Tag Archives: environment

Going in circles

Our spray bottles for cleaning the kitchen counter, pump bottles that come with our body foam, as well as that shampoo bottle are all going to outlast our use of the fluids stored within them. They can be reused – and in reusing them for the same applications, we are reducing their usage. Good for the overall economy in terms of saving resources, for our pockets and also the environment. Except that it is in the interest of the fossil fuel companies to churn out more plastics, for the consumer goods company to create more new packaging and mark up the price of these products, for logistics companies to handle a consistent set of quality, new containers rather than re-used, non-standardized ones.

We’ve created incentives, built our economies around sheer wastage and environmental destruction. Can new business models be created, alongside the harnessing of forces to drive change in consumer culture and consumption practices? Grist reports on some interesting examples recently.

Indeed, we already have vending machines and public water fountains. Why not make soda fountains where people pay for soda that goes into their water bottles? Scoop Wholefoods already tries to retail all kinds of products by having customers bring containers into store where they are filled up.

Laundry detergent, hand soap and all can definitely be sold in bulk dispensed from big containers into the containers brought by the consumers. During the Covid pandemic, Singapore had deployed vending machines and various physical outposts around community centers where Singaporeans could bring their containers to refill and get alcohol-free hand sanitisers. Why not make that the norm?

It will be difficult for the market capitalism as we have evolved it to stomach and put up with all these changes. People want to carry on with proliferation of brands and ‘choices’ – they want to make different containers and so many different kinds of detergent, soaps and handwash that makes it hard to retail all of these in bulk.

Would you rather have more options of soap and less possibilities of a future we would want to be part of? Or less option of soaps so we can choose better futures to exist in?

Who is the enemy?

Is it fossil fuels or the fossil fuel companies?

Biomethane (or upgraded biogas) has a challenging reputation in some markets. It is chemically indistinguishable from natural gas which is a fossil fuel. It burns identically and emits carbon dioxide when combusted. However, it is considered a low-carbon fuel because the carbon content from biomethane is actually the short-cycle carbon dioxide. It is great because you can combust and generate power or heat using a conventional gas turbine or other gas appliances with it without having to retool or change the equipment.

Biomethane is a clear pathway to support decarbonisation of gas and yet it is being shunned by critics. Part of the reason is that the fossil fuel companies are getting involved and could extend the lifespan of their fossil fuel assets and infrastructure using it. And some people are unhappy that they even receive low-carbon funding for the gas infrastructure.

When we see fossil fuel companies as enemies, then anything they do will be wrong and things that continues driving their asset base even tangentially related to fossil gas seem like a problem.

But if the enemy is carbon emissions, then those companies need to be given a chance. We need to demarcate some boundaries: for example, they could set a profit margin cap on themselves and commit all the funds above that towards clean energy investments. Or even better, they could funnel those funds into a ring-fenced facility which then dole out the resources towards anything proven to be low-carbon.

New site for Mondo Gondo

For those who know, I started a podcast late last year named Mondo Gondo and finished a single season with six episodes and have not revived the podcast since. This was largely because I got busy with my work that involved a bit of relocation early this year. I still intend to keep Mondo Gondo going and have recently invested into centralising all my web content into my self-hosted platform.

Therefore, Mondo Gondo’s website had a facelift. It is much simpler now with less heavy graphics. It continues to hold only the show notes for the podcast and the intention is to eventually get back to creating another season, featuring rants, thoughts and ideas around sustainability, incentives and how we could make the world a better place.

I have some ideas around more in-depth topics on energy, discussing whether hydrogen should be used in residential applications, considering if AirBnB can potentially make tourism and hospitality more eco-friendly, thinking about how we need new models of thinking about infrastructure in order to drive more sustainable development, reconsidering the role of urban centers and more.

It might still be a while more but watch the new site for season 2.

Making the contribution

For first time in history but it’s already been a while, the world collectively seem to have abundance. The total amount of food produced could feed the entire world one and a half times over. If energy is used efficiently and excesses trimmed, the entire world should have decent amount of power to live normal modern lives. Of course that depends on what you mean by normal but I’m covering the same point that there’s enough in the world but the problem is distribution.

And distribution is not just a physical problem of course. Distribution can be an economic problem in itself. The fact that the market doesn’t really care that much about the distribution of resources, buying power / puchasing power is actually a problem. It skews the global economy towards what the people with means needs rather than producing for the best outcomes of the world. And this is perhaps why energy continues to be skewed towards the developed, high energy consumption countries or markets.

