Progress is impossible without change, and those who cannot change their minds cannot change anything.
— George Bernard Shaw.
I hope that this blog helps provide a glimmer of hope. It will be purely my musings, observations and ideas for solutions that companies, governments and individuals can adopt. It’s highly unlikely that anything I write about will be new, but maybe it might provide you with a new perspective. I love to read about this stuff and engage with others who are also trying to work out some real ways to save the planet. Subscribe below to get notified when I post new updates.
The landmark ruling by the Court of Appeal on Thursday has profound implications for the public and private sector in the UK. The irrefutable logic was simple. The commitment to reach net zero by 2050 is now in enshrined in UK law and any government decision around infrastructure build that doesn’t take this into account is simply breaking that law. By failing to take into account the consequences for CO2 emissions of building a third runway at Heathrow the the government was being unlawful. As Tim Crossland from Plan B pointed out, following the ruling, the Paris agreement now has teeth.
The climate activists who brought the case must feel emboldened by their victory. Although the Climate Change Act only directly applies to government decisions, it sets an important principle that, as a country, we have committed to a significant transition across multiple sectors of our economy over the next 2-3 decades.
Of course “taking it into account” doesn’t automatically mean all projects that don’t get us closer to net zero automatically get canned. But it surely means that major road projects are called into question and presumably bolsters the case for HS2. And it means that the conversation, which was rarely heard in board rooms until very recently, can be rightfully steered towards the net zero consequences of any business decision taken by a board. Is there is now a legal risk of companies making decisions which hinder the country’s commitment to net zero?
The Companies Act was changed back in 2006 to define in law the duties of company directors. Under section 172, one of the factors a director must consider is “the impact of the company’s operations on the community and the environment”. I imagine most directors read this as a local, near-term impact, e.g. is my factory polluting a nearby river? The “environment” is a very broad term. Maybe it is now time to clarify in law the duties of directors of private and public companies to play their part in reaching net zero.
We all live in our own little bubbles. Earlier this week I posted the following on Facebook:
I’m really not sure what was going on at Edie but the story was a hoax and it was quickly removed. Of course it wasn’t true. From within my own little oat milk-drinking bubble I so wanted to believe it, and therefore I did. Arla did publish a report that day entitled “A Vision for the Future of the European Dairy Industry”. The word “oat” didn’t appear once. “Cow” was in there 8 times. There couldn’t be a better example of turkeys not voting for Christmas.
And yet there was a certain logic to this story that drew me in. According to the “journalist” who wrote it, Arla had done an assessment of what it would take for the dairy industry to reach carbon zero and concluded that this was simply not possible whilst they still reared cattle. Therefore the only solution was to switch all cows milk production to oat milk production which required 1/7th of the land, 1/6 of the water and produced 1/3 of the Carbon emissions. This is far from just a switch in production methods, of course. It assumes that consumers are going to happily change from something that has been part of their daily diet for generations to something that, let’s face it, doesn’t taste the same. Personally I like the taste but it does take a bit of getting used to. Milk alternatives are growing in popularity and the dairy sector is already suffering from overcapacity. I am no Leave supporter, but maybe being outside the EU gives the UK the ability to tackle this structural change. Instead of continuing to prop up an industry that is in terminal decline, support should be given to farmers who are prepared to give up their cattle herds for fields of oats. But it’s not a straightforward transition.
The story got me pondering about big oil. If the White Stuff is thinking the unthinkable and voting for Christmas, what about the Black Stuff?
What would it take for an oil major to become carbon zero? Amongst the thousands of people working in these companies, you can be sure that there is a strategy group in each of them that has charted a course away from fossil fuels to a green future. It has been clear for decades that any business based on extracting a finite resource will need to change at some point. It is all about timing and what has become more and more obvious in the last few years is that the timing is no longer driven by when the finite resource is exhausted, but by what the science tells us about the scale and speed of climate change.
