Storm Imogen reminds us that there are winners and losers with climate change

AFTER Storm Imogen, is it not time more people faced up to the reality that man-made climate change is causing huge changes to weather patterns which are affecting us?

One storm does not equal climate change, neither does one hot summer. The point is that unusual weather events are becoming more frequent – THAT’S climate change. Imogen was the ninth named storm to hit the UK this winter. Before Imogen, we had the likes of Frank and Gertrude battering the country. 2015 was the hottest year since records began – the average surface temperature of the planet was 0.87°C warmer than the official baseline.

Waves crashing against the breakwater at Brighton Marina.

Waves crashing against the breakwater at Brighton Marina. Photo credit: Hehaden/flickr Creative commons.

This isn’t just a blip; global temperatures have been on an upward trend for years and 2011-2015 was the hottest five-year period on record. The weather is getting weird compared to what we’re used to. This isn’t happening by chance, it’s not ‘Nature’s way’. There’s a lot of folk working on climate science around the world and the vast majority agree that climate change is caused by human activity.

This unusual weather – increasing temperatures, storms, droughts – is down to us. The knock on effects of this weird weather – melting ice caps, flooding, damage to health and property – that’s down to us as well. Why? Because we’re changing the planet’s atmosphere. Over the last century, a by-product of various human activities has been the release of carbon dioxide and other so-called greenhouse gases. These gases block energy from leaving the atmosphere, warming the planet.

The main culprit is fossil fuels. When we burn them, we release carbon dioxide. Deforestation is important too because trees store carbon. When we chop them down we lose this storage capacity, releasing carbon dioxide into the atmosphere. There are other greenhouse gases too such as methane. This is released from the livestock we keep as part of their digestion process.

It’s not all bad, however. The impacts of climate change are many and diverse. Whilst some people lose out, others may benefit from lower heating bills in winter for example. Carbon dioxide helps plants grow which brings opportunities to harvest more crops in some parts of the world. But the more this carries on – the more greenhouse gases we pump into the atmosphere – the more these impacts become increasingly negative. The bad outweighs the good.

It’s difficult to be precise about exactly how bad things might get in monetary terms. Climate science and climate economics are not the same thing. There are fewer people working on the economics of climate change and they often don’t look at all possible climate impacts. Current best guesses suggest that we will lose out on between 1 – 10 years of economic growth in the 21st Century because of climate change.

Although much of this is difficult to predict, we do know that there will be both winners and losers. People in less developed countries are and will continue to suffer most because of climate change and have the least means to do anything about it.

Like any sentient species, humans are intrinsically motivated to try and make themselves comfortable, to acquire food, to keep warm. And so we should. We need to survive and, if possible, we’d like to thrive. But we’ll need to increasingly meet our needs in ways that don’t backfire and end up hurting us.

There’s increasing public and political will behind tackling greenhouse gas emissions. One way of achieving this is through renewable energy like wind and solar. But large-scale technical and social changes aren’t easy. We’re locked in to a fossil fuel based economy, which is protected by powerful interests that hold back the growth of renewables.

Another way to cut emissions is to increase energy efficiency. But this isn’t as straightforward as it first appears. For example, if your new car is cheaper to run because it uses fuel more efficiently, you might decide to use it more. This is called the rebound effect and it’s the focus of my current work.

But, there are always challenges with any major change and we need to remember that progress is being made. We now get around a quarter of our electricity from renewables in the UK and best-guess estimates for the rebound effect do not suggest it is large enough to warrant abandoning energy efficiency efforts.

Overall, the weather really is changing and the more it changes as time goes on, the more we can expect the impacts it causes to be increasingly bad for more and more people. Further moves towards carbon-neutral renewable energy sources has the potential to re-engage communities by involving them in the production of energy. And energy efficiency improvements save people money. More of an emphasis on these and other benefits of change is a good way forward.

This was first published in The Argus on February 13th.

Find out more about the ‘direct rebound effect’ associated with personal car travel in Great Britain – read this blog for an overview or read the full research paper in Energy Economics.

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Why we need to rethink the financial future of oil

Andreas Goldthau, Central European University and Benjamin Sovacool, University of Sussex

The price of oil keeps moving in one direction – down. Even political tension between Iran and Saudi Arabia (historically a cause of price rises) has not stopped the drop. It may come as a surprise to some, but it drives home the point that it is not politics but market fundamentals that set prices.

