Sustainable Business Review Issue 8 - May 2023

The Sustainable Business Review is the UK's first student-led quarterly magazine producing thought-provoking opinion pieces around green finance, environmental economics and innovation We aim to bridge the gap between corporates and students when discussing sustainability, and want to inspire the next generation of environmentally-driven leaders We are a team of economists, engineers and business students, and we hope that you find our content insightful and it equips you with the knowledge to help gain a new perspective on our world

Lead Editors

Zak Goldman

Economics Lead

Atharva Palve

Finance Lead

Arun Jain

Finance Lead

Aditi Solanki

Innovation Lead

Professional Guests

Dr Mark Diesendorf

Associate Professor - UNSW Sydney

Dr Elias Willemse

Founder - Waste Labs

Committee

Jack Roycroft-Sherry President

Zaid Nurmamodo

Vice-President (Magazine)

Louise Dugnan

Vice-President (Incubator)

Santhana Arnold

Marketing Director

Rajiv Ghosh

Sponsorship Director

Saisha Ratna Treasurer

Economics Authors

Jay Kirby

Sarah Aljamal

Adnan Chokhandiwala

Finance Authors

Noor Sayyeda

Dylan Remmer-Riley

Charlie Collins

Innovation Authors

Ethan White

Suhani Agrawal

Jack Roycroft-Sherry

About Economics

Explore the interplay between economic theory and the environment. We aim to discuss topics such as inequality, sustainable growth, developing economies, and government policies.

About Finance

Dive into the world of ESG with corporates and financial markets all in one place. We aim to discuss topical issues in transport, energy and cryptocurrency.

About Innovation

Contact us to have your firm featured on our magazine

Uncover the importance of innovations in technology and their influence on the carbon economy. We aim to discuss innovative topics and technologies, including blockchain technology, renewable energy, and infrastructure.

The Line: Saudi Arabia's Epicenter of the First Cognitive City in the World Interview with Dr Mark Diesendorf How gas inflates energy prices

Voting for the Earth: How Politics Impacts the Planet

On the cover

Our cover page considers the issue of space sustainability: the anthropogenic deterioration of our space environment led by the increasing presence of satellites and space debris.

Sustainable Design

Explores the features and implications of architectural sustainability, page 3

Sustainable Development

Evaluates the investment challenges, opportunities & Policies that come with the transition to net zero, page 14

Energy Efficiency

Considers the feasibility of hydrogen as a potential sustainable fuel source, page 24

Does the UK Get the Green Light on Sustainable Development?

Interview with Dr Elias Willemse Going Global: Measuring Globalisation's Impact on Global Banks' Ability to Meet Sustainability Goals

How Do We Value Forests?

Hydrogen, The Fuel of the Future? The Environmental Impact Behind NFTs Poor Data and Definitions Prevent Climate Progress

Page 6 Page 17

Q&A with Dr Mark Diesendorf

Q&A with Dr Elias Willemse

The Line: Saudi Arabia’s Epicenter of the First Cognitive City in the World

by Sarah Aljamal

ALSO IN THIS SECTION

Voting for the Earth: How Politics Impacts the Planet

by Jay Kirby

How gas inflates energy prices

by Adnan Chokhandiwala

The Line: Saudi Arabia’s Epicenter of the First Cognitive City in the World

By Sarah Aljamal

No country is immune to the effects of climate change today. According to the World Bank, climate change will drive 216 million people to migrate within their own countries by 2050 (The World Bank). Greenhouse gases are one of the biggest contributors to climate change; energy accounts for two-thirds of total greenhouse gas emissions (Bloomberg). As a result, countries have set targets to shift energy production to renewable energy sources. While many countries have set ambitious targets of forty and fifty per cent, Saudi Arabia has pledged to build a 100 per cent renewable energy ecosystem. This ecosystem will be part of The Line, which is the epicenter of Neom, the first cognitive city in the world worth $500 billion in investment

The Line is a linear megastructure with mirrored cladding. It will be a vertical city, with no roads or cars and thus, no carbon emissions, as shown in Figure 1. The city will run on 100 per cent renewable energy, and 95 per cent of the land will be preserved for nature. Thus, it will be able to tackle the challenges that are facing humanity in urban life today, as we can no longer ignore the environmental crisis our world is facing (Neom). With vertical urbanism, it is expected to provide its residents with an unprecedented urban living experience while simultaneously preserving the natural environment (Neom) It will be able to prioritize the health and wellbeing of the people over transportation and infrastructure, unlike traditional cities.

The line will only be 200 metres wide, 170 kilometres long, and 500 meters above sea level, as shown in Figure 2. It will be built on a footprint of just 34 square kilometres. It will stretch from the Red Sea to the city of Tabuk, and it will be able to accommodate nine million residents, resulting in an average population density of 260,000 people per square kilometer. By comparison, the world’s most populated city, Manila, had a population density of 42,857 people per square kilometers in 2020(World Population Review). Thus, there will be a reduced infrastructure footprint, which can create efficiencies that have never been seen before in traditional city functions that are horizontal rather than vertical (Neom). Within a five-minute walk, residents will have access to all the facilities they need, and with the efficient public transport network, they can enjoy an end-to-end journey in just 20 minutes The line will be in harmony with nature, which will be 95 per cent untouched, and the vertical garden cities mean that residents are only two minutes away from nature, as shown in Figure 3. Peter Terium, the head of the energy sector of Neom, says: ‘Building a 100% renewable energy system at scale has never been done before. We want to do that in the next ten years (Bloomberg). Neom will be a global innovation and research hub. Its epicenter, The Line, will act as a living laboratory where innovative businesses and entrepreneurs will gather to create ground-breaking discoveries through research. It is expected to attract the region's best entrepreneurial human talent and investment.

Figure 1: Proposed design of the line

Figure 2: Characteristics of The Line (Neom)

Additionally, it is expected to create 380,000 jobs and contribute 48 billion pounds to GDP by 2030. (Bloomberg). That said, criticisms have not failed to reach the vertical city. Its sustainability and livability claims are considered to be naïve by some experts. For example, Marshall Brown, the associate professor of architecture at Princeton University, said, ' ‘there would be so many physical and environmental phenomenal that would have to be dealt with to achieve the incredible minimal and singular character that the renderings propose’ ( Barker, 2022) The line may also not be feasible as a city because it requires much control, which is very difficult to retain In addition, Oldfield predicts that it will have a carbon footprint of 1 8 gigatons, which comes from concrete, glass, and steel, because it’s impossible to build a 500-metretall building without using these high-carbon materials ( Barker, 2022).

Moreover, while Saudi Arabia participated in the COP26 climate change negotiations and launched the Saudi green initiative, which aims to achieve net zero emissions by 2060, it promised to increase oil production just one week before attending the COP26 climate conference. As of 2019, only 0.1 percent of electricity was generated from renewable energy. (Venema and Thomas , 2022). This rightfully raises doubts about whether Saudi Arabia will live up to its promises in creating this smart city.

References:

Furthermore, the Line is being built in north-western Saudi Arabia, in the Tabuk province, where the Huwaitat tribe has lived for centuries. When construction started, the tribe was forcefully evicted (Alcido, and Chowdhury, 2023). While the aim is to achieve sustainability and enhance economic growth and development, there should be detailed considerations of wider social implications To be successful, the Line should be concerned with the social processes in society just as much as economic activity

In conclusion, while there are doubts about The Line in terms of its sustainability, design, and socio-economic implications, building a smart city with 100 per cent renewable energy seems inevitable with the current increases in global temperatures, especially that, under this business-as-usual scenario, by 2030, the world might suffer from $2 billion losses a day from weather events, which will severely impact biodiversity, and more importantly, human health, livelihood, water, and food ( Bloomberg).

Climate change. The World Bank. Available at:https://www.worldbank.org/en/topic/climatechange/overview (Accessed: March 16, 2023) Learn how Saudi Arabia's future city project will be built around people (no date) Bloomberg com Bloomberg Available at: https://sponsored bloomberg com/immersive/neom/learn-how-saudi-arabia-s-future-city-project-will-be-built-around-people (Accessed: March 12, 2023)

Manila Population 2023 (no date) Worldpopulationreview com Available at: https://worldpopulationreview com/world-cities/manila-population (Accessed: April 10, 2023)

Nat Barker Sustainability and liveability claims of Saudi 170km city are "naive" say experts, Dezeen Available at: https://www dezeen com/2022/08/08/sustainabilityliveability-the-line-saudi-170km-citynaive/#:~:text=%22I%20don't%20want%20to%20live%20in%20a%20place%20where,living%20in%20very%20large%20structures 8 August 2022 (Accessed: March 10, 2023)

The line: A revolution in urban living (no date) THE LINE: a revolution in urban living Available at: https://www neom com/en-us/regions/theline (Accessed: March 18, 2023)

The line connecting zero-carbon communities in Saudi Arabia (no date) Bloomberg com Bloomberg Available at: https://sponsored bloomberg com/immersive/neom/the-line-connecting-zero-carbon-communities-in-saudi-arabia(Accessed: March 15, 2023) theSkimm (2023) Saudi Arabia's Smart City : Flying Taxis, No Carbon Emissions, and Lots of Controversy theSkimm theSkimm Available at: https://www theskimm com/news/saudi-arabias-smart-city-draws-lines-of-controversy (Accessed: March 18, 2023) Venema, M T and V (2022) Neom: What's The Green Truth behind a planned eco-city in the Saudi Desert?, BBC News BBC Available at: https://www bbc co uk/news/blogs-trending-59601335 (Accessed: March 18, 2023)

Figure 3: How The Line will re-define living (Neom)

Q&A

Dr Mark Diesendorf

Associate Professor

UNSW Sydney

Could you introduce yourself to those who don’t know you?

