Thread by @JasonBordoff

THREAD: We wrapped @Davos #WEF19 today & I want to share my thoughts on the mood this year. Discussions focused on geopolitical & economic risks to the energy sector, #climatechange, optimism abt the pace & promise of technological innovation & outlook for clean energy.

Compared to 2018, the economic mood @Davos was more grim & subdued. Ongoing US-China trade dispute weighed heavily.. Many expect some resolution before March 2 deadline, but thorny issues in relationship will persist & China digging in for long-term. Brexit added to worries.

Last year’s lamenting by world leaders that the U.S. had withdrawn from the Paris climate agreement were replaced w/ deep concern that the U.S. has exited the world stage completely.

The perception of American disengagement & dysfunction was exacerbated by the fact the government did not send a delegation to @Davos due to the shutdown.

Several sessions focused on the causes and consequences of rising inequality fueling populist movements and economic nationalism. From an energy perspective, this brought discussion of political economy challenges of addressing #climatechange

When discussing policies like a carbon tax or transition from coal, there was more talk of the need to ensure #justtransition, address regressive policy impacts & assist displaced workers. #Giletsjaunes protests often mentioned as a warning.

Extreme weather & climate change topped the list of concerns for global leaders @Davos. There were many references to the recent IPCC report finding that the impacts of even 1.5 degrees C of global warming would be far worse than expected.

There was talk of how rapidly renewable costs were falling & electric vehicle sales were growing, leading to assertions that technology is decarbonizing the energy mix. Yet carbon emissions are still rising. Climate math is hard.

I heard a comment that if 10 years ago, participants were told how quickly renewable energy costs would decline & how sharply renewables would grow over next 10 years, would have been seen as great success.

I replied true, but 10 years ago also Copenhagen recognizing need for 2D, & if Davos was told 10 years ago emissions would continue rising nearly every year, would be seen as failure.

This is the challenge we face. Climate change conversations fail to acknowledge that two things can both be true at the same time. Clean energy has made progress - from renewable power generation to EVs - & we’re still not anywhere close to achieving climate targets

As my friend @richardgnewell points out, we never transitioned away from any fuel; instead we have met growing global energy demand with new (and sometimes cleaner) forms of energy. axios.com/despite-renewa…

We need more focus on the policies & technology that move the needle at a gigaton scale. Some views that tech & markets will drive decarbonization (e.g., coal plants in US), but avg US coal plant 42 years while in Asia 11 years, & those won’t retire til investment repaid.

Not enough attention paid to impact of pricing carbon (e.g., #carbontax), IMO, as part of the solution. See @ColumbiaUEnergy work on this energypolicy.columbia.edu/our-work/topic…

Also not enough discussion also of advanced nuclear. Cybersecurity was a major topic, with risks to energy sector included.

Optimism about tech to speed pace of transition. Digitalization, AI, smart grids, etc. Efficiency received greater attention this year. E.g., fuel economy can make bigger dent than often appreciated. Hydrogen received much attention, as @IEABirol noted

https://twitter.com/IEABirol/status/1088490952254279680

While leaders applauded China’s efforts to boost renewables & reduce emissions/pollution, more discussion about climate and env impacts of China’s BRI investments abroad in coal. This has been focus of @ColumbiaUEnergy China work by Sandalow et al: energypolicy.columbia.edu/research/globa…

Greater emphasis this year on hard-to-abate sectors like heavy duty trucking, shipping, aviation, & heavy industry, incl generating high-temp heat. See excellent @ETC_energy report energy-transitions.org/mission-possib… for more

I heard some disagreement abt #carbonmanagement & whether it’s viable, necessary, or a just a distraction that allows business as usual. But 2D scenarios all include, & 1.5 has CO2 removal too. At @ColumbiaUEnergy, we’ve prioritized under @CarbonWrangler energypolicy.columbia.edu/center-global-….

Climate change concerns dominated alongside recognition by many that the global economy will remain dependent on oil & gas for long time to come. Most of the major oil and gas companies attended & highlighted their role to reduce emissions & facilitate lower carbon technologies.

Geopolitical risks were high on the agenda, incl but not limited to: #Brexit; America’s decision to recognize the opposition leader in Venezuela as interim president; current situation in Middle East; Iranian sanctions and potential future waivers; potential new Russia sanctions.

There was much interest in whether #OPEC current production agreement would succeed amid questions abt whether other nations would join Saudi Arabia in implementing meaningful cuts & questions about whether Saudi might eventually need to “instill discipline” in OPEC

Some discussion of longer-term future of OPEC given recent challenges like Qatar’s exit, Iran sanctions, NOPEC, & Qs about Russia’s willingness to cut & continue cooperating.

Surge of U.S. oil & gas production & exports was of great interest w/ a recognition that full geopolitical effects haven’t been felt yet. Shale oil production is expected to slow next year but remain robust, notwithstanding calls for capital discipline from investors.

Several oil CEOs, as well as #OPEC Secretary General Barkindo, pointed out that as the U.S. has become the largest oil producer in the world, it could now be harmed by oil prices that are too low as well as too high. (Not-so-veiled hint to Trump to lay off the tweets)

Expectation that global gas demand will continue to grow, driven by policy like China’s efforts to deal w pollution & phase out coal-fired boilers.

Consensus that gas market shifting to more liquid, competitive, integrated market that enhances security. See recent @ColumbiaUEnergy paper on impact of US LNG on Russia, for example energypolicy.columbia.edu/research/repor…

So many vexing questions remain from this year’s meeting in Davos that we’re sure to revisit them here again next January. I was happy to contribute in some small way to the vibrant discussions, which will inform and expand our work @ColumbiaUEnergy. Thanks for reading.