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Climate tech in an era of climate skepticism
57 Plays20 days ago
Amy, Mike, and Anthony talk catch up on some recent news: arguments about climate change in Alberta Canada, the recent UN report on the Nationally Defined Contributions to lowering carbon emissions, and the revitalization of the SunCable project, which seeks to bring solar power from Australia to Singapore.
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Transcript
Introduction to Innovation Matters Podcast
00:00:10
Speaker
Hello, hello. Welcome to the Innovation Matters podcast, the podcast about sustainable innovation brought to you by Lux Research. I'm Anthony Schiavo. I'm your host, Senior Director and Principal Analyst here at Lux Research. I'm joined by two of my delightful colleagues, Amy Heuris and Mike Holman. Amy, how are you doing? I'm good. Thanks. How are you? I'm doing all right.
Anthony's Baseball Dilemma
00:00:35
Speaker
I'm planning a trip to the great, wonderful city of New York, who the hated New York Mets are, of course, or excuse me, hated New York Yankees, very importantly, the hated New York Yankees. Leave this in. Don't edit this out. In the World Series right now, which is pretty upsetting. I'm split in my loyalties here between the Yankees because they're from New York. I kind of appreciate New York even though I'm a Mets fan. I want them to beat L.A. because I don't like L.A. That's a terrible city. But my sister lives in L.A., so maybe I should be rooting for the Dodgers, right? Well, I don't know if this is good news or bad news for you, Anthony, but the World Series is over. The World Series is over? The Yankees lost? I'm literally hearing about this for the first time. I thought it was still ongoing. Nope. Damn, you can tell how plugged in. Once the Mets were out, I extremely checked out of the World Series. Dang, the hated Yankees lost. That is tough. The hated Yankees committed three errors in the fifth inning or something like that to give up five runs. They were up big, but they really choked it away. Dang, they really choked it away. That's good, though. I think Yankees fans, if you're listening to this, I'm not saying it's entirely your fault, but it's sort of your fault in proportion to how big of a Yankees fan you are and like the proximity of other Yankees fans around you. So, you know, you don't just blame yourself is what I'm saying. Dang. That's a, that's a shame. That's a shame. It stinks that LA won, but I guess, I like a real alien versus predator type situation for me as far as I'm concerned. Whoever wins, we lose. I was kind of pulling for LA both because I had a tough time getting behind the Yankees, but I grew up in Cincinnati, so I'm a National League loyalist. Yeah, I mean, as someone who grew up during the Yankees, like, you know, sort of 2000s era run of complete dominance over the league, I just have a deep distaste for them, you know. So, also, you know, family of Mets fans, so I have to pull there. What did you think of the, like, rooting for the Mets is actually, like, elitist bourgeois discourse and the Yankees are the team of the people now? Like, what did you think of this discourse, Mike? Because I was pretty skeptical, I'll be honest with you. Well, I mean, I get where it's coming. I haven't run the numbers, but I live in a neighborhood in New York where it is a lot of Dominican and other immigrant families and folks who are working class and are Yankees fans. So I see the perspective. I think that's fair, But I don't know if the Yankees have truly given up their stranglehold on the New Jersey suburbs. And I think until that point comes, then I think they're not. Yeah, the New Jersey suburbs, Westchester County. I mean, the folks who you see in the front rows at the Yankee Stadium and the broadcasts are not the working stiffs from Washington Heights or whatever. Yeah. Now, speaking of, you know, terrible organizations,
Rebranding Carbon Dioxide in Alberta
00:04:18
Speaker
right? We have to talk about... I don't know if that's the right transition, but I think it probably is because we have been unfortunately struck by a piece of news from our great neighbor to the north, Canada. Amy, your people, your squad. It's the week before the U.S. presidential election, so of course course, we need to talk about Alberta. Yeah. Election 2024, Alberta. Decision 2024, Alberta. Alberta decides. Alberta decides, dog. But, yeah. What was this story? What was the deal here? Yeah. So, Alberta is a province in Western Canada, and the provincial government in power is currently the United Conservative Party, led by Danielle Smith. And in November, the political party will be having its annual general meeting, right? And so we're seeing a lot of news stories come out about the kind of proposals that are being put forth in this meeting. And one of them is a proposal to stop labeling carbon dioxide as a pollutant and instead celebrate it as a, quote, foundational nutrient for all life on earth, right? So this