My name is Mark Diesendorf and originally I was trained as a physicist, a physical scientist. And after I got my PhD, I gradually broadened out into particularly focusing on sustainability and energy issues. Much of my research has been on implementing 100% renewable energy for Australia and for the world - and how to do that technically. But what I found was that the more I worked on the problem, the more I realised that the technical problems are the minor part and the major problems are really the resistance of vested interests who do not wish to make a transition away from fossil fuels to renewable energy and energy efficiency. And, also the existing economic system. Now, I had an introduction to questioning the existing economic system when I was doing my PhD because my professor, who was an applied mathematician and a famous physicist, also had recently written a book called Dynamic Economic Systems, which basically showed some of the flaws in neoclassical macroeconomics. So that was my first introduction really to questioning conventional economics. And that has run in parallel to my work on energy and sustainability. And of course, now, I've reached the stage where I feel that it's essential to change the existing economic system and that technological change is necessary, but it's not going to be sufficient And what we're facing is resistance to the change

First, partly by vested interests: the fossil fuel industry, the weapons industry But also they are backed up by an economic system that is based on exploiting the environment and exploiting the majority of people.So, that's where I'm at, at present, and I've become increasingly interested in alternatives to conventional economics as part of the transition to a more sustainable society.

What do you think is the most important issue that we, as a planet, can solve? Or an issue that you are trying to solve?

Well, for me it is climate change, but I'm conscious that there are many other issues where we are crossing planetary boundaries. We are losing biological diversity at a huge rate, we are destroying our soils around the world, we are using up and polluting freshwater at a high rate. And I'm talking on a global scale. Probably that will do for starters. I'm not, strictly speaking, a climate scientist, but I'm a scientist and I do a lot of engineering work and a lot of other, more interdisciplinary work on solutions to the climate problem and the technical solutions as I see it, are 100% renewable energy together with using energy more efficiently, less wastefully. But I also see in broad terms as I've mentioned in the introduction , a need to actually weaken the driving forces of unsustainability, and these I see as powerful industries and individuals are rich people whose spending is causing a lot of the problem. And changing the economic system to one which ultimately is what's called the steady state economy. Where the concept was originally coined by Herman Daly back in the 1970s. And so that's in broad terms my approach but in terms of my research output it's mostly on making the transition to 100% renewable energy But my interests are much broader than that Because making the energy transition alone isn't going to be enough to stop the collapse of civilization and the destruction of the biosphere.

Building on that view and this holistic approach to solving these kinds of problems, when did that start being important for you?

Ok, well, I first became concerned about environmental destruction as a young child, actually. Because, where I lived, across the road was a magnificent tree that I used to climb and I would spend hours sitting up in the branches there and I just loved it. And one fine day a housing development started across the road and the tree was cut down and I really felt that loss. And as I grew up, I started walking in the Bush. Bush walking is very popular amongst some of us in Australia. And I started to gain an appreciation of nature. So that was the personal start. But in terms of my academic work, it didn't really come in until I was well advanced in my career and I started with energy issues and then I saw that the sustainability issues, the issues of having a sustainable society, were much broader than energy as I've outlined a moment ago. And then I started to learn about some of these other issues. Although I can't claim to be an expert on issues like biodiversity and soils and freshwater, I'm conscious of them. And in trying to formulate solutions to the sustainability problem, I felt the need to at least read sufficiently to be able to understand the magnitude of the threats in these areas. Becoming aware, for example, of the destruction of the Amazon rainforestwhich is now at such an advanced stage that a large part of the Amazon now is becoming a net emitter of carbon dioxide instead of an absorber. Not all of the Amazon is at that stage yet, but probably 1/4 at least is. So I guess it's evolved and the more I tried to work on renewable energy in Australia, I found enormous resistance from the fossil fuel industries

So, for example, I was in our National Research Organisation as a young scientist, that is CSIRO, It's the Commonwealth Scientific and Industrial Research Organisation. And I managed to get some funding. And this is way back in the late 1970s, I managed to get some funding for doing research on wind power.

And this was before wind power was a global industry, before it was a commercial industry, apart from very small wind turbines. There was then strong resistance from the people who run CSIRO to work on renewable energy. There was work going on in many different divisions around the country. Australia was one of the world leaders on solar hot water at that time. It was also a leading researcher on passive solar housing, and it was doing important work on bioenergy as well. So this is back in like 1978 to 1980. And what happened was that as our work advanced on wind power the executive that controlled CSIRO suddenly announced that they were shutting down all renewable energy research across the organisation in every state of Australia

The solar research, the bioenergy research, the passive solar housing and our wind power research was all shut down. And I was retrenched from CSIRO and fortunately I managed to grab a university job. But that then brought home to me the power of the fossil fuel industry, which was very well represented in the executives of CSIRO. Even though renewable energy in those days was just a research topic, there was no chance of it being economical, except maybe passive solar housing. And yet the fossil fuel industry feeled so threatened and was so powerful that it shut down all the renewable energy research across this National Research Organisation. So that brought home to me that it isn't going to be sufficient just to do the science and the engineering, but one also has to tackle the driving forces of unsustainability And that I'll be bringing out very strongly in my new book that will come out next year.

So yeah, that's how it's evolved. And of course, I've seen many other examples of the power of the fossil fuel industry in my country, Australia, because Australia is the world's biggest exporter of coal, alongside Indonesia.

And it's the world's biggest exporter of liquefied natural gas And so the coal and the gas corporations in Australia are incredibly powerful politically, and they have succeeded in totally holding back strong policies by our federal government to phase out fossil fuels and to accelerate renewable energy. The miracle has been, in my country, that renewable energy has grown quite rapidly despite the efforts of our previous federal government partly because of the actions of the community. 1/4 of all houses in Australia have rooftop solar electricity and per person - that's world leading. We have many wind farms and solar farms already and one of our states, South Australia, already gets 2/3 of its electricity from wind and solar, and it'll be 100% within a few years. So the transition is happening despite the resistance of the vested interests which are so powerful, particularly at the federal government level in Australia And of course, the same thing is happening in the United States, the same resistance, and in quite a few other countries.

When we talk about implementing infrastructure in less developed countries and communities where they have no money for these expensive renewable energy systemshow can you justify reaching a solution that is centred around sustainability rather than the urgency of their needs?

It's a really good question and what's happening in many so-called third world countries or the global south is that it's becoming quite clear that for many of the poorest people who, of course, live in villages I'm thinking of countries that I visited, like India and Bangladesh, and these villages will never be connected to an electricity grid. It just doesn't make sense.

Ok, well, I first became concerned about environmental destruction as a young child, actually. Because, where I lived, across the road was a magnificent tree that I used to climb and I would spend hours sitting up in the branches there and I just loved it. And one fine day a housing development started across the road and the tree was cut down and I really felt that loss. And as I grew up, I started walking in the Bush. Bush walking is very popular amongst some of us in Australia. And I started to gain an appreciation of nature. So that was the personal start. But in terms of my academic work, it didn't really come in until I was well advanced in my career and I started with energy issues and then I saw that the sustainability issues, the issues of having a sustainable society, were much broader than energy as I've outlined a moment ago. And then I started to learn about some of these other issues. Although I can't claim to be an expert on issues like biodiversity and soils and freshwater, I'm conscious of them. And in trying to formulate solutions to the sustainability problem, I felt the need to at least read sufficiently to be able to understand the magnitude of the threats in these areas. Becoming aware, for example, of the destruction of the Amazon rainforestwhich is now at such an advanced stage that a large part of the Amazon now is becoming a net emitter of carbon dioxide instead of an absorber. Not all of the Amazon is at that stage yet, but probably 1/4 at least is. So I guess it's evolved and the more I tried to work on renewable energy in Australia, I found enormous resistance from the fossil fuel industries

So, for example, I was in our National Research Organisation as a young scientist, that is CSIRO, It's the Commonwealth Scientific and Industrial Research Organisation. And I managed to get some funding. And this is way back in the late 1970s, I managed to get some funding for doing research on wind power.