The global marketplace is awash with crude, thanks in part to US shale, Russia pumping at its limits, OPEC countries incapable of agreeing to a cap on production, Saudi Arabia remaining in a fierce price war with US shale producers, and Iranian stocks entering the market. Industry stocks are as high as almost ever before.

Demand also remains sluggish in emerging regions such as Asia. Wall Street augurs even see additional downward potential, suggesting US$20 as a likely floor price – which is remarkable given that from 2010-14 US$100 oil was the “new normal”. In short, the market environment is soft, which is why oil futures traders are not paying heed to the hostilities between Iran and Saudi Arabia.

Oil giant BP reacted by shedding 4,000 jobs, while globally some US$1.5 trillion of energy investment has been put into question. Clearly, oil assets are on the losing side and the future does not bode well for global oil. This, however, is for reasons related to climate change, not because of tumbling prices. Two actors are key: the US government and financial investors.

Oil prices 2011-2015.

Shale squeeze

In the US, it is particularly the “independents” that have become squeezed. These are small to mid-sized companies which form the backbone of the recent shale gas revolution. So far, they have shown a remarkable ability to cope with an oil price spiralling downward, thanks to their innovative nature and their ability to cut costs and streamline production processes. Now, they have hit their limits. While some unconventional oil wells on the Barnett, Eagle Ford or Bakken formations still break even at US$30 a barrel, many no longer do, leaving the independents in the red.

The US government’s decarbonisation strategy, meanwhile, has a strong incentive to keep these independents alive and well. By and large it relies on replacing coal with gas, in addition to tougher power plant regulation. This strategy so far has worked thanks to lots of additional gas coming online as a byproduct of oil production, keeping the market oversupplied and gas cheap. A faltering shale oil industry therefore also questions whether a US climate policy that relies on “market signals” remains sustainable.

One of many shale oilfields in the US.
Reuters/Lucy Nicholson

If the events of 1998, when low oil prices brought the US oil industry to its knees (and Russia went bust), are any good predictor, Washington will keep the industry from collapsing – so long as the independents are needed to help bridge America’s pathway into an unfolding low-carbon energy economy.

Tipping point

The finance industry, in turn, shows signs of a serious rethink in its fossil fuel investment strategy. To be sure, Wall Street and the City of London have valued oil – the world’s most actively traded commodity – as an investment opportunity. It is not only bankers who put their money into oil assets, but also managers of more conservative outfits such as pension funds, Ivy League university endowments and insurance companies.

Yet, doubts are emerging over whether oil remains as attractive as it has been in the past. Already in 2013, Citibank, a global financial firm, declared that global oil demand was “approaching a tipping point” and that “the end is nigh” for growth. It cited the trends of substituting natural gas for oil, coupled with improvements in the fuel economy of vehicles, as the reasons.

Moreover, as the Paris climate deal of December 2015 underlines, there are significant social and environmental costs stemming from unabated climate change. The 196 world parties to COP21 acknowledged that humanity must therefore manage its remaining “carbon budget”. This means that it needs to limit, and eventually end, the use of fossil fuels, including oil.

Fossil fuels are reaching their limits.
Reuters/Stephane Mahe

As a consequence, many barrels of oil will need to stay in the ground as “stranded assets”. The volumes of oil that “cannot be used” by 2035 due to carbon restraints are projected at 500 billion to 600 billion barrels – roughly a third of today’s proven reserves. Some studies suggest that up to 80% of coal, oil and gas reserves held by stock market listed companies cannot be burnt and should be written off.

Reacting on this, the global insurance companies Allianz and Axa already announced an end to investing in coal. Oil is likely to follow. With the global divestment movement gaining further traction, there will be additional impetus from civil society to abandon oil. This is why some observers have already called on established international oil companies “to sell their existing oil reserves as quickly as possible”.

Ultimately, the future politics of oil present a fundamental and inescapable paradox. As ironic as it is, it is the very same climate change imperatives that are helping to stabilise America’s oil industry in the short run while sounding its death knell in the long term. Going short on oil therefore makes both climatic and financial sense.

The Conversation

Andreas Goldthau, Professor, CEU School of Public Policy, Central European University and Benjamin Sovacool, Professor of Energy Policy, University of Sussex

This article was originally published on The Conversation. Read the original article.

