Environmental and Natural Resource Economics Lecture 13

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1 Masters in Environmental Engineering Environmental and Natural Resource Economics Lecture 13 Tiago Ribeiro Researcher IST MARETEC Marine, Environment and Technology Centre Environment and Energy Scientific Area Department of Mechanical Engineering

2 Revolutions

3 Revolutions What does the word revolution mean? revolution (POLITICS): a change in the way a country is governed, usually to a different political system and often using violence or war revolution (CIRCULAR MOVEMENT): a circular movement: the revolution of the earth around the sun was proposed by Copernicus. one complete circular movement of something, for example a wheel: engine speed can be measured in revolutions per minute (abbreviation rpm). revolution (CHANGE): a very important change in the way that people do things What is a revolution? It is relevant change, quick and widespread

4 Type of revolutions 1 The core revolutions: 1. Energy revolutions -when there is a significant change in the access, control and use of a relevant energy source (examples: fire, steam, electricity, oil, nuclear, renewables, batteries (storage), mining asteroids*, moons* and planets*, space solar*) -> See Vaclav Smil 2. Information revolutions -when there is a significant change in the access, control and use of relevant information (examples: hieroglyphs, spoken language, written language, calendars, art, trust, science, AI, singularity*) -> -> * has not happened yet!

5 Type of revolutions 2 The technical revolutions: 3. Technological revolutions -when energy and information conspire to create and combine technologies (in a special way!) A technological revolution is an era of accelerated technological progress characterized by new innovations whose rapid application and diffusion cause an abrupt change in society. A technological revolution is made of interconnected technological changes. 4. Agriculture revolutions -when the technology behind a certain technological revolution of foodproduction becomes mature, scalable, very productive and is widely diffused 5. Industrial revolutions -when the technology behind a certain technological revolution of production of things becomes mature, scalable, very productive and is widely diffused

6 Type of revolutions 3 The people revolutions: 6. Social revolutions -when an asymmetry of the distribution of rights and obligations between people is corrected (examples: universal voting, universal schooling, universal health, end of slavery, women s rights, minorities rights) 7. Health revolutions -when significant changes in human thought and organization of society unlock new levels of human potential and growth [measured by number of people, age, height and BMI] (examples: theory of germs, anesthesia, antibiotics, vaccines) 8. Economic revolutions -when innovations in human thought and the organization of society unlock new levels of economic potential and growth [measured by GDP] (examples: money, trust, mercantilism, capitalism, finance, credit)

7 Type of revolutions 4 These 8 types are not independent of each other. They form a web or a network of effects that amplify and feed on one another. It is useful to treat them as separate events to better understand the role of each force in the evolution of people and society. Impacts of revolutions on people and society: rights (or inequality) health wealth

8 Energy (or exergy) (or useful exergy) (who remembers the last lecture?)

9 Energy efficiency increases and then saturates 25% Electrification: stationary power 20% 15% 10% 5% Motorization: increase in mechanical drive uses from oil products 0%

10 The four industrial revolutions First: new (concentrated) energy source (coal); mechanical work widely available (steam engine); large effect on total factor productivity Second: new (concentrated) energy source (oil); mechanical work available at smaller scales (internal combustion engine, electrical motors); large effect on total factor productivity Third: no major energy transition; information technologies and automation; small effect on total factor productivity Fourth: new and old (dispersed) energy sources (solar, wind and biomass); harvesting of small gradients; energy available at micro and nanoscales; big data; potential large effect on total factor productivity

11 However Thelimitsofgrowth Population growth Climate change Pollution Poverty Inequality

12 Can we have a sustainable industrial revolution?* Lets call it SFIR (Sustainable Fourth Industrial Revolution) An ambitious initiative, aiming to steer the promise of the fourth industrial revolution, digitization addressing the physical world (robotics, internet of things, sharing economy, etc.), to leverage energy efficiency to promote economic growth, recognizing the role of natural capital in economic activity and human welfare, and reducing inequality and environmental impact. *(can we afford to have another unsustainable industrial revolution?)

