Disclaimer



Disclaimer.
After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Sunday, January 19, 2020

The hybrid solution

I've been fairly dismissive of hybrids in the past.  After all, it appears to make no sense to have two engines in a car.  And eventually, battery prices will fall enough to make full-on electric the cheapest way to go.  But—the problem is that battery prices won't get cheap enough to give EVs an up-front cost advantage for 5 years (or more—see below).  Plus, the demand for batteries is so strong that there aren't enough to go round, as I discuss in The EV Bridge.  And there's the issue of range anxiety.  If you buy a Tesla, you'll have no problems.  But any other brand, here in Oz, at any rate, there are just too few chargers. 

So, while EVs are clearly the technology of the future, for the time being hybrids (whether serial or parallel, plug-in or not) are still cheaper and more popular.  And since we must cut emissions as rapidly as possible, we should encourage any electric car, hybrid (HEV) or plug-in hybrid (PHEV) or full-on electric (EV).

The price gap between hybrids and the un-hybrid version of a car model seems  to be low (see Toyota's biggest selling hybrid isn't the Prius)—just US$ 2,200.  And that will deliver a 30 to 40% cut in emissions. 

Here's the 2019 pricing of the Hyundai Ioniq in the US:

Hybrid                $22,400
Plug-in Hybrid   $25,350
EV                      $29,815

Let's assume there were a Hyundai Ioniq without an electric motor, an "un-electric" as it were.  Using the Corolla price gap, it would cost, say $20,000.  This means that the full-on electric would cost roughly 50% more than the un-electric, the plug-in hybrid 25% more.  Even though both the plug-in hybrid and the full electric will be cheaper to run than the un-electric, the sales of these cheaper electric versions of the Ioniq still wouldn't replace sales of the un-electric, because ppl have to find the up-front cost of the car, whereas the petrol costs are spread over its lifetime.  You can lease a car, but not everyone is able or willing to do that, and HP requires a deposit and the costs are still mostly up-front.

So, what to do?

Let's suppose we gave a subsidy of $2,500 to all electric cars.  Using the Ioniq as an exemple, that would remove the up-front cost disadvantage of the HEV, reduce it for the PHEV to where the HEV's is today, and reduce the cost premium of the full-on EV relative to the un-electric to 37% from 50%.  With a $2500 subsidy, rational consumers would buy electric.  At first, most would buy the simple hybrid, though some would buy plug-in hybrids, and a few would buy the full EV.  Emissions would fall by at least 40% as the car fleet transitioned.

I don't know how much the Ioniq EV's battery bank costs, but the petrol engine + gearbox + radiator + petrol tank must cost more than an electric engine—look at the small gap between the HEV and the un-electric, which represents the addition of an electric engine plus a small battery.  This means the Ioniq's EV battery bank costs, say, $12,000.  In five years' time, given that battery prices are falling by 20% per annum, it will cost just $4000, so the cost of an EV Ioniq will be close to the cost of the HEV, and below the cost of the PHEV ('cos you'll only need one engine).  At that point, the subsidy will encourage ppl to buy the 100% electric car instead of the HEV.

Eventually, the EV would be cost competitive even without subsidy.  On the Ioniq's current pricing, EVs will equal the cost of an un-electric in 8 years (longer than I had thought—I've been estimating 2023 or 2024, but this suggests 2028).  The trouble is, we haven't got 8 years to waste.  We must electrify our car fleet as soon as we can.

Instead of a subsidy, we could set rising targets for electric (of whatever kind) sales as a percentage of total sales, starting at 10% and increasing each year by 15%, so that by 2027 the EV/HEV/PHEV target would be 100% .   It works like this.  If a car wholesaler/manufacturer reached their target, there would be no penalty.  If they didn't, they would have to buy points from those who have.  Let's say the target is 10%, but they only reach 8%.  They'd have to buy points equal to 2% of their total car sales.  If they exceeded the target, they would have surplus points available for sale.  But unlike the Californian and Chinese schemes, under my scheme, the manufacturer would earn 1 point for each electric car, whatever its type, rather than 1/4 point for an HEV, 1/2 a point for a PHEV and 1 point for an EV*.