proposal is going to be up for debate in the party's general meeting. And really, it's a proposal that's seeking to kind of abandon all net zero targets for Alberta and really kind of to kind of rebranding carbon, right, as a as a positive natural substance that is not is not doing any harm to the earth. Right. And so this is a this is happening, I guess, also for for some context. As most people know, Alberta Alberta has an economy that's closely tied to the oil and natural gas industry. So Alberta's economy is pretty much based on those two industries. And so the population relies on those industries for their jobs and also to keep their local economies going. And so I think, I guess there's a few things that we can unpick here. One is the political side of things. And I think this resolution is really linked to an attempt by Daniel Smith to maintain power within the party. So at the last, the previous leader of the United Conservative Party was actually removed during the annual general meeting. And so this review is kind of like a leadership review to see if she'll stay on as leader. And so there's over 5,000 members of the party who are registered to attend the meeting and they're going to vote on her leadership, right? And so there's going to be a debate of these policies. And so really with these sorts of resolutions or proposals, we can see that the party is is or Daniel Smith is kind of trying to appeal to the party base, to the members who will be voting on her leadership. And there's a number of kind of activist groups within the party that are pushing in this direction because they're closely tied to the oil and gas industry.
Alberta's Decarbonization Challenges
00:07:52
Speaker
And then I guess the other thing to pull out here that we can discuss is like climate change denialism, right? And kind of this backlash that we're seeing among populations that are possibly afraid that they're going to be negatively impacted by the movement transition to green energy. So yeah, I guess that's a general introduction and let you guys weigh in there. Drill, baby, drill. We are familiar
00:08:27
Speaker
obviously i want to just take a second to stake out the official innovation matters a podcast policy on climate change which is that it is real and not good bad And we should be taking aggressive efforts to stop climate change. So not a fan of this policy here. But Mike, with this phenomenon. I guess like, I'm curious for your read on this. Because this kind of thing has been popular in American politics for a long time. But on the flip side, you have, I recently read a story where it's like oil companies were like, basically saying, hey, like, if Republicans win the US election, don't undo the IRA. We like that, please. You know, like, we actually like these policies, you know, the more favorable policies that are promoting the sort of green transition. So what's your read on this? Is it sort of just a political theater or, I mean, are these people serious? What's the deal? Yeah, I mean, I think the celebrating CO2 part of the resolution is more of what the kids would call a troll, right? We're just kind of a thumb in the eye of climate activists or whatever. But obviously, like rolling magnets, zero targets would be would be a real policy. And, you know, I'm not sure for one how how how, you know, I will not pose as a as a as an expert on Alberta politics. But I did know like this is, as Amy said, just one party. It is the majority party, but they're not an overwhelming majority, at least from what I looked up this morning in the legislature. So I'm not sure it'll necessarily translate into policy, even if it does pass, you know, within the party, in part because, as you said, there's, with you know, as some of the business groups in the U.S. that have a stake in the IRA, there are a lot of business interests that do have a stake in decarbonization in Alberta, right? So Dow has made a big investment in the world's first net zero, um, ethylene cracker, right. It's in, um, Fort Saskatchewan, Canada, which is, is confusingly actually in the province of Alberta. Um, and there's a lot of other projects that, um, uh, that, uh, that folks that the companies have been involved with in Canada. There's a big Canada net zero hydrogen energy complex that air products and other people are working on, also in Alberta, right? So there is a lot of that type of activity in addition to the, you know, more traditional extraction. And I think these companies, even though oil and gas companies may not going to be maybe the biggest fans of aggressive net zero regulation, I do think there is the desire for this industry to make the deals to understand like in the long term, at at least least we got to make this transition and and would not probably be pleased about some of these these projects that I think are seen as very strategically important for their for their long run future being you know being impacted by this kind of swing in policy yeah I, I think it's tough to say
