The Dodo Club (65th Edition)-Realistic Hope in a Fragmenting World (2)

A note from me:

Hi Folks,

My apologies to Newsletter subscribers who prefer to read issues on a regular beat when they are initially published because this particular edition will be arriving in your email inbox rather later than expected.  I’m afraid I have been unwell for a couple of weeks so it has been difficult to concentrate.  It’s a shame in many ways as there has been a lot going on in the world and in my life in the intervening period but, no doubt, I’ll be able to make reference to the most interesting developments over upcoming editions.  

Personally, before I became unwell, I travelled to Merseyside to immerse myself in the incredible atmosphere at Everton football club, which was enjoyable despite the less than ideal results.  I was also invited back to my old college in Oxford for a dinner hosted by the new Principal. It was a small group of people who had, in different ways, contributed to the renewal of the college library. It was less a formal occasion, and more a quiet moment of recognition - and reflection.  Looking back, it’s difficult not to see how much of any path is shaped by things that were never designed. Small acts of attention. Institutions making space. People who opened doors without needing to. I was a beneficiary of what became known as The Tanner Scheme, which actively looked for students who might otherwise be missed.  I came from a rather broken family, without wealth or obvious advantage, and yet found my way to this prestigious university education - which became a platform for much that followed in my life, including Caltech, MIT and Shell.  But that journey sits alongside quiet enablers like Neil Tanner and Hertford College, and modest acts that can bring hope to others. 

My Bi-weekly Guide:

Realistic Hope in a Shattering World

In the last Newsletter, I introduced some consideration of Realistic Hopes and 5 general principles for generating and realising these.

1. Diversity – combining power from who is involved in progress

2. Dialogue – how players engage with each other  

3. Experimentation – what individual players do

4. Systems Thinking – the context for approaching problems

5. Futures Framing – the purpose of co-creating a more positive future 

In this newsletter, however, I begin to focus on a specific area – the Energy System - that is extremely troubling for multiple reasons (consider the current impacts of closing the Strait of Hormuz, the war in Ukraine, volatile prices, and growing emissions), but where I believe there is value in considering both the basis for realistic hope and also the challenges holding us back.   

Basically, we can not do, move or build anything without energy.  With growing numbers of people on the planet, all rightly seeking a decent quality of life, there is expanding need for what energy enables.  Yet the bulk of the energy we use still comes through the combustion of fossil fuels.  This generates the greenhouse gases driving climate change and the associated disruptions to the quality of life that are already being experienced.  

Hence the urgent need for more, yet cleaner, energy.  

This need has been apparent for decades, but it has only been very partially addressed so far.  Energy use and supply has, indeed, grown significantly, powering the material benefits enjoyed by an increasing number of people.  But, for understandable – often even good – reasons, fossil fuels still dominate.  Hence the growing stock of greenhouse gases in the atmosphere is still building irreversible environmental damage and societal disruption that will become increasingly apparent over the coming decades.  The extent of damage will be serious, and just how serious depends on how quickly the energy system, and hence entire economies, can shift from fossil fuel combustion.

This is the brutal reality we must face.  Where is the realistic hope?

On the technical side, as outlined below, routes to energy system expansion and transition are both clear and technologically feasible.  Many are already beginning to unfold.  These are encouraging developments.  The challenge, however, is the pace of change.  This involves aligning and motivating incentives across different sectors of society to accelerate appropriate investments, when the significant benefits and relatively modest costs of doing so are not universally understood or evenly spread.  These are social coordination and organisational problems that are complex but in our collective power to address.  We even know much about how to address them, but will our socio-political dynamics enable or obstruct us in doing this in a timely way?  

In this Newsletter, I’ll mainly highlight the technical reasons for realistic hope, and dive deeper into the socio-political challenges in the next edition.   

