Illuminating the Path to a Low-Carbon Future
- Ts. Raja Shazrin Shah
- Jan 21, 2024
- 9 min read
Harnessing Optimism in the Climate Battle
As we stand on the brink of potentially the warmest year in over a century, COP28 in Dubai has kindled a spark of optimism in the climate narrative. This isn't just a brief moment of hope; it's a loud call for transformative action. This week's newsletter looks into the dynamic connection of climate reality and commercial imagination, drawing inspiration from COP28's groundbreaking dialogues.
Revolutionising Power: The Solar Revolution
In the UK, a quiet revolution is unfolding. Streets and homes are increasingly basking in the glow of solar energy, with around 17,000 houses each month joining the solar brigade. This isn't just about harnessing the sun; it's a bold statement against traditional energy paradigms. Places like the Isle of Anglesey and Aberdeenshire, not exactly sun-soaked paradises, are now miniature strongholds of solar power. This shift is driven not just by environmental consciousness but by the undeniable fact: solar power is now the most cost-effective form of electricity.
As we spotlight the UK's solar energy surge, it's vital to turn our gaze eastward to Asia, where a similar solar revolution is unfolding with remarkable momentum. China, in particular, stands out as a solar powerhouse, having installed more solar capacity this year than the United States has in the last thirty years. This staggering expansion is a testament to Asia's commitment to renewable energy. In India, the drive towards solar energy is equally impressive. The country has set an ambitious target of 450 GW of renewable energy capacity by 2030, with solar energy playing a pivotal role. As of 2023, India has already surpassed 50 GW of solar installations, a clear indicator of its rapid progress towards this goal. Across Asia, from the solar parks in the deserts of China to the rooftop installations in urban India, the shift towards solar energy isn't just an environmental choice; it's becoming an economic imperative, driven by falling costs and increasing efficiency. This Asian solar insurgency isn't just reshaping the energy landscape; it's laying the foundation for a sustainable and resilient energy future for one of the most populous regions on the planet.
Electric Vehicles: The Powerhouses on Wheels
The conversation around electric vehicles (EVs) has shifted from "if" to "when." With 18% of new vehicles in 2023 being battery-powered, the EV market is surging ahead. But the real game-changer lies in Vehicle-to-Grid technology. Imagine your car not just as a mode of transport but as a dynamic energy trading hub. Parked 95% of the time, these vehicles could buy and sell energy, contributing significantly to grid stability and renewable energy integration. The prospect of EVs powered by personal solar panels, selling excess energy back to the grid, isn't just exciting – it's a glimpse into a self-sustaining future.
Europe's embrace of electric mobility is striking, with nations like Norway leading the charge – a whopping 56% of new passenger vehicles in 2019 were electric. While Norway stands as a beacon of progress, the Netherlands is not far behind, with a combined total of 29% for battery electric and plug-in hybrid vehicles. This enthusiasm for electric vehicles is mirrored across the continent; from Sweden's 15.5% to Germany's modest 3%, each country contributes to a greener future. The United Kingdom, despite a 3.1% share, is at the cusp of an electric revolution, reflective of a continent-wide shift that is reshaping the very fabric of mobility. The trend is clear: the roads of Europe are becoming the testing grounds for a new era of transportation, one that promises reduced emissions and a sustainable model of travel for future generations.
The Battery Bonanza: Powering the Future
The UK is witnessing a rapid rise in large-scale battery farms, crucial in the transition to a net-zero electricity grid. These storage giants, like the one in Buckinghamshire capable of powering 300,000 homes, are pivotal. By the end of the decade, we could see enough battery capacity to power millions of homes, fundamentally altering our energy landscape.
Japan is also rapidly accelerating into the battery storage sphere, embracing the shift towards renewables with strategic investments. Itochu, the Japanese trading giant, is spearheading this movement by partnering with Akaysha Energy, an Australian firm with BlackRock's backing, to deploy large-scale battery farms. This bold venture aims to address Japan's pressing need for energy storage solutions, given the recent constraints in transmission capacity that have hampered renewable energy utilization. Itochu's ambition is to develop up to 20 battery storage sites, primarily across Japan, by 2030, with a projected business scale reaching 100 billion yen ($678 million).
