 So welcome to the last session of today. I hope this will be exciting for you enough to keep your eyes open after a long day of presentations. This session is about fossil fuel scarcity and overabundance. What is it in reality out there? And what's the implications on different ideas of whether we are overabundant or scarce on fossil fuels? What's the pros and cons for development? Of course, as all of us know, the axis of energy is closely related to development. No energy, no development, at least if we look into history. Through history and recent history the overabundance of fossil fuel have been the chief source of energy on which the whole remarkable development over the last couple of hundred years have been propelling the development and most lately exemplified by China's matchless development which has been propelled by abundance of very cheap coal. At the same time, as we all know, the same fossil fuels is responsible for climate change, threatening future development. The focus of global and national debates today has been about how to reduce the use of fossil fuels in order to limit the catastrophic effects of climate change. But this panel instead will then focus on the pros and cons of the fossil fuel supply and discuss the role of fossil fuels in the future. And this, we believe, is an area of research that many environmental researchers seem either not want to talk about so much or are simply quite ignorant about. So is the world or parts of it long or short on fossil fuels? And what are the wider environmental and geographical implications of that? So my name is Karl Halding and I'm leading one of the research themes here at SEI, the Rethinking Development Theme where we are actually bothering ourselves with these types of broader questions around development. Now in order to make this session a bit more dynamic, I have also invited my colleague and good friend, Perkz Liebnes who is leading the New Climate Economy Project here at SEI as a sidekick to help frame trick questions and to help me to pick up all sorts of questions from you in the audience. We will organise this session a little bit differently than the previous sessions. So instead of having six consecutive PowerPoint presentations, we will invite the panellists two and two up here to present their main arguments during five minutes each or ten minutes together and then we will have a short ten minute Q&A picking up questions from you and questions from Perkz and then towards five o'clock we will wrap up. But I thought since I have Perkz here and there are no other sessions here on the New Climate Economy this is a very, very interesting project. Perkz, what is the New Climate Economy all about? Long and short answers to that, but to start with the premise of the project is as Annika introduced this morning is very much one of recasting the discourse about taking climate action and mitigation in particular. The debates have been very stuck in thinking very linearly about climate as changing the way we do things in a more expensive way, this is bad for the economy. And the premise of the New Climate Economy then is to start from decision makers current agendas, not starting from the climate agenda necessarily, thinking about the concerns whether it's security, whether it's growth, jobs and perhaps also the longer term strategy for development and thinking about how they overlap and what a climate overlay means on top of that. Of course the picture that emerges isn't as simple as one that simply says there are costs of climate mitigation but there are multiple areas of co-benefits and there are areas where security concerns and climate action can overlap. It's not a question of trying to pick out, just identify a list of overlaps and conflicts it's much more about thinking quite deep and hard about the drivers of economic growth as we look for the next decade and beyond and then thinking about concrete actions in the short and medium term in particular where climate mitigation and broader economic objectives can mesh together for two-one agenda. So that's in the abstract and hopefully we'll become clear a little bit in the session in the direction of questions, more types of questions that we're trying to investigate there. Well hopefully you will be finding food for thought here during these sessions. We have divided then the session into three panels. As I said the first one is about what we could learn from history with a certain focus on biofuels that Francis Johnson will soon talk about. The second mini-panel will be around the new fossil fuel economy. Are we short or long on the fossil fuel supply? And the third mini-panel are focusing on questions around whether environment and resources constraints is driving geopolitical change and how that could affect the prospects for sustainable development. So I invite the first mini-panelist up here, Francis Johnson and Goi Han. Five minutes, Francis. Okay thanks to the organizers today and a special thanks to the session organizers for cutting our time from ten minutes to five minutes. I was able to reduce my slides from eight to three but not to zero. So many years ago my professor, in fact my best professor said the only subject you need to study is history or every subject you study must include history. And I think that, I don't know, I kept this for many, many years. I wasn't really able to act on it but finally I have started thinking recently about and gathering some data about the very long-term use of energy in particular biomass energy. Now long-term for the policy people is like 10, 20 years but I'm talking hundreds of years because we have this record to learn from. So now the title of the talk is lessons. I'm not going to give you any lessons because it's work in progress but I throw out a few ideas and then we see if it stimulates some thoughts. So if you look over time, in 200 years the shift that has gone on can be thought of based on the basic fuels, biomass and then followed by fossil fuels and then followed by hydro and nuclear. And what you're reminded of of course is that it's a fairly, it's not