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Rooftop solar in emerging economies has a finance problem
| Disclaimer: This post is based on Episode #189 of the Energy Transition Show with Chris Nelder. You can listen to an abridged version below, and become a subscriber to hear full episodes at https://xenetwork.org/ets/ |
Getting to net zero (ASAP)
In an earlier post, we spoke about how global emissions must reach net zero by the middle of the 21st century to meet the temperature goals of the Paris Agreement, which are to hold the increase in global average temperature to well below 2°C above pre-industrial levels, and pursue efforts to limit the temperature increase to 1.5°C. Reducing global emissions as soon as possible will provide the best opportunity to achieve these goals.
Since the Paris Agreement was struck, the IPCC highlighted the benefits of restricting warming to 1.5°C, relative to 2°C, and the need to achieve net zero emissions by the middle of the century.
The latest reporting by the IPCC highlights the new urgency of achieving net zero emissions even sooner and the size of the global task.
The graphic below shows how achieving this would be a dramatic shift away from what we’ve always done—increase emissions year on year.
The graphic also shows how energy accounts for around two-thirds of total greenhouse gas emissions. You’ll notice the pattern of historical energy emissions tends to mirror that of overall emissions, underscoring the importance of reducing energy emissions to achieve broader emissions reduction goals.
Putting the world on a path to achieve net zero by 2050 requires a substantial increase in clean energy generation across all regions and all economies.
We also know that despite the challenge of climate change, the response is also well underway.
Advanced economies have seen the writing on the wall and are on the path to a net zero future, aided by the falling cost of solutions.
The question is whether emerging economies can also do things differently.
Investing in net zero (ALSO ASAP)
Clean energy is being deployed in greater numbers as the cost of production decreases over time and the political will to act increases.
This trend has unlocked projects and project finance as they become feasible and effective policy creates an environment that will spur investment.
The private sector is key to this investment continuing at the scale required. The IEA estimates around 70 per cent of clean energy investment over the next decade will need to be carried out by private developers, consumers and financiers.
The future is distributed
Often when we think of renewable electricity generation, we tend to think of something like this:
There is another type of renewable energy generation which is set to play a crucial role in the energy transition—distributed generation.
Distributed generation, or DG, includes rooftop solar, household storage, microgrids and more.
These systems are often decentralized, modular, flexible, less than 10 MW, and are situated close to the consumer.
There are many benefits to distributed generation, including:
- Low deployment cost
- Lower infrastructure costs
- Quicker deployment and installation
- Systems continue to run during power outages
- Systems allow more efficient personal energy use
- Greater employment benefits
Emerging markets are different
Given these benefits, it would make sense to deploy these technologies in emerging economies across Asia, Africa and Latin America.
Yet, the IEA has stated that during the past decade, emerging economies have lagged behind others when it comes to clean energy investment. This is despite rapid growth in electricity demand and several cost-effective opportunities for emissions reduction.
If the world is to meet clean energy and emissions reduction targets, these low levels of investment must be turned around.
the international finance problem
Depending on their structure, international financial institutions have two key goals:
- make a return on their investment
- reduce global poverty, improve living conditions and support economic development.
Different types of banks play role in facilitating these activities, with money often starting at a major international institution and funnelling through to a local commercial bank.
- A multilateral development bank (MDB) focuses on development and poverty reduction. It provides finance and technical advice to aid development in emerging economies. Many MDBs provide finance that adheres to sustainability, resilience and inclusiveness requirements.
- An investment bank is a financial services company that acts as an intermediary in large and complex financial transactions. It provides financial advice, facilitates mergers and its clients can include corporations, governments and pension funds. Many declare support for energy transition and sustainability, while some continue supporting high-emitting, fossil fuel projects.
- A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. Some are large and multinational in scope, such as HSBC and Citi Group, while others cater to local clients and understand local conditions.
When this system works effectively, resources are directed towards profitable investments. They are also targeted at supporting sustainable economic, social and institutional development.
The installation of distributed generation assets in emerging economies could fulfil both of these objectives.
A project could deliver greater energy security to a remote home or business. It can also provide a reliable return. Clean energy assets typically have higher upfront investment costs and lower operating and fuel expenditures over time, allowing pay back within a short time.
what’s causing the breakdown?
Despite the cost-effectiveness of clean energy, the need for greater energy security and the advantages of distributed generation, there hasn’t been a massive roll out of rooftop solar in emerging economies.
Access to finance remains a key barrier for these countries.
The cost of capital
Emerging markets are different. Decision makers in these countries often face hurdles that keep them from accessing the finance needed to build cost-effective distributed generation.
One such hurdle is the cost of capital, which reflects the expected financial return for investing in a project. This expected return is linked with the amount of risk associated with the project’s cash flows.
Emerging economies will face additional barriers that drive up the cost of capital, such as currency risk or geopolitical risk.
As finance travels from an MDB to a project on the ground, it will face additional costs as each institution takes a separate cut. This pushes the initial credit, which may be at 6 per cent interest, towards 10 per cent or higher.
The bureaucratic process (particularly within local banks) can lead to significant project delays, which has the potential to terminate a project.
A preference for large projects
Multilateral development banks tend to overlook distributed generation projects, which involves a number of smaller installations, limited information and exhaustive due diligence requirements. These banks have typically been accustomed to taking on large, centralised projects, which favor traditional lending models.
Limited domestic capacity
State-owned enterprises account for around half of energy investment in emerging economies. Yet many state-owned utilities are in a poor financial situation and unable to invest in electricity supply and transmission.
Public funds are also scarce, and governments have limited fiscal capacity to respond the the need for greater investment in clean energy. This places further pressure on countries to look externally for solutions.
A lack of understanding about energy transition from investors
The energy transition has brought new technologies into the market and unlocked new ways of thinking about energy.
The financial system, preferring major energy projects, hasn’t updated its systems to match shifting dynamics in the sector, including towards distributed assets.
Finding a way through
Several barriers stand in the way of international financial institutions investing in distributed generation, which can speed up energy access, alleviate energy poverty, provide a return on investment, and contribute towards net zero.
So what are the possible solutions?
Recognise urgency and enhance support
There is an urgent need for the widespread deployment clean energy across all regions in order to limit warming to 1.5°C.