And this was before wind power was a global industry, before it was a commercial industry, apart from very small wind turbines. There was then strong resistance from the people who run CSIRO to work on renewable energy. There was work going on in many different divisions around the country. Australia was one of the world leaders on solar hot water at that time. It was also a leading researcher on passive solar housing, and it was doing important work on bioenergy as well. So this is back in like 1978 to 1980. And what happened was that as our work advanced on wind power the executive that controlled CSIRO suddenly announced that they were shutting down all renewable energy research across the organisation in every state of Australia

The solar research, the bioenergy research, the passive solar housing and our wind power research was all shut down. And I was retrenched from CSIRO and fortunately I managed to grab a university job. But that then brought home to me the power of the fossil fuel industry, which was very well represented in the executives of CSIRO. Even though renewable energy in those days was just a research topic, there was no chance of it being economical, except maybe passive solar housing. And yet the fossil fuel industry feeled so threatened and was so powerful that it shut down all the renewable energy research across this National Research Organisation. So that brought home to me that it isn't going to be sufficient just to do the science and the engineering, but one also has to tackle the driving forces of unsustainability And that I'll be bringing out very strongly in my new book that will come out next year.

So yeah, that's how it's evolved. And of course, I've seen many other examples of the power of the fossil fuel industry in my country, Australia, because Australia is the world's biggest exporter of coal, alongside Indonesia.

And it's the world's biggest exporter of liquefied natural gas And so the coal and the gas corporations in Australia are incredibly powerful politically, and they have succeeded in totally holding back strong policies by our federal government to phase out fossil fuels and to accelerate renewable energy. The miracle has been, in my country, that renewable energy has grown quite rapidly despite the efforts of our previous federal government partly because of the actions of the community. 1/4 of all houses in Australia have rooftop solar electricity and per person - that's world leading. We have many wind farms and solar farms already and one of our states, South Australia, already gets 2/3 of its electricity from wind and solar, and it'll be 100% within a few years. So the transition is happening despite the resistance of the vested interests which are so powerful, particularly at the federal government level in Australia And of course, the same thing is happening in the United States, the same resistance, and in quite a few other countries.

When we talk about implementing infrastructure in less developed countries and communities where they have no money for these expensive renewable energy systemshow can you justify reaching a solution that is centred around sustainability rather than the urgency of their needs?

It's a really good question and what's happening in many so-called third world countries or the global south is that it's becoming quite clear that for many of the poorest people who, of course, live in villages I'm thinking of countries that I visited, like India and Bangladesh, and these villages will never be connected to an electricity grid. It just doesn't make sense.

But what is happening is that you're now seeing, in many of these villages and also in Africa, small solar systems. Just a small solar collector and a battery. And that is sufficient for lighting in the evening, which means that children and adults can study. It's a much better lighting than using kerosene, and kerosene is actually expensive in India, for example, although it is subsidised by the government. And it turns out that solar in many parts of the global south is actually cheaper. And I'm now talking about small solar systems, a single battery that's just got enough to store electricity for a few hours. Enough electricity for lighting and for perhaps a radio, and for charging a mobile phone. And this is spreading across the Third World very rapidly And thanks to the low cost of solar panels Now, batteries are still expensive and in some global south countries there are schemes where a village can have a stock of solar charged batteries. But, solar is spreading in these countries. So I guess that's the first thing, but it's really strange and you still see journal papers written about covering Africa with high voltage transmission lines, as if villagers will be able to tap in to this technology which is really designed for large industries and for exporting electricity or exporting the products of industrial technologies produced by large industries. And there's this sort of naive idea that somehow you put in large power stations. Large coal-fired power stations and high voltage transmission lines. And the argument is made that somehow that will lift the country out of poverty. Well that's very questionable, very debatable to say the least And certainly what's happening is that at the grassroots, people are going solar and that's exciting

How gas inflates energy prices

By Adnan Chokhandiwala

Gas plays a key role in setting energy prices. Before energy reaches an end-user, which may be a consumer or a business, it is bought by suppliers in the wholesale market Since the war in Ukraine caused energy prices to rise sharply, wholesale prices have risen to make up 50-60% of what consumers pay for their electricity with the April 2022 price cap (National Grid ESO), thus highlighting its importance.

In the UK, national pricing is used. There is one wholesale price across the country, at a given time. This is set using marginal pricing. The power exchange accepts bids from electricity generators, who provide the price they are willing and able to produce electricity at. The bids of each supplier are aggregated, sorted from lowest to highest by price and the final supplier needed to meet electricity demand is used to set prices. The cost they bid is set as the price for all suppliers, including those that bid below them.

In January 2023, the price of electricity in the Day Ahead Baseload market, one of the UK’s many wholesale markets, was on average £132 per MWh (Ofgem, 2023). The market can be simplified to two suppliers: a wind farm which is willing to provide electricity at £75/MWh and a gas-fired plant which is willing to provide electricity at £132/MWh In the market, wind is not able to meet demand alone The power exchange accepts the bid from the gas producer as the final bid In this month, the UK consumed 26m MWh (National Grid ESO, 2023a). Due to the way the market is structured, both the wind producers and the gas producer would be paid £132/MWh. Despite wind producing energy at a significantly lower price, the fact that gas is needed to meet demand means that prices are higher than they otherwise would have been.

Advocates of such a system claim it keeps wholesale prices as low as possible: electricity suppliers have the incentive to bid only their operating costs (marginal costs) to ensure they remain competitive and receive an offer Producers also have the incentive to reduce their costs to the lowest possible level, their profit is the market price minus any costs they may incur Any costs saved are extra profit for the business. On an aggregate level, if every firm took such an approach this could lower market prices.

Another advantage is that it takes advantage of the fact that the most popular low-carbon sources such as wind and solar have extremely low operating costs. After high startup costs to build the necessary infrastructure, the cost of an additional unit of electricity is extremely low, approaching zero in many cases. A solar farm requires no extra inputs to produce electricity, besides regular maintenance. This means that they are the first picked to produce electricity. Carbon emitting generation, which has a higher marginal cost, is given a lower priority and is used only if needed, this minimises carbon emissions.

In theory, this market structure sounds ideal: it is efficient and environmentally friendly. However, the real world is not as kind. After the war in Ukraine, wholesale energy prices spiked as the price of gas rose to unprecedented levels (though it is worth noting that they are significantly lower than the peak reached in 2022) In the UK, Italy and Spain gas set the price of power more than 80% of the time (Zakeri et al , 2022) On average across 2022, gas provided less than 40% of energy production in the UK (National Grid ESO, 2023b). It plays a disproportionate role in the market, as the most common energy source to be chosen last, it dictates wholesale energy prices. It is through this that it influences household and business energy prices.

One potential solution to this problem is to split electricity prices across the UK. A single price across the country fails to reflect the diversity of electricity generation and consumption across regions. Certain regions, such as the Scottish Highlands, produce significantly more energy than they consume, whilst others run at energy deficits. Physical constraints in energy transmission and storage meant that enough wind energy to supply 800,000 UK households went to waste in 2020 and 2021 (Drax, 2022). To meet energy demands elsewhere in the country, gas generation is used to overcome constraints.

In 2022, the National Grid spent £717m on gas turbines to plug such gaps (Sky News, 2023). Renewable energy generation is wasted in favour of fossil fuels. The UK government is looking into whether regional pricing can help solve the imbalance of energy production. Regional pricing could mean higher prices in regions like the South-East of England, encouraging investment in renewable energy where it is needed the most It could also have the additional benefit of promoting energy storage solutions in regions where there is excess power produced.

The short-term cost of introducing more regionalised pricing is outweighed by the efficiency gains. Regionalisation would allow for optimal dispatch of energy when and where it is needed. Consumer’s preferences would more closely be reflected in investment and would reduce the risk of overbuilding unnecessary infrastructure in the future. A gain in efficiency of electricity provision and investment would be passed on to consumers through lower prices.

Localisation of the energy market to reduce inefficiency could not come soon enough. Decarbonisation of the energy grid means that congestion costs have increased 8-fold since 2010 and are forecasted to reach £2.3bn annually by 2026 (National Grid ESO, 2022) The government considering regionalisation of the system is an exciting prospect which will hopefully encourage local investment in renewable energy and reduce energy bills.

References:

National Grid ESO (no year)- https://www nationalgrideso com/electricity-explained/how-electricity-priced Ofgem (2023) - https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators

National Grid ESO (2023a) - https://www nationalgrideso com/document/275836/download Zakeri et al. (2022) - https://ssrn.com/abstract=4170906

National Grid ESO (2023b) - https://www nationalgrideso com/news/britains-electricity-explained-2022-review Drax (2022) - https://www.drax.com/press release/cost-of-turning-off-uk-wind-farms-reached-record-high-in-2021/ Sky News (2023) - https://news sky com/story/britons-paying-hundreds-of-millions-to-turn-off-wind-turbines-as-network-cant-handle-the-power-they-make-onthe-windiest-days-12822156

National Grid ESO (2022) - https://www nationalgrideso com/document/258871/download

Voting for the Earth: How Politics Impacts the Planet

By Jay Kirby

Environmental concerns pervade public discourse like never before, with wildfires, floods and ‘an increase in world average temperature by 2100 [between] 1.4 and 5.8 degrees celsius’ becoming increasingly pressing issues. (McMicheal et al, 2006) It should therefore be startling that governmental climate action appears so inefficient and inadequate, with global fossil fuel usage being higher than ever in 2021 at 37.12 billion tonnes (as seen below)! (Ritchie et al, 2020) It’s time to ask: why is politics not leading to the necessary reforms, and could modern voting patterns demonstrate why the solutions to Earth’s problems seem so far away?

