Clean Energy Is Surging, but Not Fast Enough to Solve Global Warming

Wind turbines and solar panels in Hebei Province, China. Renewables are expected to supply 40 percent of the world’s electricity by 2040.

Wind turbines and solar panels in Hebei Province, China. Renewables are expected to supply 40 percent of the world’s electricity by 2040.

Over the next two decades, the world’s energy system will undergo a huge transformation. Wind and solar power are poised to become dominant sources of electricity. China’s once-relentless appetite for coal is set to wane. The amount of oil we use to fuel our cars could peak and decline.

But there’s a catch: The global march toward clean energy still isn’t happening fast enough to avoid dangerous global warming, at least not unless governments put forceful new policy measures in place to reduce carbon dioxide emissions.

That’s the conclusion of the International Energy Agency, which on Monday published its annual World Energy Outlook, a 661-page report that forecasts global energy trends to 2040. These projections are especially difficult right now because the world’s energy markets, which usually evolve gradually, are going through a major upheaval.

Here are some of the report’s major themes:

Around the world, the electricity sector “is experiencing its most dramatic transformation since its creation more than a century ago,” the report said. One big factor is the rapid growth of wind and solar power.

Over the past five years, the average cost of solar power has declined 65 percent and the cost of onshore wind has fallen 15 percent. The energy agency predicts those prices will keep tumbling as technology improves and governments scale back subsidies. Solar plants are becoming well-placed to outcompete new coal plants almost everywhere.

The agency sees renewable power supplying 40 percent of the world’s electricity by 2040, up from 25 percent today. Even that forecast could prove conservative: In the past, the agency has underestimated the speed at which wind and solar power proliferate.

“Our solar expectations are about 20 percent higher than they were last year, both because of new policies in China and India and because the costs are coming down so fast,” said Fatih Birol, the agency’s executive director.

The report warns, however, that many countries will need to retool their grids to manage the output from wind and solar plants, which run intermittently. That will mean overhauling rules for how electricity markets operate, relying on batteries and gas plants for grid flexibility and exploring new tools like hydrogen storage.

For decades, developing countries like China and India have turned to coal as the cheapest, easiest way to power their economies and lift themselves out of poverty. It’s a big reason carbon dioxide emissions have skyrocketed.

That’s quickly changing.

China, which burns half the world’s coal, is making heavy investments in wind, solar, nuclear and natural gas, spurred in part by concerns about air pollution from its coal plants. The agency now projects that China’s coal consumption will plateau around 2025, with renewables overtaking coal as the country’s biggest source of electricity by 2040.

And, while countries in Southeast Asia and elsewhere are still drawing up plans to build new coal plants, the agency expects this frenzy of construction to slow sharply after 2020.

But don’t expect coal to disappear altogether. While the era of rapid coal growth is fading, the agency projects that global coal consumption could stay flat for decades. One reason for that: The average coal plant in Asia is less than 15 years old (compared to about 41 years in the United States). Those plants will keep polluting for decades, unless countries decide to retire them early or develop technology to capture and bury their emissions.

A refinery in Port Arthur, Tex. The petrochemical industry has not seen the same gains in efficiency as the energy sector.

A refinery in Port Arthur, Tex. The petrochemical industry has not seen the same gains in efficiency as the energy sector.

Even as the world puts hundreds of millions of new cars on the road, we’re increasingly using less oil to fuel them. The report projects that global oil use for cars will peak by the mid-2020s as countries ratchet up their fuel-economy standards and deploy more electric vehicles.

That doesn’t mean overall oil use will decline, however. Only about one-quarter of the world’s oil is used to fuel passenger cars. The rest is used to fuel freight trucks, ships, and airplanes; for heating; and to make plastics and other petrochemicals.

Those sectors haven’t seen the same improvements in efficiency. As a result, the agency expects global oil demand to keep rising through 2040, led by developing countries.

Even with the impressive recent gains for renewable energy, the world is still far from solving global warming. Global carbon dioxide emissions rose 1.6 percent last year and are on track to climb again this year. The report projects that emissions will keep rising slowly until 2040.

One reason: Carbon-free sources like wind, solar and nuclear power aren’t yet growing fast enough to keep up with rising global energy demand, particularly in places like India and Southeast Asia. That means fossil fuel use keeps growing to fill the gap.

For this to change, nations will have to enact sweeping new policies, like investing in energy efficiency to slow demand growth, curbing methane leaks from oil and gas operations, and developing carbon capture technology for existing fossil fuel power plants and cement factories.