as fast a process as we think, shifting from one fuel to another. And if you look at the 19th century almost all of the energy used was still biomass and I should point out that it was basically biomass from forests whereas today we have a much more diverse set of biomass resources available compared to then. So then you see that at the turn of the century things are getting very dynamic and interestingly coal's share of global energy was peaking around the turn of the century as the new fossil fuels came in. Oil followed by gas and then of course hydro and nuclear. And then if you look at this curve at the very top of the curve is biomass so it's been shrinking over time but what has happened in recent decades is that it's flattening and it's flattening for two reasons. One is that in the least developed countries they are still very dependent on biomass and the population growth in those areas is much higher than the world average. So the actual amount of biomass that's used for traditional purposes just like it has been for thousands of years is still quite big and in absolute terms is not really shrinking. And then you have this other part which is the modern bioenergy part both in developed and developing countries alike. Now I take you back even further in history back to the 1400s. At this time England was getting started on a big transformation and that transformation was defined very much on the energy side. It's common with energy and technology to think about the saturation of a fuel as 90% which means it's almost completely dominating the market or 10% when it's just getting a hold in the market. So what I show you here is various countries and regions. The time period it took to go from 90% biomass to 10% and so you see that the UK I should actually say England, England and Wales. So it was about 300 years. Now also what you can see from the chart is that they basically completed this transition before anyone else even started. And so this idea of the first mover in this case in energy and industrialization is true in many other fields and so the first mover is still of course very important and has a big effect. And by the way during this period they were industrializing so fast and they needed wood constantly because coal was just becoming available. So they were importing wood. You can imagine how costly it is to import bundles of wood and what country was the main supplier of wood to England? Sweden which is also an interesting historical fact. Now Sweden is quite the opposite. It has plenty and sometimes it's a net exporter. So anyway you see the other regions and countries making this transition. The non-OACD countries that is the developing countries have still not come down to this figure. And in fact they probably never will. And another fact I found interesting when I was gathering this data is that the share of biomass in Sweden and in developing countries is actually about the same 23% which is interesting. And so I say hey Sweden's just like any other developing country. But this is an important point because the amount of bioenergy used in Sweden from the end of this graph it has increased about 10 times a factor of 10. But the area of planted forest has increased. This is hard for most people to understand. And it's mostly woody biomass. How can you get 10 times as much energy and have more forest? Well, it's good management. So land is not as scarce a resource as the NGOs would like you to think. It's a question of doing things well. So just to finish I should say also that and maybe now I want to go back to the other slide is that so here we are with this little chunk at the top of biomass which I'm saying it probably will start to bend down this curve. But the difference is that it will be heterogeneous. So these other sources coal, oil, gas, hydro, nuclear they're rather heterogeneous. The homogenous is what I meant to say. Biomass is heterogeneous. They're an infinite number of applications. So we're entering into a very different situation with a resource like this and that's the basis of the bioeconomy. So it's no longer these transitions are no longer straightforward the way we used to be where we have our energy slaves which is fossil fuels. It's different now. We have to deal with a much more varied situation and very different applications. Okay, five minutes barely. Thank you Francis. I think we will have the opportunity to come back to a few of those questions after Goy has presented. Some of his thoughts around lock-in as something that we are not usually as concerned about as we're more interested in transitions but we often forget about the lock-in and whether we could learn it from history avoiding lock-in and path dependencies and such things. Goy. I'll use Francis's thing for two things. One is the opening sentences that one of the professors of mine told me when I started the risk by the way Roger is sitting there say you have to always know what is the real risk and when I look at China today increasingly I think it's not the flooding, not the earthquake is in this rapid transition we're locking into so many things that eventually will cause China a tremendous great deal. The other thing is that exactly that graph I was purposely left there if you look at that translation of the energy systems since the industrial revolution I think that today and what is remaining on the top part where the biomass is still predominant is the developing countries we call it is where that pattern is going to evolve the next is going to copy what is down there which is largely coal, oil, gas and it's going to transition into something as the earlier session we talked about be that the energy system transition be that inclusive of some other terms I think that's where this wonder whether we talk about the notion of locking is let me put another way really the impetus for us to think about this is where the emerging countries all the developing countries in general repeat the carbon lock in pattern in the energy system as it did the rich countries since the industrial revolution so that's basically I could have just