The IEA’s 2022 World Energy Investment Report calls for additional financial and technical support, and capital to bridge the gap between investment in advanced and emerging economies.
Concessional funds (below market finance) and blended public-private finance models can further accelerate development objectives.
Simplify everything
Bureaucratic delays and complications are a clear barrier to investment. Simplifying the process could save time and make an investment in distributed generation more efficient and appealing. This includes:
- Creating an asset class for distributed infrastructure, simplifying the process for investors.
- Standardizing contracts, performance guarantees and other financial processes.
- Creating super funds dedicated to distributed generation in emerging economies.
Shorten the line between donors and recipients
Money provided by the World Bank can go through different institutions before arriving at a recipient.
Shortening the pathway between investor and recipient could unlock greater investment. Could the local banks be circumvented, with MDB money arriving at its customer directly? Could investment banks or major commercial banks play a greater role in facilitating new distributed energy projects?
MDBs are becoming less essential as DG (and other forms of clean energy) slide up the commercial readiness scale and become bankable assets. This creates new opportunities for other actors to invest directly.
Leverage existing solutions
Could lessons about investment in distributed assets in emerging economies be learnt from other sectors? For example, in the agriculture sector and for other SME lending.
Could existing solutions, such as Odyssey Energy Solutions, be scaled and deployed across nations?
Redefine the roles of the key actors
Could we give international finance institutions a stronger strategic mandate to finance clean energy transitions? This may improve the delivery of finance, promote the deployment of blended finance to mobilise additional private capital, or incentivise markets to fund a broader range of clean energy opportunities.
The international community can take steps to improve the borrowing terms of emerging economies, including extending the horizon of credit ratings beyond three years.
Governments can also set supportive policies that encourage greater investment in their countries? Given the rapid deployment of distributed generation, markets can react quickly to effective policy, as demonstrated in Vietnam.
Financial distributed generation in emerging economies is a sticky issue. It has been understood for years, with few breakthroughs.
The following clip is from Episode #21 of the Energy Transition Podcast in 2016 highlighting many of the same issues that remain in 2023.
This is a mid-transition challenge, where the existing fossil-based system coexists alongside a new low-carbon energy system, generating new policy challenges.
| In January 2023, the World Bank announced it would review its operating and financial models to better address the scale of development challenges such as climate change. These reforms may unlock different funding models that could tackle some of the issues listed in this article. |
Balancing the COP-benefit equation
Critics highlight the perceived wastefulness and hypocrisy of UN Climate Change Conferences, commonly known as COPs.
This criticism often centres around the number of flights taken by world leaders, national delegates, NGOs, the research sector, the finance sector, the business sector, the media and others.
Do as we say
In the four days leading up to COP27 in Egypt, 268 aircraft landed at Sharm el-Sheikh airport, carrying between 30,000 and 40,000 delegates.
These flights led to greenhouse gas emissions, which we elaborate on a little later.
Greenhouse gas emissions were also generated by delegates’ energy and transport use on the ground in Sharm El-Sheikh.
In addition to the environmental costs, countries committed public funds to ensure they were represented across the fortnight.
To assess the costs of these COPs, it is important to compare them with the other side of the equation—the benefits.
blah blah blah?
Something often lost in the conversation is why these conferences are held, and the benefits they bring.
So let’s step through each…
Global agreement
In 1992, countries identified a need to address the global problem of climate change.
They came together and adopted the UNFCCC, which set out the basic legal framework and principles for climate change cooperation between countries.
For more on the international climate governance framework, see an earlier post.
Countries have since used COPs to agree collectively on decisions that drive national policies and send a signal to markets on how all 194 countries are aligned on the issue of climate change.
Countries have also used these conferences to agree on technical frameworks related to monitoring, reporting and trading carbon emissions; as well as assessing the different types of risk associated with climate change.
Many delegates landed in Sharm El-Sheikh to negotiate decision text while representing their countries, which may be parties to the three international climate treaties—the Paris Agreement, the United Nations Framework Convention on Climate Change (UNFCCC), and the Kyoto Protocol.
How does it work?
A member from each country will sit in a room like this:
On the screens in front of them, they will see text like this:
And one by one, speakers from each country will request edits until all parties are satisfied. If there is a disagreement, the issue is elevated to a senior level until it is resolved.
The result can be something like this—at COP24 in Poland, countries agreed on the technical rules for a transparency framework, which are presented below.
Why does this matter?
Because transparency enables countries to measure their emissions in a way that is accurate and comparable with other countries.
It shows to everyone whether emissions in a certain part of a country’s economy are decreasing or increasing.
Can you imagine a world without transparency?
Perhaps more importantly, accurate and comparable emissions reporting builds mutual trust and confidence among countries.
And with trust, there can be more global agreement.
And continued agreement across global climate governance’s main areas of contention will increase the likelihood that the world will respond to the climate crisis effectively.
Media attention
Over time COPs have grown in prominence, with the amount of delegates attending steadily increasing since the first COP took place in 1995.
For two weeks of the year, this one event attracts world leaders and considerable media attention.
This attention builds political momentum, which leaders leverage to seek outcomes that they can present to domestic audiences.
For example, COP26 saw the launch of the Global Methane Pledge, which commits to reducing global methane emissions by 30 percent by 2030. The media attention and political momentum generated at COP26 has led to 130 countries since joining the pledge.
As COPs have grown more prominent, more countries have also pitched to host them in the future including Bulgaria in 2024, Brazil in 2025, and Australia in 2026.
Inclusivity
Climate encompasses all sectors of the economy and it will increasingly affect all of us over time.
It will particularly affect those that lack the capacity to safeguard their livelihoods against its threat.
Women, youth, low-income communities, handicapped, indigenous groups, small nations and others affected by inequality and marginalization can sometimes be cast aside during global decision making processes.
To varying degrees, COPs place an emphasis on ensuring all these communities are included under one roof, creating the space for dialogue, understanding and opportunity—something that would otherwise be unlikely to exist.
Knowledge sharing
COPs have also broadened in scope to become a source of knowledge.
From once being a forum for multilateral governance and collective decision making, COPs now increasingly feature a range of technical experts and major players.
These people use the opportunity to present new technologies, exciting breakthroughs, and possible solutions to those who have come along to learn about them.
