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Topic: Divestment

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[Episode #156] – 6-Year Anniversary Show

Sep 29 2021

In this sixth-anniversary show, we welcome back energy researcher Jonathan Koomey to help us review some of the hot topics in energy transition over the past year.

Topics in this discussion include:

The energy elements of the bipartisan infrastructure bill that passed the Senate, and how they stack up against the actual infrastructure needs of the US.
Highlights from the new climate assessment report from the IPCC, and the disconnect between how that modeling framework is structured, and what policymakers and journalists really need. We also try to identify how climate scientists can be more helpful in communicating the path the world is currently on.
The case for and against divestment and other supply-side strategies to reduce the consumption of fossil fuels.
The zombie theory of ‘value deflation’ in solar, and why it’s mistaken.
Corruption in the nuclear industry, and why climate hawks must start getting more discerning about who they are backing in the struggle to take action on climate change.
The energy requirements of the Internet and Bitcoin mining.
A new tool to explore the EIA’s vast stores of data.

In the news segment, we review the ongoing efforts in Congress to electrify the US Postal Service vehicle fleet; we update two stories about corruption associated with the US nuclear industry; we hail the world’s first production of a batch of steel without using fossil fuels; we have a look at the world’s largest battery storage system; and we note a major blow to the credibility of “blue hydrogen.”

Geek rating: 8

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[Episode #135] – Internalizing Climate Risk

Nov 25 2020

Mini Episode

Climate change poses a host of risks to the global economy. From ‘natural’ disasters causing property damage, to climate mitigation measures rendering fossil fuel assets unburnable, to potential impacts of climate change on agricultural production, energy, food, insurance, real estate, and other sectors, it’s clear that private sector companies and all kinds of investments stand to suffer significant losses as a consequence of climate change.

Yet few regulations exist to require these risks to be recognized on balance sheets, or disclosed to investors, unlike many other everyday risks that are subject to such disclosure and protection. A home built in a floodplain and destroyed in a flood, or at a wildland interface and destroyed by a wildfire, has not seen its cost of insurance go up to reflect the rising risk of another loss due to climate change. Pension funds have not been required to evaluate the risk of their investments in oil, gas, and coal companies losing value due to future restrictions on carbon emissions. And entities like the U.S. Federal Reserve have been free to continue lending to fossil fuel producers even as they warn about the damage that climate change is doing to the global economy.

Clearly, it is long past time to recognize the risk of climate change across all sectors of the economy. We must begin implementing ways of measuring those risks, testing portfolios for their risk tolerance, divesting public money from the fossil fuel sector, and start implementing economy-wide ways of pricing carbon emissions.

To that end, in 2019 the U. S. Commodity Futures Trading Commission (CFTC) formed the Climate-Related Market Risk Subcommittee, and tasked it with producing a report to consider what climate-related risks might be; examine whether adequate information about climate risks is available; identify any impediments to evaluating and managing climate-related financial and market risks; ask whether the market can do a better job of integrating climate-related scenarios and use them to stress-test investments; incorporate disclosures of climate risk into financial and market risk assessments and reporting; identify how risks can be managed and disclosed in order to protect the stability of the financial system; and ensure that information about climate-related financial and market risks are internalized into the market.

On September 9, 2020, that report was released. In this episode, we speak with the chairman of the subcommittee, Bob Litterman, founding partner and Risk Committee Chairman of Kepos Capital. Bob has had a decades-long career in risk management, and has been a champion of recognizing and integrating climate risk for many years. We’ll ask him about what the report says, why it’s important, and how its findings might be used to integrate awareness of climate risk into financial metrics and enterprise governance.