stopped here but since we reduced the one I would not talk about what is the lock in but just to say that it's not all locking by itself it's a bad thing and as a fact the locking is mechanism we increase efficiencies we benefit from the economic scale and all that it's just those lock ins in our case primarily that the choices made in the developing pathways that later on turned out has a major unintended environmental consequences and we're interested in those kind of lock ins and why should we care about it and I would not talk about it but we should what we already know I would definitely not talk about that why is I don't know what we already know but I also know a lot what we already know so that could take all the time but what more do we still need to know you know it's a lot yet we need to know but who has the time so I would just talk about three one is a typology of locking I think it's a lot of those talking in the literature now and at least to me we don't have much thought into there's all kinds of lock ins and they do different and in terms of how easily they get out the mechanisms through which they may be broken and get out for example if a specific technology locking versus a technological system locking is drastically different and then it's the whole area's work I think in the area I studied we often call it a hidden hazard increasingly we see the literature called as unintended consequences and it's the inertia and the time lags and increasingly now with case study we are starting with some colleagues in China it's really taken to look at will China lock in in terms of the car dependency or the motor vehicle dependency as what we are seeing in the US and we are arguing is that not going to happen because this is so-called the check time it takes much less time for the system to kick back the unintended consequences or the check information to the decision makers saying that no this is the past you cannot go down whereas in the US we have roughly the same size of land as in China but quarter of the population for so many years so they have the land and all that so not getting into that but the notion here plays to say the check time, look at the system is an important one to understand how locked is locked in the third one is can we have a framework and the twos for assessing this very notion of how locked is locked in and the last one I have a question how to know what we need to know when we have time to talk about that thanks a lot Goy for keeping the time and please join us here for a few questions I think Per you had a question to lead into this discussion yeah I mean this sort of provides me with a get out of jail car to ask any question I want right because Goy sort of said you know what can I talk about so I mean and one Per is asking this question do you have any questions raise your hand pick one or two of those the question I'd like to ask then is one common learning from these two things is of course you know France if you look at the historical record of how slow actually the biomass transition has been or any other energy transition really if you want even vastly superior technologies take a long time to reach the 90% and very often is for the reasons that we're painfully aware of now limited energy access to a large part of the world's population so given that it is very slow and given that lock-in is much more than just building a piece of infrastructure or capital asset that lives for a long time which is how the IEA for example talks about lock-in that it's about market arrangements that it is about social norms that it's about acceptability of technology that it is about financing constraints at a very micro level and all sorts of other things now one question I can ask myself and what does this mean for looking ahead to a low carbon transition and biomass is a very interesting case here the role of biomass in that but the question really is then if you contrast the sort of shiny supply-side scenarios to show what's technologically possible and paint a pathway where we can say we meet all of these energy services these technologies with existence of energy efficiency opportunities that have been around for 40 years or more showing the big gap in what energy efficiency we could have cost-effectively compared to what we do we're confronted with a huge discrepancy here where the lock-in is one of a very slow transition away from technologies that we have towards ones that might be better whether from a development or price or a low carbon point of view now the question then is what does this mean for policy how can policy makers try and accelerate this without also heavy-handed interventions that they cause other trouble again your hidden hazard so if you could reflect on that from the two perspectives you presented Well, I think it's two perhaps two reflections one is that the lock-in if we look at limited eye-reading for example the economics literature they say the technology eventually they will be replaced so in a way if you leave to the market long enough certain lock-ins will go out because it's all kinds of that mechanism that the economists tell us and I do believe that perhaps is true but the difficulty in us that we are facing today my understanding is the urgency of the climate change issue as such that doesn't allow that breaking this carbon locking pass entirely by the market and that will take too long and too much emission that leave the climate issue without any resolution so I guess in the between is your question and of course I have no clue and how that our combined government and the private partnership or a popular term can accelerate that transition and one thing I think is I was a fan of that we have real experts like months and Oliver earlier the introduction this environmental technology innovation diffusion research tradition the transition management and within there for example this where key notion of the niche strategic niche management I guess that's where we need to think more and where is that in accelerating this is in that just not to go back to the earlier session but