TBLI Weekly - July 11th, 2023
Your weekly guide to Sustainable Investment
Next Featured TBLI Event
Join us for TBLI Private Online Screening of BREAKING SOCIAL on Sept. 14 followed by a Q&A session with director, Fredrik Gertten.
BREAKING SOCIAL is the new documentary from award-winning director Fredrik Gertten, which investigates how the super-rich, the money maximisers, have gained control over the bulk of political and economic life, also in traditionally stable democracies. It argues that most of the frustration and popular uprisings as in Chile, Black Lives Matter, Women’s Rights Protests in Iran and the climate movement have the same root cause: the breaking of the social contract and undemocratic rule.
Watch the trailer:
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Obituary - Professor Paul Watchmann
Last week the world lost a giant, a friend, and a true mensch. Paul Watchmann was the only person ever to be named TBLI Hero twice and had been inducted into the TBLI Hall of Fame for pioneering ESG work and Impact Investment. (See bio below)
Paul was a great soul who always had time to help others, share his humanity, and inspire others. He had a wonderful sense of humor and a brilliant mind. He made complexity simple to understand. Never a ribbon cutter, but always the person who did the work and got on with the job. Paul didn’t get in touch to see how you could fill up his wheel barrel of stuff and leave no crumbs for others. His ask - if there ever was an ask - was never selfish or ego-driven. He genuinely wanted to help and share.
His beautiful soul will be sorely missed as we all try to continue his work to make an economy based upon well-being.
I learned so much from Paul, and I am grateful for his guidance. Paul was a truly special person. He was kind, generous, and brilliant. He made the world a better place, and he will be deeply missed.
- Robert Rubinstein.
Bio - Prof. Paul Watman:
In October 2005, Paul Watchman, working at Freshfields Law Firm, published a paper called, for the United Nations Environmental Program The Freshfields Report. This report’s title was A Legal Framework for The Integration of Environmental, social, and governance issues into institutional investment.
This report profoundly changed the landscape and laid the basis for ESG Investment
Professor Paul Q. Watchmann was a partner in one of the leading magic circle firms, Freshfields Bruckhaus Deringer. Paul produced The Freshfields Report, which has been said to be the most downloaded report in UN history. It is also credited with revolutionising market practice on the legality of integrating ESG considerations into investment decision-making by pension funds and other investment houses. Paul was named by Ethical Corporation with Hank Paulson, former United States Secretary of the Treasury, as one of the six most influential global figures in the development of sustainable finance and has been awarded the Thomson Reuters Environmental, Social and Governance (ESG) Leadership Award for Outstanding Contribution to the Development of ESG (Environment Social and Governance) in 2010.
In November 2020, we had Paul as a guest on at a TBLI Talk Webinar - to learn about his story you can watch the full session here
Brazil says illegal miners driven from Indigenous territory, but ‘war’ not over
Country’s top cop said 90% of miners despoiling Yanomami land had been expelled, though experts say they are only displaced
Brazil’s top federal police chief for the Amazon has celebrated the government’s success in driving thousands of illegal miners from the country’s largest Indigenous territory, but warned the “war” against environmental criminals is not yet over.
Speaking during a visit to the Amazon city of Belém, Humberto Freire estimated environmental and police special forces had expelled 90% of the 20,000 miners who had been devastating the protected Yanomami territory, since launching their clampdown in February.
Freire, who was appointed after Luiz Inácio Lula da Silva became president in January, said the eviction of those garimpeiros was bearing fruit. “In April 2022, we received 444 mine-related deforestation alerts. In April 2023, it was 19 – a reduction of more than 95%. In May, there were 10 alerts and in the first half of June none at all. So we’ve seen a significant reduction.”
Images released by Brazil’s armed forces last week showed the waters of the Uraricoera River, which runs through the Portugal-sized Indigenous enclave, had become dramatically less cloudy, purportedly as a result of the destruction of illegal mines.
But Freire, director of the newly created federal police department for the environment and Amazon, warned that 1,500 to 2,000 cassiterite and gold miners remained and were resisting.
“We can’t think that the battle is won [and] that this war is over,” he said, vowing to launch “focused, surgical” operations to dislodge the remaining miners and to continue attacking the criminal enterprises employing them.
There was a brutal reminder of the challenges authorities still face last week when a Yanomami child was shot dead and five others, including an Indigenous leader, were injured during an attack on a Yanomami village. It was the latest in a series of deadly incidents to hit the territory since the eviction campaign began.
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How Thailand is moving toward a more flexible energy mix
Thailand is highly vulnerable to the impact of climate change — as are many other countries in Southeast Asia. Extreme weather events such as floods, droughts and rising sea levels are becoming more common in the region. This makes mitigating climate change and advancing Thailand’s journey to net zero vital to the country’s future.
In the time since the UN COP26 Climate Change Conference in late 2021, the Thai government has further tightened its policies and initiatives for energy efficiency and carbon neutrality. This has included new green financing standards, strengthening the country’s climate pledge in its Long-term Low Greenhouse Gas Emission Development Strategy (LT-LEDS) and reworking the National Energy Plan. Draft policies now commit the country to carbon neutrality by 2050 and net zero greenhouse gas emissions by 2065 — much earlier than previously planned.
But Thailand has significant challenges to overcome on its way to reaching these goals and developing a decarbonized, more flexible energy mix.
Thailand’s energy landscape
Thailand has a relatively low share of coal in its power mix, but natural gas accounts for close to two-thirds of its electricity generation. The country also imports more than 10% of its electricity from neighboring countries — a large share of which is generated using coal. Depleting natural gas reserves at home have bumped up the share and cost of fuel imports, presenting a growing challenge for the country.