As outlined in more detail in Newsletter Edition 17, all credible future energy transition outlooks highlight 5 main building blocks: 

1. Moderating energy demand growth through structural efficiencies including integrated modes of transport, integrated power/heat/waste/water utilities, and urban densification

2. Renewable/non-fossil energy sources such as solar and wind power

3. Deep electrification of economies, up from about 1/5^th of total energy consumption to well over a half, to realise the maximum potential of renewable energies as these are primarily generators of electricity

4. Liquid & gaseous substitution of fossil-fuels by bio- and synthetic fuels in sectors that are hard to electrify like heavy industry and heavy-duty transport where energy-dense, portable, or thermal molecular fuels are required

5. Removal of residual carbon dioxide emissions from the atmosphere by technical (CCS) and natural (forestation & soil regeneration) means.  

While the mix of these developments will vary according to local circumstances, we understand all of these building blocks.  They are all already technically feasible, and the economic incentives for several of them are already in place which is why, for example, we are already seeing the significant penetration of solar and wind energy in power generation.  Incentives for others, however, are not yet aligned, and a degree of re-perceiving energy transitions is required to accelerate this.  This is considered in more detail in Newsletter Edition 18.  Most decision-makers still consider energy transition a single, slow-moving, costly, supply-led burden, which is hardly a recipe for enthusiastic investment.  However, if you dig into the actual experience of transitions, it becomes apparent that it is equally valid to recognise energy transitions as:

1. Not a single process, but a series of tipping points

2. Not slow-moving, but explosively fast, driven by competitive dynamics once the right stars become aligned 

3. Not high-cost, but modest cost at most at the “macro” level, and affordable for most consumers as significant “green” investment premia upstream in business chains are significantly diluted by value-adding steps by the time products reach end-users

4. Not supply-led, but ultimately demand-driven

5. Not a burden, but a landscape of opportunity offering high growth potential and the possibility of securing early competitive strongholds for businesses and regions on the front foot.

These perspectives are just now beginning to become more widely appreciated, with a recognition of how the alignment of incentives all the way along business chains is needed, from downstream consumers all the way to upstream commodity industries where the most significant investments are usually required.  Such alignment requires relevant information to be transparent to all participants in the system which is, in itself, a major challenge but we are now in an information age in which the capacity for this is emerging.  We have already seen explosive growth in areas like electric vehicles and battery technologies, and are even seeing the early green shoots of growing investment in the harder-to-abate sectors of the economy (e.g. see the upcoming 2H-2026 Project Tracker report from Mission Possible Partnership).  In addition, there is ample scope to prioritise attention as just 8 business chains affecting our everyday lives account for over half of all greenhouse gas emissions – electronics, food, fashion, construction, vehicles, fast-moving consumer goods, professional services, and other freight.  Even in the policy world, attention is turning to the development of product-level standards that can drive incentives, e.g. EU Digital Product Passports.

I believe these considerations provide solid foundations for realistic hope.  Technologically, we can evolve the energy system needed for better lives with a healthy planet for future generations, and the economic incentives and alignments to drive this are beginning to come together.  However, achieving this will still require many people and decision-makers to have a broader perception of their own self-interests, and the interests of others, than is often apparent.  This will be particularly challenging in the current political climate when a narrower, “might is right” attitude is increasingly celebrated.  This will be the subject of the next Newsletter.

Question of The Fortnight

Every fortnight, I’ll be asking a thought-provoking question in hopes of sparking interesting and enlightening discussion.

I’d love to hear your response! You can do so by simply responding to this email.

Today’s question is:

Do you believe that we can transform the energy systems underpinning our economies sufficiently quickly to avoid the worst consequences of climate change, and why?

The Dodo Club Online Course

If you would like to learn more about the kinds of topics covered in these Newsletters, then please consider signing up to the introductory Dodo Club Online Course.  This covers scenario/systems thinking for grappling with uncertainty, an introduction to energy transitions, and the development of strategic character in leadership.

In the interest of avoiding the fate of that unfortunate bird, the Dodo, this course aims to help us secure our own personal legacies within a changing world and the energy transition - and to leave a healthier planet for future generations.

You can access the course through Udemy using the link below!

A series of follow-up courses that treat the main topics in increasing depth and detail will be provided if there is sufficient interest.