Summary of climate change mitigtion study by the University of London.
Policy makers have generally agreed that the average global temperature rise caused by greenhouse gas emissions should not exceed 2 °C above the average global temperature of pre-industrial times1. It has been estimated that to have at least a 50 per cent chance of keeping warming below 2 °C throughout the twenty-first century, the cumulative carbon emissions between 2011 and 2050 need to be limited to around 1,100 gigatonnes of carbon dioxide (Gt CO2)2, 3. However, the greenhouse gas emissions contained in present estimates of global fossil fuel reserves are around three times higher than this2, 4, and so the unabated use of all current fossil fuel reserves is incompatible with a warming limit of 2 °C. Here we use a single integrated assessment model that contains estimates of the quantities, locations and nature of the world’s oil, gas and coal reserves and resources, and which is shown to be consistent with a wide variety of modelling approaches with different assumptions5, to explore the implications of this emissions limit for fossil fuel production in different regions. Our results suggest that, globally, a third of oil reserves, half of gas reserves and over 80 per cent of current coal reserves should remain unused from 2010 to 2050 in order to meet the target of 2 °C. We show that development of resources in the Arctic and any increase in unconventional oil production are incommensurate with efforts to limit average global warming to 2 °C. Our results show that policy makers’ instincts to exploit rapidly and completely their territorial fossil fuels are, in aggregate, inconsistent with their commitments to this temperature limit. Implementation of this policy commitment would also render unnecessary continued substantial expenditure on fossil fuel exploration, because any new discoveries could not lead to increased aggregate production.
When scientists and policymakers talk about limiting climate change, what they’re mainly talking about is keeping more fossil fuels in the ground. The fact is, there’s no way to prevent global warming from reaching catastrophic levels if we burn up our remaining reserves of oil, gas, and coal.
Climate negotiators have agreed that warming should be limited to 3.6 degrees Fahrenheit above preindustrial level. That means that humans can release about 1.1 trillion metric tons of carbon dioxide emissions, and we’ve gone through about half of that already. The remaining emissions are known as our “carbon budget”; if we “spend” emissions beyond our budget, we’re much more likely to push the planet to dangerous levels of warming. If we burned through all of our current reserves of fossil fuels, we would overspend the budget by about threefold.
In other words, there are a lot of fossil fuels that are “unburnable” if we’re going to stay within the prescribed warming limit. But how much, exactly? And where exactly are those unburnable fuels? That’s the question asked in a study released today in the journal Nature by a team of energy analysts at University College London. The answer matters because mapping the geographical spread of unburnable fuels is a key step in understanding the roles specific regions need to play in the fight against climate change.
The model developed by Christophe McGlade and his team takes into account known estimates of fossil fuel reserves in a number of different countries and regions, as well as the global warming potential of those reserves and the market forces that determine which reserves are the most cost-effective to exploit. The results, shown below, are what the model finds to be the most cost-effective distribution that stays within the 3.6-degree limit.
The researchers ran the model twice: Once assuming widespread use of carbon capture and storage (an emerging technology for catching carbon emissions as they escape from power plants that is gaining steam but has yet to be proven on the global stage), and once assuming no CCS at all. The two scenarios ultimately aren’t that much different—using CCS won’t allow us to burn vastly more coal, oil, and gas. The results shown below are from the “with-CCS” scenario.
A couple interesting things pop out. As you might expect, the vast majority of the world’s coal would need to stay buried. The United States is able to use most of its oil and gas in this scenario, because those resources are relatively cost-efficient to extract and bring to market compared to, for example, gas in China and India. In other words, according to this study, the US fracking boom can go forward full steam as long as the gas it produces aggressively replaces our coal consumption. But Canada can’t touch most of its oil, because the oil there—the kind that would be carried in the Keystone XL Pipeline—is exceptionally carbon-heavy tar sands crude.
What isn’t shown in the graphic above is that the model prohibits developing any of the vast oil and gas reserves in the Arctic. Melting sea ice has made those reserves increasingly attractive to energy companies like Shell.
Of course, the model has to make assumptions about future oil and gas prices that are basically impossible to be certain about. Unexpected changes to the price of oil, for example, could upset the cost equation for drilling in the US and re-shuffle the entire regional breakdown. But even as an estimate, the study really illuminates the vital need for policies all over the world that dramatically cut our dependence on coal.
Sri Lanka: Free Again?