How does that “green future” compare to the lucrative returns of producing fossil fuels today? In the week that Bernard Looney took over as BP’s CEO, Greenpeace stepped up their campaign to get BP to switch to 100% renewables. The problem for BP is that they don’t have any particular competitive advantage in renewables. They know about geology and process engineering in challenging environments. Carbon capture, use and storage leverages that. It is a high risk opportunity and one that has had limited investment compared to the $71bn that Greenpeace claims BP is investing in exploration over the next 10 years. There are no easy answers for any of the oil majors but they have a stark choice between taking some big bets with uncertain revenues or joining a long list of big companies that simply failed to adapt to a market environment that changed quicker than they thought it would. Think Kodak, HMV, Woolworths, Nokia, etc.
Again it will be driven by a combination of consumer pressure and policy to support the shift. Phasing out of petrol and diesel cars puts a huge hole in oil revenues. Renewables will hit the gas producers, although there is still the huge issue of domestic gas heating to tackle. And the divestment movement must be hurting even if it is difficult to quantify.
A clear commitment this year from one of the oil majors to halt investment in exploration and lay out a roadmap to a carbon zero future would go down in history as a pivotal moment in humanity’s mission to save itself. There has to be a first-mover advantage here. It will need tremendous courage from the CEO and Board. The time is now.
As I am about to head off on a long-haul flight with the family to see friends in Abu Dhabi, I’ve been reflecting on one of the toughest challenges, that of air transport. I remember talking to a colleague several years ago about the challenges of climate change. He was deeply concerned about the issue but I remember him saying that one thing that people shouldn’t give up is flying because the broader benefits of travel outweigh the cost of the climate impact of the flight. At the time I probably jumped on my moral high horse and told him this was an unacceptable attitude but actually I think he had a point.
Flying accounts for around 2-3% of global emissions although recent research on the warming effects of contrails (or vapour trails) puts the overall contribution to warming at more like 5%. Whichever number is correct, nobody is disputing the fact that the problem will continue to grow significantly for the next few decades. And for good reasons. As developing nations get richer their citizens want to explore the world beyond their borders for both business and leisure purposes. The last thing the world needs right now is for everybody to stay on their own islands.
For long-haul travel, there really is no substitute on the horizon for kerosene-fueled jets. There has been slow development of biofuels partly because the energy to weight ratio for fuel is that much higher when you are battling gravity. The IEA forecasts a paltry 10% by 2030 (20% by 2040) of fuel coming from SAF (Sustainable Aviation Fuel). This forecast scenario is predicated on relatively small subsidy of SAF.
The simple solution here, as in many other sectors, is to tax the bad option (Kerosene) and use the money to subsidise the better option (SAF). However there are two pretty big problems with that:
By its very nature air transport is international, of course, so planes can just fill up in the lowest tax jurisdiction. It requires global cooperation to uniformly apply taxes, something that the EU has started discussing but it is still far from clear how this can actually happen.
SAF in the form of biofuels aren’t exactly the ideal solution. As with all biofuels there is a trade-off to be made with land-use. Any land used to grow biofuels is likely to be also good for growing crops to feed people. So there is more pressure on land and a greater incentive to cut down forest. Second-generation biofuels do aim to take this into consideration but the scale of growth required to replace fossil fuels will inevitably lead to a competition for land at some point.
So we have a market failure of epic proportions here. The thing (air travel) that is causing significant negative externalities (i.e. costs borne by 3rd parties who are not consuming the thing) is being sold at a price that in no way reflects its cost. It is difficult for governments to use taxes to reduce demand and the substitutes carry their own negative externalities.
The next best answer then is offsetting the emissions from aviation and / or investing in Carbon Capture and Storage (CCS). Effectively funding other actions not related to aviation that will remove Carbon from the atmosphere. This needs money and I have an idea where it might come from.
Large corporates are responsible for a significant proportion of the warming effects of flying, especially as they are more likely to fly business class. If I was CEO of a global people-centred business, with a large number of flights taken by employees, this is what I would do:
Identify any high volume short-haul routes where there is a decent alternative (i.e. short-haul domestic flights such as London-Manchester in UK) and ban those flights.
Place an internal tax on all other flights. Each business unit will have an operating budget, some of which is spent on travel. The leaders of these business units will now have an additional cost to pay into a central pot every time one of their employees books a flight. The tax can be easily calculated based on the calculated CO2 emission of the flight. There would be a multiple that might start at 1x in the first 6 months to get everyone used to the new system but would quickly scale up over 2-3 years so that the cost would be significant to the business unit and there would be real pressure to reduce flying.