This initiative is not just about capacity but also about smart technology; Akaysha's advanced software leverages AI to optimize the storage and release of energy, positioning the company to profit from peak pricing in the electricity market. The plan to construct facilities with a total capacity of 1,000 MWh could secure Itochu a significant market share, estimated between 10%-20%, in Japan's renewable energy storage sector.
The Japanese government's vision for a green transformation, backed by an investment of 150 trillion yen over the next decade, underscores the country's commitment to sustainable energy infrastructures. Additionally, the plummeting costs of lithium-ion batteries, expected to drop to $80 per kilowatt-hour by 2030, further fuel this initiative. With government subsidies potentially covering half the investment and the anticipated reduction in costs through joint procurement strategies, Itochu’s venture is not just a leap towards Japan's energy sustainability but also a calculated move towards a profitable green future.
This strategy is echoed by other key players in Japan, including NTT Anode Energy and Kyushu Electric Power, who recently commenced operations at a storage facility in Fukuoka. With oil majors like Eneos and Idemitsu Kosan joining the fray, Japan is clearly positioning itself as a leader in energy storage, a critical component in the global transition to a renewable-driven economy. The increased reliance on storage batteries is an essential countermeasure to the prevalent 'output control' issue, which saw a significant loss of potential renewable energy in the Kyushu region. Through these developments, Japan is setting a global benchmark for integrating large-scale battery storage into the energy mix, a crucial step in combatting climate change.
Climate Justice: The Legal Lens
The courts are emerging as unexpected but powerful players in climate advocacy. With major climate litigation cases on the horizon, including a $52bn claim against fossil fuel producers in the US, the legal system is poised to redefine accountability and catalyse change in the corporate world. This echoes the battles fought against big tobacco, signalling a new era of environmental justice.
The legal landscape for climate justice is experiencing an unprecedented expansion, with court cases more than doubling since 2017, as highlighted by the UNEP and Sabin Center for Climate Change Law (source). This rise in litigation is a crucial lever in the machinery of climate action, pushing for accountability from governments and private sectors alike. The "Global Climate Litigation Report: 2023 Status Review" paints a vivid picture of the legal battles being waged across the globe, with the number of cases soaring from 884 in 2017 to 2,180 by the end of 2022, a clear signal that individuals and organizations are increasingly seeking justice through the courts.
The report highlights a significant increase in climate litigation outside the US, with about 17% of cases emerging from developing countries and Small Island Developing States. These nations are harnessing the power of legal systems to address the disproportionate impacts of climate change they face. The global spread of litigation is not confined to advanced economies; it’s a worldwide call for climate justice, encompassing international, regional, and national legal forums.
Courts are increasingly recognising the nexus between human rights and climate change. For instance, Australia's government was found in violation of its human rights obligations to Torres Strait Islanders due to inadequate climate policy. Brazil's Supreme Court raised the stature of the Paris Agreement, classifying it as a human rights treaty with "supranational" status. In another landmark ruling, a Dutch court mandated that Shell reduce its CO2 emissions in line with the Paris Agreement, setting a precedent for corporate climate accountability. Moreover, Germany's Federal Climate Protection Act faced judicial review, with parts struck down for being incompatible with the rights to life and health, while France was held accountable for ecological damages due to climate inaction.
The UK's legal duties under the Climate Change Act 2008 were put to the test when a court found the government's net-zero strategy lacking. Additionally, the quest for advisory opinions from the International Court of Justice and the International Tribunal for the Law of the Sea, spearheaded by Small Island Developing States, signifies the increasing role of international adjudication in climate matters.
The report anticipates further diversification in climate litigation, with future cases likely focusing on climate migration, Indigenous peoples' rights, local community impacts, and corporate liability for extreme weather events. The expanding scope of litigation reflects a broader understanding of the various ways climate change infringes upon rights and livelihoods, as well as the complexities of attributing specific climatic events to broader trends. However, it also warns of potential "backlash" cases seeking to undermine climate-positive regulations.
Through this proliferation of climate litigation, a global pattern emerges: citizens and communities are not only demanding their day in court but are also shaping the very fabric of climate law, setting new precedents that ensure the voice of the vulnerable is not only heard but acted upon. This legal groundswell is crafting a narrative where climate justice is not an abstract concept but a tangible reality, compelling nations and corporations to align their actions with the urgency that a warming world demands.