Blommberg editors opine: Strongman Mahinda Rajapaksa was kicked out in last week’s elections in Sri Lanka. Another small, strategically vital Asian nation appears to have rejected China’s embrace. Whether the U.S. and India can exploit this opportunity, however, will depend on whether they recognize what’s unique about Sri Lanka.
Voters elected Maithripala Sirisena as president because they had tired of the opacity and perceived cronyism of Rajapaksa’s administration, symbolized in part by multibillion-dollar projects handed out to Chinese companies with little oversight. Elites had begun to fear that Beijing would soon demand more political and military influence as part of its largesse. Yet, unlike Myanmar, which shares a land border with China, such concerns remain somewhat theoretical. Sri Lanka has vast infrastructure needs — and therefore good reason not to reject Chinese money entirely.
If other nations want to compete, they’re going to have to demonstrate they are as willing and able as China to carry out large projects. India is itself seeking Chinese money for infrastructure. At the same time, Japan, Sri Lanka’s largest donor, has shown interest in increasing its investments in the region, and there should be room for Tokyo and New Delhi to combine forces.
Sri Lanka’s has also sidelined the people who have been most directly implicated in past human-rights abuses — including President Rajapaksa and his brother Gotabaya, who served as defense secretary during the last stages of the brutal war against Tamil Tiger insurgents. This should make it easier for the U.S. and India, which has a large and vocal Tamil minority, to work with the new government and eventually strengthen military-to-military ties. U.N.-led efforts to investigate allegations of Sri Lankan war crimes should continue, but hopefully the new president will be given a chance to promote internal reconciliation and accountability. The campaign to end Sri Lanka’s longstanding culture of impunity will have far higher chances of success if it is led from within, rather than imposed from abroad.
China still has a legitimate interest in expanding its presence in the Indian Ocean, given its dependence on the region’s shipping lanes. By the same token, Sri Lankans could benefit greatly if Beijing’s plans for a “Maritime Silk Road” integrate the infrastructure and economies of the whole region.
Ideally, China will continue to cultivate its interest in Sri Lanka as one investor among several. Worthwhile public projects should proceed with open bidding and labor and environmental safeguards. Needlessly provocative actions — such as the docking of Chinese submarines at Sri Lankan ports, which Rajapaksa allowed — should cease.
Can Hacking Be Controlled?
India Flexing Economic Muscles
Steven Hansen thinks the Indian economy looks strong. The election of Narendra Modi as Prime Minister in May 2014 has been what many believe a water shed election sweeping in a majority government for the first time since 1984. Narrow cast and religion voting patterns were set aside and the electorate opted to vote for promise of clean and effective governance. Modi is known for achieving results in his past elected positions – but not known as a great master planner.
The appointment of Indian-American economist Arvind Panagariya to the key post in economic planning for India. Panagariya is a heavyweight on the stage of international economists.
Modi administration’s performance since May 2014 has been mixed one. Politically reigning in what is called the “Saffron Family” has been tough who have at times worked at odds with Modi administration. Economically the country has stabilized. Inflation is down and India’s manufacturing PMI rose to 54.5 in December, 2014, while in the corresponding period a year ago it stood at 50.7, just above the crucial 50 mark which separates growth from contraction. Many in industry blame the super Hawkish Raghuram Rajan for throttling industrial growth. Modi has put together a heavy weight team which believes free market economy tempered by social spending to create inclusive growth for the third of the world’s most extremely poor who live in India.
From May 2014 when Modi got elected , the Super Hawk Raghuram Rajan has been running circles round Modi’s administration by keeping tight leash on money. Many believe that the Central Bank single handedly has almost frozen industry by crying wolf on inflation, completely ignoring the generally deflationary trend worldwide. In an ironic twist he has been now circled by the heavyweight Pangariya and his crack team who may have better handle on what needs to be done for the Indian Economy. Hopefully we should see the Indian Economy being unfrozen.
Here are the positives:
- Reform in Indian banking sector
- Government will not find larger fiscal deficit to quicken the infrastructure spending
- A Hawkish Central Bank led by Raghuram Rajan will have to “bow” to equally heavy weights led by Panariya who are not hawkis
- Taxation Reforms which will be friendly to both domestic and international business
- Manufacturing sector should get a boost
Downside scenarios are sabotaging Modi’s administration good work by The Saffron (Hindu zealots) and the continuous tension on Indo-Pakistan border. We do not make much about the Indo-China rivalry and have on the contrary argued that both will work together.
Is Putin An Economic Problem?