It is also an opportunity to outline some of the barriers that are preventing these potential solutions becoming results.
Connecting the dots
This takes knowledge sharing a step further.
Amidst greenwashing and empty promises, it can be easy to become cynical about whether governments and businesses are actually willing to do anything about climate change.
But as the costs of low emissions pathways decrease and public pressure for political outcomes increases, governments, NGOs, the research sector, the finance sector, the business sector, and others come together to genuinely explore solutions.
COPs are arguably the world’s biggest climate-related networking event.
And while some of these interactions are deliberate, some occur by accident.
By waiting in line for a coffee at Australia’s pavilion, people would often turn to one another and ask ‘so what brings you to COP27?‘.
These micro-interactions and exchanges of business cards led to conversations and potential opportunities.
On a conference-wide scale, these interactions can be extremely powerful.
A boost to the local economy
40,000 people spent two weeks in Sharm El-Sheikh. They stayed at local hotels, dined at local restaurants and injected millions into the local economy.
Rotating the COPs between the different regional groupings (see below) ensures these local benefits continue to be shared around.
Ratcheting it up
So far we have acknowledged the costs generated by COPs (including some environmental costs) and touched on some of the benefits.
So how can we tip that balance even more, so that the costs are minimized, and the benefits are even greater?
First, it’s worth highlighting that the greenhouse gas emissions generated by 268 flights are comparatively quite small.
If you were to assume:
- the number of delegates was 35,000
- the average one-way journey to Sharm el-Sheikh was 6 hours and
- everyone flies home again…
This would equate to somewhere around 40 Kt of CO2 emitted, or the average daily emissions of a country like El Salvador, Kyrgyzstan or Estonia.
When put alongside the daily emissions of major emitters, the impact of flights to COP27 are microscopic.
But microscopic is still not zero, so how could we reduce these costs even more?
Getting everyone together under one roof achieves a number of benefits relating to interaction, exchange, understanding and agreement. But could some of these be conducted by videoconference?
For example, the Facilitative Sharing of Views is a regular mandated event where countries present on their plans to reduce emissions, and other countries ask them questions. This is just one example of a mandated event that could be entirely virtual with few consequences.
Could emissions associated with a COP be offset?
Taking the flights in isolation, a USD 50 carbon price would equate to just under USD 2 million in carbon offsets—a fraction of the many millions it costs to run a COP.
This money could be invested in real projects that lead to genuine emission reductions.
For more on emissions offsetting, see an earlier post.
What about the benefits? Could they be supercharged?
The layout of COP27 was a mess, with no flow to design of the conference centre and delegates spending considerable time finding the correct rooms.
What if instead, the layout was designed around problem statements, or ‘themes‘.
The casual interactions that occurred in places like Australia’s COP27 pavilion (see above) could be leveraged and applied more deliberately and tactically.
Perhaps a section of the event space could be set up so that businesses, researchers and governments could focus on a key issue, like how to make renewable energy reliable and affordable.
Another change could see the different innovative ideas generated outside the formal negotiations fed back into them.
Often, there is a split across the itinerary and the conference venue between the formal negotiations at COPs, and everything else.
Country negotiators file into rooms and haggle over sentences and words, often late into the evening.
Across other parts of the venue, people can be seen hearing people’s stories and ideas, as well as exploring some of the new solutions that are on show.
Being able to merge the two and feed new ideas into the negotiations could open doors for countries to find common ground and explore new solutions.
Aside from those, the single most important way to get the most out of a COP is this:
Citizens need to put pressure on countries to find agreement on strong, ambitious language that guides national policies and businesses towards net zero emissions as soon as possible.
After all, what is the point in committing so much money and emitting so many greenhouse gases, if the result is lukewarm?
It’s worth it
Quite often the costs of something are evident, while the benefits can be harder to capture. For example, when we pay taxes, insurance premiums, or even when we pay for education, the costs are upfront but the benefits are either not guaranteed, opaque, or delivered some time in the future.
We are right to scrutinise the costs of these events and the benefits they bring, but a fair assessment means weighing the costs and benefits alongside one another.
Transparency is not sexy. It doesn’t make headlines or attract eyeballs, but it is vitally important if countries are going to trust one another to reduce emissions.
The transparency framework only existed after years to discussions, trust-building, compromise and agreement.
A meme like this, does attract eyeballs.
These are not genuine counterarguments—they are snapshots that make people question the truth and ultimately, delay or blocks responses to climate change. These snapshots work because they are novel and tap into our values.
For more on derailing debate, see an earlier post.
In reality, the emissions from flights to COP27 were a fraction (of a fraction) of global emissions. The agreements, breakthroughs and media attention that can emerge from COPs overwhelmingly justify it.
Mega-what? Simplifying the size of renewables
In January 2023, an article suggested India’s corporate sector could deploy an extra 45 gigawatts (GW) of renewable energy by 2027.
And some of you might be like…
So we went ahead and worked out…
- what 45 GW means and…
- how it fits alongside other forms of energy
The Newton: Force
Let’s begin with the Newton, which measures force.
1 Newton is the force required to make a mass of 1 kilogram accelerate at a rate of one metre per second squared.
Is it also the force of Earth’s gravity applied to a mass of something weighing about 102 grams.
So if a 102 gram object (like an apple) sits on a flat surface, it is applying 1 Newton of force.
The joule: Work
A Joule is the amount of energy transferred to an object when a force of 1 Newton is applied to it over a distance of 1 metre.
In the graphic below, the 102g apple is lifted 1 metre. By doing so, 1 Joule of energy is used.
You can also think of a Joule as work.
The watt: POWER
A Watt is a measure of power and is equal to 1 Joule being transferred per second.
In the graphic below, two apples are lifted. In each case, it spends 1 Joule of energy.
However, the hand on the left lifts the apple in 1 second. The apple on the right is lifted in half the time, 0.5 seconds.
Because 1 Joule is used over 1 second, we can tell that 1 Watt of power is generated.
Because the apple on the right is lifted in half the time, it generates twice as many Watts as the apple on the left.
bulb to Bhadla
To put the size of watts into context, we can begin with common items from the household.
We encounter watts in everyday life. For example, on lightbulbs, on our laptops and on other household appliances.