13 Why the focus on transportation? Transportation is significant in terms of energy use (~1/3) Itcurrentlyuses mainlyoil(gasolineanddiesel) (only~3 million electric vehicles, BEVs are ~2/3 of this) Itisinefficientin termsofusefulenergy(ice vselectric engine) It is polluting both at local (particles) and global (GHG) levels Ithasbeenfailingto deliverthedesiredlevelofservice, specially in urban landscape(congestion, injuries) Andestimatessaywillgrow a lot! Onestudyforecaststotal vehicular travel to grow from 23 trillion pass-km (tp-k) in 1990 to 105 tp-k in the year 2050) A 2.56% CAGR!

14 Example: UK GDP from transport

15 Mobility Revolution?

16 Can we have a sustainable mobility revolution? The electrification of transportation? Let s focus on light duty vehicles Is it enough to electrify vehicles? Whatelseisneeded? Thecase for CASE vehicles Connected(always on ) Autonomous(5 levels) Shared(vehicles, trips) Electric(BEVs please!) The dream scenario

17 Connected (CASE) Individual benefits personal safety (rescue) shorter routes OTA SW updates mobility services Collective benefits reduced congestion reduced local pollution big data collection

Autonomous (CASE) Individual benefits commuting security (accidents) access to mobility (old, disabled) end of drivers health hazards Collective benefits reduced

18 Autonomous (CASE) Individual benefits commuting security (accidents) access to mobility (old, disabled) end of drivers health hazards Collective benefits reduced congestion* reduced local pollution* increased road "productivity" (platooning or road trains) reduced parking space (both outside and inside buildings) *under some assumptions

19 Shared (CASE) (ownership and pooling) Individual benefits more productive vehicles (more kms per vehicle) less capital more choice Collective benefits more rational use of public space less vehicles convergence between public and private models of transportation

20 Electric (CASE) Individual benefits less costs (TCO) less local air pollution Collective benefits higher energy efficiency lower CO2 emissions (if most of the electricity used comes from renewable sources)

The case for CASE vehicles (or the pros and cons of (electrical) hitch-hiking) Combining the pieces Twobytwo Threebythree All together Poolingistheanswer!

21 The case for CASE vehicles (or the pros and cons of (electrical) hitch-hiking) Combining the pieces Twobytwo Threebythree All together Poolingistheanswer! The benefits of scale(and network) Economic, social and environmental impacts and benefits TaaS, MaaS, activetransport, intermodal passenger transport Land-use, jobs and productivity Integrated local production and consumptionofelectricity: Can CASE vehicles lead adoption of cleaner locally produced and consumed renewable energy? example of master thesis

22 The disbenefits of CASE vehicles

23 A SWOT analysis of CASE vehicles 1 Whatisa SWOT analysis? Strengths: characteristics of the business or project that give it an advantage over others. Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to others. Opportunities: elements in the environment that the business or project could exploit to its advantage. Threats: elements in the environment that could cause trouble for the business or project. Tried-and-true tool of strategic analysis

24 A SWOT analysis of CASE vehicles 2 Stakeholders who is involved? endusers workers Government(local and central) energy companies transportation companies software companies vehicle manufacturers Group work(10 minutes)

MEET2030 BUSINESS, CLIMATE CHANGE AND ECONOMIC GROWTH TOWARDS A CARBON NEUTRAL ECONOMY HOW CAN PORTUGAL S ECONOMY GROW WHILE CREATING EMPLOYMENT?

MEET2030 BUSINESS, CLIMATE CHANGE AND ECONOMIC GROWTH TOWARDS A CARBON NEUTRAL ECONOMY HOW CAN PORTUGAL S ECONOMY GROW WHILE CREATING EMPLOYMENT? TOWARDS A CARBON NEUTRAL ECONOMY HOW CAN PORTUGAL S ECONOMY GROW WHILE CREATING EMPLOYMENT? Portugal aspires to be carbon neutral by 2050. Companies need to prepare for this challenge, and therefore it