Life Archives - Kevin Low

SAF and fuel mandates

I wrote about the trickiness of cutting subsidies which raises the cost to various groups in the society. This is effectively changing the underlying dynamics of wealth transfer in the society. Another thing that could alter the dynamics is putting some kind of regulation into the system. This tends to be less controversial when people are in agreement that the regulation is necessary. For example, getting companies to increase climate disclosure or just improve packaging labels etc would raise prices for customers as companies need to bear these costs in order to comply.

One could argue the consumers benefit from those regulations so it is fair for them to pay the price. What about when passing environmental regulations? Essentially when you first pass them, it creates benefits for parties going beyond the consumers themselves. Take the case of putting pollution control regulations on a manufacturing plant; eventually the consumers of the product of that plant is paying the cost but the ones who benefit from the regulation are the ones living near the manufacturing plant. That is when you evoke the ‘polluter pays’ principle because in this case, you are regulating away a ‘cost’ that existed in the system rather than creating a new benefit.

That brings us to the issue of climate change and greenhouse gas emissions. I work in the field of energy transition and this is intimate linked to those problems. For one, my day job is focused on solving these issues. What I’m wondering, as the CORSIA regulations kick in to push aviation industry to decarbonise, is whether national governments will choose to spend time going out to set up agreement to enable carbon credit trade which involves corresponding adjustments, or put in fuel blending mandates for Sustainable Aviation Fuel (SAF) which can play a role in airlines meeting CORSIA obligations.

Setting up fuel blending mandates will cost the airlines, who will then pass on the cost to the passengers. And perhaps that will reduce the tourism to the country, or perhaps it could increase the cost of doing business and hence make it less attractive for inbound investments. All of that factor causes it to be unclear who is paying the cost for the environmentalism and whether it ends up hurting the country more. Fuel blending mandate could nevertheless bring about new manufacturing jobs and opportunities that offset the job losses. And at the same time, you might attract relevant, future ready technologies to be based in your country.

Looking at the situation now, it is unlikely for SAF or other green fuels to get into the market through a supply push. The fact is that without a proper, transparent and accepted carbon price, there is no incentive to use a greener fuel that would cost more expensive. And this are green fuel that still ends up emitting carbon dioxide albeit in the short-cycle and hence considered to have zero greenhouse warming potential. Government should take the stance that they will have to mandate the blending and then manage the impact of the costs later. In this case, the ‘polluter pays’ principle could be evoked as a foundation but then various other instruments and tools can be used to cushion the impact for various groups to continue achieving economic objectives.

Gift of grace

This Christmas, I thought to just repeat to all of us what the gift of grace from God is. Christianity is all about this gift of grace from God, through Christ being born as man to die for our sins. And what this grace means is not that we have to be good in order to earn our place in heaven. Rather, it is that Christ have been that good for us such that we already have a place in heaven, so that we can be good as a response to that. We will never earn our place with the goodness that we can have or do.

It was never the point for us to earn our place with our goodness. But this is what we are constantly fed by the world. And Christianity is this safe spot where we learn that we don’t. Even as Christian myself, I need this reminder. And that’s why this Christmas I’m writing it again, in a different way. To tell all of us that we achieve our place in heaven not by our own goodness. But the goodness of God through Christ, who died for us. This is grace.

And that is what Christmas is about. Christ born for you and I. Grace given to us. Freely. What a joy to be able to receive it.

GST hike & discounts

As we move from 2023 into 2024, Goods & Services Tax (GST) in Singapore will rise by another 1%. Given the prevailing rate is 8%, the 1% rate increase is actually a 12.5% increase in the consumption tax. No doubt companies will try to convince you to buy stuff before 31 December 2023 to benefit from the lower GST, rather than wait till next year. And if we were to project this logic forward, knowing that GST might eventually be 10%, there is a question of whether we should bring forward some of our purchases even more.

This is more of a psychological trick than anything. Take for example, your interest in an iPhone that may cost you $1000. Buying it before end of the year will save you $10 at the most because of the 1% additional GST that you will need to pay next year. That is hardly a ‘discount’.

Let’s say you got 10% discount from a Black Friday sale instead. Would it compel you to change to a new model rather than stick to your old one? You might. But what if instead of using your existing phone for 1 additional year (eg. 3 years instead of 2 years). If your original phone was also costing $1000, you’d effectively get a discount of 33% just by using it for 1 additional year. Obviously, it goes down if your base time length is longer.

But you get my drift. The biggest discount is when you can use your goods for longer and get more life out of it. There is no point chasing after lower prices of new goods upfront if you keep replacing them quickly. This is an element where sustainability on the consumer end actually lines up with economics but the challenge is psychology.

