2021 – we live in quite challenging times and we are facing many different problems that need to be tackled.
For more than 1.5 years, the whole world is suffering from the COVID-19 pandemic and although the likelihood of such a pandemic was predicted by health experts for more than a decade, we have not been prepared for it. It has brought much sorrow and pain upon us, also because of many mistakes being made, and the structural problems that we were exposed to.
However, even in these “dark days” there are good news: Science, research and tech did make the difference. Never before, reliable vaccines have been developed so quickly, and great progress is underway in the development of antivirals. But, even if we overcome COVID-19 with one black eye, it is more than likely that this was not the last pandemic.
A further burden has been the natural disasters that occured in the last few months. In Germany, we had major floodings due to extremely heavy rain of more than 200 liters per sqm within one day. Entire towns have been destroyed, people lost their lives and many lost everything they owned, indeed facing nothingness. The costs of this catastrophy are expected to be beyond billions of Euros (first estimation ~ 10 billion). At the same time, we saw – as already over the last years – burning forrests in many places of the world, that led to huge emissions and wood that is lost for decades. Along with this, we had incredible temperatures (the thermometers showed over 50 degrees celsius) not only in California or the Death Valley (where you somehow can expect it), but in northern places of Canada and Finland for instance; another major health risk for people’s lives. All over the world, these extreme weather conditions are on the rise, for years now, giving clear evidence of the ongoing climate change that we might be seeing much more of soon.
These are only two actual examples for the challenges of mankind but there are many more, which I have clustered into the four following categories.
Thus, in the meantime, everyone should be aware that we urgently need to protect our world in order to protect mankind. And as the two examples should underline, what needs to be done is going far beyond of what is labelled climate protection. Further, everyone needs to become aware that all the challenges are interconnected, a fact that needs to be taken into account when working on solutions. Last but not least, these are all global challenges and no one can solve them alone. However, someone needs to take the lead and it could be Europe.
In order to reduce complexity, let’s focus on the climate catastrophy. But even then, we need to look at two different dimensions.
Firstly: We have to make sure to reach our climate protection goals, by creating a Net Zero CO2 Emission World at the latest by 2050, as agreed upon in the COP21 Paris Agreement. We’d better have done it already, given that we know about it for at least half a century – refering to the findings of the Club of Rome. However, it is in our interest to reduce the impact of climate change to the maximum extent possible and to maybe even stop it.
Secondly: We have to accept that the climate will further change, and that we will increasingly experience extreme weather conditions and natural disasters . Consequently, we have to accept living with uncertainties and we need to adapt to these uncertainties. Thus, we need better warning systems, we need to work on better protection measures, and generally become more resilient.
To address both dimensions, a remodelling of our economies is required, and a different treatment of nature. And, we should do so fast whilst in global cooperation in order to be efficient and to save costs. Prevention will be cheaper than rebuilding!
I firmly believe in the power of tech and business, and am convinced that if we do it right, it will offer us profitable businesses and even increase economic welfare of societies, compared to conducting business as usual. I believe Europe should be leading this development.
Having detected a problem the starting point for all actions to solve it is the WHAT?
If we remind ourselves on the first dimension above, the question of WHAT needs to be done to reach our climate goal has been answered for good. In Germany, we have reached consensus throughout the majority of our society and the political goals for carbon reductions over time have been set quit ambitious (climate neutrality by 2045), not least because of the enforced improvement by the federal constitutional court.
But now, we are coming to the tricky part because we need to answer the HOW?
HOW do we reach the WHAT? The answer is inevitably linked to the overarching question of how do we want to live in future? I am afraid we unfortunately do not have the time to answer this question in full, but we might easily agree upon it that we shall keep, or even increase, quality of life. Also, that we should avoid making the same mistakes we did, for instance, with respect to nuclear power. We need to take into account the whole lifecycle of any solution and build circular solutions. Looking at the HOW, I am convinced that we will not reach our goal if we only work with bans. If we create the right framework and regulations whilst believing in ourselves, the creativity of people and the art of engineering – for which we have always been famous in Europe – then tech will deliver the required solutions. And, if there are still unsolved issues and absolute transparency is guaranteed, then the one or other ban , or let us better say, a change in behaviour, will be commonly accepted. Especially in Germany, we have to get rid of our scepticism. I can already hear all the doubts, that we have less than 25 years left to reach our Net Zero Emission Goal, but please recall that JFK announced at the beginning of the 1960s, that America will bring the first man on the moon within that decade and they successfully did.
Let’s get back into 2021 and let me try to delineate our journey, and to explain in more detail – the HOW. We need to take a holistic approach when developing a masterplan for climate challenge. We should not allow to further muddle around with populist symbolic politics, and eye-catching lighthouse projects in industry. Climate policy is also social policy and migration policy. Climate protection refers not only to changing the energy market but also the heating-and-mobility markets, as well as agriculture, forestry and urbanization.
The best way forward, in my view, will be to establish a kind of Merit-Order for implementation of solutions, and this Merit-Order will not be a one-size-fits-all-approach. It needs to take into account geography, weather conditions, locally given infrastructure, required use-cases, economic situation and financial or financing opportunities. Although, there is no positive track record in this regard, local regulations, as well as European regulations, should not be a hindrance, once taken seriously , these “artificial” rules can be adjusted as needed. An example for required changes in regulation would be the European funding regime, that is not helpful from my point of view.
