Electric Battery Upgrade, Plastic Recycling Conundrum, and Discussion of the Costs and Opportunities of the Net-Zero Transition

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This week current climate, which every Saturday brings you a balanced view of the news of sustainable development. Sign up to receive it in your inbox every week.

The European Commission is moving forward with plans to recognize a role natural gas and nuclear energy to achieve carbon neutrality by 2050, but with a number of caveats. The bloc’s green taxonomy is a tense battleground for member states facing different priorities. Predictably, gas- and nuclear-dependent Member States are pushing for their inclusion, while more climate-ambitious countries want to set a clear example of what a clean energy transition looks like – and some prepare to fight for it in court. The famous Romeo and Juliet A line from William Shakespeare comes to mind: “A rose by any other name would smell just as good” – and a form of fossil fuel-based energy, by any other name, smells just as good polluting (while one based on combustion, as readers of this newsletter would know, has other sustainability issues even though it is low-carbon.)

Other stories I focus this week on the myths of sustainable business, the development of a powerful new electric battery, and concerns about plastic chemical recycling processes.

In Climate Talks, I spoke to Mekala Krishnan, a partner at the McKinsey Global Institute (MGI), the business and economics research arm of McKinsey, who authored a recently published report looking at how much can be spent and earned on the path to net zero emissions.

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The United States is behind on its climate goals. Here’s what to do in 2022 to get back on track

For the United States to meet the goal of halving emissions by 2030, there should be continued pressure to decarbonize businesses and entire sectors and drive the adoption of climate policies and regulations that ensure that the United States is transitioning to a fairer economy.


Progress

Japanese researchers say they’ve developed a battery with almost twice the energy density of that used in a Tesla Model 3 car, offering just as much hope longer life batteries could soon make their way to cell phones, electric vehicles, and even electric airliners.

Challenges

There are “significant concerns” around plastic chemical recycling systemswhich, if left unaddressed, could lead to increased carbon emissions, warns a new report from the World Wide Fund for Nature (WWF).


Busting the Three Big Myths of Sustainable Business

When it comes to sustainability, environmental restoration and social justice, myths can be harmful. Myths based on misunderstanding can serve as excuses not to do more or ask more questions, when the time has come to act and invent. These are three of the most ubiquitous and persuasive, and the truth behind them.


Climate Talks

Numerous studies have shown that the cost of inaction in the face of climate change will ultimately be greater than the cost of action. But a McKinsey study published this week estimated how much is left to spend across all sectors and countries. to achieve an orderly and universal net-zero transition over the next three decades: Capital spending on physical assets would total about $275 trillion through 2050, or about $9.2 trillion per year, or a $3.5 trillion increase in annual spending today Today, as high-emission activities are scaled back and low-emission activities ramp up. The share of GDP devoted to the transition should increase from 6.8% today to 8.8% between 2026 and 2030, before falling again. Dr. Mekala Krishnan, the report’s lead author, told me more about what’s behind the numbers.

Where should this additional $3.5 trillion come from?

The nature of this transition means that the investments that will be required are not evenly distributed. Some parts of the economy – sectors that themselves contribute to emissions like fossil fuel-based energy, or sectors whose products contribute to emissions, like the automotive sector – will have to spend more than other parts . There is still 10% of the economy where the supply chain is the biggest contributor to emissions. So if you think about it, the investment we need to make is not evenly distributed, it’s actually concentrated in certain parts of the economy. The same is true when we think of countries, where we find that emerging markets, as well as fossil fuel-based economies, are expected to spend around one and a half times or more than advanced economies both for their economic development, but also to build low-carbon infrastructure in the future. When we look at deploying this capital, there are different types of challenges that go well beyond the scale of the expenditure.

We shouldn’t view this expense as a cost – in many ways it’s actually an investment, it creates opportunities for growth and avoids the build-up of physical risk and reduces the chance of triggering the worst effects. most catastrophic of climate change. It’s also important to remember that the world may actually be able to afford it. From other research we’ve done, we’ve found that the global toll has tripled significantly over the past 20 years. And so there’s a whole bunch of capital that’s actually looking for productive uses. We have the financing capacity and many of these investments are paying off. It is important to think about collaboration between the public and private sectors, for example, to reduce the risk of some of these investments. We may also need collaboration between the private sector and financial institutions to manage some of this risk and help deploy capital. There is also a need to strengthen collaboration between stakeholder groups to direct capital flows to where they are needed, and we may also need to think about entirely new types of financial instruments, whether voluntary carbon markets to generate capital flows or special purpose vehicles to help decommission high-emitting assets, etc. We’ve talked a lot about the net zero transition about technological innovation. I also think that we need to think about other types of innovation, for example, business model innovation or innovation with financial instruments.

What steps can business leaders take now to ensure their businesses can sustain themselves and thrive during the transition?

The first thing companies should consider doing is to do a solid comprehensive assessment of the potential. Based on these assessments, [they can] develop plans both for decarbonization, but also to manage these risks and opportunities. Depending on the nature of the business, the focus may be on their scope 1 shows or their scope 3 shows. It may not be their own shows at all, but rather their business models themselves and the nature of their products. Doing the analysis indicates what is the most urgent action. If you think about both increased physical risk and the net zero transition, it’s very important for business leaders to realize that this actually affects every business decision a company makes, in one way or another. another, shape or form – how companies think about capital allocation, strategy, operations and supply chains, R&D. We have a chart in the report and in chapter five of the report that shows a set of about 20 to 25 different business decisions and how each of those decisions will change if the net zero transition is built into it. This will require entirely new capabilities in the organization to integrate climate into all of their decision-making.

So one of the questions companies need to ask is, for each function in the organization, do they understand how that function would evolve if climate considerations were taken into account? Our hope is that by publishing this kind of evidence base [report], it can lead, inspire greater and more thoughtful, more decisive action. We need this action for two reasons. One is, of course, the avoidance of physical hazards. The second, equally worrying in the short term, at least, is the risk of a more disorderly transition, where displacements and adjustments are not managed.

Dr. Mekala Krishnan’s responses have been condensed and edited for brevity and clarity.


on the horizon

The Danish Consumer Ombudsman publishes an English translation of its guide to greenwashing, which offers several examples of both accurate and misleading ways of marketing products.

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