Fifty Shades of Climate Change

I have no aspirations to stimulate a parallel with ‘Fifty Shades of Gray’, but a realization has dawned upon me that painting Climate change with a singular paintbrush, or a limited unidimensional viewpoint amounts to undermining the issue and not addressing it’s multiple dimensions. Also, as the COP-28 kicks off and as a lot of pledges are made and NDCs (Nationally Determined Contributions) amended upwards, one realization that must truly sink in is that Climate Change is finally upon us and we need to act as a collective and now! Climate Change is the most seminal and existential issue that we face this century and there is no escaping the fact that our response within this decade (hopefully fleet-footed) is what we will bequeath to our future generations. There may be a lot of hype around existential risk of AI (after all AI and GenAI in particular are the key themes resonating across the boardrooms and governments worldwide), but no matter what the pundits portend about the dystopian scenarios of AI and how it may mean the end of our civilization, it will be our response to climate change and how the actual Energy Transition unfolds and takes shape, that will likely determine the future of humanity.

‘Cos before the Bots get us, we may be our own undoing’! your’s humbly

We have oft clubbed things under the overarching moniker of Climate Change, but there is a nuanced view of things under that rubric. Energy Transition to address the Climate Change tsunami that is already in play is a complex issue and unless we understand and address the multi-faceted aspects of the massive transition needed to address Climate Change, we are not even seeing the tip of the iceberg.

First and foremost, we have to move beyond the forces of denialism and acknowledge that Climate Change is for real. It is the here and now. It is impacting lives and livelihood’s today through extreme weather events which have grown exponentially across different quarters in the past few decades.

It may make us squirm, but we do need to deal with the aftermath of what those events create unless we take the bull by the horns (proverbially speaking) and put in motion mitigating actions that will soften the blow and help ensure that we tame the beast and come out good.

We have to address the multiple dimensions (fifty shades) that confront us in this tryst against Climate Change and come out good on the other side. While it is difficult to cover all the fifty shades in this post, I will delve into a few of the crucial ones. I will touch upon more in subsequent posts and even drill down on individual topics on each of the dimensions below (e.g. the potentially massive role that CCS could play as technology initiative to combat Climate change).

Firrst and foremost, let’s consider equity which is premised on how civilization took roots and who benefited from burning fossil fuels to grow their economies and catapult into the status of advanced economies. Equity is a key force that we must contend with. The advanced economies have grown outsized over the past century by leveraging fossil fuels and having a disproportionate contribution to the cumulative emissions till date. While it is a good argument to give the dystopian climate change rhetoric to halt the developing and emerging economies in their tracks, one must look at the cumulative emissions till date and the dependencies of economic development on fossil fuels in the emerging and developing countries. There is at the very least an argument for developing economies that we must pay heed to.

Linked to this, let’s explore the Loss and Damage aspect which was a major topic of discussion at the COP-27 for a moment. It addresses the issue of adaptation more than mitigation, since mitigation may potentially not be a solution alone anymore. Despite the promises, the few hundred million dollars fund committed to Loss & Damage in comparison to the overall opportunity of trillions of dollars needed for the climate response) hasn’t come to fruition yet. Add to the same, and ironical as it may be, the parts of the world that have contributed the least to the emissions are the most susceptible to the impacts of climate change.

Geo-politics is again a crucial dimension and has a major role to play too. In addition to the heightened geo-political tensions in the current landscape, the energy transition seems to be further swinging the pendulum from the established multi-lateral trade world order towards one of protectionism, subsidies, local production mandates etc. to aim towards self-reliance. The mining, extraction and processing of critical metals & minerals that will lead the charge towards supporting the energy transition to electrify our industry, transport & heating needs alongside providing grid scale storage depicts a very lopsided picture. Extreme dependence on certain nations states for key minerals and rare earth minerals needed for the energy transition needs to be navigated adeptly along with the associated geopolitics to ensure that the transition is not held captive to vested interests and is equitable. Supply Chains need to be streamlined, unleashed and untangled and we also need to explore alternative materials & pathways (including new innovative chemistries), which will eliminate extreme dependence on individual sources of supply.

Another meta dimension is technology. Technology on specific archetypes is growing leaps and bounds. Solar and Wind (and the multiple variants beneath them like home/community/grid scale solar or onshore/offshore/floating point offshore) have proverbially gotten the wings and are on an exponential growth curve driven by 10x improvements over the past decade. They are pretty much at par or beyond with Fossil fuels on cost basis and on a continuous upwards trajectory. And that is just speaking about the poster child of renewables. There is so much unearthed potential for geo-thermal (no pun intended), Nuclear (Small Modular nuclear reactors) which provide a safe and a credible alternative and Carbon Capture and Storage (CCS) which still a bit in its nascency phase but growing exponentially. Then there are the exotic variants like Geo-engineering (injecting aerosols in the stratosphere) which stake claim to solving the climate change conundrum. And there is the whole great promise of Green Hydrogen to address hard to abate sectors.

Public Policy is another major dimension to the Energy Transition equation and will determine the response that nation states play to either provide a fillip to the climate change response or stymie/undermine the efforts in that direction. Eventually, we have to coalesce on the direction we need to take before it’s too late. The siren sounds coming off major initiatives from developed nation states in terms of defined policies and acts (IRA, RePower EU etc.) are a right step in this direction but need to be bolstered constantly to ensure that the momentum in this direction keeps pace. Regulatory standards and mandates around Carbon reporting and CBAM i.e. Carbon Budget Adjustment Mechanism in the EU are a step in the right direction). If we need to get to net zero, the first step in the process is to be able to account for and measure Carbon emissions accurately. In the words of the late management Guru Peter Drucker: ‘What gets measured, gets managed’. We are running out of our emissions budget and unless we pay close attention to the same, we are heading towards disaster.

Climate Financing is another key consideration in our quest to move towards a sustainable planet. There has been a lot of impetus around ESG investing, Climate Tech investments but the momentum needs to grow to ensure that all future investments are geared with a lens on this and this becomes a de-facto criteria for all future investments in capital projects.

No discussion on this topic would be complete without a dialog on the adverse impacts to specific communities and individuals. How do we soften the blow for individuals who have relied on the fossil fuels enabled economies and provide them a soft landing. How do we deal with the issues of stranded assets in the trillions of dollars? How do we make the move to the new energy transition economy take root? These are complex issues that we must grapple with.

Climate Change and the ensuing planned Energy Transition to tame its impact is a colossal issue with diverse ramifications. We need to consider it from a multi-faceted perspective (technology advancements, public policy, geo-politics, equity etc.)

What I have touched upon is just the tip of the iceberg, but if it piques your interest, do respond to this post with your viewpoint. Over subsequent posts (and I aspire to convert this into a regular blog series delving into each of the fifty shades), I want to delineate in great detail each of the individual facets that will comprise our response to this existential issue facing our generation and the ones to follow).

Please comment on what dimension you would like to hear more about by responding to this blog post and my future blog posts will be aligned with your comments and interests. Each of these dimensions and its components is a nuanced issue and needs a fair degree of debate and deliberation to determine the best possible outcome. Let’s join in this journey together to create the right momentum. Thanks