Governments will play a key role: The report notes that the world invests $2 trillion annually in energy infrastructure, and 70 percent of that is directed by state-owned companies or regulators. “That tells me that our energy destiny will rely heavily on government decisions in the next two decades,” Mr. Birol said.

Air-Conditioners Cool the Home but Heat the Planet. Can Anyone Invent a Better One?

As incomes grow and more people move to cities, and as global temperatures rise, the world is buying more air-conditioners. And as more air-conditioners spin up — you guessed it — they cause more warming, both through the energy they consume and the gases they release.

In fact, the number of air-conditioning units worldwide could surge to 4.5 billion by 2050 from about 1.2 billion today, a new report warns. By the end of the century, household air-conditioning alone could elevate global temperatures by as much as a half-degree Celsius.

household air-conditioning alone could elevate global temperatures by as much as a half-degree Celsius

household air-conditioning alone could elevate global temperatures by as much as a half-degree Celsius

Richard Branson, the British entrepreneur and Virgin Group founder, hopes to break that vicious cycle. This week he helped to initiate the Global Cooling Prize, a $3 million technology competition that aims to spur more efficient air-conditioning technology.

The prize aims to “literally help save to save the world from the disaster it is facing,” Mr. Branson said on a brief call with reporters ahead of the program’s formal opening in New Delhi, India, on Monday. (The Indian government is a partner.)

“Most air-conditioners, at their core, are still running on 100-year-old vapor compression technology,” Mr. Branson said. “There’s been no incentive for innovation.” He added that the prize isn’t open only to start-ups, but people from all walks of life.

The prize initially offers 10 chosen contenders $200,000 to build prototypes of more efficient cooling methods. That technology will then be tested in a lab as well as in 10 Indian apartments in midsummer.

“We think the world needs air-conditioners that are five times more efficient,” said Iain Campbell of the Rocky Mountain Institute, a Colorado-based nonprofit that wrote the new report and is managing the prize.

One start-up, for example — SkyCool Systems, based in Palo Alto, Calif. — is working on a literally out-of-this-world technology that beams the heat of the sun away from the earth and into space. The technology would take advantage of the ability of infrared light to pass through the atmosphere at certain wavelengths.

There are also more down-to-earth ideas. As my colleague Kendra Pierre-Louis wrote this year, experts say governments should also set efficiency standards for air-conditioners and provide incentives for manufacturers and buyers.

There has been some good news. As part of an agreement known as the Kigali amendment to the Montreal Protocol, some countries are working to phase out refrigerants that are also potent greenhouse gases.

3 Ways to Create a Climate Change Investment Strategy

The United Nations released a sobering report on climate change this month, stating that the Earth is warming faster than even scientists thought and that without far-reaching action, the planet is likely to warm to a dangerous level by 2040.

Scientist have been sounding the alarm about global warming for decades, but the report hit a chord: Time is running out before serious and possibly irreversible effects are felt.

Solar panels on a Walmart Supercenter in Baldwin Park, Calif. Walmart signed a deal this week to increase the use of solar panels on its stores.

Solar panels on a Walmart Supercenter in Baldwin Park, Calif. Walmart signed a deal this week to increase the use of solar panels on its stores.

Debate on the causes and effects will continue, but money managers say this stake in the ground gives investors a concrete guide to understand how climate change will affect their investments.

“When you lay out what the challenge is, you’re in a better position to attack it,” said Stephen M. Liberatore, a fixed-income portfolio manager at Nuveen who manages $9 billion with an environmental, social and governance mandate.

“A report like that lays out the solutions,” he said. “If we need $2 trillion to invest to save the planet, here’s what we need to do. I think it allows people to see what they need to do to accomplish their goals.”

It has been getting easier for individuals to invest with climate change as a focus. Since 1995, assets in sustainable and responsible investments have grown 18-fold, to more than $11 trillion, according to US SIF, a membership organization of sustainable investors.

There are two main approaches to creating a climate change investment strategy. One is investing in alternative energy. This can be done in a variety of areas, including solar, wind or geothermal production and distribution, or companies that make the infrastructure, like battery cells that power electric cars.

The other way is what some call climate-proofing a portfolio. The premise is that a warmer Earth will create economic disruption and that companies need to prepare for this.

