing clean energy from the desert to power the European grid would provide a roadmap for peace and sustainable development in the “enlarged Mediterranean”.
The plan is ambitious and fraught with geopolitical obstacles. Yet, technological progress has made it viable, while markets are driving the shift to renewable energy.
In a world threatened by the collapse of natural ecosystems and unrestrained climate change, markets make such plans highly relevant for anyone in a position of influence.
Italy is well placed to profit from stability in the region. Yet, Rome remains an observer, while others take to the green energy field.
<h1>Europe’s challenge</h1>
The question that will make or break the European Green Deal is where and how we will generate and distribute the clean energy that will be needed by 2050. To put things into perspective, in 2018 the total electricity generated in the EU was 2800 TWhour. The total energy consumed by the 27, however, was four times that amount.
To reach that consumption benchmark while getting rid of EU dependency on fossil fuels (to achieve climate neutrality) will require direct electrification, sector coupling, and green hydrogen. In sum, we need to scale up renewables, particularly wind and solar, to decarbonise the energy mix.
Yet, there are limits to what we can do in Europe. Across the continent, onshore and offshore wind-generated electricity production hit the 458 TWhour mark in 2020, contributing 16% to our energy mix. Currently, Europe has 25GW offshore and 195GW onshore wind power installed. According to the EU Offshore Wind Strategy published last year, wind will deliver 25% of the bloc’s power demands by 2030 and 50% in 2050. But land is precious, and the energy transition must be achieved together with the protection of ecosystems and biodiversity.
That is why an “old” plan to produce clean energy from the Sahara Desert (solar) and other renewables sources in the region (wind), has now been revived and is gaining momentum with German industrial and diplomatic backing. In its latest version, the plan includes green hydrogen production in the Gulf.
It all starts from the bottom line: 1.2% of the Sahara Desert is sufficient to cover all the energy demand of the world at competitive costs with solar power.
The vision of a green hydrogen economy is also reawakening the vision of desert power. Hydrogen would allow renewable power to dock on Europe’s Mediterranean shores in a different form: green molecules. The cheap, renewably generated electricity could be used to produce green hydrogen onsite. Existing gas pipelines on the seabed could be used for transport. Ammonia or power fuels could be shipped by tanker to any place in the world. That is a paradigm-change in electricity production with the incremental reuse of existing infrastructure.
<h1>The scale tips towards solar</h1>
Two minutes of sunlight are enough to power the world for one year. And it doesn’t cost much.
The science behind the vision is solid. Every two minutes, the energy reaching the earth from the sun is equivalent to humanity’s annual energy needs. According to the World Energy Consumption &amp; Statistics 2020, global energy consumption in 2015 (coal, oil, hydroelectric, nuclear and renewable) was 13,000 Million Ton Oil Equivalent (13,000 MTOE), which correspond to 17,3 Terawatts annual consumption.
With today’s technology and moderate conversion efficiency, producing 17,4 TWhour would require us to cover an area of the Earth 335 kilometers by 335 kilometres with solar panels. Approximately 111,369 square kilometres is enough to power the world, which is equivalent to 1.2% of the Sahara Desert. That energy would be clean and would come at a competitive cost. There is no way coal, oil, geothermal or nuclear can compete with this in the longer term.
<img src="https://illuminem.b-cdn.net/articlebody/77dc5190bf0e39e16af2772007fa81b33c7e7842.png" alt="undefined">
To harness renewable energy from the desert would also solve the conundrum posed by conflicting land use, limiting the negative impacts of large-scale solar plants on ecosystems and biodiversity, even considering the increase of temperature induced by solar farms.
The cost for such an investment would near five trillion dollars. This is a one-time investment that does not consider economies of scale or savings. This amount corresponds to less than 10% of the world’s global Gross Domestic Product. The economic rationale is strengthened by the upward trend of carbon prices in Europe (ETS) and upcoming global carbon tax systems.
To put this amount into perspective, the cost of a 1 GWe (Gigawatt electric) nuclear plant is around three billion dollars. The maths are simple: to generate 17,3 TWhour of nuclear power would cost fifty-two trillion dollars, that is ten times the cost of the solar energy equivalent.
<h1>The solution at hand</h1>
Recent studies suggest that the 1.5℃ is technically feasible at relatively low-cost for the overall economy. The “<a href="http://pure.iiasa.ac.at/id/eprint/16239/">Research Report on Global Energy Interconnection (GEI) for addressing Climate Change</a>” comprehensively analyses the energy system and mitigation technology of GEI in 2℃ and 1.5℃ scenarios. The results are remarkable. By 2050, the global intercontinental power trading volume will amount to 800TWh; the cross-region power flow will be 660GW; clean energy will account for 86% in primary energy; the cumulative global CO2 emissions will be kept under 510 billion tons; and the discharge of sulfur dioxide, nitric oxide and PM2.5 will drop by 86%, 98% and 93% respectively.