If this is indeed true, then perhaps an analysis of voting demographics age patterns in particular may provide a clearer indication of how politics and sustainability interact. In the 2020 presidential election, Biden’s votes were split almost exactly between under and over 50 year olds, with Trump’s being only slightly skewed towards more elderly supporters. But from whom are these votes coming? More than 50% of the registered voting body in America were aged 50 and above, likely due to a slowly declining birth rate and technological advancements improving life expectancy; this would imply that issues more popular with elder generations may be more widely represented in voting patterns. The issue is compounded by a significantly lower proportion of young people choosing to vote one study, for instance, noted how only 37% of 18-24 year olds voted in the 2005 general election compared to 61% of the general population. (Marsh et al, 2007) Explanations for this phenomenon include ‘that they are relatively apathetic, alienated or that they may fail to see the relevance of a political agenda that they may regard as incorporating few of their interests.’ (Furlong and Cartmel, 2012)

It is no secret that climate change has become a highly politicised issue. No example could illustrate this better than Republican president Trump’s decision to pull the US from the Paris Agreement in 2017 before Biden’s administration reversed this in 2021. Interestingly enough, however, polls tend to display the variance between Democrat and Republican opinions on the issue as somewhat minimal that is, the two are not so dissimilar in terms of their faith in the scientific consensus, for example. The divide is far more prominent between the more extreme ends of the political spectrum, with 79% of liberals believing that human activity is responsible for climate change compared to just 15% of conservatives (Funk and Kennedy, 2016) Overall, 49% of participating Americans were found to hold this particular belief, suggesting that votes for one party or the other based solely on this issue would largely cancel each other out.

As might be expected, this has significant ramifications on climate change. Prevailing public opinion would tell you that the average young person is more likely to be actively concerned about fossil fuel usage and the importance of recycling than more senior citizens and social scientists would largely agree, with issues such as the environment, nuclear power and 3rd world growth dominating polls of 18-30 year olds. (Inglehart, 1977) As research into medicine and the like continues to improve life expectancies in the decades to come, the number of elderly votes will only increase, while young votes are set to dwindle yet further As a result, climate change could become severely underrepresented in politics

An issue arises, however, in that the US political system is dominated heavily by just two parties, with 93% of all votes in 2020 leaning towards one of these options; since these have drastic and opposing views on a wide variety of topics besides climate change, we cannot necessarily assume that, for example, all votes for Biden’s manifesto were based on a desire to fight climate change. (Pew Research Center, 2020) On this side of the pond, meanwhile, there is significantly more room for independent candidacy, meaning that the performance of the Green Party could be taken as evidence of how climate-based voters are choosing to act. The evidence thereby does not appear promising; this party currently holds just a single seat in Parliament, suggesting that in December 2019, issues such as the Brexit deal were considered more pertinent by the British public than climate change

References:

Herein lies the issue when voting, the slow burner of fossil fuels (no pun intended) will almost certainly be pushed into the background in the face of a cost-ofliving crisis. Rather than claiming that voters simply do not care about the planet, we may instead note that our short term worries and pressures often dwarf long-term consequences; this could be extended to climate policy as well, as governments standing for reelection in four years may find costly and disruptive measures with no immediate, visible effect hard to justify.

So what can be done to amend this vicious cycle of perpetual procrastination? First off, the decline in young voting is still a serious issue, and it’s one with many proposed solutions, including encouragement throughout education (Kawashima-Ginsberg and Kiesa, 2019) and personalised messaging. (Burgess et al, 2000) In addition, as so often appears to be the case, the messaging and information surrounding climate change continues to require improvement. A population who fully understand the nature and consequences of, for example, the proposed Willow Project will be far more likely to vote with sustainability in mind let’s give the Earth a vote.

• McMichael, Woodruff and Hales “Climate change and human health: present and future risks ” ScienceDirect, March 2006 Available at: https://www sciencedirect com/science/article/pii/S0140673606680793?casa token=LpJ6Q x-QZMAAAAA:jYJ0FpiE3X-vtJB YmhuY2ek-I ilQrX2AvrkYD9DNnf4fG0ZoiY5AFP8GgMIyatQGFKuhA Ritchie, Roser and Rosado “CO2 emissions” Our World In Data, 2020 Available at: https://ourworldindata org/co2-emissions?utm source=tricity%20news&utm campaign=tricity%20news%3A%20outbound&utm medium=referral#citation

• Funk and Kennedy “The Politics of Climate Change in the United States ” October 2016 Available at: https://d1wqtxts1xzle7 cloudfront net/55450880/The Politics of Climate Change in the United Stateslibre pdf?1515147795=&response-contentdisposition=inline%3B+filename%3DSCIENCE POLITICS and BACKWARDNESS.pdf&Expires=1678207438&Signature=H1cywLI7nOkIzXkzOZXlX0S5gHIyNZzbGpsEciKWT GPY7mKHKj8jC bKDT3gKDrLfcnysT yzVyRrs8iUfEyHTfwj57~BSomFNY58-RgmNfGqYB4iOOr31gxsYRXbyIq6O08ynkjm7Z7gcz3oT-2JN8v1pPmPL~IRYJJR~XXujcfjroUw2UozuLOKqBXFmEZXCnRE3Rn9~5a3EK1YsMKNzSqZLyuvjgFRJzgSVMgyTgFg4WtHvoJnYXkNrpYCSUOJPq9UWjrYUh9qntHMzlDHmUFHGB36lhgDz1u2p~QPOAvqNUVS8qiImGXLWEaBolwZxbmUCrPcjSU0yRqMExWw &KeyPair-Id=APKAJLOHF5GGSLRBV4ZA

• PewResearchCentre “Whatthe2020electoratelookslikebyparty,raceandethnicity,age,educationandreligion ”October16,2020 Availableat:https://www pewresearch org/fact-tank/2020/10/26/what-the2020-electorate-looks-like-by-party-race-and-ethnicity-age-education-and-religion/

Marsh, O’Toole and Jones “Young People and Politics in the UK: Apathy or Alienation?” 2007 Available at: https://books google co uk/books? hl=en&lr=&id=EKF9DAAAQBAJ&oi=fnd&pg=PP1&ots=T4Tx1Mlbvf&sig=2oGERKKnoF2qOeFlePwJCgqcc 0&redir esc=y#v=onepage&q&f=false

• Furlong and Cartmel “Social Change and Political Engagement Among Young People: Generation and the 2009/2010 British Election Survey” January, 2012 Available at: https://academic oup com/pa/article/65/1/13/1462793

• Inglehart “The Silent Revolution: Changing Values and Political Styles Among Western Publics” 1977 Available at: https://books google co uk/books? hl=en&lr=&id=wX59BgAAQBAJ&oi=fnd&pg=PP1&ots=Bu oHLGlQu&sig=m0F0QR7CFeyT jwhUfneYn68gjM&redir esc=y#v=onepage&q&f=false

• Kawashima-Ginsberg and Kiesa “Getting Young People to Vote: Seven Tips for the Classroom ”National Council for Social Studies 2019 Available at: https://www socialstudies org/system/files/publications/articles/se 8304194 0 pdf

• Burgess, Haney, Snyder, Sullivan and Transue “Rocking the Vote: Using Personalised Messages to Motivate Voting among Young Adults ” Public Opinion Quarterly March 2000 Available at: https://academic oup com/poq/article/64/1/29/1818230

Visualaids

• Ritchie, Roser and Rosado “CO2 emissions” Our World In Data, 2020 Available at: https://ourworldindata org/co2-emissions?utm source=tricity%20news&utm campaign=tricity%20news%3A%20outbound&utm medium=referral#citation

• PewResearchCentre.“Whatthe2020electoratelookslikebyparty,raceandethnicity,age,educationandreligion.”October16,2020.Availableat:https://www.pewresearch.org/fact-tank/2020/10/26/what-the2020-electorate-looks-like-by-party-race-and-ethnicity-age-education-and-religion/

Sustainable Development

Does the UK Get the Green Light on Sustainable Development?

by Noor Sayyeda

by Dylan Remmer-Riley

by Charlie Collins

Does the UK Get the Green Light on Sustainable Development?

by Noor Sayyeda

The recently instated US Inflation Reduction Act has served as a wake-up call for the UK and the EU to step up their industry policy in preparation for a net zero transition In addition to the cost-of-living crisis, the UK should also seek to prioritise the imperative move towards investment in renewable technology by moving away from controversial extraction methods such as fracking and towards cleaner sources of energy. The Spring Budget presented by Jeremy Hunt included £20 billion towards nuclear energy and carbon capture, but many critics noted cheaper and cleaner solutions available, such as onshore wind; something the budget neglected to include. A member of the Ashden climate change charity, Cara Jenkinson, emphasized that £20 billion could have been spent retrofitting millions of houses and generating 200,000 jobs. The interim CEO of UK100, Jason Torrance, additionally stated that long-term solutions are necessary, such as investment in renewable energy sources.