Anders Aslund writes: The current oil price will force Russia to cut its imports by half – a move that, together with the continuing rise in inflation, will diminish Russians’ living standards considerably. Add to that ever-worsening corruption and a severe liquidity freeze, and a financial meltdown, accompanied by an 8-10% decline in output, appears likely.
Russia’s ability to negotiate its current predicament hinges on its powerful president, Vladimir Putin. But Putin remains unprepared to act. When he finally does acknowledge reality, he will have little room for maneuver.
Putin could withdraw his troops from eastern Ukraine, thereby spurring the United States and Europe to lift economic sanctions against Russia. But this would amount to admitting defeat.
Short of initiating a major war, Putin has few options for driving up oil prices. Even before the oil-price collapse, crony capitalism had brought growth to a halt – and any serious effort to change the system would destabilize his power base.
In fact, Putin’s leadership approach seems fundamentally incompatible with any solution to Russia’s current economic woes. There is economic expertise among Russian policymakers. Russia’s key economic institutions boast competent managers. The problem is that policymaking is concentrated in the Kremlin, where economic expertise is lacking.
Putin has usurped authority not just from his more knowledgeable colleagues, but also from the prime minister, who has traditionally served as Russia’s chief economic policymaker. Indeed, since Putin returned to the presidency in 2012, Prime Minister Dmitri Medvedev has been all but irrelevant.
In short, Putin – who is no economic expert – makes all major economic policy decisions in Russia.
In the sensitive currency market, unlike in most other countries, the central bank does not retain the exclusive right to intervene. When the ruble tumbled in December, the finance ministry – which holds almost half of Russia’s foreign reserves, $169 billion, in two sovereign-wealth funds – deemed the central bank’s intervention to be insufficient. So it announced that it would sell $7 billion from its reserves to boost the ruble.
When the exchange rate plummeted again, the Kremlin urged the five largest state-owned exporting companies to exchange a portion of their assets into rubles.
Russia’s fiscal situation, determined by Putin’s arbitrary budget management, is hardly better. Putin’s priorities are clear: first come the military, the security apparatus, and the state administration; second are the major infrastructure projects from which he and his cronies make their fortunes; social expenditures (primarily pensions), needed to maintain popular support, come last. Suddenly, oil revenues are no longer sufficient to cover all three.
If Putin wants to save Russia’s economy from disaster, he must shift his priorities. For starters, he must shelve some of the large, long-term infrastructure projects. Though the decision in December to abandon the South Stream gas pipeline is a step in the right direction, it is far from adequate.
Likewise, Putin should follow Finance Minister Anton Siluanov’s sensible recommendation to cut public expenditure, including on social programs and the military, by 10%.
Russia faces serious – and intensifying – financial problems. But its biggest problem remains its leader, who continues to deny reality while pursuing policies and projects that will only make the situation worse.
Can the EU and the Euro Endure?
Joseph E. Stiglitz writes: At long last, the United States is showing signs of recovery from the crisis that erupted at the end of President George W. Bush’s administration, when the near-implosion of its financial system sent shock waves around the world. But it is not a strong recovery; at best, the gap between where the economy would have been and where it is today is not widening. If it is closing, it is doing so very slowly; the damage wrought by the crisis appears to be long term.
Then again, it could be worse. Across the Atlantic, there are few signs of even a modest US-style recovery: The gap between where Europe is and where it would have been in the absence of the crisis continues to grow. In most European Union countries, per capita GDP is less than it was before the crisis. A lost half-decade is quickly turning into a whole one. Behind the cold statistics, lives are being ruined, dreams are being dashed, and families are falling apart (or not being formed) as stagnation – depression in some places – runs on year after year.
The EU has highly talented, highly educated people. Its member countries have strong legal frameworks and well-functioning societies. Before the crisis, most even had well-functioning economies. In some places, productivity per hour – or the rate of its growth – was among the highest in the world.
The EU’s malaise is self-inflicted, owing to an unprecedented succession of bad economic decisions, beginning with the creation of the euro. Though intended to unite Europe, in the end the euro has divided it; and, in the absence of the political will to create the institutions that would enable a single currency to work, the damage is not being undone.
The current mess stems partly from adherence to a long-discredited belief in well-functioning markets without imperfections of information and competition. Hubris has also played a role. How else to explain the fact that, year after year, European officials’ forecasts of their policies’ consequences have been consistently wrong?