that's where I saw it also being emphasizing the inclusive is really strategic in terms of what we think would be the strategic niche to speed that transition of course by the end being inclusive is important I don't know whether made any sense but yeah that was complex I've forgotten the question now but I will try I think that the lock-in you know locking is can be there's a technical structure part of lock-in okay you have all that there's also a certain sociocultural lock-in as an American who moved here many years ago and has not owned a car for 15 years I can vaguely remember now the American love affair with the automobile you know and that's a certain type of lock-in as well right but and so the example with regard to policy in this respect the Swedish example is interesting here because they implemented with different pathways for alternatives in the transport sector biogas electric cars biofuels etc so generating different alternatives and experimenting this is very useful and the willingness to fail bureaucrats usually are much more scared of failure than they are happy about success so if you can create a culture in governments and in agencies in general that the willingness to experiment and fail is very important and that's another reason why I find bioenergy very interesting because like I was saying earlier there's an infinite number of ways to implement and the different feed stocks applications whereas the transitions we've gone through in the past they're actually very linear we need energy we want to do more we get more we just suck it out of the ground and keep going well you know I don't think this is going to work in the long run so well it's not going to work but are you willing to invest more now to avoid much pain later I guess is the question and then you have to leave that linear mindset and think much more multi-dimensional and that's what the new renewables will hopefully offer as well as efficiency and so forth Thanks a lot and please stay on the stage here while we turn to the next mini panel Peter and Mike will come up Charlie we will keep the question for later because we have to keep the time schedule Goi and Francis please come up here and join us on the stage so the second mini panel here is around the new fossil fuel economy which is something that Michael and Peter have been doing quite a bit of research around and are we short along on fossil fuel supply and how should we deal with this the two papers in the abstract but I guess you will actually do a joint stunt here on this or are you going to do one by one anyway it's a common entanglement in the case of Mongolia sorry Pete Erickson and then Mike a toolkit for joint actions, new frontier and a keystone test please Thank you Carla it will be sort of a joint presentation we've split up some topics but I'll start you can be the judge of that so we've been doing some research on this notion of unburnable carbon the idea that if we are going to limit global warming to 2 degrees say or less that we can only burn so much more carbon there's a lot more than that in the ground and so we're going to have to not burn some of the carbon, some of the fossil fuels that we have I think this is not a surprise to anyone here but I think I'll read one quote from OECD Secretary Secretary General Guria that I think sort of brings the challenge to be really clear the fact is that any new fossil resources brought to market conventional or unconventional risk taking us further away from the trajectory we need to be on a very strong tide is what we call carbon entanglement that governments everywhere on behalf of their citizens have major stakes in bringing fossil fuels to market and taking their share of the rents carbon entanglement will not be easily undone these are some of the strongest tides we have to confront and this is becoming perhaps increasingly accepted we heard this morning from Charlotte that this started to become a theme at the World Economic Forum last week but we also heard that low carbon development really needs to benefit the poor and if fossil fuels are going to have to be left in the ground that brings up some really interesting and thorny questions about who has to leave them in the ground and who gets to burn them so one very interesting case study that we have been working on is the country of Mongolia Mongolia is a very poor country by many standards per capita GDP of between $4,000 yet it has the economy that's most dependent on coal exports of any in the world this shows this chart is from data from the World Bank that shows that coal represents about 30% nearly one third of Mongolia's GDP which is extraordinarily high which raises a number of questions risks to the competitiveness of its economy both in terms of whether it's investing enough in other sectors but also is this income stream from coal likely to be there in the future are the markets is the demand going to be there last week also at the World Economic Forum there were some scenarios presented on the key source of demand of Mongolia's coal China perhaps in one scenario China takes its coal caps seriously and ratchets them down and potentially is no longer a giant producer of steel which is the other which also demands significant quantities of coaking coal and in which case if that were to play out if coal demand from China and other major economies were to decline under say a two degree scenario what would that do to Mongolia's economy so there are fundamental risks and challenges that Mongolia but also other countries are faced that rely on fossil fuels for development so the question that we are exploring in our research and that Michael is going to expand upon is what tools and analytical tools and frameworks are needed to take on this question because most of climate policy most of climate policy analysis has been on the demand side has been looking at how do we burn less fossil fuels over time and there has been much less attention on the supply side on how to analyze and how to develop policy to not dig up the fossil fuels in the first place so one of the tools that a very