Worryingly enough growth has been stagnant for 15 years and not investing enough in green technology means neglecting the future, which requires more energy security and efficient solutions. A recent speech by the Confederation of British Industry (CBI) director revealed that the UK is falling rapidly behind the Americans and Europeans For instance, the UK lost £4 3 bn in greentechnology market share in the last two years, while the US embraced green growth opportunities by introducing incentives for green manufacturing and heavily investing in climate-related projects as part of its Inflation Reduction Act. Furthermore, the Skidmore report (2022) scrutinized UK

green policies illustrating how the deployment of green technologies is held back by "a lack of long-term thinking" and "uncertainty over the length of funding commitments"

Can the UK level up?

An interesting response the UK could consider is levelling up. Levelling up is deemed a place-based economic policy aimed at boosting economic growth in areas that lag behind – something British politicians have been pushing for quite some time As part of the COVID-19 green recovery package, the UK, like France, focused on supporting existing sectors For the UK, this included allocating the largest amount of funds to railway infrastructure and in northern England, hydrogen support has been promoted to help coastal industry hubs reduce carbon emissions in accordance with the country's regional development strategy. (Geels, Pereira & Pinkse, 2021).

Overall, however, most sectors have staggered spending timeframes which means that even levelling-up may not play a key role in the allocation of green spending. It was found in a report by the Bennett Institute of Public Policy (2023) that the UK has demonstrated no sustained interest in national or regional industrial policy in both controls of state aid and offering of domestic subsidies. Thus, the UK’s lack of action in combining economic prosperity with fighting climate change is heavily contrasted with the efforts of the US and the EU, who are competing to offer subsidies for new green industries and jobs. As such, the UK risks being left behind in implementing its levelling up policies as well as in the fight to combat climate change

While the UK could put more effort into investing in a greener future, some countries hold a comparative advantage Diversified solar manufacturing capacity is dominated by China and there are some areas where the EU and the US are more suited to subsidies in production that can create more resilient supply chains and cheaper prices than the UK. (Bell Torsten, The Financial times, 2022)

What's next for the UK?

Going forward, some opportunities that lie ahead for the UK include wind, nuclear and grid flexibility in electricity supply. It is true that the UK does not possess comparative advantages on a range of goods and technologies related to zero-emission vehicles or grid flexibility, but we can make use of our digital strengths, for example through the development of autonomous vehicles and smart grids. (The Economy 2030 Enquiry, 2022). Most importantly, investment challenges must be overcome; the government needs to develop investable business models and de-risk emerging sectors such as hydrogen and greenhouse gas removals, particularly in commercially maturing sectors.

This could potentially spur investment into clean technology where the share of venture capital investment has fallen from over 10 per cent in the early 2010s to under 1 per cent in 2020. (The Economy 2030 Enquiry).

References:

UK Faces Recession and Lost Decade Without Growth Plan, CBI Says (2022) - https://www bloomberg com/news/articles/2022-12-05/uk-facesrecession-and-lost-decade-without-growth-plan-cbi-says

Curran, B., Martin, R., Muller, S., Nguyen-Tien, V., Oliveira-Cunha, J., Serin, E., Shah, A., Valero, A., Verhoeven, D., Curran, B., Martin, R., Muller, S., Nguyen-Tien, V. and Oliveira-Cunha, J. (2022). Growing clean Identifying and investing in sustainable growth opportunities across the UK [online] Available at: https://economy2030 resolutionfoundation org/wpcontent/uploads/2022/05/Growing clean report pdf

US-Europe trade tensions heat up over green subsidies (2023) Financial Times- https://www.ft.com/content/0f8bf631-f24c-48da-905f-e37f8dc5d5f8

UK Government (2023) Net Zero Review: UK could do more to reap economic benefits of green growth

Knights, J (2023) The UK needs to invest in its green economy now [online] Elite Business Magazinehttps://elitebusinessmagazine co uk/analysis/item/the-uk-needs-to-investin-its-green-economy-now

Pereira, J. Pinkse (2021) Public investments in COVID-19 green recovery packages

Leam, R. (2023). Why the EU should not worry about US industrial subsidies – but the UK should [onli Bennett Institute for Public Policyhttps://www bennettinstitute cam ac uk/blog/industrial-subsidies/

What Britain should learn from Biden’s IRA plan (2023) Financial Timeshttps://www ft com/content/faebb418-a0d7-4cd0-927e-b4f34deab951

Q&A

Founder

Waste Labs

Dr Elias Willemse

Why did you start Waste Labs and what problem are you solving?

Yeah, you don’t meet a lot of people that say “Oh, I like to work in waste”. It’s a bit of a niche field in that sense. But what got me into it. My background is in optimization and AI for a very long time, over 10 years. And when I started to explore this field, there's this concept of where you use mathematical models to solve business problems. So you take the business problem, you turn it into a mathematical problem, you solve the mathematical problem, you have a solution for your business problem. And I thought, this is brilliant This is how you solve business problems But then the question became like, do I just want to solve business problems? I mean, companies are making enough money as it is. Like isn't there other problems that you can solve in the same way? Turn it into a mathematical problem, solve the problem. I was living in South Africa, for a service delivery. And I kind of got exposed that people were actually using maths and mathematical modelling to save waste collection problems. And that's what started intriguing me like, oh, you can actually use this instead of helping businesses, you can use it to kind of touch on an essential service which is waste.

So that got me down the rabbit hole of can I use the skill that I have of solving business problems as mathematical problems? Can I apply that into an area that has a real impact? That can actually improve people's lives and deliver essential service So that got me into waste So initially I didn't know much about waste, so then I had to educate myself a bit and I was shocked at the scale of waste. I never knew it was so big. The amount of money involved, the amount of resources involved. That came as a shock to me. And I still think it comes as a shock to a lot of people. And after that shock of how big it is, it kind of

became an obsession of how to make a difference in this space. Because it's important. Nobody likes to think about it. But the moment it stops, the moment they strike, the moment nobody collects waste - then it's a crisis. But I think everybody understands how important it is. So that's how my journey started into waste management and thinking ‘How can I make a difference in waste management?’

So, on your second question, what we're doing is we're specifically looking at the transportation of waste. So, you know we as people produce waste, we put it in our dustbin and you know maybe on the side of the road, maybe in the container and we forget about it But the moment you do that, there’s this whole process of ‘How do you take care of it?’ And a lot of that involves transportation. Like, there's a lot of waste just being driven around cities. I mean, once you start to look for waste trucks, you will see them everywhere. So what we do is, we focus on that transportation bit. How do you get that transportation bit right, How do you make sure you do it as efficiently as possible so that you use the least amount of resources? Because if you use fewer resources, it means that a city can spend money on other stuff like building hospitals instead of driving with waste around, or they can actually collect more waste. Because if through our system, we tell them, “Ok, you used to use 10 trucks, now you can use nine ” That means they now have a tenth truck to collect some other waste So they can collect recyclables, They can collect food waste. So it actually allows cities and even companies to collect more waste and divert more of it away from landfill and more of it away from improper disposal.

Just to add to that, are you also looking at the collection points as well and calculating the most efficient way to go about that?

That's a very good question, so what we found is that we are still people. We are suckers for convenience. If something is too inconvenient, it doesn't matter how good our intentions are, chances are we won't do it. So part of what we do is we do what we call coverage modelling. It's ‘Where do you place bins?’ ‘Where do you place a reverse vending machine?’ Where do you place those things so that you can give the best accessibility to the highest number of people? You know, so that can be, how do you place it so that you’re within 5 minutes walking distance of a bin? So we do look, look at those as well and it's a good question because it's important to at least make it easier for people to get involved with proper waste disposal and then recycling as well

How are waste collection systems usually created and what was it like before the digital transformation and presence of AI?

Again, a good question. So first, waste collection systems are very old. They've been around for like thousands of years. So even before AI, before our tools, the systems were there. So in the past, the process was pretty simple as well. Like, people throw everything together at one point, you come around, you collect it, and you take it to the nearest landfill site. So these systems were designed, sometimes with pen and paper, on a map. Otherwise it was trial and error. It would be, well, let’s just send the trucks out or the wheelbarrows out, or the donkey carts out or whatever was fashionable at that point in time, you know And then afterwards you walk around and see if everything is collected If it's not collected, then you get complaints and they send the donkey cart out again. So it was a lot of trial and error. Surprisingly, the systems got pretty efficient through trial and error. If you look at collection and logistics systems, Waste collection is pretty efficient because it's a lot of stops,

there's not a lot of travelling or what we call like ‘between stops travelling’ and they get quite full. So the systems used to be pretty efficient through this trial and error and manual process. But then what happened is people became more environmentally conscious and they said, you know what, we need to recycle. We can't just throw everything in the same bin. You need to have separate waste streams. And that confused things a bit because now suddenly 40 years of experience of doing it in a certain way is no longer valid because the system has changed, the regulations have changed. And this is where digitalization and AI became important Because you can't wait another 30 years to get it right by trial and error You need to get it right a lot quicker, and one of the best ways to do it is to use digital tools and to use data and to use algorithms to design the system so that you get to an efficient system a lot quicker.