The models upon which those policies relied were badly flawed. In Greece, for example, measures intended to lower the debt burden have in fact left the country more burdened than it was in 2010: the debt-to-GDP ratio has increased, owing to the bruising impact of fiscal austerity on output. At least the International Monetary Fund has owned up to these intellectual and policy failures.
Europe’s leaders remain convinced that structural reform must be their top priority. But the problems they point to were apparent in the years before the crisis, and they were not stopping growth then. What Europe needs more than structural reform within member countries is reform of the structure of the eurozone itself, and a reversal of austerity policies, which have failed time and again to reignite economic growth.
Those who thought that the euro could not survive have been repeatedly proven wrong.
But the critics have been right about one thing: unless the structure of the eurozone is reformed, and austerity reversed, Europe will not recover.
Greece is posing yet another test for Europe. The decline in Greek GDP since 2010 is far worse than that which confronted America during the Great Depression of the 1930s. Youth unemployment is over 50%. Prime Minister Antonis Samaras’s government has failed, and now, owing to the parliament’s inability to choose a new Greek president, an early general election will be held on January 25.
The left opposition Syriza party, which is committed to renegotiating the terms of Greece’s EU bailout, is ahead in opinion polls. If Syriza wins but does not take power, a principal reason will be fear of how the EU will respond.
If Europe does not change its ways – if it does not reform the eurozone and repeal austerity – a popular backlash will become inevitable. Greece may stay the course this time. But this economic madness cannot continue forever. Democracy will not permit it. But how much more pain will Europe have to endure before reason is restored?
Is Natural Gas a Good Energy Solution?
The proposed Port Ambrose deepwater LNG terminal near New York City has been denounced by environmentalists as a dirty and dangerous export terminal in disguise. The reality is that LNG is the safest and cleanest fuel available and natural gas is critical in efforts to eliminate air pollution and save lives in New York City.
Protesters showed up at a public hearing to encourage Governor Cuomo to veto the proposal for the terminal.
The Port Ambrose LNG terminal should be appreciated by environmentalists as a technological marvel that helps provide much needed seasonal supplies of clean natural gas to the New York City region, saving lives today through improved air quality, keeping utility costs down for rich and poor alike, and all in an engineering package that has the barest of ecological impacts.
The background on this project is expanding demand for natural gas in the region and constraints in the gas pipeline infrastructure that causes daily spot prices to spike with increases in demand.
New York City is currently undergoing an ambitious program to improve air quality and save lives in the region by switching out thousands of highly polluting fuel oil furnaces for natural gas furnaces. PlaNYC was begun under Mayor Bloomberg and continues under Mayor DeBlasio.
New York City and Long Island are major natural gas demand centers that have historically suffered from pipeline constraints that cause daily spot prices to spike as demand fluctuates. The chart below from the US EIA clearly shows the price volatility.
The Port Ambrose LNG import terminal is intended to complement other pipeline improvements by providing alternative gas supply that can flexibly come and go to meet seasonal demand. .
The technology that is intended for Port Ambrose is truly innovative. Unlike previous proposals for the region that involved constructing artificial islands as ports for large LNG vessels, the current proposal is an exercise in minimalism. The buried gas pipeline is connected to a buoy system that rests on the ocean floor when not in use, with only a small marker buoy visible on the surface. A specially designed SRV that carries both the cargo and the regasification equipment, connects to the submerged buoy and injects gas into the pipeline. The regasification process takes around 24 hours and in case of bad weather or emergency the SRV can disconnect and sail out to sea in 15 minutes. There are no water discharges or any kind of effluent deposited in the water at any time…
Port Ambrose in not a bait and switch. LNG is the safest and cleanest of all fuels. LNG can easily co-exist with wind farms. During the actual Superstorm Sandy, the natural gas infrastructure in Manhattan remained functional when the electric power grid went down.
LNG is clean energy,
Bio-Fueling Up in the US
America is the largest biofuels producer in the world — accounting for 48 percent of global output. To remain the global industry leader, the US Energy Department is investing in projects that address critical barriers to continued growth. This includes a key focus on improving feedstock logistics — the processes we use to collect grasses, plants and other organic material prior to converting them into clean, renewable fuel.
Collecting feedstock to convert into biofuels — from harvesting and packaging, to loading and transporting — can be complex and costly. To better streamline the process, the Energy Department has given contracts to five companies aimed at overhauling the feedstock logistics process. Among the grant recipients selected to improve processes to sustainably grow and harvest feedstock was Ohio-based FDC Enterprises.