The Historical Perspective: A Beacon of Progress
Reflecting on the journey since the Paris Agreement, the progress is undeniable. From a document that once skirted around fossil fuels, we're now at a juncture where their phase-out is a tangible goal. COP28 isn't just another conference; it's a testament to how far we've come and a roadmap for the future.
Incorporating Planetary Health Indicators
The integration of Planetary Health indicators into our corporate strategies is not just a progressive step; it's a fundamental reorientation of how we define and measure success. The Anthropocene – our current epoch where human activity is the dominant influence on climate and the environment – demands a new business ethos, one where environmental stewardship and economic growth are inextricably linked.
Consider the approach of multinational conglomerates like Unilever and Patagonia, which have embedded sustainability into their core business models. Unilever's Sustainable Living Plan sets out to decouple its growth from its environmental footprint, while increasing its positive social impact. Patagonia's commitment goes even further by pledging 1% of sales to the preservation and restoration of the natural environment, a model that has inspired a global movement of over 2,000 companies.
In the financial sector, the rise of green bonds exemplifies this shift. These bonds are designed to finance projects that have positive environmental or climate benefits. In 2021, global green bond issuance hit a record high, underscoring investors' growing appetite for sustainable investment opportunities.
The real estate industry is also adapting, with the advent of green buildings. These structures are designed to reduce or eliminate negative impacts on the climate and natural environment, using resources more efficiently than traditional buildings. The Edge in Amsterdam, often cited as the world's greenest office building, boasts an energy use that is about 70% below that of average office buildings.
Furthermore, the energy sector is being transformed by companies investing in renewable energy projects, which not only reduce greenhouse gas emissions but also offer long-term cost savings due to lower operating costs. Giants like Google and Apple are now among the world's largest corporate purchasers of renewable power.
Even in agriculture, a sector historically linked with environmental degradation, innovative practices such as regenerative agriculture are being adopted. This approach focuses on topsoil regeneration, increasing biodiversity, and improving the water cycle, fundamentally supporting the ecosystem that agriculture relies upon.
However, the shift to Planetary Health indicators is not without challenges. It requires businesses to rethink their value chains, invest in long-term sustainability, and sometimes accept short-term costs for long-term gains. Despite these hurdles, the transition to a model that values Planetary Health is accelerating, driven by consumer demand, investor preferences, regulatory pressures, and the recognition that planetary stewardship is not just an ethical choice, but a strategic and economic necessity in the long-term.
Final Thoughts
In the aftermath of COP28, our collective resolve must extend beyond mere adaptation to our changing climate – we must be the forerunners of this change. The integration of Planetary Health into corporate strategy surpasses moral responsibility and enters the realm of perceptive foresight. In this new age of environmental enlightenment, we are not mere bystanders; we are the pioneers crafting the blueprint of a sustainable legacy.
Implementation of the Environmental, Social, and Governance (ESG) framework is a critical step forward. ESG is not just a lens to assess corporate behaviour; it's a comprehensive strategy that aligns business objectives with ecological and societal stewardship. By embedding Planetary Health within the ESG framework, businesses can map out their environmental impact, set measurable sustainability goals, and make informed decisions that foster a balanced ecosystem.
But this shift isn't solely about policy—it's about people. Communication is the bedrock upon which behavioural change is built. By engaging with stakeholders through transparent dialogue, businesses can foster a culture that values sustainability. This means educating consumers, empowering employees, and aligning shareholders with the company's vision for a sustainable future.
Moreover, this path demands that we innovate – not just in technology, but in governance, partnership, and accountability. The marketplaces of tomorrow will favour those who today invest in renewable energy, who seek out sustainable supply chains, and who innovate in product and service offerings to minimize environmental impact.
It's time to push behavioural change to the forefront of our agenda. This includes championing new consumer habits, nurturing green technology, and shaping investment patterns. We must inspire action that resonates on an individual level and amplifies into a collective impact.
As we stand at this critical juncture, every decision we make, every action we take, must be infused with the urgency and purpose that the climate crisis demands. The path to a sustainable future is paved with the choices of the present. Let us choose wisely, act boldly, and lead with the conviction that a sustainable future is not only achievable but is the only future worth striving for. Our journey towards sustainability is not a solo expedition but a collective voyage – one that requires us to be steadfast stewards of the planet we call home.
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