So why do waste management companies not already have a sustainable waste management system?

Yeah. So I think waste collection companies are reactive. So they can only do what the end customer requires. So if a city says we want you to collect waste, but we're going to pay you as little as possible. Then the waste collection, companies have to do it in a certain way that's probably not sustainable. Then it's going to be “we can't recycle”, “we can't do this” because you're not supporting that initiative So it's up to waste collection companies to provide a service and the cities and us as customers decide what that service should look like. So I would kind of flip the question around and ask “Why do we as customers or cities not demand sustainable waste collection services?” and then importantly “Why aren't we willing to pay more for sustainable waste collection services?”.

So that for me is the question because the waste collection companies react to what we want.

What are the benefits for a company to analyse their waste logistics?

The first one is it allows them to be more reactive and to understand how they should change their operations when legislation changes or when things on the ground change. So if somebody says ‘You know what, we want to collect food waste’. Then if you are digitised and you use data, you can react and plan and execute that a lot quicker than you would without data So that's probably the biggest benefit The second benefit is efficiency. If you design the system through AI and data, the system becomes more efficient, which means you can either deliver a better service or again, you can use the resources that you've freed up and you can offer additional services. Like maybe you can collect diapers, collect anything you want basically. So those are the two main benefits: reaction time and then efficiency which frees up resources to do something more.

Do companies and cities you work with react fast enough to implement more sustainable practices? Or do you feel as though there's still a lack of prioritisation and urgency to be more environmentally conscious?

That's a good question Usually by the time they engage us there, there's usually already some sense of urgency. So as much as we would love to go to waste collectors and tell them like, yeah, you need to prioritise this and pay us. It doesn't work like that. They decide, ‘you know what, this is a priority, how do I do this?’ And then they come to us. So then it's a priority. What we have found with our customers is that by working with us

they can actually exceed their requirements. So without us, they had an idea of the service that they can deliver and what their kind of ceiling is. And then through our AI we can show how we can actually push that a bit. We can deliver even better services. We can tell the city or our or their clients that we can actually exceed their expectations using our services. So we help them to run a little bit faster, but they're already running by the time they come to us.

So as a company, who is your target audience and who do you want to influence?

So we are a startup We're still young, which means we change a lot We're agile When we started it was waste management companies. We liked to work, and we still do like to work, with large-scale waste management companies. To help them improve their operations, improve their efficiency and do better service delivery. And what's happened now is we've actually shifted quite a lot towards the big producers of waste. So these are big companies that produce waste. So this would be like CocaCola or Nike. And they are now actually taking a direct interest around how can they better recycle, how can they better get their waste materials from their product back into their supply chain. So the same services that we used to give to waste management companies in terms of helping them improve their efficiencies and helping them collect more - we’re now giving to brands, to polluters to actually help them almost become better collectors of their own waste So at the moment, that is our main target market. Brands that want to be sustainable and that care about what happens to their endproduct.

Going Global: Measuring Globalisation's Impact on Global Banks' Ability to Meet Sustainability Goals

By Dylan Remmer-Riley

In an age of social media, low-cost air travel and information overload, meeting sustainability goals for global corporations is no mean feat The last few decades have been characterised by escalated globalisation, manifested in the sharp advancement of world trade, FDI and the free movement of people. Various left-leaning critics of globalisation have criticised the stark, negative consequences of such rapid globalisation. These include former Labour leader, Jeremy Corbyn, who in 2017 proposed to ‘rewrite the rules of the economy so it works for everyone: not just the billionaires’. Problems of wealth inequality, environmental destruction and civil disobedience remain key challenges. So, how do global banks navigate these choppy waters and meet their ambitious sustainability goals?

Globalisation allows for greater access to global markets and supply chains. Many, particularly those with conservative attitudes, feel this presents global banks with the best opportunity to meet sustainability targets. Access to these markets can lead to increased revenue and profitability, which can be reinvested in sustainability initiatives (Financial Times 2019).

BlackRock, for example, uses greater access to global markets and supply chains afforded by globalisation to meet sustainability goals BlackRock offers a range of ESG ETFs (exchange-traded funds) and mutual funds that enable

investors to align their investments with their sustainability goals. By providing access to these products in global financial markets, BlackRock is helping to drive demand for sustainable investments and encourage companies to improve their ESG performance. This demonstrates an important benefit of globalisation, which positively impacts wider sustainability.

Supply and Demand

Supply chain complexities demonstrate a significant challenge for financial institutions in achieving sustainability goals. EY, for example, in September 2022, posted an update on their website, advising readers to ‘prepare now for the new era of globalisation’. The accounting firm asserted that ‘geopolitics has shifted dramatically and the outlook for the global operating environment is increasingly uncertain’ This illustrates a weakness of globalisation, as it makes companies susceptible to external shocks (such as Russia’s invasion of Ukraine) This major world event, compounded by the ongoing impact of COVID-19 and rising inflation, has created key trade-offs for financial institutions looking to achieve corporate responsibility goals (Ernst & Young 2022).

However, the benefits derived from technology and innovation arguably offset the costs of supply chain complexities. Globalisation promotes technological innovation, which can enable companies to develop new products and processes that are more sustainable. For example, advancements in renewable energy technology have enabled companies to shift away from fossil fuels and reduce their carbon footprint. ING Bank, for example, a Dutch bank has developed a blockchain-based solution called Katana that enables sustainable supply chain financing. In addition to supporting sustainable supply chains, Katana allows ING Bank to reduce the risk of financing unsustainable practices, such as deforestation and child labour. By tracking the movement of goods and materials from source to destination, the platform identifies ESG risks and enables the bank to make informed decisions as to where to allocate its capital (Business Chief 2020)

Increased competition, which is a fundamental consequence of globalisation, creates opportunity costs for corporations when assessing sustainability targets. Pressures to innovate and retain customers often incentivise cost-cutting. This is a clear challenge to meeting sustainability goals, as doing so contrasts with spending on social responsibility.

Speaking in 2015, Pope Francis criticised this aspect of globalisation, stating: “It [globalisation] has damned many to starve to death… It is not enough to ensure economic growth if in doing so we create greater injustice”. The sharing of practices is a crucial advantage of globalisation, which allows global banks to meet sustainability goals. Globalisation facilitates the sharing of best practices amongst big corporations’ operations across all corners of the globe. This enables these firms to identify innovative approaches to sustainability and adopt strategies that have been successful elsewhere. An example of sharing of practices is the adoption of investment into clean energy by JP Morgan Chase & Co In 2021, the investment bank set out the goal of financing $200 billion in clean energy and sustainable development projects by 2025. This followed the 2020 announcement by Goldman Sachs to invest and finance $150 billion in clean energy by 2025. The latter aims to support the transition to a low-carbon economy, consistent with the largest investment banks This exemplifies a key benefit of sharing practices, which significantly positively impacts sustainability goals. This promotes greater equality when those in fortunate positions profit from something they were not responsible for. With natural resources being one of the United Kingdom’s greatest assets, the gains made from overseeing the extraction of these resources should be reinvested in the nation, instead of going into the hands of some of the wealthiest companies in the world

Moving Forward

Despite these points, regulatory differences are key to an increasingly globalised world and can harm corporate sustainability goals. Globalisation can make it challenging for companies to implement consistent sustainability practices in their global operations In some cases, firms may be forced to comply with weaker standards in order to operate in certain countries. This certainly creates conflicts of interest, given differences in cultural attitudes to some ESG targets.

On the whole, globalisation has a more positive impact on global banks’ ability to meet sustainability goals While globalisation can create challenges related to increased competition, supply chain complexities and regulatory differences; it provides access to new markets and technologies that can support sustainability efforts. The various challenges, with careful planning, can be navigated by top firms and global banks. It is therefore clear that the opportunities presented through globalisation outweigh any cost, as big corporations strive to meet sustainability goals.

References

America Magazine (2015) Pope Francis: To Care for the Poor is Not Communism, It is the Gospel

Available at: https://www.americamagazine.org/content/dispatches/popefrancis-care-poor-not-communism-it-gospel

Business Chief (2020) ING introduces ‘Katana’, its artificial intelligence bond trading tool

Available at: https://businesschief eu/corporate-finance/ing-introduceskatana-its-artificial-intelligence-bond-trading-tool-1

Ernst & Young (2022) Prepare Now for the New Era of Globalisation

Available at: https://www.ey.com/en gl/geostrategy/future-ofglobalization

Financial Times (2019) Jeremy Corbyn’s Plan to Rewrite the Rules of the UK Economy

Available at: https://www ft com/content/e1028dda-ca49-11e9-a1f43669401ba76f

Goldman Sachs (2020) Clean Energy, The Future is Here

Available at: goldmansachs.com/insights/new-energy-landscape/lowcarbon-economy/clean-energy/

JPMorgan Chase (2021) JPMorgan Chase Targets More Than $2.5 Trillion over 10 Years to Advance Climate Action and Sustainable Development

Available at: https://www.jpmorganchase.com/news-stories/jpmc-toadvance-climate-action-and-sustainable-dev-goals

How Do We Value Forests?