Room for charity

I love this recent article by Toh Yan Yun in Rice Media, it makes an important point about Singaporean’s perspective on inequality and also our perceived sense that our meritocratic system will continue to serve us well. I frequently question this point about how well our meritocratic system is working; but more than that, whether our overemphasis on the workings of the meritocratic system we have is squeezing out room for charity. So much so that government needs to use tax deductions as a means to further incentivize donations. Question then, is whether the tax department is the one being generous or the philanthropist?

In believing that we are entitled to the successes and achievements we receive, and seeing that as a system that works, we are also thinking that those who are down and out deserves to be so. Like what Yan Yun says in the article; the belief implies “So long as you play your cards right, your big break lies around the corner.”

Those who have been in reality will certainly respond, ‘Yea, right’. A society that does not see luck and chance playing a part becomes less forgiving for people’s mistakes and even for failures. And this has become so serious in Singapore that people are struggling even with being average. There is some obvious implication for mental health and our functioning as a society.

Do we want to start caring? Do we deserve it?

Success factors in life vs exams

When you get back your exam scripts, do you focus on the questions you got right or the questions you got wrong? When I was a teacher, I often reminded my students that those scripts were more valuable for the way they show you how you had gone wrong rather than places where you got things correct. And in fact, those lessons were probably the whole point of sitting for the exam – more important than the grades themselves. Grades do not show whether you are good or bad but merely reflects your progress in the attempts to master the materials you were provided.

The issue with life after graduation is that it is so different from exams. To begin, your score in exams is capped at 100 whereas in life, your upside is really infinite. Now that means that unlike in exams where you could hone in on your mistakes and try to deal mainly with the weak points, life cannot be managed by exceptions or by focusing on weak points. You’d end up trying to perfect areas or dimensions that do not matter at all. Because unlike examinations, you are no longer trying to complete all the questions. You are now looking for questions worth answering amongst infinite questions. It looks more like an examination where there’s endless questions you can choose to answer and you’re trying to get to correct answers for the questions you do attempt.

So then the strategy now can be to just pick the easy questions, those that you have a high confidence of being right. Or to start devoting yourself to being really good at a particular cluster or set of questions around the same topics or ideas. And you want to get away from questions that you don’t stand a chance at unless you happen to be really interested and think you have a shot in developing the ability to answer them. Notice these approaches are radically different from what we learn in school. But once you are able to see life this way, you start recognising you need a different approach from what you were brought up with.

Positive cycles in systems

There are certainly some positive self-fulfilling prophecies in life, and they represent positive cycles in life that we can do more to encourage and harness. Students who have teachers believing in them tend to end up doing better than if they were left on their own; encouragement matters, and more importantly, the social dimension of love and nurturing has an impact on the learning outcomes of students. That is an input for teachers beyond pedagogy, but are we training teachers to believe in their students?

The industrial system works best when we can identify success factors and then invest in them to keep those positive feedback loops in the system. The tricky part is how the industrial system seeks to interact with that ‘scientific management’ koolaid about measurability and creating metrics and indicators. As a result, some of those success factors that are strictly unmeasurable get left out. After all, how do you make sure that a teacher can ‘believe’ in the students evenly in the class? But that question, which is precisely what standardisation and industrialism are based upon, misses the point.

Some of these unmeasurable success factors can generate power feedback loops. Consider the culture of graciousness in a workplace, gentleness, kindness, patience. Just because we cannot correlate the attributes with outcomes doesn’t mean they do not exist. And we all are worse off because we have allowed measurability and ‘big data’ to take such a dominant position in our systems.

Electrification Tussle II

This post continues from yesterday’s blog post.

There will be players who cannot electrify their processes, and they will need solutions. Most of them would be using natural gas running through the pipelines. And for them to decarbonize, they would need either a renewable form of natural gas, which is probably the most acceptable solution for them technically. For some of them, burning green hydrogen could potentially work as well, assuming they overcome the issues around the lower energy content of the hydrogen. Let’s consider again the drive to electrify. Using green hydrogen for these industries is equivalent to electrification because green hydrogen production is driven by renewable wind or solar power production. The notion is ultimately to shift the energy demand of these hard-to-abate industries back to the electricity grid, except through green hydrogen. Except, of course, the green hydrogen route is a very inefficient use of electricity because of poor conversion by electrolyzers and then coupled with the fact that more energy might be used to transport or store the hydrogen.

What I’m trying to point to here, is not that green hydrogen isn’t a viable solution – because in due course, with technological improvements, it definitely can and should be used. But in light of the electrification challenges I highlighted in part 1 (yesterday’s post), green hydrogen does not help alleviate the problem. It tends to complicate it and put even more stress on the electricity system when trying to green the grid. The mix of policy stances involving the heavy promotion of green hydrogen, the attempts to accelerate the reduction in gas use domestically, and setting aggressive renewable energy targets (really more like renewable electricity targets) for the grid emissions factor are all putting a lot of pressure on the electricity system while trying to keep electricity cost pressures under control.