The Californian and Chinese EV targets encourage sales of EVs over PHEVs and PHEVs over HEVs, by giving more points to the EVs than lesser electric cars.  But that distinction is prolly unnecessary, and may slow the uptake of electric vehicles.  As EV costs decline, they will automatically be chosen over HEVs and PHEVs.  A target/subsidy which simply rewards buying an EV of whatever kind would lead to a much bigger take-up of electric cars than one which rewards EVs only, because hybrids are only a little more expensive than un-electrics.  As battery costs decline over the next 7 to 8 years, sales of full-on EVs would rise progressively, until 100% of electric sales are made up of EVs.  This would mean that we could start cutting emissions from transport now, not in 5 or 7 or 10 years while we wait for EVs to become cost competitive.

 If at first electric sales are mostly HEVs or PHEVs, it wouldn't matter, because each year emissions of 1/12 of the vehicle fleet (assuming a 12 year car life) would fall, by an increasing percentage, as the electric target bit deeper.  After 6 years, emissions of an additional 1/12th of the total car fleet each year would fall by 40%, rising progressively as EVs took a larger and larger market share.  This would mean that total car emissions would be falling by 3% per annum from 2025 onwards, and this decline would continue and accelerate as the percentage of EVs in the mix rises.  Over the first 10 years, the cut in emissions would come from hybrids, over the next 10 from a further step-by-step switch to EVs.

The world must, at a minimum, target a 3% per annum cut in total emissions if we are to avoid a climate catastrophe.  By being less purist about HEVs relative to EVs, we can rapidly reduce emissions from cars (and implicitly, lorries and busses) starting now.  Almost all manufacturers have one or other kind of hybrid in their line-up.  And they have them now.  The transition would be simple and easy.  And from 2026 onwards, we could take the next step: going for 100% electric.



Two reviews of the Ioniq:


Hyundai Ioniq Hybrid 2019 review

—————

* or rather 1 point for an HEV, 2 points for a PHEV and 4 points for an EV, which implies that the effective EV target is lower than the stated one.

Most dangerous places to live


Saturday, January 18, 2020

Americans increasingly alarmed about climate


(From Yale Program on Climate Communication)

Nearly six in ten (58%) Americans are now either “Alarmed” or “Concerned” about global warming. From 2014 to 2019, the proportion of “Alarmed” nearly tripled.

Our prior research has categorized Americans into six groups – Global Warming’s Six Americas – based on their climate change beliefs, attitudes, and behaviors. The “Alarmed” are the most worried about global warming and the most supportive of strong action to reduce carbon pollution. In contrast, the “Dismissive” do not think global warming is happening or human-caused and strongly oppose climate action. [A short “Six Americas” quiz is publicly available online.]

Our latest survey (November 2019) finds that the Alarmed segment is at an all-time high (31%). The Alarmed segment has nearly tripled in size since October 2014. Conversely, the Dismissive (10%) and Doubtful (10%) segments have each decreased over the past five years. The proportion of Americans in these two segments combined has decreased by about five percentage points since 2014.

Over the past five years, the U.S. population as a whole has shifted dramatically towards membership in the Alarmed segment. In 2014, the Alarmed and Dismissive were similar in size. As of November 2019, however, the Alarmed now outnumber the Dismissive by more than 3 to 1 (31% vs. 10%), representing a major shift in these two “issue publics” most engaged with the issue of climate change.



Second hottest year ever

NOAA has calculated the global temperature anomaly (relative to 1901-2000) for December and so the year 2019.  The chart below shows the annual average as well as a LOESS trend estimation.

Four points:

  1. 2019 was not an El Niño year (that was 2016).  Even so, it was the second hottest ever measured.
  2. The average rise per decade since the beginning of 1970 has been roughly 0.2 degrees C.
  3. Since 2010, as measured by the LOESS trend, that has increased to 0.3 degrees C per decade.  
  4. If this trend continues (and it is consistent with ever-increasing greenhouse gas emissions), we have less time to de-carbonise our economies than we thought.


Source: NOAA

Lab-grown food will save the planet

We know that we can transition electricity generation to renewables, and that process is now well under way.  By 2030, there won't be that many coal power stations left, because they will simply be too expensive compared to renewables plus storage. 

We know that, at some point quite soon, EVs will start to outsell petrol(gasoline)/diesel cars (ICEVs, which stands for 'internal combustion engined vehicles'), again because their up-front costs will fall below those of ICEVs as battery costs fall.  By 2030 at the latest, it is likely that EVs will make up 90%+ of total car/lorry/bus sales.  