The point is how quickly will economies and societies move to the electrification of their infrastructure. The GEI report suggests that keeping the global temperature rise below the 2°C benchmark requires investment in electrification to the tune of 0.2% and 1.0% of global GDP, each year, until 2050. The range highlights that economies of scale can lower the macroeconomic cost. Most importantly, these numbers do not account for the costs of inaction.
<h1>The geopolitics of interconnection</h1>
In essence, decarbonisation and electrification go hand-in-hand and the shortest route to the objective goes through the MENA region.
The upcoming energy structure requires different national security perspectives. The current fossil-based system is hierarchical, with the interests of producers, importers, and energy transit countries potentially colliding.
As renewables are more equally distributed and more infrastructure-reliant, foreign energy “dependency” is reduced. Renewable energy supply pushes for the further interconnecting of the higher voltage systems across countries and continents.
“All countries visited”, reads the State Department’s press release closing Kerry’s visit to the three MENA countries, responded “enthusiastically” to the visit. The discussions highlighted the importance of a successful COP26. The Italian G20 is also in the background.
Riyadh has laid out concrete plans for achieving the announced target of 50% electricity generation from renewable sources by 2030 and for scaling up hydrogen and carbon capture technologies.
<h1>The infrastructure race</h1>
Nothing new under the sun, it is appropriate to say.
These issues have been on the table of European chancelleries for some time. At the Energy Transition Dialogue 2021 held in Berlin last March, the Saudi Minister for Energy, speaking on a panel with John Kerry and the EU Commissioner for energy among others, had already addressed the key points of the country’s transformation from a major oil producer to a major exporter of clean energy and hydrogen. The German industrial system is ready to provide credit and investment.
As for Egypt, earlier this year, Cairo signed an agreement with Siemens to scope out a 1.65 GWp green hydrogen production project.
Even more importantly, the land of the pharaohs is part of the EuroAfrica Interconnector, a project to bridge Africa and Europe via HVDC transmission lines and submarine cables, with a transmission capacity of 2GW in both directions, between Greece, Cyprus and Egypt. The Republic of Cyprus has issued the final building permit for the Egypt-Cyprus interconnection system in August 2020.
The new energy highway will start in Damietta, on the Egyptian coast, and will be a new landmark for Mediterranean energy geopolitics. Until now, there are only two energy interconnectors between Europe and Africa. Both connect Morocco to Spain. A third with 700 MW capacity will be commissioned by 2026, according to a Memorandum of Understanding signed between <a href="https://www.pv-magazine.com/2018/07/12/spain-covers-45-8-of-first-half-electricity-demand-with-renewables/">Red Eléctrica de España</a> (REE) and its Moroccan counterpart in 2019. The EU has an interconnection target of at least 10% by 2020 and 15% by 2030.
However, not everyone moves at the same speed. A senior Brussels technocrat recently commented on Rome’s recovery plan, telling me that Italy today has more gas in its belly – and in its energy matrix – than it should have in 10 years’ time. Yet, Rome seems to be resting on its fossil laurels.
A long planned project to build an interconnection between Sicily and Tunisia (200 km) is sitting in a drawer while the UK-based company Xlinks is planning to build 10.5 GW of wind and solar capacity in Morocco and sell the generated power in the UK through a 3,800 km submarine cable. The Saudi ACWA Power Renewable Energy Holding, and the Chinese Silk Road Fund are partners in the British-led Xlinks project.
After decades of inaction, the world is speeding up measures to tackle the existential threat of climate change. The moment is right for the MENA region to contribute with their enormous clean energy potential, stepping up their generation and transmission capacity. The race for a clean development model powered by renewables and hydrogen has just started.
The political will to act also rests on solid economic foundations. Since 2010, the price of solar energy has dropped: by 82% for photovoltaic solar and 49% for Concentrated Solar Power (CSP). Wind and solar power are today the least-expensive option for bulk electricity for two-thirds of the global population, 71% of global GDP, and 85% of global power generation. A new financial and legal system for the post-fossil economy is emerging to regulate international trade and markets. The transition offers excellent business opportunities and promises the creation of sustainable jobs within advanced, future-facing industries.
Climate neutral is very good business in a world of sinking oil assets. For oil-dependent economies, this is an existential race against time with both economic and geopolitical significance.
This article is also published on <a href="https://brusselsmorning.com/2021/06/18/planning-a-post-oil-relationship-with-the-middle-east/">BrusselsMorning</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Planning a post-oil relationship with the Middle East