Polarization and Economic Fears in Climate Change
00:12:10
Speaker
exactly. We're in this era of retreat, right? I think from a lot of climate tech, you have people seeing sticker shock with hydrogen, right? It's coming in a lot more expensive than people expected. But at the same time, we're also, you know, solar is getting a lot cheaper, right? Solar prices are continuing to fall. Deployment's continuing to really skyrocket globally. So, I mean, I think a lot of the bits and pieces, EVs, right? There was this sort of talk, oh, EVs are like slowing down. And it's like, no, no, actually like they're not slowing down um and so I think there's a lot of uncertainty more maybe even than there was last year or two years ago I think two years ago especially last year after the inflation reduction act passed in the United States you had this really strong international I think alignment of like we're going to invest a ton of money in, in like climate change related technologies. All the other nations are going to play catch up to the U S and China is going to, you know, play catch up with the U S or China is going to charge ahead with its own priorities. The U S is going to do its own thing. Um, and everyone's going to be like sort of rushing to do this. And now it feels like the tide has definitely come back on that um which is i mean i think to be expected on some level and i i guess i'll stake my claim and say that i think that this is more of a blip man a um real meaningful destabilization of of the the situation um not necessarily saying that we're like we're we're totally golden or whatever because i mean the other piece of news we wanted to sort of mention was um you know the un has these nationally defined contributions and dcs these are essentially targets for emissions reduction um for. And every year they check against what was set in the Paris Accords. And they just published a new report. You know, where are we at? And basically where we're at is not good. You know, we're still basically, I would say, current plans to fully implement it would see emissions of 51.5 gigatons of CO2 equivalent in 2030, a level only 2.6% lower than 2019, right? Greenhouse gas pollution at these levels will guarantee a human and economic train wreck for every country without exception. That is quote verbatim from the UN there. So that's not good. We're on path for a quote train wreck for humanity and the economy, depending on how much you value either of those things. I guess you can be concerned in equal or lesser or greater measure. Yeah, you know, it's tough to understand for a guy like me where these sorts of anti-climate policies are coming from in that context. And I know, Amy, you and the predictive anthropology team has looked into this. I mean, what motivates this? I think there's a lot of discussion of the economic factors. Like, obviously, if you're in Alberta and, you know, your job is drilling for oil, stopping doing that is a little bit scary. But is that
00:15:45
Speaker
ah whole story or or how do you how do you see this these issues yeah i think it kind of perhaps we can say it like a distinction between the um you know the the paris agreement and the government's official pledges to to combat climate change and to to lower emissions and then what what people are experiencing on the ground. So like the general population and what their opinions are. And I think we're seeing, the whole story or how do you how do you see these issues? and we talked about this as well when we talked about the election in our webinar on policy impacts. Among consumers, we see increasing polarization in terms of some consumers being very um supportive of climate action and others feeling increasingly marginalized and um increasingly dissatisfied and distrustful of governments that are are um participating in the kind of transition or trying to, or enacting policies to to transition economies to to greener solutions. And so I think, yes, on one level, we we see consumers are, and actually this comes from research that we've done on climate change denial and skepticism in the US. And this research was done by our anthropologists, Fabian Bowens and Emma Kiberkstis. And they found that, yes, economy, um the the local economy is definitely a ah defining factor for a lot of consumers. So they see, a spec and we can see this, especially in Alberta, that, you know, the fossil fuel and industries are seen as as very vital for the home economy.
00:17:26
Speaker
um And they're really kind of questioning whether these so-called sustainable companies um or sustainable um alternatives are actually going to provide jobs that they need. right And so they've relied on these industries for so long. um And the movement towards um so green energy it kind of requires a different type of workforce, different skills. And so there's there's a concern about being left behind as fossil fuel is phased out. um At the same time, we see um among these consumers um a sense of feeling that talk about climate change is kind of like and as an elite.