We can produce carbon-free cement and iron/steel.  We will prolly, by 2030, have carbon-free sea and air transport.

What will be left then is agriculture. Agriculture is responsible for something like 24% of greenhouse gases emitted across the world.  And most of that comes from producing meat and milk.  Most people won't give these up, and in developing countries, rising meat consumption as living standards increase is likely to blow our carbon budget out of the water.  


Source: The Guardian, Illustration: Matt Kenyon


Here's an extremely interesting piece by George Monbiot in The Guardian bout how lab-grown food will save the climate and the world.  


It sounds like a miracle, but no great technological leaps were required. In a commercial lab on the outskirts of Helsinki, I watched scientists turn water into food. Through a porthole in a metal tank, I could see a yellow froth churning. It’s a primordial soup of bacteria, taken from the soil and multiplied in the laboratory, using hydrogen extracted from water as its energy source. When the froth was siphoned through a tangle of pipes and squirted on to heated rollers, it turned into a rich yellow flour.

This flour is not yet licensed for sale. But the scientists, working for a company called Solar Foods, were allowed to give me some while filming our documentary Apocalypse Cow. I asked them to make me a pancake: I would be the first person on Earth, beyond the lab staff, to eat such a thing. They set up a frying pan in the lab, mixed the flour with oat milk, and I took my small step for man. It tasted … just like a pancake.

But pancakes are not the intended product. Such flours are likely soon to become the feedstock for almost everything. In their raw state, they can replace the fillers now used in thousands of food products. When the bacteria are modified they will create the specific proteins needed for lab-grown meat, milk and eggs. Other tweaks will produce lauric acid – goodbye palm oil – and long-chain omega-3 fatty acids – hello lab-grown fish. The carbohydrates that remain when proteins and fats have been extracted could replace everything from pasta flour to potato crisps. The first commercial factory built by Solar Foods should be running next year.

The hydrogen pathway used by Solar Foods is about 10 times as efficient as photosynthesis. But because only part of a plant can be eaten, while the bacterial flour is mangetout, you can multiply that efficiency several times. And because it will be brewed in giant vats the land efficiency, the company estimates, is roughly 20,000 times greater. Everyone on Earth could be handsomely fed, and using a tiny fraction of its surface. If, as the company intends, the water used in the process (which is much less than required by farming) is electrolysed with solar power, the best places to build these plants will be deserts.

We are on the cusp of the biggest economic transformation, of any kind, for 200 years. While arguments rage about plant- versus meat-based diets, new technologies will soon make them irrelevant. Before long, most of our food will come neither from animals nor plants, but from unicellular life. After 12,000 years of feeding humankind, all farming except fruit and veg production is likely to be replaced by ferming: brewing microbes through precision fermentation. This means multiplying particular micro-organisms, to produce particular products, in factories.I know some people will be horrified by this prospect. I can see some drawbacks. But I believe it comes in the nick of time.

Several impending disasters are converging on our food supply, any of which could be catastrophic. Climate breakdown threatens to cause what scientists call “multiple breadbasket failures”, through synchronous heatwaves and other impacts. The UN forecasts that by 2050 feeding the world will require a 20% expansion in agriculture’s global water use. But water use is already maxed out in many places: aquifers are vanishing, rivers are failing to reach the sea. The glaciers that supply half the population of Asia are rapidly retreating. Inevitable global heating – due to greenhouse gases already released – is likely to reduce dry season rainfall in critical areas, turning fertile plains into dustbowls.

A global soil crisis threatens the very basis of our subsistence, as great tracts of arable land lose their fertility through erosion, compaction and contamination. Phosphate supplies, crucial for agriculture, are dwindling fast. Insectageddon threatens catastrophic pollination failures. It is hard to see how farming can feed us all even until 2050, let alone to the end of the century and beyond.

Food production is ripping the living world apart. Fishing and farming are, by a long way, the greatest cause of extinction and loss of the diversity and abundance of wildlife. Farming is a major cause of climate breakdown, the biggest cause of river pollution and a hefty source of air pollution. Across vast tracts of the world’s surface, it has replaced complex wild ecosystems with simplified human food chains. Industrial fishing is driving cascading ecological collapse in seas around the world. Eating is now a moral minefield, as almost everything we put in our mouths – from beef to avocados, cheese to chocolate, almonds to tortilla chips, salmon to peanut butter – has an insupportable environmental cost.

