Thread by @MLiebreich

My latest piece for @BloombergNEF is a deep dive into the concept of resilience. What are the risks against which we need to protect ourselves? How much money should we spend? And are there trade-offs between resilience to climate and other types of risks?about.bnef.com/blog/the-quest…

In January 2022, the World Economic Forum’s Global Risks Report identified the top three “most severe risks on a global scale over the next 10 years” as biodiversity loss, extreme weather and, in top place, “climate action failure”. Seriously?
weforum.org/reports/global…

Russia is invading #Ukraine; the US and its allies are on a path to confront an increasingly authoritarian China. And Covid is still taking its toll on people and the economy. Surely any one of these presents a more severe global risk than climate change over the next decade.

Activist and climate scientist Professor Michael Mann claims that “wildfires, droughts, floods, heatwaves, coastal inundation – climate change is already costing far more lives than Covid 19”, but he’s simply wrong - by at least two orders of magnitude.

The confirmed toll from Covid so far is 5.8 million, and the best estimate of the actual total, including deaths before testing was available is nearly 20 million. Total weather-related deaths, by contrast average less than 20,000 a year – down by 95% over the past century.

Before you jump all over me, I’m not saying we should not be acting on climate change. Climate change is already increasing the frequency and violence of extreme weather. We are far from the 1.5C goal that guarantees long-term stability of the climate, or even the less safe 2C.

What I am saying is that those who seek to coopt the concept of resilience in support of climate action may be short-changing more catastrophic near-term threats. And we may be rendering our energy and transport systems less resilient rather than more. about.bnef.com/blog/the-quest…

I take as a starting point the future net zero economy we are building: a power network built around deep renewables penetration, electrification of transport & heating, some clean hydrogen in industry. We are headed somewhere north of 60% electrification.
about.bnef.com/blog/the-quest…

Some argue that the new system will be inherently more resilient because it will be less dependent on a small number of large suppliers. De-carbonized, Decentralized, Democratized, runs the mantra. That is just wishful thinking.

It is relatively easy to design a wind and solar-based system that meets power needs much of the year, but orders of magnitude harder to design one to get through monsoon and rainy seasons, winter weeks with low wind and freezing weather, and shocks of an unprecedented scale.

There is no shortage of energy analysts who will claim I'm wrong. They remind me of financial analysts in the run-up to the Great Financial Crisis, using their huge computers to scour historic trends and find profits, but blind to fat tail risks that were not in their data sets.

The fact is we are not really planning for resilience. History - in the form of energy prices and Ukraine war - is already teaching us a painful lesson: shutting down investment in fossil fuels before you can replace their role in the energy system is neither resilient nor just.

There are no easy answers. Over-reliance on nuclear is not a resilient strategy. Energy independence is not a resilient strategy. Fracking in the UK is not a resilient strategy: it won't move gas prices. Relying on imported LNG is not a resilient strategy. about.bnef.com/blog/the-quest…

Oh, and with great power come great power cuts. We are building a system of systems – power, transport, telecommunications, health services, logistics, payments, emergency services, public information – dependent on each other, with tight linkages and no circuit breakers.

In 2011, Germany’s Office of Technology Assessment looked at what would happen in the event of a prolonged power outage. They concluded “it would be almost impossible to prevent a collapse of society as a whole.” Germany - not a fragile developing country. publikationen.bibliothek.kit.edu/1000103292

Want to be scared of an immediate threat that could bring down global systems? Look no further than cyber-security. Infrastructure presents a particularly juicy attack surface, as we've seen from Colonial Pipeline, Manabaft and countless other attacks. about.bnef.com/blog/the-quest…

And don't look up. No, I'm not talking about meteor strikes, I'm talking solar storms. If one on the scale of the 1859 Carrington Event were to strike Earth today, the result could be no power, no transport, no communications for months - with less than a day's notice. Enjoy.

So what’s to do? First, if we are serious about resilience, we need to identify the risks we actually face, not just focus on the ones that happen to be in the political or civil society spotlight.
about.bnef.com/blog/the-quest…

Next, we need to plan infrastructure and systems that can withstand the shocks identified. There is an extensive literature on how to do this, structured around 4 principles identified by US National Infrastructure Advisory Council: Resistance, Reliability, Redundancy, Recovery.

*Resistance*: Building to withstand likely shocks . In the context of climate change, that means higher sea levels, higher temperatures, more violent storms, more frequent droughts & wildfires. This may also prepare us for non-climate related risks, but that must not be assumed.

*Reliability*: Assets must operate in a wide range of conditions without degrading. The power grid needs to serve to critical demand even in the event parts of it or other systems fail. We must invest in our aging infrastructure – a resilience risk with or without climate change.

*Redundancy*: It's vital, but in a world governed by profit motives, it is often squeezed out of the system; regulators must be ready to step in. As I first said at my 2014 @BloombergNEF Summit keynote, overcapacity must be a feature of the future energy system - it's not a bug.

*Recovery*: This is the ability of the system to adapt after it suffers a shock either in real time – as when power utilities seamlessly shifted output from offices to homes during the pandemic – or by learning and adapting after incidents.
about.bnef.com/blog/the-quest…

Finally, though, if we want resilience, we are going to have to pay for it. As New Zealand’s leading futurist, @rogerdennis , put it in the context of the pandemic: “resilience is expensive in the short term, but cheap in the long term”.
cleaningup.live/episode-8-roge…

Part II of @IPCC_CH's AR6 report on adaptation rightly points out that climate change is a source of near-term risk. But it is only one source among many. We must do clear-headed analysis, roll up our sleeves, get our checkbooks out, and start building!
about.bnef.com/blog/the-quest…