Global per capita energy consumption averages 2,500 watts, or 2.5 kilowatts (kW). This figure is higher in high-consuming, advanced economies such as the United States.
As we move to larger sizes, we can see that 100 kilowatts would power many homes.
2500 kilowatts, or 2.5 megawatts (MW), is the capacity of an average onshore wind turbine.
Offshore wind turbines are even larger, with one of the largest pushing 15 MW. A medium sized solar farm, like Limondale in Australia, is around 300 MW.
Limondale is dwarfed by India’s Bhadla Solar Park, which has a capacity of 2,700 MW, or 2.7 gigawatts (GW). This is roughly the same capacity as many large fossil-fuel plants.
The nameplate capacity of Palo Verde Nuclear Plant, the largest in the United States, is 3,937 MW. Yet this size appears tiny when viewed alongside humanity’s total power requirements.
Our future energy needs will increase due to three factors. These are population growth, an increase in standards of living across emerging economies, and greater electrification.
Electrification means switching to electricity as an input and moving away from incumbent fuels. For example, a car with a typical combustion engine can be switched for an electric vehicle. As clean energy is generated in the form of electricity, a switch to electric is often part of sectoral efforts to decarbonize.
Wedged between Palo Verde and India’s 2030 renewable energy target is the figure from the top of the page—45 GW.
To this point, the graphics above have displayed one type of unit for energy—the watt. Using watts to measure energy assumes the facility generating it was operating at full capacity in ideal conditions.
To account for electricity being made and used irregularly, the kilowatt-hour is used.
Watt-hours
A watt-hour (Wh) is a unit of energy that equates to 1 Watt of power sustained for 1 hour.
The kilowatt-hour (kWh) is more often used in practical settings. The formula remains the same: one kilowatt of power sustained for one hour is one kilowatt-hour.
The two animations below demonstrate how a watt-hour works.
In the first animation, a 10 watt energy source delivers power to a battery over an hour. This equals 10 watt-hours.
In the second, the same 10 watt energy source delivers power to a battery over two hours. This equals 5 watt-hours.
You could exchange watts for kilowatts and the formula would remain the same. A 10 kilowatt energy source delivering power over two hours would equate to 5 kilowatt-hours.
| Item | Generation (kWh) |
| 5 hours of direct sunlight on a 300 watt solar panel | 1.5 |
| Energy required to cool a refrigerator for 3 months | 1,000 |
| Per capita energy consumption (India) | 7,000 |
| Per capita energy consumption (USA) | 76,500 |
| Enough energy to power around 250,000 homes | 1,000,000 |
| IEA Net Zero Scenario: Renewable energy generation in 2050 | 64,500,000,000,000 |
| IEA Net Zero Scenario: Total energy generation in 2050 | 73,000,000,000,000 |
A final word
This post has clarified what is a watt and the ways to explain the different scales of power. The article at the top of the page suggested India could add 45 GW of renewables in the corporate sector by 2027.
India’s current total installed capacity of electricity is over 400 GW. It is aiming for 500 GW of installed renewable energy by 2030. So, the extra 45 GW would be a welcome addition towards that target.
If the world is to meet the goals of the Paris Agreement, it must achieve net zero emissions by mid-century. A key part of this is building new renewable energy assets at a scale well beyond India’s domestic target.
The amount of greenhouse gases in the atmosphere is rising faster than usual
Let’s start at the very beginning
Short-wave radiation passes through the atmosphere and reflects off the Earth’s surface as long-wave radiation.
A lot of this radiation is emitted straight into space, but there are gases that trap the rest.
If it weren’t for these gases trapping the radiation, Earth would be about 30°C cooler.
Increased greenhouse gas concentration in the atmosphere leads to increased retention of radiation (and heat).
This is the enhanced greenhouse effect, and you can read more about it here.
Yet, the amount of greenhouse gases in the atmosphere is rising faster than usual.
So, how do we know what is ‘usual’?
No, not like that!
To determine what is ‘usual‘ for greenhouse gases, we need an ongoing set of reliable data.
For recent data, we can use instruments
This includes thermometers and other modern measuring instruments. These allow us to measure data from about the last 200 years.
For data that is older, we can use biological indicators that preserve climate records.
- Tree rings give us data from about the last 2,000 years.
- Glaciers give us data from about the last 12,000 years.
- Ice cores give us data from about the last 800,000 years.
- Geological evidence gives us data to about 40 million years ago.
Ice cores
Ice cores are tubes of ice that researchers extract from a large ice sheet. They contain trapped ice that can be hundreds of thousands of years old.
They provide one of the richest sources of past climate information because of the ice and the other materials trapped in it. This allows scientists to understand different conditions over long periods of time.
Ice cores capture a record that is long enough to account for variations in climate between ice ages and non-ice ages. Researchers can also view them alongside other geological records around the world to match findings.
Some of the more well-known and useful ice cores are the Vostok ice cores, which were extracted in Antarctica.
In more recent times, the Mauna Loa Observatory in Hawaii has allowed scientists to measure carbon dioxide (CO2) concentrations in the atmosphere. When this information is viewed alongside information found in ice cores, we begin to understand why today’s levels of greenhouse gases may be outside of what is considered ‘usual‘.
Parts per million
Using the sources listed above, we know for at least the last 400,000 years, CO2 has hovered between 190 and 270 parts per million (ppm).
It may even be the last 800,000 years.
Yes, parts per million.
What does that mean?
Imagine a 100 x 100 x 100 cube. This would equate to a million parts and if we were to apply the 190 to 270 ppm as a single cube inside of it, it might look something like this.
And so you might be thinking…
How could something so small make such a large impact?
While it seems tiny, it’s normal to find cases in the natural world where a small concentration of something is significant enough to lead to change.
Snake venom, which exists in small concentrations, can still be enough to make an impact.
A 0.05 per cent blood alcohol reading is 500 ppm.
Iron is only 4.4 ppm of your body’s atoms yet changes in iron can be damaging for health.
John Cook’s Skeptical Science outlines a series of other similar ‘small’ quantities, which are not insignificant.
We are no longer in the ‘usual’
From the end of the last ice age, a 50 ppm increase took no more than 1,000 years and was driven by small changes in Earth’s orbit.