simple one that we started applying in the Mongolia case is this idea of extraction based emissions accounting most greenhouse gas emissions accounting is based on what emissions arise from within a country but what if instead you looked at the emissions that eventually result from a country digging up fossil fuels in the first place and in the Mongolia case their territorial emissions are about 10 million tons of CO2 annually but their extraction based emissions are 10 times that now this is just data through 2010 they're arguably their contribution to global climate change is much greater via what they export than what they burn in country so we've been working with the Mongolia Ministry of Environment and Development as well as the Ministry of Energy to raise these kinds of questions and have some of these very challenging discussions that we can continue and Michael will touch on further now you can start take the do I just kill that and then the other one comes up alright let me just say that I'm feeling very guilty first of all for not being inclusive enough but we realized afterwards that I was thinking about mobile what oftentimes is termed as mobilization and so we need to think about what that word inclusiveness really means also feeling guilty because if you noticed and Goyi were up here they kept referring to that American US model of development and you kept looking at me and finally for using PowerPoint it I'm sorry but we're from Seattle and it's actually legislated in Seattle since that's where Microsoft comes from that we're required to use PowerPoint at every presentation so it is the last PowerPoint Magnus and Marie will save you for the end without it so I want to just talk a little bit about I think we're on the cusp of a lot of interesting new work at what we're doing as well as in collaboration with Holland and I see Baldur's here and others on trying to develop a toolkit the toolkit for climate actions new frontier what is that frontier Pete referred to on how Gloria's sort of seminal talk about carbon entanglement unburnable carbon and stranded assets what happens to those assets such as the coal mines and coal plants under a two degree scenario lots of interesting research occurring on some of those issues like stranded assets but from an analysis and accounting perspective as we'll discuss it's really a blank sheet there hasn't been so I've been working on the demand side of the equation for many many years and it really does seem like for some reason it's been our blind spot Keystone XL raise your hand if you know what Keystone XL is okay about half about half so it's sort of a cause celebrity for the environmental community in the oil industry it's a pipeline that would connect the oil sands we can't call them tar sands oil sands in Alberta with the ports in Texas for export and it passes through the US and it requires US State Department approval lots of reviews and now President Obama is about 70 to 100 days away from having to make a decision in which he said in his climate address last year he will only approve it if it does not exacerbate his work exacerbate the problem of carbon pollution so let's return to that in just a second but what it does is it begins to say okay let's start looking at infrastructure fossil fuel supply infrastructure not just coal plants but what brings fossil fuels to market let me just ask a question okay try to ignore the chart there for a second fossil fuel scarcity or abundance raise your hand if you think it's a scarcity issue raise your hand if you think it's an overabundance issue all right well I did kind of lead it with the slide but I would argue actually it's both and so some of you may be familiar this is sort of our spin on the underpinning of the unburnable carbon dilemma and that shows you and the nutshell of all I want to get across here and we can come back to this is the two resources that are the issue that we're going to talk about and we're going to be talking about the three degrees or three degrees or four degrees it's still the same it's coal and it's also unconventional oil that's oil sands oil shale as in Estonia and elsewhere where there is more potential resource and it's also extraction techniques in other parts of the world so lock in unburnable carbon dilemma with increasing investments in a coal mining and for instance Colombia where they're considering more coal mining and orienting towards the Asian market or Indonesia the world's also the world's leading coal exporter and so it's ironic here is having worked in this area of low emissions development and in green growth studies as we were working in Mongolia you read those studies you read that literature is there any discussion of the supply side you could have all sorts of energy efficiency and renewable energy and in your plan but no discussion of development based on fossil fuel exports because it's also an issue as well for low carbon competitiveness of economies so I'm going to flip through these this is Brazil oil affect its domestic policies example from Estonia or the Arctic these issues are everywhere so let me just say I'm not going to walk you through the demand and supply curves just to say that a missing element of the debate the debate on keystone has been dominated on this question of oil sands tar sands it's dirty and it's high emitting well what we have found remarkably is that looking at its impact in the global oil market if it brings more oil to the market which is an open question is actually a bigger impact in terms of emissions in terms of increasing consumption and the interaction of supply and demand we can go into that more so there are tools of supply and demand analysis that can be brought to the supply side that aren't being brought in sufficiently and so there is space for SEI to contribute to develop robust analytics that paper we're trying to we're working on a submission to nature climate change right now on that to try to build the literature on that side understand equity implications who can exploit the remaining space to produce fossil fuels this is and we're so our