Consumer Skepticism Towards Sustainability
00:18:09
Speaker
It's happening in elite circles, liberal circles, these woke circles, and they're feeling um kind of ostracized or judged for even questioning um whether or not the science is valid. um And so I guess we can see like this distinction between what they see as elite conversations happening and then the reality of what the general working person on the ground has to deal with. And the fact that, you know, buying more sustainable products is usually more expensive and maybe out of their price range um and and fears that, you know, all of this, these discussion of a climate crisis is more of a marketing tool um in order to get more money out of and of the general consumer. and And so there's really, there's skepticism on all levels, skepticism towards government, whether or not they trust the government um and skepticism towards corporations where they think they're being duped. And so it's a complex um issue. And i think it's I think it's important for clients to understand this, especially for CPG clients, because we've had a lot of clients um talk about how it's it's, despite consumers talking about the fact that they want more sustainable products, they're not willing to pay for them. They're not willing to pay more for them. And really trying to understand why why certain populations or certain demographics um might be um less willing to adopt sustainable solutions, um why certain sustainable solutions may not work well or be be received well or face more barriers in particular particular regions like Alberta. There's that famous um Upton Sinclair quote that says it's difficult to get a man to understand something when his salary depends on his not understanding it. There's definitely a little bit of an element of that. but yeah i mean I think one of the things that's really interesting about the research that you and, you know, Fabian and Emma and and other folks on your team have done is you kind of get into, you know, some of the beliefs behind that and the way that people do, you know, even though there is, I kind of think, that that underlying economic driver for these these motivations. There are these these sentiments about things that are getting you know associated, certain types of energy with more traditional ways of life and people wanting to to associate with that. So it's it is it is a tricky problem. I mean, I do think I agree with Anthony's perspective that, you know, overall, and it's probably more of ah of ah of a blip in terms of the the overall climate picture. um Here, I think that that ultimately things like this probably are not massively, you know, it's not going to stop a lot of the the climate activity and the energy transition that we're already seeing. It has has a lot of really strong commercial momentum behind it and in a lot of areas like solar and electric vehicles and wind and so on. But, you know, to the point about the UN report, you know, it isn't isn't speed, you know, it's it's going to slow some things down or it does. It certainly is not helping to speed them up at a time when we really do need to be need to be speeding up in order to, you know, to reach the the climate goals that that that countries have committed to. So, yeah. So, again, even even if it's not going to stop climate action, it's going to slow things down at a time when we we need to be speeding up. So that's why I'm glad we have Amy and her colleagues here to kind of help us navigate because, then you know, as much as, you know, we can have these sort of more or less, you know, conversations about politics and things, which is always interesting, but it it is it is kind of a key factor that's going to be to be driving the dynamics of a lot of of a lot of climate tech and energy rollout.
The Ambitious Sun Cable Project
00:22:23
Speaker
Speaking of climate tech rollout, yes. There we go. We wanted to talk about the big cable. Maybe the biggest cable. Not actually the biggest cable of all time. I don't know what that would be. But a big cable indeed, which is going beneath the sea, connecting Singapore, I believe, to Australia. um The idea being that this is a solar energy can be transported from Australia, where it's bright and sunny and also they have a lot of space and land. You can get a lot of solar going. To Singapore, which is not as bright, a lot more rainy and also not very ah blessed with lots of space. has and Very big. As you might know, as if you've ever been there. But um Mike, i'm I'm curious. I think you're the one who maybe brought the story. What's the deal? And because this has been talked about for a long time and I think kind of in development for a long time so what's the deal what's the update here from this yeah i mean so there's there's been a lot of efforts to um ways to explore bringing i mean in general solar or wind resources from places where they're abundant to places where they are not um and in particular, from Australia to Singapore and and other other parts of of Asia, like Japan or Korea, right, that that don't have that level of of renewable resource. And a lot of that has been around things like, oh, we can ship transport, convert it to hydrogen and transport it, or maybe we use these liquid organic hydrogen carriers or things like shipping it, because it's, I think, generally been thought, and I think we've even argued in