The next 50 ppm increase took 200 years.
The next 50 ppm increase occurred between 1970 and 2000.
We are now at about 415 ppm and increasing at about 2 ppm per year. Over recent decades this appears to be accelerating.
It probably hasn’t been this high for 2,000,000 to 4,000,000 years.
Learn to swim
As a species, we are well and truly in uncharted waters in regard to atmospheric CO2.
You can keep up here.
So, what’s the driving cause of this sharp increase in CO2?
Nope
Not really
Bingo
Scientists estimate burning of fossil fuel (which has allowed humans to switch on lights, perform brain surgery, and go to the Moon) is responsible for about 75 per cent of recent greenhouse gas emissions, with deforestation responsible for most of the rest.
It’s worth noting that plants, soils and oceans absorb a lot of the CO2 humans have put out.
But as we will see, a sizeable amount has remained in the atmosphere.
The lowdown
What’s important to know is that we have hit a pattern that deviates substantially from the norm.
Note the acceleration since 1950.
We have deviated substantially from the conditions that allowed life to flourish during the Holocene—the geological epoch with comfortable, stable climate conditions that have allowed our civilisation to flourish.
Or in other words:
While conditions on Earth have fluctuated over 4.5 billion years, it is this recent period of stability that has allowed us to build modern life as we know it.
The speed at which levels of CO2 are changing, as well as the attribution to human activity, means the transition we are experiencing is not normal.
| A word on the other gases Carbon dioxide and greenhouse gases are often used interchangeably. In reality, carbon dioxide comprises around 75 per cent of all greenhouse gases. Other gases include methane (17 per cent) and nitrous oxide (6 per cent). While less is less methane in the atmosphere, it has a higher ‘radiative forcing’, that is, one tonne of methane contributes more to warming than one tonne of carbon dioxide. You can read more about greenhouse gases here |
Next: Global average temperature is rising faster than usual
Global average temperatures are rising faster than usual
One of the problems with explaining temperature change over time, is understanding time itself.
Because inevitably, you run into this:
Understanding time
The Earth is around 4,500 million years old.
To put 4,500 million years into perspective, put your hands in front of you, about a metre apart, like this…
If you then equated that distance to a 100 year period, like this…
…then 4,500 million years would equate to around 40,000 km, which is roughly the circumference of the Earth.
If we applied a 100 year-to-90 cm scale to other significant events in the Earth’s and human history, it might look something like this…
| Years ago | Significance | Scaled |
|---|---|---|
| 100 | 4 generations | 90 cm |
| 4.5 thousand | Pyramids at Giza | 40 m |
| 12.5 thousand | Start of Holocene | 100 m |
| 130 thousand | Modern humans | 1.1 km |
| 250 thousand | Early humans | 2.2 km |
| 500 thousand | Vostok ice core | 4.5 km |
| 2.6 million | Last ice age begins | 23 km |
| 50 million | Indian subcontinent collides with Asia | 440 km |
| 65 million | Last dinosaurs | 575 km |
| 200 million | Pangea starts to break apart | 1,8oo km |
| 400 million | First land plants | 3,500 km |
| 500 to 1,000 million | Geological records that indicate temperature change (approx) | 4,500 to 9,000 km |
| 3.9 billion | First life | 34,500 km |
| 4.5 billion | Age of Earth | 40,000 km |
Yes, temperature has fluctuated over the Earth’s history.
Over 4,500 million years, the Earth has seen no ice at the poles, it has frozen over completely, and has seen everything between.
We know this because there is evidence—in the rocks, in the ice, and in the trees.
We call these proxies.
We can’t see evidence for the whole 4,500 million years. Yet, geological records allow us to understand temperature variations to around 500 million years ago. There is some evidence this extends to around 1,000 million years ago
Using the 100 year-to-90 cm scale, 500 million years would be about the same as the distance from London to Tehran. 1,000 million years would be London to Seoul.
This evidence tells us this time scale has experienced periods of extreme warming and cooling each lasting millions of years. It also reveals that the transitions between these periods lasted millions of years too.
When the Earth is hot, and the poles experience no ice and warm temperatures, we call it Greenhouse Earth.
The Earth has been in the state for most of its known existence.
The other extreme,Icehouse Earth, is much like the recent Ice Age, which began around 3 million years ago and continues today.
The following is simplified version of the broad fluctuations between Greenhouse and Icehouse Earth over the past 500 million years. Using the 100 year-to-90 cm scale this would equate to the distance between London and Tehran.
For example, there have been around five known Icehouse periods, three of which would fit within the time parameters of this figure — the Andean-Saharan (briefly around 450 mya) Paleozoic (360–260 mya) Late Cenozoic Ice Age (since 34 mya)
So what causes these million-year scale fluctuations?
They are driven by long-term, major events. These events either occur in isolation, or in conjunction with one another, to trigger the conditions that lead the Earth into a new climatic state. This includes:
The LAST 65 MILLION YEARS
Let’s take that 500 million year time frame and look at the last 65 million years.
The last 65 million years, or the distance between London and Western Germany, provides further context for the recent warming.
Apologies in advance! the x-axis now flips from left-to-right to right-to-left.
This graph demonstrates a gradual decline in temperature over the last 65 million years. It measures temperature by using oxygen isotope measurements in foraminifera fossils as proxies.
(1) The Paleocene–Eocene Thermal Maximum (PETM) — a sudden spike in temperature driven by a massive carbon release into the atmosphere.
The PETM caused a temperature increase over 20,000 years of another 5°C on top of that — leaving little to no ice on Earth.
While the exact cause of the carbon release is contested, the event has allowed scientists to understand a very unique climatic event. The event has shaped scientists’ understanding of today’s climate change
Estimates of carbon release during the PETM range between 3,000 and 7,000 gigatonnes over a 3,000 to 20,000 year timeframe.
On a carbon per year average, it would look something like this, with the low end estimate on the left, and the high end estimate on the right:
To give you an idea of today’s rate of emissions, this is how these two PETM estimates are dwarfed alongside emissions averaged over the last 250 years…
Back to this…
(2) The Earth then enters a period of long term cooling, in part due to the collision of India and Eurasia, which causes the Himalayas to rise.
The cooling continues, with a major cooling event occurring around 30 million years ago and ice sheets returning to polar regions.