But just as hope appeared to be evaporating, the new technologies I call farmfree food create astonishing possibilities to save both people and planet. Farmfree food will allow us to hand back vast areas of land and sea to nature, permitting rewilding and carbon drawdown on a massive scale. It means an end to the exploitation of animals, an end to most deforestation, a massive reduction in the use of pesticides and fertiliser, the end of trawlers and longliners. It’s our best hope of stopping what some have called the “sixth great extinction”, but I prefer to call the great extermination. And, if it’s done right, it means cheap and abundant food for everyone.

Research by the thinktank RethinkX suggests that proteins from precision fermentation will be around 10 times cheaper than animal protein by 2035. The result, it says, will be the near-complete collapse of the livestock industry. The new food economy will “replace an extravagantly inefficient system that requires enormous quantities of inputs and produces huge amounts of waste with one that is precise, targeted, and tractable”. Using tiny areas of land, with a massively reduced requirement for water and nutrients, it “presents the greatest opportunity for environmental restoration in human history”.

Not only will food be cheaper, it will also be healthier. Because farmfree foods will be built up from simple ingredients, rather than broken down from complex ones, allergens, hard fats and other unhealthy components can be screened out. Meat will still be meat, though it will be grown in factories on collagen scaffolds, rather than in the bodies of animals. Starch will still be starch, fats will still be fats. But food is likely to be better, cheaper and much less damaging to the living planet.
Farmfree production promises a far more stable and reliable food supply that can be grown anywhere, even in countries without farmland. It could be crucial to ending world hunger. But there is a hitch: a clash between consumer and producer interests. Many millions of people, working in farming and food processing, will eventually lose their jobs. Because the new processes are so efficient, the employment they create won’t match the employment they destroy.

RethinkX envisages an extremely rapid “death spiral” in the livestock industry. Only a few components, such as the milk proteins casein and whey, need to be produced through fermentation for profit margins across an entire sector to collapse. Dairy farming in the United States, it claims, will be “all but bankrupt by 2030”. It believes that the American beef industry’s revenues will fall by 90% by 2035. 

[There's more, which you can read here]

For years I have wondered how it would be possible for passengers and crew on space stations and space ships, and on lifeless worlds like Mars or the Moon, to eat meat, fish or dairy.  The space and resources needed are simply impractical.  Lois McMaster Bujold, in her SF novels, talks about vat-meat, vat-chicken and vat-milk, and it is obvious that this is what will happen.  But it's equally likely that this will happen on Earth, too, as Monbiot points out.  Climate change, insectageddon, water shortages—everything points to the inevitable future where our meat and milk doesn't come from cows and pigs and chickens but from proteins grown in labs.  On top of which, it will be cheaper.  An order of magnitude cheaper.  We will be able to end world hunger, permanently.

This trend is starting now—even before we have food grown from bacteria.  I am a vegetarian, and I haven't eaten meat for 40 years.  To be honest, the very idea revolts me, these days.  So when I had one of the new, meat-like vegetarian burgers, which tasted like meat, "bled" like meat, and had a meat-like texture, I was rather put off!  But if you want to stop the horrible cruelty to animals which meat production involves, and if you want to reduce your carbon emissions now, by a good 20%, then you should try them. 

We need to start cutting emissions this year, and ramp up the reductions each year until we get to zero.  We need to stop exterminating insects.  We need to restore the soil.  These are compelling and vital steps, and we cannot dither and phaff any more.  To quote Churchill:  Action this day.

See also:

Chinese EV market share reaches 4.7%


2019 electric vehicle market share in the world’s largest auto market, China, increased from 4.5% to 4.7%, even after a significant trimming of incentives from July. The EV market share increase comes amidst an 8.4% fall in sales of combustion vehicles (26.82 million in 2018 to 24.56 million in 2019), with EV sales remaining relatively unscathed (1.26 million trimmed to 1.21 million). Whilst government officials expect fossil vehicles sales to fall again in 2020, EV sales will remain relatively healthy, helped by a stable incentive environment and substantial numbers of Tesla’s locally made vehicles.