some of our past analysis that it's too far or too far economically to transfer for via cable. But um but the good folks behind the sun cable, as this is called, disagree with that. And they think, it so it was it was a couple of ah actually executives ah originally from from Fortescue, which is an Australian mining company that that that were going to be behind this project. And there's been some some fallings out and things. Long story short, this this project was proposed. It's a 4,300-kilometer cable, which I think would would be the largest high-voltage DC power cable in the world by a pretty wide margin. There's there's one that runs from Denmark to the UK. It's about 750 kilometers that I think is the longest to to today. So this would be about six times as long. And, it you know, it kind of, the map is wild to look at. It goes from Darwin in Northern Australia to to Singapore. So it's kind of like snaking through islands in Indonesia and stuff like that. um this So this project was proposed. It um had some funding challenges, went into voluntary administration in in January 2023, but it was just revived. So the the Singapore International Energy Week is always a big ah big event in Singapore. And this so this was was the revival of this project was um was announced at SCIEW last week or maybe two weeks ago now. So it's a pretty it's a pretty significant news. And if and if you know they can actually pull this off, I think it's really going to change a lot of people's views about what's possible with high voltage DC cables for for transporting renewable energy. I mean, I think if you can get it to work and and manage it without the losses being too high, obviously there's there's a lot of benefits to just being able to transport the electricity generally as directly, as opposed to having to you know convert it into hydrogen and somehow maybe convert the hydrogen to something something else, ammonia or hydrogen carriers that you can load onto to ships and then convert it back to the other end. Yeah, all those conversion losses definitely. Yeah, they really are. Not to mention the cost. So, um yeah, so I think it's, I mean, it's still not expected to to open up in this current iteration until after 2035. So we're not going to find out for for a while. But, you know, there's a lot of places that that this, I mean, there's already talk about, right, you know, building a lot of solar in Northern Africa and using HVDC cables across the Mediterranean to bring that to Europe. um and Obviously, even like within somewhere like the US, if you can, um you know, build transmission from, you know, wind resources in North Dakota or whatever to bring that to to to Chicago or to the West Coast or East Coast or things like that. So based on if what you can, you know, if you can demonstrate this and it can and it can work and it can be economical, it's going to be, I think, pretty significant for the ability to develop and and make use of a lot more renewables and in in a lot of places. But we're not going to know for a little while.
Challenges in Sun Cable's Execution
00:27:44
Speaker
Yeah. Is this an opportunity for materials innovation? Because we've been talking a lot where I've had a number of conversations around superconducting cables. Now, those are really great for right now. Short range transmission, right? The idea is you can basically put a transformer station outside of town and then bring really ah you know high voltage power into town um without needing a lot of like equipment. right You don't have to transform and switch it back and forth, AC, DC, all this stuff. You can just do ah DC over certain miles. right um But is you know, there's an opportunity, whether it's for like coatings for the coils or, you know, metal, better, you know, metal wires, you know, there's always that super wire project where they're trying to put carbon nanotubes into copper. Like this an opportunity for that or is it really more of a project management exercise in your view, Mike? I think it's more of ah of a project management exercise. I mean, there's definitely going to be obviously a lot of, you know, there's a lot of aluminum and copper that's that's needed for this. um You know, they do have um the the cladding and insulation and things that that goes around these cables. It's like high-performance polyethylene, cross-link polyethylene. And I'm sure there's there's a lot of other, you know, materials that do go into, you know, different layers of the cable. And as as you said, like the kind of the substations and things that are going to be to be built along the way for that, to to handle that ah kind of power conversion and try to to minimize the losses. I don't think that this project is, as far as I've been able to tell, isn' and isn't based on any, you know, kind of breakthrough. It's not a superconducting cable, right? It's not based on any particular breakthrough um material innovations or or or technologies. I'm sure there's going to be a lot of, you know, innovation that's needed to make, you know, a much longer HVDC cable work, but um they're not they're not counting, as as far as I I could could tell tell, on on any you know kind of major technological breakthrough in HVDC technology. It's more a matter of, can we really effectively scale it up to this level? I guess I have a question about the, the amount of energy that this project is, is meant to