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How good is your model? Quantifying quality research

Lee STapleton

a photograph of Lee StapletonOur latest EPSRC-funded research carried out in CIED (and led by SPRU, Sussex) has something new to say about the testing of statistical models. Available now in the journal Energy Economics and authored by Lee Stapleton, Steve Sorrell and Tim Schwanen, you can access the paper here

The paper estimates the so-called ‘direct rebound effect’ associated with personal car travel in Great Britain. This effect relates to the increased driving that may occur when fuel efficiency improvements make car travel cheaper. Our results suggest that the direct rebound effect has been in the region of 20% in GB over the last 40 years. Put differently, a 1% fall in average fuel prices over this period leads to a 0.2% increase in total distance travelled.

To arrive at this conclusion we developed and estimated a total of 108 different regression models. Some of these models were quite fancy, some were quite simple and together they produced a range of parameter estimates in terms of rebound and other determinants of distance travelled. So, how did we choose between them?

To do this, we quantified the robustness (strength or quality) of each model in terms of the extent to which it adhered to governing rules and assumptions about structure, stability, parsimony and the behaviour of parameter estimates and non-fitted data (residuals).   Unfortunately, most applied research which uses these kinds of models pays insufficient attention to these rules and assumptions – many of which are well-documented in textbooks and routinely covered in courses on research methods. So why are they so often ignored? Other assumptions and rules are confined to the more technical, specialist literature which makes it easier to understand their limited diffusion in applied research.

Capturing multi-dimensional concepts such as robustness can be achieved by constructing so-called composite indicators. In other words, uni-dimensional constituents of robustness can be combined mathematically into weighted, aggregated, multi-dimensional representations of the concept. And that’s what we did. Specifically, we assessed 96 of our 108 models in terms of 13 ‘quality indicators’ to create aggregate, composite measures of robustness for each model. We took two approaches based on different weightings. The first (unequally weighted) is based on our judgement of the ‘relative importance’ of each robustness constituent. The second (equally weighted) does not differentiate in terms of importance.  We assessed the remaining 12 models in terms of a reduced set of 6 quality indicators because the robustness of these models was trickier to assess. Here, again, we developed unequally and equally weighted robustness composites.

Doing this allowed us to explore the relationship between model robustness and parameter estimates. We haven’t seen this done before. Previously, this has only been approached using relatively narrow operationalisations of robustness compared to the multi-dimensional indicators developed and used here.

So, the $64,000 question is Do bad methods lead to biased results? And conversely Do good methods lead to less biased results? We can provide answers using our robustness indicators. If there are systematic relationships between parameter estimates and robustness we should be concerned that bad methods do indeed lead to ‘wrong’ answers. But, if there is no relationship between parameter estimates and robustness we can afford to be less concerned about these bad methods.

In our latest work here, we found some evidence to suggest that bad methods lead to biased results, but only some. It depends on which model parameter estimates you look at. More studies need to be done which apply comparable robustness indicators to other models to get a better handle on this. Regardless of the answer, it is a good idea to choose and use statistical models which are multi-dimensionally robust. Hence, we are currently applying the indicators developed in this work to models being developed in other projects.

Lee Stapleton is a Research Fellow at the Science Policy Research Unit and the Tyndall Centre for Climate Change Research.  Working principally in the EPSRC-funded Centre on Innovation and Energy Demand (CIED) within the Sussex Energy Group, Lee’s research focusses on the application of time-series (static, dynamic and co-integrating) regression models to estimate so-called ‘rebound effects’ in the transport sector. 

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My awesome SPRU Masters experience

Okafor Akachukwu after graduating his SPRU Masters.

akI have always planned to follow-up my undergraduate studies with a policy course.  My work in different themes of development: poverty reduction, education, water and sanitation, health care and environment had clearly illustrated to me that access to efficient, clean and affordable energy is the key to human development efforts. And that Climate Change is another huge issue on the global agenda.

I had started to explore the role that science, technology and innovation plays in international development, through my previous studies and work in international development: I took trips with a friend to some off grid remote farming and nomadic villages in Nigeria’s North Central region, to understand how the people lived without access to electricity and other energy services. I am interested in exactly what hinders people in these villages from having access to efficient and clean energy.  I also visited island communities in Lagos for the same purpose.  These visits helped me take the final decision to study an energy, innovation, and sustainability related policy course.

I quite easily found the ‘Energy Policy for Sustainability‘ programme offered at the Science Policy Research Unit, University of Sussex, on-line. I met the entry requirements, applied and was offered a place. I arrived on campus to an experience that would be one of the most exciting academic and learning experiences I may ever have. I was not surprised that I enjoyed the course – I was motivated even before arriving for my studies. Weeks before arrival, the course convener had shared a reading list to serve as an introduction to the course. This was particularly helpful to me.