The official auto market figures were released by the China Association of Automobile Manufacturers (CAAM) on Monday, and include both passenger vehicles and commercial vehicles. China’s overall auto market decline in 2019 accelerated from a smaller decline in 2018, after almost 3 decades of rapid growth. Shi Jianhua, a senior representative at CAAM, told reporters:

“We have moved away from the high-speed development stage. We have to accept the reality of low-speed development. … We had high-speed growth for a consecutive 28 years, which was really not bad, so I hope everyone can calmly look at the market.” Shi Jianhua, CAAM.

Remaining calm may be easier for some than others. Of the big international automakers, Ford appears to have been hit hardest, with China sales down 26.1% in 2019. Meanwhile, premium EV makers in China, such as Tesla, Nio, and others, have plenty of future growth to look forward to. Let’s see the recent drop in sales of fossil vehicles and the relative rise of EVs plotted in a bar chart:






China’s New Energy Vehicle (NEV) policy is primarily guided by the MIIT, whose senior official, Miao Wei, confirmed on Saturday that NEV subsidies would “remain relatively steady” during 2020.

Since China represents around a third of the global auto market, the falling sales of fossil vehicle bodes well for progress on pollution, the climate emergency, and fossil fuel conflicts.

The other two largest global auto markets, Europe and the US, likewise saw flat or declining fossil sales in 2019, following the initial trend we saw in 2018. Overall, fossil vehicle sales continued their global decline in 2019. 

Friday, January 17, 2020

Scores of countries signal stronger climate plans in 2020

Source: Carbon Brief



From the Belfast Telegraph (hat-tip to Carbon Brief):


The UK has welcomed news that more than 100 countries are set to boost their plans for climate action this year.

Data gathered by the United Nations’ climate body shows 114 countries have produced a more ambitious set of plans for cutting emissions or have signalled their intention to do so this year ahead of key climate talks in the UK.

It represents a doubling of countries committed to increasing efforts on cutting emissions to meet their pledges under the international Paris Agreement to curb global warming, since a UN action summit in September.

In addition, 120 nations have told the UN they have signed off on plans to get to net zero carbon emissions by 2050 or are working towards that target.

The figures have been released at the start of a year when countries are expected to boost their “nationally determined contributions” to the Paris Agreement ahead of “COP26” climate talks in November in Glasgow.

The Paris Agreement, which comes into force this year, commits countries to cutting greenhouse gas emissions to curb global warming at “well below” 2C and pursue efforts to prevent temperatures rising more than 1.5C. above pre-industrial levels.

But on current pledges of national action the world is on course for around 3C of warming by 2100.

The UN’s climate science body, the Intergovernmental Panel on Climate Change, published a report in 2018 which warned of the damaging impacts of temperatures rising above 1.5C.

And it warned that the world would need to cut carbon emissions to “net zero” – so no more is being put into the atmosphere than is being removedby measures such as planting trees – by 2050 to limit warming to 1.5C.

Claire O’Neill, former clean growth minister who will be president of the COP26 climate talks, said: “I’m pleased to see that 114 countries have now committed to lowering emissions by rethinking their nationally determined contributions in this crucial climate year of 2020.

“This is an increase of more than 60% since September.

“We will now urge countries to develop ambitious plans to deliver these commitments ahead of the COP26 summit in Glasgow.

“It’s also encouraging to see the number of countries following the UK’s lead, and pledging to develop a net zero plan has doubled from 60 to 121.”

Ms O’Neill added “2020 presents a golden opportunity for countries to show their commitment to achieving net zero by 2050. It’s vital the world comes together if we are to stand a chance of limiting warming to 1.5C”.

The UK has signed up to a legally-binding target to cut greenhouse gas emissions to net zero by 2050, but the Government’s advisory Committee on Climate Change has warned it urgently needs to increase action to meet the target.

Developing countries have led the way with signalling they will submit new climate plans in 2020, along with European countries including the UK, France and Germany and nations such as Argentina and Mexico.

Pressure will be on countries such as India, China and Japan to release new targets for cutting emissions.

We mustn't give up hope, even though emissions are still rising.  We are moving towards a world where carbon emissions are falling.  The pressure on all countries to do something is building.  Remember, though, to achieve zero emissions in 2050, emissions must fall by 3.3% in the first year (100%/30), and each year we postpone this makes it harder to achieve.  Good intentions are not enough.  All the same, the huge achievements in Europe in moving away from coal are a sign of what can be achieved.