By Charlie Collins

Forest products are used in our everyday lives, from the chairs we sit on to the books we read, to the medicines we take and even the timber used in the buildings all around us. Without them our lives would be vastly poorer. Additionally, forests provide jobs for thirteen-million people globally (WWF) and are home to three-hundredmillion people Forests are also important environmentally, providing a habitat for 80% of the world’s terrestrial biodiversity (WWF) and housing for over half of the world’s land-based species. Second only to oceans, they are also the largest storer of carbon. How, then, can we begin to place a value on something so vital? The Boston Consulting Group (BCG), have attempted to do just that, coming up with four dimensions to consider: the climate regulatory function forests play, their commercial output, their environmental benefits, and their social impact.

The climate regulatory role forests play is significant, to say the least. Forests are the second biggest storer of carbon dioxide, and store around one billion tonnes of CO2. Since one tonne of CO2 is roughly valued at $27 to $135, the value of forests in climate regulation ranges from $27 to $135 billion. The latter CO2 price of $135 may be necessary to use in order to prevent global warming exceeding 1.5 degrees, whilst the lower price of $27 represents the current 30-day rolling average of EU CO2 prices. This climate regulatory role accounts for the majority, 65% to 90%, of the total value of forests.

Next, the commercial value of forests is perhaps the easiest to value. It can be quantified by both the value of wood products, such as timber and paper, and the value of other non-wood products, such as honey, fruit and the raw materials used to make medicines. Non-wood products are very important for certain production processes, but only account for about 1% of the commercial value of forests. In total, the commercial value of forests represents about 5% to 20% of a forest's total value.

United Nations, Market Insider, BCG analysis

The value of forests by function

Thirdly, the benefits of forests to the environment beyond regulating the climate are are numerous, from their importance for biodiversity to the way trees filter clean water (purifying 60% of clean water in Asia, for example, and thus proving essential for many people). Essentially, the environmental value of forests is based on avoided costs, such as the cost of water filtration or the increased healthcare costs that would occur from higher pollution levels This accounts for around 2% to 7% of the total value of forests

Finally, the social value of forests is extremely important and should not be overlooked. Many people directly depend on forests for their homes and livelihoods. Accordingly, the value of people living in forests is calculated based on what those individuals would need to pay for things like housing and food, if they had to live in a non-forested rural community instead. Moreover, forests have recreational benefits, which can be quantified based on the amounts people will pay to travel to visit them.

The total value of forests is calculated at about $50-$150 trillion, which at the upper end is twice the value of the global stock market. However, valuing forests can prove extremely tricky. Therefore, whilst this estimate is informative, further work is still needed, for example in more accurate measurements, especially if we wish to end deforestation. This is because we must be able to value forests in order to compensate developing countries with large forests so that they might preserve rather than destroy them. Systems like BCG’s for valuing forests are a step in the right direction. Yet there is as yet no clear cut, unified methodology globally for valuing one of the world’s most essential resources.

References:

Kappen, G et al (2020) The Staggering Value of Forests and How to Save Them The Staggering Value of Forests and How to Save Them | BCG

WWF (2022). [online] Available at: <https://wwf panda org/discover/our focus/forests practice/importance forests/#: :text=The%20importance%20of%20forests%20cann ot%20be%20underestimated.%20We,prevent%20soil%20erosion%20and%20mitigate%20climate%20change.%20> [Accessed 18 March 2022]

The high-end value of forests is roughly double that of global stock markets

Bloomberg (2020), World Gold council (2020), BCG analysis

INNOVATION

Energy Efficiency

Hydrogen, The Fuel of the Future?

By Ethan White

ALSO IN THIS SECTION

The Environmental Impact Behind NFTs

by Suhani Agrawal

Poor Data and Definitions Prevent Climate Progress

by Jack Roycroft-Sherry

Hydrogen, The Fuel of the Future?

By Ethan White

Introduction

In its gas form, hydrogen is the most abundant element in our universe. Its isotopes are the starting step in the monstrously powerful fusion reactions that power the stars in our sky The hydrogen ‘hype’ has been around for decades now, so why hasn’t it fixed all our energy woes? This complex topic crops up in sustainability conversations constantly, here a succinct overview of the main benefits and limiting factors with the implementation of this group one element as a fuel source will be considered; as well as its existing and potential impacts on wider industry.

Why Hydrogen?

The energy in 1 kilogram of hydrogen gas is about the same as the energy in 1 gallon (2.8 kilograms) of gasoline (US Department of Energy), this alone is a significant factor in its promise as a fuel of the future. Additionally, although elemental hydrogen is not present in great quantities on earth (Lubitz and Tumas 2007) unlike on other planets with more favourable conditions, such as Jupiter, it is stored in many common molecules. These include water and perhaps more importantly, hydrocarbons which we already use for fuel; such as propane or methane. In tandem, these facts display this humble particle in a very favourable light, given the right conditions, transportation methods and infrastructure As it happens however, these constraints are not simple to overcome

Limiting factors

Hydrogen is a colourless, odourless and tasteless gas which is very flammable and explosive, so much so it will spontaneously combust at a broad range of concentrations, even as low as 4% in air (NASA). This possesses a particular issue when safely trying to transport as much of it as possible. Higher concentrations mean more hydrogen molecules per volume of storage space, hence increased transport efficiency. One option to overcome this issue is to store it in its metal form, however an immense amount of energy is required for hydrogen to solidify into this state. This is its de facto form in our solar systems gas giants, but harvesting anything from these celestial bodies is currently pure science fiction.

But lets ignore these ‘small’ feasibility issues and instead take a look at how hydrogen infrastructure has developed over the last few decades. This foundation to build from should be somewhat in place, right? As it appears, large companies have shown limited interest in committing their time, resources and personnel to this so far One factor is that the hydrogen vehicles that have been developed so far are significantly less efficient than electricity in cars, about half as much it turns out (Volkswagen 2019) This fact combined with the issues highlighted in the rolling out of electric charging stations makes the prospect of undertaking another similarly gargantuan infrastructural project hard to swallow for investors.

Consequences

In the face of this adversity, where does hydrogen technology currently stand? Well there is still significant promise buried beneath the surface, the immediate thought may be hydrogen cars and refuelling stations, but other options do exist and have shown great results. The UK is not on target to reach its transport CO2 emissions commitments, change is needed and the transportation sector, accounting for a quarter of transport energy usage (The Royal Society of Chemistry, 2018), may provide the target demographic for hydrogen fuel cell implementation.

Schematic diagram of Hydrogen fuel cell Credit: David Murray-Smith 2019

These cells use an electrical current to trigger the chemical transformation of hydrogen and air into water and other less common bi-products, whilst releasing energy. These are significantly more suitable for use in the transportation sector since travel is back-to-back, scheduled and therefore more predictable. As a consequence of this, less of the aforementioned refuelling stations would be required, whilst being utilised to a greater extent than they would be for individual travel in cars, for example. These benefits would also apply for similar reasons to certain aspects of public transport such as in fuel cell buses. A case for this technologies’ use in ships, planes and other larger methods of transportation could be made, since these vehicles require greater amounts of energy to function and therefore, benefit to a greater extent from hydrogen’s high energy density as a fuel

Conclusion

In conclusion, although it impossible to say whether or not the hydrogen question will be answered within the near future, its development is certainly slow and steady There are many rabbit holes to dive down in its current and future implementation, such as the ongoing research into increasing storage and transportation energy efficiency, through its inclusion in different stable chemical compounds. One case study that sums up the current situation effectively is that of National Grid’s ‘Future Grid’ project. Much more research and testing is needed and holds a lot of potential upside to UK energy consumers, but is in political limbo with the next general election looming. As we draw closer to climate change deadlines, and sustainability becomes an ever greater consideration in industry, hydrogen as a fuel of the future will only be mentioned more and more.

References

US department of energy. Hydrogen Benefits and Considerations. Hydrogen basics. Alternative fuels data centre. https://afdcenergygov/fuels/hydrogen benefitshtml#:~:text=Hydrogen%20can%20be%20produced%20from,stationary%20and%20transportati on%20energy%20sectors

WolfgangLubitzandWilliamTumas,(2007) Hydrogen:AnOverviewChemicalReviews DOI:101021/cr050200z ACSPublications

NASA. Ask Magazine. Explosive Lessons in Hydrogen Safety. Russel Rhodes. Page 46. Explosive Lessons. https://wwwnasagov/pdf/513855main ASK 41s explosivepdf

Volkswagen (2019) Hydrogen or Battery? A Clear Case, Until Further Notice https://wwwvolkswagenagcom/en/news/stories/2019/08/hydrogen-or-battery--that-is-the-questionhtml

DavidMurray-Smith (2019) AReviewofDevelopmentsinElectricalBattery,FuelCellandEnergyRecoverySystemsforRailwayApplicationsA ReportfortheScottishAssociationforPublicTransport.DOI:10.13140/RG.2.2.16555.67362.