Already mentioned in the earlier blog post is that natural gas resources can serve as part of the transition story. Now, there are concerns and worries about an addiction to fossil gas. After all, the economy might actually be addicted to it because it is a very lucrative export for Australia and so even as the country tries to reduce domestic use, it is unlikely to give it up as an export. And the fear is that the addiction would make it harder to decarbonise. This is why the other area for the government to direct its resources and develop policies that channel efforts in the right direction would be to promote biomethane production and displacement of fossil natural gas through the use of biomethane.

It is almost a no-brainer. Yet, there were concerns about the costs of biomethane while the more costly green hydrogen is being subsidised in all directions. There were further concerns about the limits of the resource potential of biomethane when the grid resources for green hydrogen production are even more scarce and expensive.

In providing my opinions, I have not given any figures but assumed that readers can find and discover for themselves the relative costs, and other challenges associated with how the overall policy mix and energy transition conversation is creating needless bottlenecks and distorting the orderliness of the energy transition. I suggest that we direct our efforts as an industry, economy, society and country in a more sensible, coherent, and directed manner to navigate the energy transition. The technically sensible approach is available and on the table, let’s set that as a destination first, and then slowly navigate the political minefield to get to it. This would likely produce better results than to be muddling through the technical solutions while trying to satisfy various political constituents and be none the wiser as to which destination we’re trying to get to.

Just an additional note to say that these entries are purely my personal opinions and do not reflect any views of my employers or any organisations I happen to be affiliated with.

Temptation to be an expert

For most of my life, I had wanted to be an expert. I wanted to be looked up upon for specific knowledge or intelligence, or smarts in some area. There were of course, some areas I was more keen on than others. And as I read more, and gravitate towards specific topics, I wanted more and more to be known as an expert in those subject matters. The problem is that I was curious about many other things as well; in things I would not consider myself expert in (yet).

So then my knowledge starts to broaden, and I get to know a lot more about a variety of things. And I begin to see patterns across the domains. And I begin to think of expertise less like a deep hole, and more like a network of connections across disparate bits of knowledge that others might not recognise as fitting together but you, as the expert, can see it. Precisely because of the lots of learning you had to get there – not by hoarding knowledge but by eventually seeing patterns in the knowledge you acquire.

And then you begin to belittle dense knowledge in any single field or narrow buckets of knowledge that serve specific and narrow purposes. You no longer think that an expert is worth becoming; if you were an expert in just one or a few areas, you are losing out so much more of reality worth exploring. Maybe I just need to be reminded that I never was keen on being an expert, just pursuing wisdom more than mere knowledge. And wisdom is truly a more worthwhile pursuit.

Active government

Mariana continues her tirade against government capture by capitalist in general. It is interesting how her lessons for government applies perhaps overall to organisations and businesses just as well. That the point of the economy is not the profits but the purpose of the activities themselves. In short run, going for the profits may work but in longer run, it is knowing what problems you want to solve and working on them effectively that brings about the profits.

For governments, that is perhaps the strongest point. But when it comes to corporates, I still think that it is natural for the capitalists to hijack the agenda of the government, lobby for the focus on growth and highlight all of the social benefits of economic growth so much so that government keeps staring that way. The dominance of the economic agenda and how the goals of societies have become caught up with the principle of growth is perhaps something we should be discussing and considering as a society.

In Singapore, how we want to grow our society next needs to be considered. I think the Forward SG initiative was attempting that exercise through the idea of (re)formulating our social compact yet all too often, the logic of resolving the issues seem to boil down to certain initiative, formation of committees or some kind of organisation to look into things. Maybe it is not about adding components? What if it’s about discarding some of our existing things? Including our emphasis on academic merit?

We ought not lose heart but keep the conversation going.

Guidance & belief

A good coach puts some pressure on you to do better and demonstrates his belief that you can do better in you. But more than that, the coach makes sure that what is expected of you is clearly communicated so that you have a clear vision of yourself accomplishing it. The ‘video’ that can be played in your head is important. If the resolution of this video is poor, then it is harder for the coachee to perform. And putting pressure on the person by reminding him or her of the deadline or final prize is pointless.

A coach doesn’t review a race with the runner telling that him or her that at different point of the race, how far or near he/she is still from the finish line. He tells the runner about his or her gait to improve, the rhythm of breathes. The how is more important than the what; but the why even more so. The good coach then reminds the runner of why he or she is running.

It is not possible for managers to help a team thrive without these coaching capabilities. Most managers would just be churning output without developing the team or sustaining the right motivation for the team to go on. Often this could lead to burn-out and poor morale. This is where a strong individual contributor needs to learn new skills to move into manager position and not thinking that he or she can just keep doing what they are good at.