So making a contribution to this world isn’t really about production. If the world continues in the same fashion tomorrow, you can really make a greater impact on someone’s life – from an incremental perspective – by improving the distribution in the system. By bringing access to higher quality energy, better nutrition, bringing critical and vital knowledge to the communities which can use them properly. That sort of contribution is of unparalleled value. Probably not the kind of contribution involving helping companies break into new markets or keeping fossil fuel businesses alive to emit more carbon.

Bridge to the future

Having been based in Australia for two months now and getting a better view of the overall energy landscape, I’d say that the greatest hurdle we need to overcome is developing an alignment in commitment, plans and action to bring bioenergy especially biomethane into the system energy mix in order to decarbonise.

We are trying to build a bridge to the low-carbon energy future. And there has been many announcement, efforts and plans around hydrogen hubs, hydrogen parks. In the year 2023, the prices of electrolysers didn’t seem to come down all that much as expected, renewable electricity in the form of wind and solar, while being cheap, is bringing about a degree of intermittency that challenges grid operations to the extent that overall cost of electricity or at least access to electricity remains high. As it turns out, we were building the bridge from the destination towards us when we were working on the hydrogen projects. They were good, at some point in the future but it seems that they are not being built fast enough to reach us today. We are still unable to adopt those solutions.

This means that as the decarbonisation targets and emission reduction dreams comes back to bite us, we need to start building the bridge from our side. And biomethane is a great solution that allows us to do that. It displaces natural gas on a one-to-one basis and does not require end-users of natural gas to change their appliances. Biomethane can be spec-ed properly in the biogas upgrading process in order to achieve the quality required for gas grid injection. Moreover, the production of biogas (precursor to biomethane) can be done in conjunction with managing our organic and agricultural wastes which were either being burnt, composted openly or sent to the landfill – all of which involves some kind of carbon emission (albeit short-cycle to a certain extent) that does not achieve extra work done. And don’t get me started on the potential of biogenic carbon dioxide as a future market to build.

Lots of clear work and action. Once we get the perception right and eliminate the misinformation around bioenergy in Australia.

Incentive to ignore

In 1977, more than 45 years ago, James Black, a senior scientist from ExxonMobil delivered a sobering message to the company:

In the first place, there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels…

And in later warnings, he was clear about the need for action

…present thinking holds that man has a time window of five to 10 years before the need for hard decisions regarding changes in energy strategies might become critical.

And if you want to know more about this you can check out the article published 8 years ago in Scientific American. What I’m trying to say here is that incentives are important guide to corporations, businesses and while they are operated by humans, we cannot trust them to follow moral principles or human values that are not captured within regulations, rules or laws. In fact, we already cannot quite trust them to follow rules, regulations and laws to begin with, especially when they are at odds with profit-making.

The market is designed to act in certain ways that do not necessarily promote the greatest general well-being of the society. The conclusion that Adam Smith came to unfortunately doesn’t apply to the extent that market incentives rule so many aspects of our lives.

If ExxonMobil had been not only incentivised to ignore the climate problem but potentially contribute to confusion in the subsequent decades, how can we expect shareholder pressure, financial reporting and disclosures to help? And at the same time, putting all of these burden on the companies are probably going to make more enemies to decarbonisation. Disclosures are more about self-regulation and expecting the market to bring the whip. That’s hit and miss; and when there is incentive to ignore the problem, the market would, as we have seen for more than four decades.

It is time for governments to wake up and lead the mission on climate change. Businesses, consultants, NGOs, activists can only go this far and no more.

Government bashing

The government tends to be an easy target for most of the problems, or the lack of solution towards them. In most cases, the lack of technical solutions tend not to be the barrier towards solving the problems. It is a matter of adoption. And people look towards the government to drive the uptake of solutions. The struggle today, in the market economy where there’s a multitude of technical solutions backed by various different economic interest, there’s some kind of gridlock towards having governments select solutions.

Historically, the popular beliefs, ideas and thoughts drive the directions of democratically elected government. Influence from businesses probably will contribute to some of that. But the options are limited (automobiles or horse carriages, internal combustion engines or electric engines, AC or DC transmission, etc.) and there are certain dimensions by which governments can justify their choices and move forward.

Today, it is less clear. Should we electrify homes completely or allow them to continue using gas, albeit having to encourage the development of renewable gases? Should the government be driving the choice of technologies used in homes or industries by enabling or making difficult the development of more biomethane for grid-injection? Or should they be encouraging full electrification not just of homes but also industries, and even heavy transport, redeveloping infrastructure to be able to deliver lots of electricity, enabling battery swapping or ultra-fast charging along highways?