The central pot would then be run as an investment fund. This would fund a combination of offsetting and investment in R&D to find alternative fuels and develop CCS. These investments are likely to be high risk but as it is a ring-fenced fund it should not impact the credit-rating of the mothership. If the fund is well run it should provide a long-term return to the business accepting some failures along the way.
If governments are not able to use taxes to reduce demand then global corporates have a responsibility as well as an opportunity to step up and show real leadership here. The positive impact on brand reputation would be significant with consequent benefits for attracting and retaining employees as well as customers. They would also be positioning themselves well for a scenario in which governments did actually manage to agree a taxation regime.
Who should lead on this? Well, really anyone who operates globally with large numbers of knowledge workers who rack up the air miles. Maybe you work for such a firm. Maybe you are already considering something like this. Leave a comment below and let us know if you think it could work.
At, this time of increased consumption, I thought I would write about the role of personal choice and reflect back on just a couple of things that we have done as a family this year to reduce our impact.
I heard a member of Extinction Rebellion talk recently. He gave his perspective on the choices that individual consumers or citizens can make. It made a lot of sense to me and it went something like this.
We all make choices in our everyday lives and these can reduce our personal contribution to the crisis. These are necessary but not sufficient. Even if every person made reasonable adjustments to their lifestyles and purchasing habits, this would not make enough of a difference to avoid catastrophic climate change. An unlimited marketing budget and 24/7 Attenborough on our screens would change the individual choices we make each day but would not be enough.
Only governments have the tools to make the scale of change required through taxation, regulation and legislation. That is why XR’s focus is on direct action in centres of power to campaign for action from those in power.
However if we are campaigning for this level of change, we need a certain amount of authenticity in our own life choices. Exactly where this level lies is down to personal choice and individual circumstances. Sailing across the Atlantic for meetings in New York is not going to be practical for everyone. But driving yourself around in a grotesquely large petrol or diesel vehicle everyday when you have access to public transport isn’t really going to cut it either.
So how should we think about ourselves doing the “right thing” if we know it is not enough? Individual and collective actions and changes to lifestyle can make you feel better. Clearly you are not going to solve the problem on your own but if you can be a little less a part of the problem, why not feel good about that? Enjoy the warm feeling of “doing good”. See it as therapy for your climate anxiety if you like.
So, as a bit of look back at 2019, I thought I would share just a couple of changes that our household has made over the last year to reduce our impact. I really don’t want any of this to come across as being pious. It is just a sharing of ideas, some of which might be relevant for choices you can make in your life.
I hadn’t realised how big an impact moving to a plant-based diet can make until I spent some time playing with this calculator from the BBC. It really brought home to me the emissions involved in meat, especially Beef and Lamb. I’m not a pure vegetarian, I don’t find these labels to be all that helpful. It’s not a religion, and if someone kindly prepares a meat-based meal for me I am not going to refuse it. But nearly all my own cooking nowadays is meat free and I am gradually persuading some of my family that I can make a decent meal without meat!
We consume a lot less cows milk than we used to thanks to the alternatives available. I have converted to oat milk on my cereal. It’s about the same price as milk, keeps a lot longer and is really tasty on cereals. We still need cows milk for tea, though! I found a good blog about the impact of various milk alternatives. Maybe I need to try making my own in 2020…
We still have one of the those big diesel-fuelled cars I was talking about. At some point we will swap it for an EV but it still works fine and for long distances it’s not a bad eco-choice. But we have cut down how much we use it locally. I have always cycled, but this year started using BlueCity electric rental cars. Sadly, they are ceasing operations in February. That could be the subject of a future post if I can find out more about it. But the option of renting a car when you need it to go point-to-point, parking it and plugging it in at the other end seems like a great solution to me. Especially as more lamppost charging is rolled out in London.
So you could do nothing. After all what difference would the actions of an individual make? But you don’t exist on your own, you have influence over friends, family, colleagues. Whatever you do could inspire others to do the same, which in turn inspires others still. And by being open-minded to new options, taking the time to explore alternatives to your current choices you might just find something you really like as well as doing your bit to save the planet.