For its project, FDC enlisted a number of industry partners to design, build and test innovative harvesting equipment that integrates many different components of the feedstock collection process into one system. To test the new system, FDC harvested large acre crops of homegrown feedstocks — including switchgrass, prairie grass and corn stover. After significant testing, FDC’s innovative approach enabled a faster, more streamlined solution to the feedstock logistics process — all while cutting operating costs. This new equipment will reduce the cost of harvesting and delivering large square bales of homegrown feedstocks by more than $13 per delivered ton.
FDC’s efforts — along with their collaborating partners — support the Energy Department’s sustained commitment to making biofuels an affordable, reliable, domestic alternative to fossil fuels.
To learn more about biomass feedstocks and how a domestic biofuels industry can help create jobs in rural America, generate clean, renewable fuels and reduce our dependence on imported oil, watch the Energy Department’s
Hollywood, Bollywood, Nollywood?
Nigeria’s film industy produces 50 titles a week. Most go stragiht to DVD and sell on the streets. What’s called Nollywood is a big business. It contributes about 1.2% to Nigeria’s GDP. It employs about a million people. Filmmakers complain that poor regulation of the street markets leaves films open to piracy, and unregulated sales means money for the films doesnt’t reach their pockets.
Most movies are filmed in ten days and seldom cost more than$40,000 to produce. To improve content and export the films, better quality is necessary. But that’s difficult with current budgets. If they can get more money for films, Nollywood will explode.
Jason Njoku founded the first online streaming firm IROKOTV and pays from $8000 to $25000 for limited rights. Some filmmakers now sell to several online platforms. Nigerian films are going international. Will this be Bollywood redux? Nigerian filmmakers are hoping Yes.
Room at the Top for Food Entrepreneurs
It was an interesting year in the world of food and drink. 3D-printed foods are gaining traction. Vermont became the first state to require GMO labels. Greens and gluten-free diets are going mainstream. Consumers are demanding more transparency on food labels.
Here are some novel entrepreneurs. While working in San Francisco’s financial district one day in 2012, Jason Wang and his colleagues found themselves craving Ikes Place sandwiches for lunch. Problem was, Ikes doesn’t deliver and the trip across town and back would have taken a couple of hours. “We asked ourselves, why can’t the good restaurants deliver?” Wang, recalls. “Why is it the mediocre and generic pizza, Thai, Indian restaurants on every single delivery website?” With this thought, Caviar was born: A premium food delivery service that brings a city’s best cuisine to your doorstep for a flat fee of $4.99. Wang’s site was acquired by Jack Dorsey’s Square for $90 million last August.
Apoorva Mehta is also disrupting the industry with his tech platform and business model, Instacart. Founded in 2012, it is fastest-growing grocery delivery service ever, beating out Webvan and Amazon Fresh. The app allows shoppers to order groceries — from supermarkets like Kroger’s KR -0.54%, Whole Foods and Costco (no membership required). Deliveries typically come in less than half an hour.
One advantage of Mehta’s business model is not having set aside funds for warehouse rentals, maintenance costs, delivery trucks, and full-time manual labor. Most of Instacart’s runners (a.k.a. “green men”) are locals. It’s a prime example of how efficient the sharing economy model can be.
If booze-delivery is more your type, look no further than the Drizly boys. Founders Nicholas Rellas and Justin Robinson, both 25, decided to focus on something as simple as an app that delivers alcohol. Since the company’s inception in 2012, Drizly has worked with over 150 retailers to deliver beer, wine and liquor to consumers and businesses.
Other standouts include Marianne Barnes, WoodFord Reserve’s Master Taster. Despite having no background in spirits of any kind, Barnes is bucking industry conventions and making her own path. She puts her chemical engineering degree to use every day on the job, relying on science to craft her bourbon, and is the chosen protégé to become WoodFord’s next Master Distiller.
Momofuku Ssäm Bar Executive Chef Matthew Rudofker has been running the kitchen since he was 25, when he held the title of Chef de Cuisine. After just one year of operations, the place has picked up clients like Grant Achatz, Jose Garces, Eataly N.Y.C. and Eataly Chicago and even Moet Hennessey.
At wearable tech maker Jawbone, 26-year-old Laura Borel is Head of Nutrition. The Stanford graduate led the food release, bringing simple and intuitive eating advice to millions Jawbone users. “In a world where most people say eating healthy is more complex than doing their taxes,” says Laura, “simplicity is the way forward.”