Geek rating: 6

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[Episode #133] – Stranded Assets

Oct 28 2020

Mini Episode

A decade ago, it was very conventional for asset managers to have exposure to the oil and gas sector as part of a diversified portfolio. Calls for them to divest from carbon assets because climate policy could render fossil fuel reserves unburnable mostly fell on deaf ears. But now the oil & gas sector has turned in a decade of underperformance, vaporizing tens of billions of dollars and becoming the worst-performing sector in the world. Now banks, asset managers, and even oil operators have now joined the ranks of those worrying aloud about the increasing risk of stranded assets. Now, the warnings about stranded assets are converging with calls for companies and investors to apply ESG filters to their activities, and investors are demanding divestment from carbon-heavy assets.

One think-tank saw all this coming: Carbon Tracker. In fact, they put the concept of stranded fossil fuel assets on the map over a decade ago. In this episode we speak with its founder, Mark Campanale, about what investors have learned from the experience of the past decade, what they still need to do going forward, and some of the more interesting efforts that are under way to encourage divestment from carbon and reorient capital toward energy transition solutions.

Geek rating: 7

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[Episode #114] – Cyber and Climate Risks

Feb 5 2020

Mini Episode

As energy transition progresses and more internet-connected distributed energy resources (DERs) join the grid, they increase the grid’s flexibility and dynamism, but they also expose those systems to the risk of being hacked. What kinds of protections do we need to have as grid modernization proceeds and more and more devices in the so-called “internet of things” (IoT) become part of the grid ecosystem? Should we be encouraging the adoption of smart, interconnected devices at all? Or would we be better off using devices that were not connected to communication systems in any way, to better ensure their security? And what are the relationships between cybersecurity on the grid, and the effects of climate change?

Our guest in this episode is a cybersecurity expert with the Idaho National Laboratory, part of the US Department of Energy, who provides strategic guidance on topics at the intersection of critical infrastructure security and resilience to senior U.S. and international government and industry leaders. He’s a longtime expert in this domain with a deep and wide set of relevant expertise, and you’re sure to learn a lot in this conversation about things that you probably didn’t even know existed, but that are intimately connected with grid security, climate change, and energy transition. Open your mind wide for this one – it’s a doozy!

Geek rating: 9

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[Episode #112] – Climate Science Part 11 – Climate Confusion

Jan 8 2020

Mini Episode

What do the various emissions scenarios published by the IPCC really mean? Is the worst-case RCP8.5 scenario “bollox,” as some have asserted, or it useful? Are we already doomed to experience seven feet of sea level rise and five degrees Celsius of warming globally, or is there still a chance that we can limit warming to two degrees? And if so…how likely is it that we can hit that target? How much can our energy transition efforts, both now and in the foreseeable future, do to mitigate that warming? Should our scenarios err on the side of being too extreme to account for unknown feedback effects and tipping points that may come in the future, or should we try to be as accurate as possible with our modeling, given the available data and scientific tools?

In this 11th part of our miniseries on climate science, we attempt to answer these questions and help our listeners sort out the various perspectives, from the tame to the apocalyptic, that feature in the current debates about our climate future. We hope that it will leave you with a much better understanding of what the climate scenarios really mean, how likely they are, and what the actual trajectory of climate change might be. We’re not out of the woods by any means, but our prospects may be better than you think!

View all parts of The Energy Transition Show mini-series on climate at: https://energytransitionshow.com/climatescience

Geek rating: 9

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[Episode #110] – Death Toll for Petrol

Dec 11 2019

Mini Episode

Electric vehicles have many fairly well-known advantages over conventional, petroleum-fueled vehicles. But what most people are yet to realize is the massive energetic advantage an EV can have when powered by renewables over a conventional vehicle powered by oil. In fact, an EV powered by wind or solar can deliver six to seven times as much mobility as a typical car powered by gasoline. This startling finding implies that in the long run, oil prices would need to drop drastically for conventional cars to remain competitive with EVs running on renewables. In fact, the price of oil would have to fall far below the current breakeven price for producing it. In other words, it could mean the end of growth in oil demand. In this episode, we take a deep dive into all the numbers involved in this fascinating analysis by a veteran sell-side analyst with BNP Paribas. Oil producers and automakers ignore these findings at their peril.

Geek rating: 9

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