Introduction

Welcome to our Snippets newsletter which as always endeavours to provide coverage of developments in energy and environmental issues, from both here in New Zealand and around the world. We hope you continue to find our fortnightly collection of articles to be of interest in what is a rapidly evolving area.

We open with a study published in Nature Climate Change, authored by the London School of Economics and Vivid Economics, which estimates that a business-as-usual emissions path would lead to expected warming of 2.5C by 2100. Under that scenario, banks, pension funds, and investors could sacrifice up to $2.5 trillion in value of stocks, bonds, and other financial assets. The worst-case scenario, with a 1-percent chance of occurring, would put $24 trillion (about 17 percent of global financial assets) at risk.^[1]

This is the first time economists have put climate risk in terms the financial sector understands. More importantly, it isn’t something that is only going to affect the fossil fuel sector. By broadening this argument to include risks for effectively every investor under the sun, the authors have just turned up the heat on us all.

Which of course goes to one of the nubs of the problem. We have been trying to make the planet and its environment work within the confines of our economic models, where GDP growth still rules as king, instead of pursuing strategies aimed at transforming our economic systems to work within – and with – our natural environment.^[2]

There is however hope that change is in the air and as our next article discusses, we are on the verge of the Fourth Industrial Revolution, characterised by a fusion of technologies blurring the lines between the physical, digital, and biological spheres. It is also a revolution that has sustainability at its heart for global economic growth, defined by a growth in awareness and demands by customers, an increase in regulatory oversight, investors wanting greater transparency and accountability, a general shift to renewable energy and an overall changing set of societal values.^[3]

And for a business, adopting sustainability makes perfect sense. If conscientiously integrated into business operations, it will realise an improved brand image and competitive advantage, increased productivity and reduced costs, increased ability to comply with regulation, attract employees and investors, reduce waste and make shareholders happy. What’s not to like about all of that?^[4]

The mind-set of businesses, and governments, around adopting sustainability must, and is, improving. The G20 have implemented a plan to help its member organisations achieve improvements in energy efficiencies. Its voluntary Plan (first adopted in 2014) is being prioritised in its 2016 agenda. The plan has six individual work streams that will share best practices and technical resources (with a seventh, data, also proposed for this year). To achieve the two-degree climate goal the world needs to multiply current energy-efficiency investments by a factor of five to eight between now and 2030. Support from both government and private sector investors in the Plan’s work streams is essential in 2016 to help make this happen. ^[5]

Innovation will play a big part in achieving the two degree climate goal. Bloomberg New Energy Finance have announced its selection of the ten 2016 New Energy Pioneers – game-changing innovators that are revolutionizing the energy sector. These leading edge companies are pushing the boundaries and helping to make a ‘real’ difference. ^[6]

The movement of businesses towards “green” buildings can unlock huge economic and social benefits, as well as energy efficiencies, by focusing on the health benefits that green buildings can provide. The thinking that focussing on saving energy is the only way to achieve payback of funds spent on sustainability features needs redirecting, as researchers have found that (for example) improving indoor air quality of buildings improves each employee’s performance and productivity by US$6,500 annually. This can be achieved with an investment of between US$14 to US$40 per person per year. A happy work force, and a better bottom line in the long term. ^[7]

Indoor air quality, and outdoor, are important in business and in wider society. A report from the UK finds that air pollution is claiming at least 40,000 UK lives a year. We all know that outdoor air quality can be poor, especially in heavily populated cities, but indoor air quality is an area that is often overlooked. Sources of indoor air pollution include smoking, faulty boilers, gas cookers and heaters, as well as irritant chemicals from new furniture, air fresheners and household cleaning products. House-dust mites, mould and dander from pets can also damage health, according to the report. Who would have thought the indoor air could be so dangerous! ^[8]

Other businesses are encouraging sustainability in different ways. There are a number of large corporations offering employees incentives in this area, as seen in our next article. Facebook are offering staff a huge bonus to live closer to their main campus, minimising their travel. As well as taking sustainability seriously as a business, these corporations are encouraging employees to do their bit as well, by ‘leading from the top’. ^[9]

On a different note, we next venture into nature. By studying and analysing nature around us, organisations are working to mimic biological efficiencies found in oceans in an effort to create more efficient technology. Nature has always followed the most efficient path, and by replicating some natural movements, companies are now able to create products which are far more efficient than previous inventions. ^[10])

Closer to home, our next few articles discuss some current New Zealand issues. Firstly, a report by the Morgan Foundation discusses how, although NZ emissions have risen since 1990, we have been offsetting these by (mostly) buying fraudulent international carbon credits, which are expected to be claimed upon until 2020. The report states that the carbon credit scheme has not had the impact that it has intended, instead it gives countries the ability to ignore their emission problems, and instead purchase their way out. ^[11]

The controversial sale of the Lot 9 by Ashburton District Council is discussed next. The land for sale has a permit to extract 1.4 billion litres of water each year from the local aquifer. Although this is very significant, and one of the largest allowed in the country, the article notes that many international companies are already bottling water in NZ. It suggests that bottling water is better for the environment than using water for milk production, where 250 litres of fresh water goes into producing one litre of Canterbury Milk. ^[12]

And lastly, a report by the Royal Society (NZ) shows the terrifying consequences of a 0.5 – 2 meter rise in sea level to coastal NZ areas. The report not only mentions the effects of a rise in sea level, but also the flow on effects of this, including increased acidity levels in the ocean, harm to freshwater sources, and increased fire risks. ^[13])