TheRoyalSocietyofChemistry (2018)EnergyandEnvironmentalScience TheRoleofHydrogenandFuelCellsinTheGlobalEnergySystem OtherRoadTransport.DOI:https://doi.org/10.1039/C8EE01157E.

The Environmental Impact Behind NFTs

By Suhani Agrawal

NFTs have explosively gained popularity within the last years, which in some ways is unsurprising, given the craze around bitcoin and cryptocurrencies. However, the two have a definitive distinction: NFTs are unique and cannot be exchanged or traded for another, whilst a bitcoin can and is essentially homogeneous. NFTs, or non-fungible tokens, let you trade digital tokens linked to digital files, ranging from artwork to GIFS to videos, and even tweets. These tokens are collectictibles, similar to procuring a rare oil painting, but are created instead via transactions on blockchains like Ethereum Each time an NFT is created or sold, a new transaction is put into motion, each of which can require lots of energy As such, given the recent COP26 summit in Scotland which put the spotlight on reducing carbon emissions, the snowballing NFT craze has been attracting attention for the wrong reasons: because of its hunger for energy.

The fact that cryptocurrencies have high emissions is quite well-known. Yet, while a single Ethereum transaction has a carbon footprint of 33.4 kg of CO2, an NFT transaction requires an even larger 48 kg. (Earth.org, 2021). Since an NFT may have more than several transactions including minting, bidding, sales and ownership transfer, it is possible for a single NFT to have hundreds of kgs worth of carbon emissions. Space Cat, for example, an infamous NFT of a cat in a rocket heading to the moon, has a footprint equivalent to an EU resident’s electricity usage for two months (The Verge, 2021). Given the emissions associated with NFTs, a digital market like SuperRare, one of hundreds of such platforms, with its 18000+ NFTs, would be responsible for 3.8 metric tonnes of CO2.

The main reason NFTs consume such high levels of energy is the proof-of-work verification system underlying their transactions, which help secure the blockchains upon which they are traded, and which help define each token’s uniqueness. A potential solution, then, might yet be found in a new verification system being developed, proof-ofstake, which requires significantly less power usage than proof-of-work. Proof of stake requires buyers to lock down their own cryptocurrency tokens, which in so doing helps secure the blockchains supporting NFTs, and which they would lose if they did anything out of line This not only helps the environment but also cleans up the questionable and dubious aspects of the NFT market, such as fraudulent trades and stolen art Moreover, ETH2 0, a new version of the Ethereum blockchain, plans to reduce the costs and ecological impact of the ethereum blockchain as a whole. This would not be the first time someone has tried to revolutionise the world of NFTs in order to make it more environmentally friendly. Memo Akten once developed a website, cryptoart.wtf, which allowed you to view the estimated greenhouse emissions associated with an individual NFT before buying it. However, it was soon shut down since it triggered harassment towards already struggling artists and digital creators.

NFT electricity usage compared to electricity consmption of entire art studio

These past years have proved that NFTs are the future, and that there is no putting the brakes on them. However, making active efforts to make them more sustainable is essential in order to continue buying your favourite GIFs without also buying a rich legacy of greenhouse emissions. Through creating cleaner trading platforms and polishing up blockchains such as Ethereum, this could soon be achieved, and would be to the benefit of artists and buyers both

References:

Qiu, J (2021) What Are NFTs, And What is Their Environmental Impact? [online] Earth org Available at: https://earth org/nftsenvironmental-impact/.

Calma, J. (2021). The climate controversy swirling around NFTs. [online] The Verge. Available at: https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change.

The Independent. (2021). How bad are NFTs for the environment? [online] Available at: https://www.independent.co.uk/climatechange/sustainable-living/nft-environment-climate-change-crypto-b1835220.html.

Bruner, R. (2021). Are Environmentally-Friendly NFTs Possible? [online] Time. Available at: https://time.com/6120237/nftsenvironmental-impact/.

Barber, G. (2021). NFTs Are Hot. So Is Their Effect on the Earth’s Climate. [online] Wired. Available at: https://www.wired.com/story/nftshot-effect-earth-climate/

Poor Data and Definitions Prevent Climate Progress

By Jack Roycroft-Sherry

In early 2021, climate activists celebrated a landmark climate when a Dutch court legally endorced energy Giant Shell's activist-led emission reduction plan (pictured to the right) It was the first time a major company has been legally forced into binding emission cuts Since then, climate litigation cases have seen record record highs 1800 climate legal cases were filed against firms in 2021, more than double the 800 made through all of 1986 to 2014. However, this rise in legal action in the climate sphere is only a tiny part of a turning tide.

Shareholder proposals are also at a record high;

In may 2021, the activist hedge fund Engine No.1 successfully foreced three new three new members onto oil giant ExxonMobil’s board, after unsatisfactory climate disclosure, has made it unignorable.

Authorities have also been adding to the climate clampdown, with the USA’s Securities and Exchange Commission having recently proposed requiring companies to disclose emissions and climate information. On other side of the Atlantic, as of April 6th 1300 of the UK's largest registered firms will be required to disclose climate-related financial information, and across the Channel the European Banking Authority is soon to require climate and environmental risk disclosures from its lenders However, as new green targets abound amidst pressure to reach netzero greenhouse gas emissions, obstacles continue to thwart real climate progress.

Reluctance for change is inevitable. Firms will challenge court decrees and new regulations just as banks will bemoan climate stress tests and reporting obligations The narrative, however, is that despite truculent companies fighting change wherever possible, with enough ammunition - enough legal cases, shareholder proposals, regulations and reporting requirements - they will be forced to change. It is, unfortunately, not that simple.

Consider the European Banking authorities’ climate disclosure requirments Not a single one of the 109 lenders the authority oversees has managed to complete the full set of its soon-to-be mandatory disclosures, with only 12 per cent managing to declare any climate assessments at all. Although this might appear like it is just another case of corporate intransigence that will not last once regulations become legally binding (which by the end of 2022 these are set to), it is in fact telling of a deeper and more serious issue.

There is almost no way anyone could have expected those banks to conform to such climate requirements. Banks need firms to properly report their emissions if they are to themselves disclose the climate risks embedded in the loans they finance. But according to Val Smith, Citi Bank's chief sustainability officer, most of its clients “are not yet disclosing their emissions, specifically their scope 3 emissions” (FT Moral Money, Feb 2022). You might then reasonably push the blame back further, and propose that it is then these recalcitrant firms that need sufficient regulatory sticks; then the problem would neatly be solved Again, that is too simplistic

Director of Friends of the Earth Netherlands celebrates court victory over Shell

In order to have effective climate disclosures and therefore effective change, you need good data and good definitions by which to score progress. For a start, that means having coherent and comprehensive reporting frameworks that make it possible for firms to adhere to set standards. Some such frameworks do already exist. The Task Force on Climate-related Financial Disclosures (TCFD), spearheaded by former Bank of England Governor Mark Carney, has had such a comprehensive methodology since 2017. However, despite many firms taking up such reporting standards, with a quadrupling in companies referencing the TCFD since 2017, few were doing an adequate job reporting under the framework, with many just making glancing references and failing to set and monitor targets Clearly, firms are finding it difficult to disclose emissions too.

One might argue, then, that a resolution will come once authorities agree on set standards and implement them in a legally binding fashion. Perhaps, but then the question would still remain of precisely what standards should be set. Should authorities build regulations from scratch, or build them based on existing ones, such as the TCFD’s, the Global Reporting Initiative's, or those from the International Sustainability Standards board? Each of these considers slightly different metrics and dimensions, including this category but not that; this problem but not that All this begs the question: which problems do we want to solve?

The underlying issue is two-fold. The first is a lack of clarity in terms that help obscure which problems firms should be culpable for. For example, just the term ‘corporate sustainability’ was found to be defined in 33 different ways (Meuer et al, 2019). Or consider the increasingly popular term ESG (Environmental, Social and Governance). Some firms use it as positive advertising to showcase the good they do, whilst others are beaten over the head with it when deemed to be doing the opposite Whilst ESG purports specificity - since it covers the three areas of environmental, social, and governance - it fails to clarify precisely what issues need to be solved within those immensely broad categories.

The second issue is a lack of tools for measuring progress. If we want to measure carbon emissions, e.g. scope 3 emissions arising from the use of end products, then we will require a technological overhaul, otherwise the issue will not be addressed effectively. Measuring carbon emissions is tricky from an engineering, statistical, and accounting perspective. It is no simple feat to accurately pinpoint where emissions come from and therefore who is to blame.

As to solutions, we need not just more data, but high quality data That means, irrespective of which rules firms are forced to comply with, independent audits and checks that help ensure climate and societal issues are measured to the same standards as traditional financial metrics. We should also be careful with overusing vague terms like ESG and sustainability, which more often than not are used to obfuscate rather than clarify. Finally, we need technologies that can help to measure carbon emissions and store climate data. That means investments in carbon trackers. That means innovation in how we measure pollutants. Whichever problems the world deems worth solving, sound data and definitions will be essential.

AirBandTechnologies

- a start-up attempting to better measure air pollution