The cooling is believed to have been partly caused by the separation of Australia and Antarctica. The separation created a deep water passage and changed global heat transport.
The cooling event occurs over thousands of years.
In fact, the changes mentioned above, sometimes gradual, sometimes abrupt, each occur over several thousands or millions of years.
Using the 100 year-to-90 cm scale, this represents kilometres of distance.
(3) Around 25 million years ago, the Earth warms again, before gradually cooling. Earth’s ice sheets begin to form their present day size and thickness.
(4) Alongside these broad fluctuations, shorter fluctuations are observed.
The ‘shorter’ fluctuations
The Earth has fluctuated between periods of extreme warming and cooling that have lasted of millions of years.
We are currently within one of those cooling periods—Icehouse Earth.
Within icehouse periods, the Earth experiences glacial and interglacial periods, which last thousands of years.
| Glacial period | Interglacial period |
| *Proper cold *Polar and mountain ice sheets aplenty *Ice sheets blanket North America and northern Europe | *Less cold *Pretty much like now |
Here are the last 800 thousand years. The fluctuations in carbon dioxide (CO2) are driven by shifts between glacial and interglacial periods.
800,000 years equates to 7 kilometres down the road.
But what’s causing the fluctuations between glacials and interglacials?
In 1938, Serbian scientist Milutin Milankovitch observed that the most likely cause was the variation in the intensity and timing of heat from the sun.
He pointed out three such variations: procession, tilt and eccentricity.
- Procession of the equinoxes: The wobble of the axis, every 22,000 years, or 200 metres
- Tilt: The obliquity of the Earth’s tilt, every 41,000 years, or 350 metres
- Eccentricity: The switch between circular and elliptical orbits, every 100,000 years or 900 metres
And over thousands of years, these orbital processes influenced a series of other changes in the climate system. This includes melting ice sheets, which alter ocean circulation and transfer of heat around the Earth.
These processes ultimately change the climate.
The regularity of the orbital changes means the Earth switches between glacial and interglacial cycles periodically.
We are currently in an interglacial period, the green spike circled in red.
This period is otherwise known as the Holocene.
Ahh the Holocene —comfortable, stable climate conditions that have allowed human civilisation to flourish.
The Earth first entered the Holocene around 12,000 years ago; that is, about 100 metres.
From changes over millions of years and fluctuations over thousands of years, we are left with just over ten thousand years—the last little green chunk in the graph above.
And it is at this point, that everything else falls into place.
The last 12,000
A re-constructed record of global temperature over the last 12,000 years shows a period of stability, with a gradual decrease followed by a very sharp increase.
Over last two thousand years, about 20 metres, the trend becomes more clear.
Since 1850
The year 1850 is a big deal.
We finally have instruments that can measure temperatures, and we have a long enough period to assess change.
Over this period, we can see a clear increase in global temperature, with a sharp increase since the 1970s.
And so here we are, a short history of temperature change throughout time.
Yes, Earth’s climate has always changed.
Sometimes it’s been covered in ice, sometimes reptiles have lived in Arctic regions.
Denialists will point to this as evidence that the fluctuations are part of natural cycles, casting doubt on today’s human-induced change.
However, the rate of change in the past compared to recent history means this time it’s different.
Previous: The amount of greenhouse gases in the atmosphere is rising faster than usual | Next: Global average temperature will continue to rise
Temperature will continue to rise
The last page highlighted increasing temperature over time.
This chapter outlines what happens next.
What’s a couple of degrees?
We’ve known for a while that increasing emissions of greenhouse gases leads to warming.
IPCC Synthesis Reports have told us this with increasing amounts of evidence and certainty in:
1990
1995
2001
2007
2014
For example, in 1990 under the worst case scenario, average global emissions were modelled to lead to 1°C warming above the historical average by 2025 and and 3°C by the end of century.
Scientific understanding has improved over time and our knowledge of how the climate works has become more certain.
The most up to date evidence of this is found in the 2018 IPCC special report on the impacts of warming of 1.5°C. It built on all the reports listed above, and added:
- Human activities are estimated to have already caused around 1.0°C of global warming.
- Warming is likely to reach 1.5°C between 2030 and 2052 if it continues to increase at the current rate.
- Warming caused by humans will persist for centuries to millennia and will continue to cause further long-term changes in the climate system.
1.5 and 2 degrees – what’s the big deal?
A vehicle travelling 35 miles per hour hits an object with twice as much force as one travelling 25 miles per hour, even though the speed has only increased by 40 per cent.
Similarly, the difference between a 1.5 and 2 degree temperature rise seems negligible.
But a little increase leads to disproportionate consequences.
The 1.5°C special report highlights some of the differences in risks between 1.5°C and 2°C, stating:
- Climate-related risks for natural and human systems are higher for global warming of 1.5°C than at present, but lower than at 2°C.
What are some of these risks?
At 2°C, many of these risks increase. Even though it is just 0.5 degrees, in some cases the risks double.
For example:
At 1.5°C warming, about 14 per cent of Earth’s population are projected to be exposed to severe heatwaves at least once every five years, while at 2°C degrees warming, that number jumps to 37 per cent.
But hang on…
Of course floods, droughts, cyclones, bushfires and heatwaves have always been around.
But the key word is risk.
RISK = CONSEQUENCE x LIKELIHOOD
As the globe is allowed to continue to heat, the risk of something happening increases.
It is more likely to happen, and when it does, the consequence will be greater.
We may not see it happen in a single year, and we shouldn’t attribute any one single flood to climate change; but gradually over time, the trend will move from the bottom left to the top right of the risk matrix.
The changes will not be universal. Some areas will suffer more than others for two reasons.
1. They are disproportionately affected by the climatic effects
To date, the impacts of climate change have not been evenly dispersed across the planet and it is projected that they won’t be in the future.
Temperatures are projected increase at different rates, with warming generally higher over land areas than oceans.
Trends currently show that the strongest warming is happening in the Arctic during its cool seasons, and in Earth’s mid-latitude regions during the warm season.
2. Different regions have different capacities to adapt to impacts
A shifting climate may mean that a region receives less rainfall over time, affecting dam levels and water security.
Imagine if this were to happen in a modern city with robust governance. Say, Perth in Western Australia.