The lecturers and faculty members are passionate about their work, teaching and sharing their experiences. The classes are interactive and held in ‘safe environments’ which means that students are protected from any undue influence from lecturers, staff and fellow students.

Course seminars were the best classroom activity for me as they afforded students the opportunity to share knowledge and experiences, to discuss and argue on related topics and to get to know each other better, outside the usual university social events.

There are weekly (non-compulsory, but necessary) seminars on energy, climate change, science, technology, innovation, development and many other energy related fields.  These are delivered by visiting researchers from other universities and research centres. I benefited hugely from the few that I was able to attend; from recent ground breaking research findings to new thinking around old ideas and approaches. The seminars are an opportunity to challenge the normal thinking and disrupt the system at little bit. It was very encouraging to attend – Masters Students were always given priority over PhD candidates and faculty members during the comments and Q&A’s that follow the presentations. Everyone’s opinion and point of view were welcome, sought out and respected. Personally, I was usually given time to express some knowledge I had and to get validation from the answers or comments that I received. It’s also a good way to meet the rest of the SPRU community and to build friendships and valuable networks.

The lecturers were welcoming, especially in classes that I had voluntarily opted to take and for which I wouldn’t be assessed. They were encouraging, helpful and always responsive. The most exciting moment for me was when I proposed to use the STEPS Centre’s Pathways Approach to do an analysis for one of my term papers. The encouragement I got is something I will never forget. STEPS Pathways Approach is a new concept and it was unusual for me to use it for my term paper. I successfully did though, and with deepest thanks to my lecturer, today I am drafting a STEPS Working Paper out of that term paper. The encouragement I had from him is what I would wish for every student. It is not difficult to get that in SPRU – just challenge yourself and ask for help and encouragement.

I enjoyed my studies so thoroughly that I was very willing to be an ambassador for the course programme at the Postgraduate Open Evening and subsequently helped produce an official video to promote courses that SPRU offer including Energy Policy for Sustainability.

On graduating, I feel ready to work in any context that I find myself. Be it a policy, research or advisory position, consultancy, government, non-profit, business or academic. I am ready! I couldn’t be more proud to have passed through SPRU and SPRU through me. I have gained a deep understanding of the different and complex factors, dynamic interactions and contexts that challenge the development and governance of efficient, low-carbon energy systems and technologies in the 21st century.  Not only have I gained tremendous knowledge but I understand how to operationalize energy policy instruments and strategies to effectively achieve the desired outcomes.

Taking the Energy Policy for Sustainability course at SPRU is something I strongly recommend to anyone; you only have to be passionate about understanding our energy systems, making energy services more accessible and efficient, and keeping our environment and world, safe from climate change impacts.

For me, there is still a lot more that SPRU has to offer.  I am keeping in touch with the SPRU community and who knows – I may be going back there soon.

Okafor Akachukwu

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On the ‘deep state’ hypothesis – Phil Johnstone and Andy Stirling react to critique

Phil and Andy no textRecently Jessica Jewell from the POLET network offered a critical response to the hypothesis explained in a previous blog post by Andy Stirling and me about the links between civil and military nuclear power in the UK. Our hypothesis is that it is strong UK government commitments to maintaining specific military nuclear capabilities that are interacting with many other complex aspects to sway decisions in favour of nuclear power. But unlike a focus on the historical associations between civil and military related nuclear activity in relation to the transfer of ‘fissile materials’, what is unique about our hypothesis is that civil/military connections are envisaged to play out at the level of innovation and industrial systems in terms of technologies and skills surrounding nuclear propulsion capabilities for submarines.

As part of developing this hypothesis, we have discussed various literatures related to understandings of ‘the deep state’, drawing attention to less visible power structures which may impinge upon ‘conventional’ energy policy decision making. In her blog Jessica argued that the deal with China somehow ‘disproved’ our hypothesis (because the UK government would not risk China gaining access to sensitive submarine-related nuclear activity), while also making the claim (that has been frequently encountered) that to even pose the question regarding the linkages between submarine-related nuclear activity and civilian nuclear power somehow represents a ‘conspiracy theory’. We were grateful for this intervention; however, we felt that it mischaracterized key parts of our argument, and thus we responded to Jessica’s comments on the POLET Network blog. We hope these dialogues can continue….To read our response click here.

 

 

 

 

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