A Conversation with Shell
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Adam Newton
Manager,
Global Strategy Team, Shell
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A conversation with Shell: How can we create a future where every city has reliable energy, clean water and enough to eat?
In 2050, an estimated 6.6 billion people will live in cities. Up to half could live in slums. What solutions would create a future where all city dwellers have reliable access to energy, clean drinking water and sanitation, and a secure food supply?
Shell has used scenario planning for 40 years to gain a deeper understanding of the world's energy supply, use and needs. In 2008, we published Scenarios to 2050 -- proposing alternative paths for the energy future in the coming decades. Our latest update, Signals and Signposts, takes into account the impact of the global economic and financial crises. It also looks at some of the looming stresses of our planet, such as freshwater shortages and rapid urbanization We're using these reports to inform our conversation.
Our global population is rapidly urbanizing. By 2050, 75 percent of the world’s population could live in cities -- up from 50 percent today. Scientists predict that managing energy use in cities will be a critical factor in affecting climate change.
Essential services are increasingly addressed at the city level, rather than at a national or regional level. Smarter development could mean compact cities with high population density, mass-transit infrastructure and energy-efficient combined heat and power (CHP) developments. Integrating transportation, energy, water and waste systems will be crucial.
This drives us to ask: How can early intervention and investment in cities lead to more sustainable long-term outcomes? How can better urban infrastructure be achieved? What governance mechanisms might support effective city development?
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Lukas Müller
I don't wish to be gloomy, but unless we find an alternative to that, our cities will inevitably collapse. Not knowing - but having to believe - that such alternatives are out there, what is our biggest problem?
In the short term, evading and postponing tactics appear to be a good solution. But they aren't in the long run. As an example of such:
In the face of rising commodity prices, subsidies may help a politician in becoming reelected, by giving the short term impression of having solved the problem. But this does not just postpone the problem, which in itself might be a good thing, as it would give developers, companies and inventors more time to come up with solutions. No. Once the problem strikes, the changes will be far more rapid, hiting a less aware society, that is less prepared and has less resources left to react.
While there are food, energy and fuel subsidies in some countries, in other countries these subsidies may occur to some extent indirectly in the form of wars, welfare and bailouts.
So what can Shell and others do? A few ideas to create awareness and distribute knowlege of solutions:
- Creating awareness of the reliability of our modern systems to fossil fuels, by conducting and publishing a study on the effects a deprivation of various fossil fuels would have on various modern cities as they are.
- Transparently financing new or existing open initiatives in linking up cities and sharing of best practices. (funding of "TED cities" conferences with significant players attending only)
- looking for new economic paradigms that bridge the gap of what fiscal figures should stand for indirectly and what is actually happening on the ground.
If you want your goals to be acknowledged openly, act openly.
Adam Newton
Our existing scenarios work (www.shell.com/scenarios) looks at a range outcomes for energy use and considers the ways in which shifts in demand and resource availability can accelerate or surpress the diffusion of non-fossil fuel energy technologies. As we work towards the next set of scenarios we place the urban environment at the very forefront of our thinking as we recognise that cities will be the environments within which a majority of the resource constraints will occur as will the innovation to create sustainable solutions.
On funding you make an excellent point. The type of consortium that could effectively plan and execute new city development against a model of better integrated urban infrastructure does not currently exist. It is clear that in such a consortium the array of skills - from planning and design, to financing and construction would be required. Already we are working hard to establish a dialogue between companies like our own and other in the technology, electronics, mobility, water and waste spaces, to consider how to create effective relationships that would be able to address the challenges that rapid urban development pose.
It is a long road.....
Lukas Müller
Due to the unrenewable nature of fossil fuels, one might be inclined to believe that rising prices will eventually solve the incentives problem, arguing that the performance required of renewables in order to succeed on the market gradually declines inversely proportional to the rise in energy prices, making renewables sooner or later an economic imperative. (to the extent they don't need unrenewable resources themselves...)
There are good reasons to believe that. Let the market decide as some say. But that only works smoothly if all external costs are taken into account and the market is not distorted in one way or the other, e.g. by direct or indirect subsidies.
But as I stated in my previous posting, there is a danger of short term "thinking" trying to bypass these high energy prices, that are in fact needed by decision makers to justify the inevitable change in strategy.
Not just can such subsidies become a problem for society, but also for traditional energy suppliers I would argue, as such short term evasion tactics eventually lead to a more rapid, more challenging shift towards renewables.
As the time runs out, let me just conclude with a few ideas:
- Experience in renewable technology gained in more advanced markets (with renewable tech subsidies) can help overcome rapid changes in markets that have been held back by subsidies of fossil fuels.
- Criticism concerning the paradox of beeing a fossil giant while at the same time advocating change can best be adressed with total openness.
shawn disney 10+