Australia's Solar Energy Export Potential
00:30:25
Speaker
create. um So I think it's like 12 hectares, sorry, 12,000 hectares of land going to be covered by solar panels in Australia. And I guess I'm wondering, is Australia going to be using some of that energy and they're only going to be exporting a portion of it to Singapore? um Or is this project really meant to just provide Singapore with with the low carbon electricity? I guess I wonder whether or not, I guess all of this investment to build a cable, maybe maybe don't put this in the final version of the podcast, but like, why not use it locally? It's like, is Australia already in a good spot when it comes to their renewable energy sources for electricity? Yeah, basically, you can look at the potential energy generation of each country compared to their theoretical demand. And Australia is, you know, population is pretty small, right? I think what, 25, 30 million people live in Australia. um You know, Mike is fact-checking me as we speak, so we'll get an update on that in a second. um But obviously, it's like a whole, it's a whole continent, right? and and So you have just an enormous potential for solar generation. So Australia could very easily, and indeed is scaling up solar very quickly quickly and will very easily and quickly outstrip their demand. um And in addition, you know, solar is an intermittent renewable, right? So you, as you add more of it to the grid without storage, you see a pretty substantial drop off in value because it peaks at a time when other sources of demand are not peaking, right? So you need to add either storage or find something else to do with the energy, like turn it into hydrogen and ship it somewhere, right? So another element of this is that as you add more solar to the grid, it gets less valuable. So this is a way of essentially avoiding that, right? Because instead of adding it to Australia's grid, you're sending it somewhere else. So it makes sense. And Mike, can we get a fact check on the population count here? 26.7 million. Hey, spot on, spot on. the the world The world politics understander is here. So, yeah, I mean, I think you could think of this. I mean, obviously, like you can look at countries like, you know, whether it's Saudi Arabia or, you know, or anywhere that have a lot of oil, right? You can say, well, we use it domestically. Yeah, they do use it domestically, but there's also a lot of economic value in being able to export it to places that don't have it. I mean, this is kind of doing the same thing with solar energy. Australia has a lot more solar resource than it could ever effectively use for its own population. So there's a, you know, it kind of ties back to but the point, right? People in Alberta are concerned about their jobs in the oil and gas industry. Like oh but Australia sees an opportunity to provide jobs or economic growth from, you know, making renewables yeah, I mean, it's interesting to me talk about the timing being one of the
Speculating Future Energy Transport
00:33:44
Speaker
challenges. and I don't know if this would ever become really practical, but, you know, this this is a basically more or less a north south cable, right? So it's not affecting the sort of the timing so much. But if you're moving across, you know, if you're going east to west, then you can think about, you know, you running a cable from somewhere that has a ton of, you know, when they need a lot of power in the evenings when everybody's coming home, maybe if there's a, you know, there's a cable that's running, running West from there, they could be getting power from, you know, like cities in say, Eastern China could be, could still be getting solar power from, from Western China, even after the sun has set, you know, in Shanghai or whatever, it could be still getting power from Western China. Yeah, that's funny. I didn't really consider that. I had an interesting idea. Well, if President Xi Jinping builds a big cable from, you know, east to west, we will talk about it here on the... Is he president or is he premier? He is president, right? President. Mike Fact Check is spinning into action. We will we talk about it. He is president. Okay. We will talk about it here on the podcast. The Innovation Matters podcast, no less.
Podcast Conclusion and Follow-up
00:35:02
Speaker
If you like this podcast, there are a couple things that you can do. You can like the podcast. You can rate the podcast. Please do rate the podcast. Give it five stars. ah don't Don't rate it. Don't give us a bad rating. We don't like that. And you can follow us on Spotify, Apple Podcasts, anywhere else, any other purveyors of fine podcasts. You can also check out www.luxresearchinc.com. That's our website. There's a lot of great stuff on there. Looking forward to talking to you next time where we will almost certainly be discussing the results of the U.S. election. Woohoo! Assuming we have results by next Thursday. Assuming we have results by next Thursday, which is day after like is not a guarantee. Not a guarantee. Innovation Matters is a production of Lux Research, the leading sustainable innovation research and advisory firm. You can follow this podcast on Apple Music, spotify or wherever you get your podcasts if you want more check out ww ww ww dot luxresearchinc dot com slash blog for all the latest news opinions, and articles. so