colleague Shibman who is very involved in equity and probably many of you know him we're exploring that question from the supply side very interesting questions and difficult ones and other conversations going on about often times it's a water constraint the coal development in China it's a nexus issue oil shale development in Jordan potentially bridge between science and policy it's like bridge out on supply side policies we need to start building some bridges is it fossil fuel production subsidy removal are there other innovative ideas that are out there we're trying to explore those and develop communities of practice so it's not just us researchers talking about it it's it's everyday implementation of doing green growth studies and we talk about these issues so thank you thank you Mike and Pete you almost used your the 20 minutes that you shouldn't have used so there is no time really for Q&A here but a few reflections maybe personally I think the idea of unburnable carbon is really interesting to develop further and could it lead to expectation shifts that in the long run could lead to shifts in how we or how different actors make investments into fossil fuel extraction that's an open question of course but Per I know you have a few reflections as well caught me on the hope there but right this is something that has been a preoccupation if you think of the new climate economy framework how do you handle the world where there's long hydrocarbons as well as coal and not the that this entanglement isn't just one of mongolia and others but in this country collects a large amount of taxes from fossil fuels it's a pension fund so heavily your pensions as far as you have built them up are heavily invested in this as well it goes much further but the problem is if you look at the market now the notion of a carbon bubble you have to say the whole market is wrong oil companies are valued at 10 years of cash flow is it really wrong is there a plausible scenario where they are getting constrained within 10 years there's a lot of confusion to clear up in this space and I couldn't agree more that we could have a contribution as I say I had to make to this and the notion of physical standing as opposed to financial standing here and also to add that very quickly I have to be very quick we're working within the new climate economy project we're working with partners in the climate policy initiative on the joint financing and energy questions one of the things that we've done in that is to ask a lot of investors about this and as you've noticed in the abstract some investors are getting a bit uneasy and finance of the coal is getting more difficult but in the main unless there's this expectations shift that actually not just against some counterfactual pathway isn't happening but actually there will be an impact on the use of these resources in the future then it's very hard to break out of this investment pattern that we have now where very large amounts are being invested for exploration in the Arctic and elsewhere shifting that investment in a tremendous innovation capacity towards the low carbon sector through an expectations shift is another influencing channel also of the international community that isn't often thought about as we haggle over carbon budgets and allotments and all of this so I think it's going to be a good one. So thanks a lot Peter, Mike, come and join us here on the stage we'll see if there's some time left over for questions later. Oh no, that was fine, it was very interesting. So Magnus and Marie please join us here. So this is the final panel of today with the question are environment constraints driving geopolitical change? So Marie are you first out, it's about the new geopolitics of environmental constraints changing ecosystems and resources competition and Magnus will then say a few words around something else, something around strategic, how countries are dealing with strategic resource risks. Both of these things are generally related to one another I hope but yeah. I'm just wondering, yes a matter of organising ourselves on stage if we should get our colleagues to come join us here so that it looks a bit more like a panel now that we're using slides. No more slides. I'll try to be brief I'll see if I can manage. As Calle mentioned we've spent quite a bit of time trying to understand the world geopolitics which seems to be popping up every so often in not only in mainstream media and news articles but also in the academic literature and while I've now spent a good couple of months trying to understand really what it means I'm still struggling so if one of you have a good definition of what a geopolitical interest is I'd be quite interested to find out but I think what you could say is that I think it's used in a way, in a way, it's used to refer to a need and a desire to understand the change that's happening in the world and I think this change on the one hand has to do with change in the physical environment so change that has to do with climate change with environmental limitations, fossil fuel availability but on the other hand it also has to do with change in the political system so the link between the physical and the political. When we talk about geopolitical outlooks or geopolitical narratives it's often referring to the changing balance of power in the political system be it the new multilateralism of countries like China and India and Brazil or be it this questioning or questioning of whether we're going to continue to have some sort of unilateral system of a hegemon is it's going to be the U.S. is China going to challenge the U.S. to this position but I think what we're not seeing so much neither in mainstream media nor really in the literature is a connection between these two so putting the layers of the physical aspect of geopolitics onto the political one and sort of answering questions about how these physical constraints brought about by fossil fuel scarcities or resource strains or abundance for that matter actually conditioned the likelihood of different geopolitical narratives so is it really worth