What are the dimensions that the government should be optimising along, should they be taking positions to propagate certain solutions or standards? Are they in the position to make those choices? Yet some of these innovations and technological adoption can only move forward with enabling policies. The issue is that being in a standstill and not enacting any policy is in itself a choice for status quo, for the carbon-intense way of life, and dooming our system. Yet making a choice can mean excluding certain options or causing certain options to be more or less expensive than they otherwise would be, hence favouring one over another.

Taking policy positions and ultimately making some kind of technological choice implicitly is inevitable. So it is just a matter of what are the priorities.

Markets and distribution

One of the things we learnt early on in economics is that allocative efficiency which the perfect competitive market seem to move towards is efficient in terms of maximising social welfare even if distributionally it is skewed. In other words, by using the ability to pay as the final arbiter for who gets the goods and services, the society moves towards high levels of efficiency about what gets produced and who gets what goods/services without questioning whether things are really ‘fair’ or if in the first place, the ability to pay is properly distributed.

This is a problem that we seem to ignore because it is convenient to think we are already in the best of worlds. The idea of Pareto optimal is powerful – that you stop moving things around as long as you cannot make someone better off without having to make someone worse off even if the one who is slightly worse off is not much more worse than the amount of betterment you can create in another. That comparison isn’t objectively possible anyways.

But by sweeping it under the carpet, economics close itself off to a lot of interesting philosophical debate that really matters and tries to consign itself to an amoral science. Yet championing for markets is not exactly amoral, it is taking the stance that the market approach is morally superior and already deferring to the market in the work of economic justice. Michael Sandel writes and lectures extensively on this and as we ponder over how we marketize various things from infrastructure to healthcare, we can go back to consider those ideas.

Creating a market

We might not realise it but governments have a huge role in creating markets. This is because markets do not spontaneously emerge out of nowhere especially in highly developed economies. One of the reasons is that markets actually requires structures, institutions and frameworks such as rules and regulation can encourage players to step forward more boldly and grow the market.

Today, in Australia, despite the multi-dimensional benefits that bioenergy brings, and synergises with the traditional economy, there’s still little recognition of the low-carbon identity of bioenergy. And it is a shame that methane produced from biological processes are still seen as not too different from natural gas that is extracted from the ground. There is no forward direction by the government to stake the space and define the standards for biogas production, upgrading into biomethane and regulations around treatment and handling of the digestate, which itself is a by-product of the process that can be made useful.

There is perhaps a clear path to create a market not just through regulatory clarity but also enforcing demand. Market for audit, market for inspections, even market for many public services are created by regulations. Sure, there’s a need and the market contributes positively to society and so regulations support that. Why can’t we do the same with clean energy? One that displaces directly the fossil fuels in our system?

Power to liquid fuels

I’m not sure if I’m yet in position to criticise McKinsey – but Mariana Mazzucato did and probably so did some media somewhere somehow that I feel sufficiently assured that I could.

The report they published last year about power-to-liquids for Sustainable Aviation Fuels is honestly trying to popularise something potentially risky and have questionable sustainability credentials. First, the process of producing green hydrogen and then recombining it with carbon dioxide only for the compound to be combusted to release that carbon dioxide sounds really strange given that we are trying to reduce carbon emissions.

Second, the idea of using industrial carbon dioxide for producing power-to-liquid fuel is misguided especially when that carbon dioxide is potentially anthropogenic emissions. By taking that and putting it into jet fuel, one is simply delaying the release of the carbon into the atmosphere by 1 cycle, not preventing it.

Third, using direct air capture carbon dioxide to produce fuel that would then release the carbon dioxide back into the atmosphere does not make that much sense from a thermodynamics perspective. So what exactly is McKinsey up to? Why do they insist that power-to-liquids are not constrained by feedstocks?

Building solar developments in sparsely populated, nonarable regions on just 1 to 2 percent of desert land would provide enough PtL fuel to decarbonize the entire aviation sector by 2030.

What about the pure water needed for the electrolysis of water to produce green hydrogen? Where is that going to come from? Where will the relevant carbon dioxide come from? How are the recommendations or “strategies” really helping to decarbonise the aviation sector? What is McKinsey trying to ‘solve’ or be strategic about when they consider power-to-liquids as a solution for decarbonising aviation? Are they just trying to diversify their positions to take so that they can gain more business from more people? Where is their conviction?