Walmart, for example, has worked to make its more than 5,000 stores more environmentally responsible, from demanding that suppliers use less packaging to turning off lights at night. These are small steps that, given the retailer’s size, have saved it billions of dollars and reduced waste. This week, Walmart signed a deal to increase the use of solar panels on its stores.

In another example, Toyota, the maker of the Prius, has sold bonds whose proceeds were used to promote its hybrid technology.

Here are three ways to consider climate change as a criterion for making investments:

Investing in publicly traded equity and debt is an easy way to express a view on climate change. And their availability, along with the increasing number and size of mutual funds with a focus on the environment, offer plenty of choices.

Yet these investments, like any other, carry risk. “You still have to do your homework,” said Lloyd Kurtz, head of social impact investing for Wells Fargo Private Bank. “If you buy an expensive stock with bad fundamentals, it could be green but it’s still going to perform badly.”

That was the case with many early solar investments and the selections that early green energy funds made, Mr. Kurtz said. But he said the case for renewable energy had been bolstered by companies, like Apple and Google, that adopted these sources to power their operations in the United States.

The debt market has developed to a level that there are offerings for retail investors.

Louise Herrle, managing director and head of socially responsible investing at Incapital, which underwrites bond offerings, said she had seen an increased interest from baby boomers who want a portfolio aligned with their values. This could mean offerings from the World Bank to fund water projects or bonds like the one from Toyota.

“Retail is going to drive this,” she said. “They want to put their money where their mouth is. People are talking about the financial return and the social return.”

Constructing sustainable buildings is a major source of green investment, as are wind farms and solar arrays. But there are plenty of companies in a middle ground, working to retrofit buildings or using alternative energy to add to existing power sources.

Kevin Walenta, who manages Fidelity’s select environment and alternative energy portfolio, said he followed companies that saved energy in more traditional ways. These companies, like Ingersoll Rand, Lennox International, Honeywell and Johnson Controls, install efficient lighting or heating and cooling systems in commercial buildings. The result is significantly less energy consumption, higher green ratings for a building and returns in just two or three years.

Mr. Walenta said he looked at both parts of investing, the environmental impact and the total return.

“I am looking for the companies that are driving environmental change but have a durable business model, good returns, positive cash flow and strong balance sheets,” he said. “Within the context of environmental change, I want them to drive profits over long periods of time.”

Another area for investors is electrical utilities, he said. In regions like Southern California and Arizona, the cost of solar energy makes it competitive with traditional energy. The same, he said, holds true for wind power in parts of the Midwest like Oklahoma.

“A decade ago, they weren’t the best investments because you had significant premium for a wind turbine or a solar panel relative to the other options, like natural gas and coal,” Mr. Walenta said. “Today, that difference is nonexistent.”

Such strategies aim to rebut the common belief that investing with an environmental focus reduces returns. There are examples of inferior investments made to achieve a social good, but there are companies focused on green initiatives that are profitable and may be more so as climate change intensifies.

“There are three main misperceptions that I talk to every investor about: You give up performance to be responsible investors, responsible investing isn’t mainstream, and you can’t make an impact in public market securities,” Mr. Liberatore said.

Our investors are “looking for return potential and impact,” he added.

Its decision to pull out of the Paris climate agreement was big news, but the United States’ pollution of the environment has stayed roughly consistent over the past 25 years, and Europe has decreased its carbon levels. The big polluters have been countries in Asia, China in particular.

Vivek Tanneeru, portfolio manager of the Matthews Asia ESG Fund, said that 85 percent of the growth in emissions had happened in Asia, and that China had accounted for 61 percent of that growth.

On the positive side, he said, the solar panels that China installed in the first nine months of 2017 exceeded all the solar panels in the United States up to 2016.

“It tells you the Chinese government has the political will to do this,” Mr. Tanneeru said. “Anyone who is serious about addressing climate change needs to begin in Asia to have any global impact.”

His investment focus is not in renewable energy. That industry, and solar panels in particular, has not had a great track record over the past decade, largely because of government support and low barriers to entry, which led to oversupply.

Mr. Tanneeru said he was focused more on battery technology, which is produced almost entirely in Asia. Tesla uses Panasonic battery cells, BMW’s i3 runs on Samsung technology, and GM used batteries from LG Chemical. It’s also an area, he noted, that has high barriers to entry.

Another climate strategy in Asia is investing in the companies that run high-speed rail networks, like MTR in Hong Kong. In a decade, China went from zero to 125,000 kilometers of high-speed rail, making living outside polluted cities like Shanghai a possibility.