An extract for a potential sample of criteria to create a Merit-Order might be the following:
- Implement technical solutions that are already available today and that could be further scaled-up easily (e.g. PV, Wind-farms, geothermal energy)
- Implement available solutions with priority in areas/locations where they offer the greatest impact (e.g. district heating from waste heat sources where it is available close to living areas)
- If possible, focus on electrification and build an all- electric infrastructure as far as possible. This should be the most cost-efficient approach that is offering the greatest flexibility at the same time. Going for an all-electric approach means to build only one suitable infrastructure, which needs only adjustments required by new use-cases and by further demand. The focus over time would be limited to the supply-side only since the tech-decision on the demand-side would have already been taken
- Do not use hydrogen applications if you can use electricity directly (as converting green electricity into hydrogen would lead to unnecessary energy losses). However, hydrogen will still be a major part of the overall solution. Based on the current developments, it has clear advantages with respect to storage applications to deal with unsteady wind for instance. Besides power-to-gas solutions, it can be the best choice in the mobility sector when it comes to heavy trucks and long-distance transportation. Last but not least, it can become a good solution for energy transport between the continents, however, in this case a deep-dive into methanol business might be worth it. The kind of hydrogen business between the continents is as well an example of climate policy being as well social policy. Producing hydrogen in areas of the world where it is cheap and bring it to high priced markets might be a possibility to offer African countries an income, by doing something good and support social stability at a local level
- If renewable energy production is used and the required distribution-grid still needs to be built, go for a DC-infrastructure instead an AC-based one in order to increase efficiency and limit the costs
- Only build biomass energy production facilities as long as the required supplies are given anyways and the demand is required on site. Otherwise the land-use for biomass is not efficient and more harmful than useful
This list shall only provide an image how a Merit-Order could be developed, however, a deep-dive and a lot of analyses are required to cater for geography, economic power etc. It shall not be underestimated that the solutions must be paid for and that costs for different solutions vary heavily from country to country. And, it needs as well to be taken into account, that the user of the energy infrastructure must be capable of operating and maintaining the implemented solutions over a long period of time.
Thinking in more detail about the idea of the Merit-Order, this is the edge where the technical solutions and the right framework and regulations must match. The European Commission has announced the so-called Green Deal and it has set the priorities and thus, the Commission is setting the frame, hopefully well-consulted by the experts.
Besides, the answers on the HOW need to be given and pushed by the economic forces. The two major drivers under this umbrella are the tech industry and the finance industry. And, here still lies the biggest challenge. If we really want to make it happen that the whole world becomes climate neutral until 2050, we have to believe in further disruptive developments, as current solutions and the required resources are clearly not sufficient to reach our goal on time.
To give an example: If each and every transport vehicle worldwide should be CO2-free and battery-electric powered, the whole production and production process needs to be powered CO2-free. The number of required batteries would be immense, taking into account that even in the economic strong Germany, we would need to build 6-times more battery production capacities than currently planned. One can just imagine what this means on a global scale. Furthermore, based on today’s battery-solutions the amount of resources required is currently not available. Not to talk of other issues that might not directly have to do with the climate change, like being far from a environmental-friendly, socially justifiable circular lifecycle for batteries. When gaining the required resources for Li-Ion-batteries, the local environment often gets highly polluted and drinking water gets wasted. The mining-workers are very often neither well-protected nor well-paid. And, we do not have a sustainable solution at hand for the end-of-life of batteries. For being fully sustainable, and to not create new future challenges that bring nature and at the end us into trouble again, a truly circular lifecycle is necessary meaning a 100% recycling solution for all components of a battery must become possible.
Under the given circumstances, the existing and available solutions as of today are extensive enough for the moment to further built on our future Net Zero Emissions World. The speed of implementation cannot be accelerated, unlimited, and much more to the opposite, the framework and regulations are not efficient enough yet, and the required experts and employees with the right skills might be not immediately available.
Thus, much more disruption is needed; especially taking into account that moving away from fossil energy leads to a massive increase in electricity consumption. It is the utmost task of science, research & development and the tech industry supported by the financial community and governmental bodies to invent the missing solutions, and to make them ready for series production. In order to reach the Net Zero Emissions Goal in 2050 at a global level, it can be estimated that this needs to happen within the upcoming next ten years.
And, we should not fool ourselves; we have to consider all options and it seems very certain that we will not reach our goal without active removal of CO2 from the atmosphere, and its storage or further processing.
There is enough reason to be confident that we can do it together, if we look back: Mankind was able to make a trip to the moon within a decade, at a time when the conditions were certainly not better than the starting position for today’s challenges. And, we have found effective vaccines against COVID-19 at an unprecedented speed. We will also find the technical solutions for climate protection.
Happy to receive your feedback on my thoughts and to learn about your ideas and expectations on the topic. And, I am ready to enter into discussions what we can do together to increase our impact on solving the climate challenge. Please feel free to contact me via LinkedIn.