Authorities in Perth might manage water availability as dam levels decreased or they might even have the capacity to bring in emergency water with trucks.
If water restrictions affected businesses and the economy, the state could intervene with support.
Over time, it might put in place new water infrastructure, like new pipelines or a desalination plant.
Apply the same scenario to Mogadishu, Somalia and you can begin to see how those ill equipped to deal with climate stressors — for example, because of poor infrastructure or weak governance — can lead to consequences.
A region’s vulnerability is heightened or mitigated by its capacity to adapt.
beyond 2 degrees – what does it mean
At 1.5°C sea level is projected to rise by about 65cm by 2100, the planet will experience some coral reef deaths, it will experience some crop failure and a high risk of species extinction.
At 2°C, the sea rise increases to 80cm, there is widespread coral bleaching and global crop decline.
Beyond 2.0°C, the risks are exacerbated once more and the probability of ecosystem collapses and breaching tipping points increases sharply.
| 1.5°C | 2.0°C | 3 to 4°C |
| Sea level rise by 2100 65cm | Sea level rise by 2100 80cm | Sea level rise by 2100 1m |
| Increased water stress | Glacial retreat reduces water availability in Europe and Americas | |
| Some coral reef mortality | Loss of Indian Ocean coral reefs, widespread bleaching | Gas release from permafrost triples |
| High extinction risk for species | Increased extinction risk | 50% risk of collapse of Atlantic Ocean circulation |
| Some crop failure | Global crop decline | Risk of disintegration of West Antarctic Ice Sheet |
And if you just isolate 1.5°C and 2°C…
| 1.5°C | 2.0°C | Impact of 1.5°C compared to 2.0°C | |
| Loss of plant species | 8% of plants will lose 1/2 of their habitable area | 16% of plants will lose 1/2 of their habitable area | 2x worse |
| Loss of insect species | 6% of plants will lose 1/2 of their habitable area | 18% of plants will lose 1/2 of their habitable area | 3x worse |
| Coral reef decline | 70% to 90% | 99% | Up to 29% worse |
| Extreme heat | 15% of the global population exposed to severe heat every 1 in 5 years | 37% of the global population exposed to severe heat every 1 in 5 years | 2.6x worse |
| Ice free Arctic summers | At least once every 100 years | At least once every 10 years | 10x worse |
But it’s not about that.
It’s not about the sea rising to your knees. It’s not about the extra 40°C day here and there.
It’s not about the 1 in 100 year flooding event that occurs, and occurs again.
Everything is interconnected
This is perhaps one of the most misunderstood parts of the climate equation.
A small increase in temperature isn’t just a small increase in temperature. It’s a pressure point.
Think about a drought.
Yes, it doesn’t rain for a bit. This probably means crop damage, less water availability, more soil erosion and increase fire risk.
But scratch the surface and it also means an increased cost of food, job losses and reduced incomes.
And with those job losses and reduced incomes may lead to crime, health impacts, domestic violence…
And on it goes.
what are we on track for?
The IPCCs Representative Concentration Pathways assess different futures under selected climate scenarios. Using modelling, they equate greenhouse gas emission output with an end of century global temperature increase.
While these pathways produce a variety of outcomes, we can assess with a fair degree of certainty that warming will not continue in perpetuity.
The IPCC 1.5 degree report says warming is likely to reach 1.5°C between 2030 and 2052 if it continues to increase at the current rate. From there, it may continue on to beyond, perhaps even well beyond 2°C, by the end of the century.
Others say that if you factor in country policies around the world, the warming may be closer to 3°C by the end of the century, with pledges taking it closer to 2°C at best.
| Update November 2021 In the lead-up to COP26, a number of countries announced new pledges and targets. The IEA has released new analysis stating that if these pledges were implemented, warming could remain at 1.8°C by the end of the century. The Climate Action Tracker has also released analysis stating pledges, if implemented, would limit warming to 1.7°C to 2.1°C. |
But this relies on a crucial aspect — it’s one thing to set a target 🎯 but it doesn’t count for much if you aren’t able to implement it or you’re not on track to meet it.
A handful countries are on track.
Others are heading in the right direction, but need to do more, fast.
And for some, it’s really hard to see how they will achieve what they’ve pledged.
So the conclusion one can draw, is that the world is on track for a temperature closer to 3°C and everything that it entails, including around 1 metre of sea level rise, reduced water availability from glacial retreat, and the risk of breaching ecological tipping points.
Amongst the hype and the denial and the chaos, you’ll be hard pressed to find an expert in the field who disagrees.
This is the seriousness of the matter and reality we face.
There is still time to course-correct, but it’s grim, and young people are justified in being concerned about a temperature that will continue to rise.
Previous: Global average temperatures are rising faster than usual | Next: We can confidently attribute temperature change to human activity
Further reading:
NASA, A Degree of Concern: Why Global Temperatures Matter
Carbon Brief, Do COP26 promises keep global warming below 2C?
We can confidently attribute temperature change to human activity
As science was advancing in the 19th century, researchers began to understand the idea that there could be natural changes in the climate over time.
Some scientists began to propose that humans could have influence over these changes.
But it wasn’t until the 1960s that evidence of a warming effect from carbon dioxide became increasingly convincing.
We know there are many things that can warm (or cool) the planet— the circulation patterns of the ocean, radiation from the sun, plate tectonics and volcanic eruptions.
But how do we know that humans have driven the most recent warming?
There’s something happening here…
Yes, something’s happening.
And we have the ability to look back and see temperature records and geological evidence that tells us that something is happening. The records also tell us that recent trends sit outside the range of natural variability.
We also know something’s happening because we have been observing the effects in lots of different places.
For example, ice sheets and glaciers are shrinking, while sea levels are rising. Snow melts sooner in the spring, plants flower earlier. Extreme weather has become more extreme.
Projecting forward
Since the 1970s, scientists have tried to model what future trends might look like based on greenhouse gas emissions and temperature rise.
A number of these models are based on the idea of climate sensitivity—a measure of how warming responds to greenhouse gases.
If humans are to have an influence of the climate, there needs to be an observable relation between emissions, temperature and other effects.