On August 14, the Russian President Vladimir Putin expressed his concern at the scale and nature of “absolutely unprecedented” natural disasters that have hit Russia. 
Within hours of the publication of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), which set off the alarm on the imminent dangers of climate change, wild fires were wreaking havoc in Russia.

On August 14, the Russian President Vladimir Putin expressed his concern at the scale and nature of “absolutely unprecedented” natural disasters that have hit Russia.
Within hours of the publication of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (<a href="https://illuminem.com/post/be8a8429-fddb-41a0-badb-16b4856b2939">IPCC</a>), which set off the alarm on the imminent dangers of climate change, wild fires were wreaking havoc in Russia.
Whilst fire devours Siberia, burning almost two million hectares of forests, torrential rains in the southern part of the country have caused flooding, evacuations, and the interruption of the electricity grid. Other strategic infrastructure is at risk.
Urging local authorities to do everything possible, the Russian leader said “all this shows once again how important it is for us to make a deep and systematic commitment to the climate and environmental agenda in the future”.
The profundity of this change of perspective in Moscow is demonstrated by an anecdote from Corrado Clini. The former Italian environment minister met the Russian president in 2003 whilst he was heading an EU climate delegation hoping to convince the Russian President to sign the Kyoto protocol. A sceptic about climate change caused by human activity, Putin responded with a joke: “if temperature rises a few degrees, we will harvest more wheat in Siberia”.
<h1>The oil world faces the impact of climate change</h1>
Today, climate change is no laughing matter for anyone. It has become a matter of national security. NATO and the Pentagon agree.
Oil and gas pipelines and industrial plants are at risk of collapse due to thawing permafrost.
On 29 May last year, an oil tank collapsed, spilling 21,000 tonnes of crude into the Ambarnaya River in Siberia. The pollution devastated an area of more than 80,000 square metres.
The US, for its part, is also at risk. Particularly vulnerable is the Trans-Alaska Pipeline, a key piece of infrastructure in the US energy system. The government has recently authorised safety measures. An innovative cooling system to consolidate the ground is also under construction.
Assuming it works, geo-engineering alone will not solve the problem. Alaska, like Siberia, is warming twice as fast as the global average. The oil industry – and governments – are committing technology, resources, and huge investments to postpone the inevitable. Is it money well spent?
Probably not. With the world’s biggest economies pledging to become carbon-neutral and carbon credit trading systems being developed, pressure is mounting for fossil giants to change course.
For petrostates failing to adapt, this could spell economic disaster. This month, one of the leading Australian industry groups, based in another country resisting calls for tougher climate action, has warned that growing international commitments to decarbonisation are the biggest risk to current Australian trade and they are likely to drive down demand for Australian coal and gas exports.
Even more concerning for Big Oil is the fact that investors and states are starting to factor in the real cost of carbon. On February 26, the White House announced an initial estimate of $51 per ton of carbon to kick off the debate. 
Diversification of oil exports is a matter of economic survival. Russia, which has significant capacity to generate wind and solar power, doesn’t exploit these energy sources. Renewables accounted for just 0.32% of its power grid in 2020.
This article is also published on <a href="https://brusselsmorning.com/2021/08/19/when-putin-joined-the-climate-change-consensus/">BrusselsMorning</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

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Arvea Marieni

Arvea Marieni

Putting the economy before the environment is an illusion

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