Regardless of the investment type, most investors suffer from home-country bias, which is a tendency to invest more where they live even if concentrating their money there increases their risk. The same holds true for climate change investing, a fact that seems baffling given that by definition, rising temperatures are a global problem.

“The U.S. has walked out of the Paris climate accord, but all of Asia is in,” Mr. Tanneeru said. “There’s a lack of appreciation of Asia’s leadership in addressing these challenges. That’s the big constraint in my mind.”

A version of this article appears in print on , on Page B4 of the New York edition with the headline: How to Create a Climate Change Investment Strategy.

Why Does California Have So Many Wildfires?

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A pregnant woman went into labor while being evacuated. Videos showed dozens of harrowing drives through fiery landscapes. Pleas appeared on social media seeking the whereabouts of loved ones. Survivors of a mass shooting were forced to flee approaching flames.

This has been California since the Camp Fire broke out early Thursday morning, burning 80 acres per minute and devastating the northern town of Paradise. Later in the day, the Woolsey Fire broke out to the south in Ventura and Los Angeles Counties, prompting the evacuation of all of Malibu.

What is it about California that makes wildfires so catastrophic? There are four key ingredients.

A house set alight by the Camp Fire in Paradise, Calif., on Thursday. The fast-spreading fire has been burning 80 acres per minute.

The first is California’s climate.

“Fire, in some ways, is a very simple thing,” said Park Williams, a bioclimatologist at Columbia University’s Lamont-Doherty Earth Observatory. “As long as stuff is dry enough and there’s a spark, then that stuff will burn.”

California, like much of the West, gets most of its moisture in the fall and winter. Its vegetation then spends much of the summer slowly drying out because of a lack of rainfall and warmer temperatures. That vegetation then serves as kindling for fires.

But while California’s climate has always been fire prone, the link between climate change and bigger fires is inextricable. “Behind the scenes of all of this, you’ve got temperatures that are about two to three degrees Fahrenheit warmer now than they would’ve been without global warming,” Dr. Williams said. That dries out vegetation even more, making it more likely to burn.

California’s fire record dates back to 1932; of the 10 largest fires since then, nine have occurred since 2000, five since 2010 and two this year alone, including the Mendocino Complex Fire, the largest in state history.

“In pretty much every single way, a perfect recipe for fire is just kind of written in California,” Dr. Williams said. “Nature creates the perfect conditions for fire, as long as people are there to start the fires. But then climate change, in a few different ways, seems to also load the dice toward more fire in the future.”

Even if the conditions are right for a wildfire, you still need something or someone to ignite it. Sometimes the trigger is nature, like a lightning strike, but more often than not humans are responsible.

“Many of these large fires that you’re seeing in Southern California and impacting the areas where people are living are human-caused,” said Nina S. Oakley, an assistant research professor of atmospheric science at the Desert Research Institute.

Deadly fires in and around Sonoma County last year were started by downed power lines. This year’s Carr Fire, the state’s sixth-largest on record, started when a truck blew out its tire and its rim scraped the pavement, sending out sparks.

Patients were evacuated from the Feather River Hospital in Paradise, Calif.

“California has a lot of people and a really long dry season,” Dr. Williams said. “People are always creating possible sparks, and as the dry season wears on and stuff is drying out more and more, the chance that a spark comes off a person at the wrong time just goes up. And that’s putting aside arson.”

There’s another way people have contributed to wildfires: in their choices of where to live. People are increasingly moving into areas near forests, known as the urban-wildland interface, that are inclined to burn.

“In Nevada, we have many, many large fires, but typically they’re burning open spaces,” Dr. Oakley said. “They’re not burning through neighborhoods.”

It’s counterintuitive, but the United States’ history of suppressing wildfires has actually made present-day wildfires worse.

“For the last century we fought fire, and we did pretty well at it across all of the Western United States,” Dr. Williams said. “And every time we fought a fire successfully, that means that a bunch of stuff that would have burned didn’t burn. And so over the last hundred years we’ve had an accumulation of plants in a lot of areas.

“And so in a lot of California now when fires start, those fires are burning through places that have a lot more plants to burn than they would have if we had been allowing fires to burn for the last hundred years.”

In recent years, the United States Forest Service has been trying to rectify the previous practice through the use of prescribed or “controlled” burns.