When investing in clean tech and other solutions that mitigate the climate crisis, businesses need to take a higher risk than they normally would. The risk is largely a regulatory / political one. The problem with many parts of our economy today is that the externalities, the global costs of supplying the goods and services, are simply not borne by those entities that make the profit from meeting the market demand. There are many examples.
Let’s take flying, and compare the cost of getting from London to Glasgow by plane vs. the train. These are two competing, maybe complimentary products that fulfil the need of getting from London to Glasgow. There are non-price differentiating factors in the two products such as how long it takes, comfort, and getting to and from the airport / station. For most customers, these are probably secondary to price. And if you look at the ticket prices, it is invariably cheaper to fly than get the train. How can this be?
Price is largely a function of costs and this is where the problem lies. Flying is a classic example of a market failure because the costs borne by the airline do not fully reflect the social costs of flying the plane which include the emissions and the impact they will have on the rest of the global economy. It is a tragedy of the commons and the only way that it can be fixed is through government intervention.
In almost all countries of the world, it is clear that this government intervention is not coming in quickly enough to avert the crisis the scientists have been predicting with a strong consensus for some time now. Apart from general inertia and aversion to change, there are two specific reasons for the lack of action:
It is a global crisis, and it is not in the interest of any one country to do things that they might perceive as harming their short-term competitiveness, unless all other countries will do the same. A parallel from economics is an oligopoly. In a normal market, the competition will push the market price to the lowest sustainable point where “normal” profits can be made by lots of suppliers. In an oligopoly, there are fewer suppliers so they can collude on price and keep the price higher thereby all being able to make “super-normal” profits. It can be tricky to agree this (not least because it is illegal) and tricky to maintain it because at any point, one player could drop their price in order to increase market share which would probably force the others to do the same. We need our governments to agree an oligopoly position, this is effectively what they are trying to do at the moment in Madrid. In their case, it is not illegal, but it is hard because there are so many players and it is complicated because there are many more factors than just price. But so long as all players can see the benefits clearly enough it can be done. Large transnational players such as global corporations have a major role to play here as they can more easily enter into an oligopoly with their competitors. There are fewer of them and some of them may feel their customers (the consumer) pressuring them to act. An example of this is the Alliance to End Plastic Waste, a non-profit that has been funded to the tune of $1.5bn over the next 5 years from over 40 global organisations involved in the production and recycling of plastic packaging. The companies are taking a hit to their short-term profits by funding the AEPW, but they believe their brand will benefit over the longer-term.
Climate change is a long-term threat, at least it has always seemed that way. It is human nature to discount threats or opportunities that are far into the future and that is perfectly normal. But we are failing to compute the size of the risk here and the scope of the actions we should take today because although the threat is in the future it is also very, very big. However, we have to believe that this is changing. We have waited long enough. We are now seeing that the threat is not so far away, and in fact there is pretty clear evidence it is already here. We have to believe that the actions that governments should have taken 10 years ago, will be taken in the next 10 years and that those actions will be at a much larger scale than if they had been spread out over a longer time frame.
So for some investments, it will not be clear right now where the return is. The required incentives, tax breaks, and customer demand may not be there right now. But we have to believe that they are coming, that they are coming big and that they are coming fairly soon. Back to the airline example, we need to find alternatives to kerosene-fuelled planes. Whether that is through risk capital or government funded R&D, there is clearly a need and we have to believe that the conditions will be right at some point that the return on investment will be there. We have to be prepared to sacrifice profits, maybe to the point that we can only just stay afloat in order to make these investments. That, after all is what entrepreneurship is all about. Taking risks to find a path to a bigger future profit rather than continuing to do the same thing which will ultimately decline to zero.
Build it and they will come. If nobody builds it, they certainly won’t come and we are screwed. If we build it and they don’t come, we are also screwed. And we are properly screwed, not just loss-making in the short term but facing a global collapse in social and economic order. But if the conditions are right and they do come, we will make profit. We have to have faith that those conditions will come. The alternative is unthinkable to the extent that it makes no sense planning for and no sense being in business for. Why be part of the problem when you just might be part of the solution?