The Thai government has solidified a commitment for renewable energy to make up at least 50% of new power generation capacity by 2050. Overall, the share of renewable electricity will need to climb to 68% in 2040 and 74% by 2050 for the country to reach carbon neutrality, according to the LT-LEDS.
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How the Western drought has increased carbon emissions
Hydropower loss added 121 million metric tons of carbon emissions over 20 years — about the same as putting 1.3 million more cars on the road.
At the turn of the 20th century, as the United States developed the West, the federal government built hundreds of hydroelectric dams on major rivers in the region. These dams destroyed river ecosystems and flooded Indigenous land, but they also provided a cheap and abundant source of renewable energy for tens of millions of people. Hydropower today meets around a quarter of the region’s energy needs.
But the hydroelectric fleet in the West has taken a beating over the past 20 years as a series of devastating droughts have battered the area. When major rivers dry up, less water flows through hydroelectric dam turbines — and dams produce less electricity as a result. At the same time, the heat waves that often accompany dry periods lead to more demand for power as people crank up their air-conditioning. That’s bad news for grid operators, who have to find an alternate source of electricity just as dams are falling short.
This decline in hydropower leads to a significant surge in fossil fuel emissions, according to a new study published last week in the Proceedings of the National Academy of Sciences, a leading scientific journal. After looking at power generation across the West between 2001 and 2021, the authors of the study found that coal and gas plants ramped up their activity during dry months to replace lost hydropower, leading to more carbon emissions and more local air pollution. While that finding was expected, the scale of the increase in fossil fuel emissions surprised the researchers.
“The effect on the power mix is actually pretty large,” said Minghao Qiu, a postdoctoral scholar at Stanford University who is the lead author of the study.
All in all, the decline in hydropower caused an extra 121 million metric tons of carbon emissions between 2001 and 2021 — about the same as if an additional 1.3 million cars had been on the road during the same period. The size of the change varied from grid to grid and from power plant to power plant, but it was considerable everywhere. Fossil fuel emissions rose by 11 percent in the Northwest during the driest months, and by a whopping 30 percent in California. At some plants, generation jumped as much as 65 percent above normal levels during dry spells.
During the driest years, this increase had staggering consequences for the climate: In 2001, for instance, a decline in hydropower caused fossil-powered plants in the West to emit 27 million tons more carbon dioxide than they otherwise would have, or about 10 percent of their total emissions from that year.
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Batteries And Renewables Are Saving Texas During The Heat Wave
Texas, along with much of the South, has been subject to a relentless, prolonged heat wave for several weeks – the kind of climate-fueled extreme weather event that scientists have warned us will happen with increasing frequency. This particular event is so extreme that Texas has been hotter than 99% of the Earth.
But unlike during Winter Storm Uri that blanketed Texas with ice and blackouts in 2021, the state’s grid has so far held up under the immense strain of powering millions of air conditioners cranked up at their highest power, driving peak demand to an all-time high of nearly 81,000 megawatts (MW), easily surpassing the 69,000 MW peak demand during the winter storm.
So, what’s the difference from 2021? How has the grid managed to function with more demand placed on it than ever before?
It’s all thanks to the rapid additions of solar, wind, and grid-scale battery storage in the last two years. Texas has added almost 3,000 MW of wind since Winter Storm Uri, and utility scale solar in the state has doubled every year since 2020, with nearly 10,000 MW of new solar added since 2020.
And here is the amazing statistic that few people know – Texas accounted for nearly 70% of grid battery additions in the U.S. in the first three months of 2023, resulting in a total capacity of 3,300 MW, almost all of which have come online since early 2021. In fact, Texas passed California last year in total installed solar and almost kept pace with California when it comes to new grid battery installations.
But during this historic heat wave, it’s been all these new, low-cost wind, solar and batteries that have kept the grid afloat and Texans cool – in many cases saving lives. Solar and wind provided 35% of statewide power last Tuesday and generated a record 31,500 MW Wednesday, which more than covered the 9,600 MW of electricity lost when extreme heat knocked several natural gas and coal plants offline. And just as solar power started falling in the evening, batteries kicked in immediately to get Texas through the most difficult part of the day when the sun was setting but the ACs were still cranking.
This all tallies with what energy system researchers have been saying for years: A combination of wind, solar, and battery storage are often more reliable than fossil fuel generation to handle periods of extremely high demand, especially if these peaks occur for short durations during a day.
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Momentum has slowed on global energy transition amid energy crisis and political turmoil
After a decade of steady progress, the global energy transition has plateaued, according to the World Economic Forum’s (WEF) Fostering Effective Energy Transition 2023 report.
The WEF’s Energy Transition Index (ETI) benchmarks 120 countries on their energy system performance and enabling environment. Global ETI scores have shown little growth in the past three years, after 10 years of steady momentum overall, and the WEF cites the energy crisis and global political turmoil as partially to blame.
This year’s report is the first to evaluate countries’ “transition momentum,” which the WEF contends is necessary for consistent progress. India and Singapore have demonstrated sustained transition momentum, the report says, but the rest of the world has been “inefficient” in achieving a balance of equity, sustainability, and security.
Only 41 of the 120 countries have made “steady” progress in the last decade, the report states. Additionally, 113 have made progress over the last decade, but only 55 have improved their ETI scores by more than 10 percentage points.
Sweden, Denmark, and Norway ranked the highest, respectively, while China, India and Indonesia have shown strong improvements as emerging centers of demand. Out of the world’s top 10 economies, France is the only country in the top 10 ETI rankings.
Although global progress has been made on achieving sustainable energy, equity has been undermined as countries begin to focus on energy security instead. Only 18% of countries in 2023 have balanced their “energy triangle” (sustainability, security, and equity) in this regard.
The full report can be read here.