Tue Dec 6th, 2016 at 10:49:57 PM EST
On November 21, 2016 Scott Nyquist of McKinsey & Company (http://www.mckinsey.com) spoke to the public at MIT's Sloan School (https://docs.google.com/forms/d/e/1FAIpQLSeTLrGhwLlrx3wx3eTYcnTX6pIS6iziw4RTLiYNL9uP0dWmVQ/viewform
Over the next 20 years, there are projections for 80% more demand on resources as a result of growing populations and growing economic production. However, higher energy intensity, efficiency, and slower GDP growth leads McKinsey and Company to consider a less than base case view.
McKinsey sees 74% of our energy still coming from fossil fuels by 2050, with an energy related CO2 peak by 2035, and a similar peak in transportation by 2025. COP 21, the Paris Agreement, has businesses going ahead and beyond waiting for negotiation, regulations and governments. Nyquist pointed us toward not only the Energy Transitions Commission (http://www.energy-transitions.org), 28 leaders from business who recognize that COP21 is not enough and are setting zero carbon as a planning goal but also the Oil and Gas Climate Initiative (http://www.oilandgasclimateinitiative.com), 10 companies with 20% of global oil and gas production, which has pledged $1 billion for low carbon technology.
The top 4 emitters, US, China, India, the EU, are planning 4 - 2.5% improvements per year in energy productivity now and that will continue. China is forecast to exceed the EU, US, India combined in zero carbon energy growth over the next 20 years. They will have a large nuclear component to their energy mix. Even the Saudis are diversifying from oil.
Autonomous and sharing vehicle systems may reduce transportation emissions dramatically by 2030. Private cars are going away, says the Senior Partner in the Houston Office of McKinsey and Company and leader in both McKinsey's Energy Practice and the McKinsey Sustainability and Resource Productivity Network.
Solar electricity, photovoltaics, are expected to be competitive in most USA states by 2025. A third of the USA now finds solar electricity competitive with other energy sources, including, in some areas, natural gas, even without subsidies. Solar is beyond the tipping point today, even with the election of Donald J Trump. Utility clients are optimistic about the possibilities of storage and micro-grids but still waiting for the technology. Nyquist did not directly address demand side management or advanced energy efficiency.
According to his conversations, fossil fuel companies understand that the carbon budget is 900 Gt of emissions to keep within the 2ºC increase in global temperature rise while fuel reserves are already 3-5 times that amount. Scott Nyquist called out the oil and gas industry and the Republican Party for their conduct on climate change. The topic of stranded assets was not addressed in this talk.
Nyquist spoke almost exclusively of emissions without really exploring sinks. All the carbon capture methods he mentioned, briefly, were industrial. He concentrated on sources of greenhouse gases rather than sinks, flows much, much more than stocks. Geoengineering did not come up nor did the idea of geotherapy, amplifying existing natural carbon sinks by ecological design.
At the very beginning of his talk, Scott Nyquist said that there is geological evidence of sea level risings as much as one foot per decade. That is the context in which McKinsey and Company are thinking about energy and climate change.