One of the earliest modellers was Professor Wally Broecker, who in 1975 estimated that by the year 2010, CO2 would be around 403 parts per million (ppm) and temperature increase around 1.1°C above pre-1900 levels, an estimate that was remarkably close to observed levels of 393 ppm and 0.9°C of warming.
Since then, modelling for climate has advanced at scale and continues to project climatic outcomes with reasonable accuracy.
Ruling out other explanations
Let’s begin with a graphic from an earlier post, which showed how unusual recent warming is when compared with the last 2,000 years.
Now let’s isolate temperature change since 1880.
One of the more common myths about causes of climate change is solar activity. The theory being that increased solar activity has caused the globe to get warmer.
The Sun explains some of the increase in average global temperature, but its a relatively small amount and has had little effect on the overall climate.
Moving along….
Could it be volcanoes?
Not really. Humans emit over 100 times more CO2 than volcanoes and volcanic eruptions also emit short-lived cooling sulfates.
Is it orbital processes?
As mentioned, orbital processes affect the climate over longer time scales—in the tens of thousands of years.
In fact, almost every factor is inconsistent with the level or warming observed in recent decades. You can look at each and every one of them in detail, with peer-reviewed evidence at Skeptical Science.
The final chart is greenhouse gases, which are almost 50 per cent higher than they were in the pre-industrial era.
It’s no contest.
Source: US Global Change Research Program
Update February 2022: See also Climate Change Deniers vs The Consensus
Previous: Temperature will continue to rise | Next: Biophysical processes are not always gradual and linear, but sometimes lead to a sudden change of state.
Biophysical processes are not always gradual and linear, but sometimes lead to a sudden change of state
One of the greatest challenges in addressing the climate crisis is the ability for humans to perceive change over long time periods.
Another is human propensity to understand processes beyond direct cause and effect.
You do something, you get a response. It is gradual, immediate and predictable.
But there’s another way.
Sometimes processes reach a point where they abruptly turn into something else.
And this applies to the climate system, but it can also apply in everyday life.
The hydraulic press presses down on the ball. For a time, the pressure (induced change) is constant as is the response. Abruptly, the ball changes state and explodes.
A toxic substance is poured into a clean lake. The pouring of the substance is constant and so is the response. Abruptly, the toxic substance comes to a point where it kills animal and plant life and the lake is no longer safe for use.
You drink 8 beers every day. The drinking is constant so is the response. Abruptly, you get ill more frequently and more serious life-threatening diseases develop.
You treat your spouse terribly. They put up with it for a while. Abruptly, they leave the relationship.
The same can be said about natural ecosystems and the climate. Pressures that could ‘tip‘ it past a threshold and into a new state, with no return.
We have also observed global tipping points in the historical palaeo-climatic record, including sudden shifts into ice ages.
Scientists believe there could be at least 9 tipping points.
| What is it | What does it mean? |
| 1. Greenland ice sheet disintegrates | 7 metres of sea level rise |
| 2. Permafrost loss | Sharp increase in emissions which are otherwise trapped under frozen carbon-rich soil |
| 3. Boreal forest shift | Stored carbon would be lost |
| 4. Atlantic meridional overturning circulation (AMOC) breakdown | Ocean circulation disrupted. Western Europe and North America several degrees cooler. |
| 5. Amazon rainforest dieback | Biodiversity loss and decreased rainfall |
| 6. West African monsoon shift | Agriculture disrupted and a change in ecosystem |
| 7. Indian monsoon shift | Agriculture disrupted and more extreme rainfall |
| 8. West Antarctic ice sheet disintegration | 3 metres of sea level rise |
| 9. Coral reef die-off | Ecosystem change and fisheries loss |
Around 20 years ago it was believed these impacts would be unlocked at around 5°C of warming. It is now understood that some of these points may be tipped at between 1 and 2°C of warming.
Some may already be ‘tipping’, with the AMOC (point 4) having weakened by some 15 per cent.
While some of these thresholds are starting to be crossed, time is still on humanity’s side and efforts can prevent further damage. For example, the melting of the Greenland ice sheet (point 1) could be around ten times faster at 2°C of warming compared to 1.5°C.
Evidence is mounting that these events may be interconnected. For example, Arctic sea ice loss and Greenland melting drives fresh water into the ocean. This could affect the slowdown of the AMOC, which could destabilise the West African monsoon and dry the Amazon and heat the Southern Ocean, which could speed up Arctic ice loss.
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Getting to zero is the goal and until then the planet has a remaining ‘carbon budget’
We can expect continued warming throughout the 21st century and beyond until the level of greenhouse gases are reduced to zero.
Increasing emissions results in temperature increase, keeping them the same results in increase. The only option for long term temperature stability is zero.
As in, all power generation, all heavy industry, all transport pretty much has to go to zero emissions by 2050.
It’s pretty much rather than definitely must for two reasons. Firstly, the Earth doesn’t wear a wristwatch with a nice neat ‘2050’ on it. In reality, we give ourselves the best shot if we reduce emissions to zero ASAP, with the middle of the century a realistic objective.
Second, net zero is not absolute zero. The Earth is made of emissions sources — cars, factories and volcanoes and sinks, which absorb CO2 — trees, oceans. Net zero means that between these sources and sinks, the net result is zero.
Putting aside negative emissions technologies for one moment, the best way to enhance sinks is to reinforce and protect the natural environment.
This leaves us with a remaining budget.
It’s like any other type of budget. How quickly you spend it determines how long it will last.
If you had $1,000 in your pocket to last a month. You have the option to gradually draw on it, or spend it all at once.
Or alternatively, Greg wants to lose 10 kg in 10 weeks. To do so he needs to maintain a calorie average balance of 2000 kCal per day.
His source is food, his sink is exercise. His budget is the average daily calories times 70 days. He begins at Day 0 and gradually loses weight at a steady pace.
Alternatively, Greg can ignore the diet for the first five weeks and to lose the same amount of weight, he must crash diet in the last weight.
In the same vein, the longer humanity waits to begin the descent to zero, the harder and more costly the task is.
At the current rate of emissions, the budget to hold warming to 1.5°C would be used up in just under 10 years, which is where these headlines originate.
| UPDATE APRIL 2022: The Financial Times has created a game that allows users to select policies in order to reach net zero https://ig.ft.com/climate-game |
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