As the markets for solar power, wind power, storage and electric vehicles continue to grow in size and strength, there are other things that will be vying for our attention this year.
Climate and insurance:
Australian insurers can absorb growing insurance
claims relating to bushfires, S&P Global Ratings
said in early January, though “the recent extremes in draught and climate conditions appear to have exacerbated the reach, longevity and intensity of the current bushfire season.” Climate change
would mean more extreme weather events globally, triggering loss and damage in many instances. The Bank of England is looking at a climate-stress-test of banks and insurers. The design of the exercise will depend on the inputs provided by stakeholders to the discussion paper it published last month. “The exercise will test the resilience of the current business models of the largest banks, insurers and the financial system to climate-related risks and therefore the scale of adjustment that will need to be undertaken in coming decades for the system to remain resilient,” it said.
Zero-emission trucks: Across the Atlantic, to cut back on emissions from transportation, regulators in California are proposing mandates to force a higher number of zero-emission medium and heavy trucks on the roads, with targets to 2030. “It is an area where clearly not just California, but the world, is in need of a major technology upgrade,” California Air Resources Board Chairwoman, Mary D Nichols, said. The board also announced it is joining with seven other US states and the District of Columbia to develop an action plan to put more zero-emission trucks and buses on the road elsewhere in the country to replace diesel vehicles, which emit nitrogen dioxide, particulate matter and other contaminants into the air.
Meanwhile, autonomous self-driving robo-cars have been making good progress, with more miles tested. As many as six countries now allow the offer of rides to the general public (in specified areas) without a safety driver on board, according to BloombergNEF. It expects US cities to lead the way in robo-car deployment, but for China to catch up and surpass the US by the early-2030s.
Hydrogen and green hydrogen: The world’s first liquefied hydrogen carrier was unveiled in Japan last month. Made by Kawasaki Heavy Industries, the ship will transport liquid hydrogen from Australia to Japan — a distance of over 9,000 kilometers. Construction of the vessel is to be completed by late 2020. Expect to hear more about hydrogen, which could be solution for lower emissions in many hard-to-decarbonise sectors such as steel making and chemicals manufacturing. Denmark’s Orsted has a team that is trying to use power generated from offshore wind farms to make “green hydrogen”, though cost remains a challenge.
Sustainable finance: Last month, Royal Dutch Shell signed a $10 billion revolving credit facility from a syndicate of 25 banks where “the interest and fees paid on the facility will be linked to Shell’s progress towards reaching its short-term Net Carbon Footprint intensity target.” Shell aims to reduce the Net Carbon Footprint of the energy products it sells by 2-3 per cent by 2021 (compared to 2016), 20 per cent by 2035 and 50 per cent by 2050. Expect to see more announcements on financing linked to progress on sustainability targets. Goldman Sachs meanwhile announced a tightening of its policy on fossil fuel financing, pledging not to support new thermal coal mines and upstream Arctic oil exploration and development.
The author is editor, global policy, BloombergNEF; email@example.com