Each fall, strong gusts known as the Santa Ana winds bring dry air from the Great Basin area of the West into Southern California, said Fengpeng Sun, an assistant professor in the department of geosciences at the University of Missouri-Kansas City.

Dr. Sun is a co-author of a 2015 study that suggests that California has two distinct fire seasons. One, which runs from June through September and is driven by a combination of warmer and drier weather, is the Western fire season that most people think of. Those wildfires tend to be more inland, in higher-elevation forests.

But Dr. Sun and his co-authors also identified a second fire season that runs from October through April and is driven by the Santa Ana winds. Those fires tend to spread three times faster and burn closer to urban areas, and they were responsible for 80 percent of the economic losses over two decades beginning in 1990.

Cost of cigarettes must rise to reflect environmental damage from tobacco industry, WHO says

The price of a packet of cigarettes should rise to reflect the wide-ranging environmental damage caused by the tobacco industry, from deforestation to water pollution, a major report has recommended.

Backed by the World Health Organisation (WHO), the study found the industry’s carbon footprint was comparable to entire countries.

Tobacco farms accounted for the loss of around 5 per cent of forests in parts of Asia and Africa, it stated.

Tobacco hurts more than your lungs – it damages communities too

Tobacco hurts more than your lungs – it damages communities too

The UK was among the countries singled out for criticism along with several other western nations which were condemned for “literally burning poorer countries’ resources”.

Cigarette production and consumption have seen dramatic growth in recent decades with around six trillion cigarettes manufactured annually for an estimated one billion smokers.

Tobacco production is often more environmentally damaging than that of essential commodities such as food crops, the study by the WHO Framework Convention on Tobacco Control found.

But while the health implications of smoking are well known, the cost to the planet is often overlooked.

The report’s authors accused tobacco firms of having been “quick to capitalise on weaker regulatory frameworks and growing populations” in lower income countries to shift the environmental and social burden overseas.

They were also sceptical about the level of carbon emissions multinational tobacco firms said were linked to cigarette production, noting that these totals were significantly lower than those recorded by scientists working on the study.

“Tobacco transnationals based in high income countries are literally and metaphorically burning the resources and the future of the most vulnerable people on our planet,” said Dr Nicholas Hopkinson of the National Heart and Lung Institute at Imperial College London, who co-authored the report.

Tobacco leaves left to dry at a farm on the outskirts of Ahmedabad in western India (Getty Images)

Tobacco leaves left to dry at a farm on the outskirts of Ahmedabad in western India (Getty Images)

Annual tobacco production contributes almost 84 million tonnes of carbon dioxide-equivalent emissions to climate change – around 0.2 per cent of the global total, the report found. This is equal to the emissions of Peru or Israel and more than twice that of Wales.

More than 20,000 square miles of land is taken up around the world to accommodate tobacco farms, which use more than 22 billion tonnes of water, meaning a person smoking a pack of 20 cigarettes a day for 50 years is responsible for 1.4 million litres of water depletion over their lifetime.

Additional environmental and social costs of the industry include soil depletion, high levels of pesticide use and child labour, the study said.

In China, the world’s top cigarette consuming country, 2.5 trillion cigarettes are produced each year using millions of tonnes of water and thousands of square miles of arable land. At the same time, China is experiencing severe water shortages and nearly 134 million people suffer from undernourishment.
The environmental impacts of cigarette smoking, from cradle to grave, add significant pressures to the planet’s increasingly scarce resources and fragile ecosystems,” said Professor Nick Voulvoulis, from the Centre for Environmental Policy at Imperial College, who co-authored the report.

In the UK, which has very little domestic tobacco production, smoking cigarettes “is done entirely at the expense of other nations’ resources and environmental health”, the report said.

Almost 90 per cent of all tobacco growing is concentrated in the developing world, but the authors noted that most of the profits from the industry end up in developed countries.
Governments are being urged to respond to the problem by increasing taxes on cigarettes and rolling tobacco, taking into account the cost of damage to ecosystems and carbon pricing to address climate change.

Fines should also be imposed to punish companies whose tobacco contributes to deforestation or water pollution, the authors said.

A ban on single-use filters used with rolling tobacco and the elimination of unnecessary packaging was also recommended.

“As well as the death and disease caused by active and passive smoking, the public need to be aware of the environmental impact of the tobacco industry,” said Dr Hopkinson. “Cigarettes should be thought of as an unethical product, not just as one that is harmful to individual consumers.”