speaking of China as the next superpower given problems related to water stress to overreliens on coal and things like that and I think this is an area where SEI has started answering questions we've made a couple of attempts but having seen presentations from my colleagues today I'm even more convinced that we could become much better at answering these questions in a more systematic way and I think this also goes back to Jakob's question I can't see him now to David on how weak is being applied in California and how this links to the broader sort of political economy I think we can really use our findings from our underground work and contribute to making more informed sort of trajectories and predictions about where the political system is heading and what the likelihood of various geopolitical outlooks are I think potentially and Magnus is going to talk more about this by doing this we could do one of the things that was mentioned this morning which is really start bringing different policy audiences together I think this notion of global change and where the political system is heading is something that definitely attracts attention beyond ministries of environment and development and so yeah an area where we can make a difference potentially well I'm probably not the only one in the room who wants to hear more from Michael and Pete and the other people on the panel so I'll try and keep this brief so I'm trying to pick up on a couple of different things that have been mentioned earlier I think Pete it's almost like the opposite of your view about extraction based accounting and the idea I was going to talk about was about importing a risk profile of a country's imports and specifically how we can explore the resource intensity of a country's consumption and again we're going to come back to York and using input output modeling and we'd begun a conversation earlier on in the New Climate Economy project about possibly using input output modeling to explore country's risk profile through the embedded fossil fuels in their consumption not the raw fossil fuel imports but these modeling approaches enable you to look at the embedded fossil fuels in the goods and services that are imported or the virtual land or the land footprint associated with various different imports to a country and so we have the toolkit to follow on from what you said Marie within SEI to start exploring different parts of these questions I think and in particular then to explore how countries will manage these risks how they see the consequences of resource scarcity and what the implications of that are for development the implications for the environment implications for sustainable development and I think we're starting to see policy makers ask those kinds of questions it's slightly different topic but I was at the European Union talking about high-end climate scenarios this complexity and uncertainty of these future worlds and the main recommendation from the external advisory service that we spoke to on stakeholder groups outside the commission who to engage was the global military advisory council on climate change these guys are doing scenario planning like you're talking about they say they're talking your language you should go and speak to them when we look at consequences are we happy to leave that discussion to the military advisory council or do we think SEI has something to also add to conversations about future uncertainty future development path and resource scarcity issues and I think we do and we have a heritage of scenario work at SEI and I think we have a sort of reawakening of that discipline within SEI with a few new people that have joined and some recent projects and we also have a track record of starting to do what you were referring to Marie of talking to policy makers about geopolitical implications or taking a geopolitical lens on the things that we already study though through like the basic work I think we've proven that we can deliver policy relevant messages based on this kind of research and I think it's an angle that SEI should go to go in a lot more and I think I'll leave it there and hope that you will all ask questions that make use of the whole panel Yes, thanks a lot for the panelist and Marie and I think there is a number of angles this could be taken further and one thing that struck me here at the very end is that what we have heard here from the panelists are issues that quite different from the way that climate negotiations have been framed as trying to find the top-down solution of how to distribute in an equitable way a limited carbon space. What we're hearing about here today is rather how different countries could be acting in self-interest to gauge different type of risks and how that could precipitate different patterns and different strategies which by itself could have foraging implications for whether or not we could reach or steer towards a lower carbon trajectory but also to what extent this could lead to new types of political alliances on the global and regional arenas Now, that was just reflection. I hope there are some questions from the audience here. Good fine, we have a good 10-12 minutes to discuss this. Charlie, please microphone or do you take my microphone? This is actually more of a comment just relating to mainly what Michael and Pete were talking about and it's just maybe from an outside perspective it's hard to see why people are getting so worked up about the Keystone project in the US you know, it's just one project but I think one of the reasons it's so vital and one of the reasons we're all getting a bit obsessed about in the US is because of the issues that Michael and Pete were raising and I think it says a lot about where SEI can make a contribution in the future as well traditionally people have thought about these issues in a rather short run way that as Pete said is very demand focused and we've kind of left it up to economists to look at these questions from a very sort of short run perspective of how are markets going to change in the short run based on the demand supply considerations but I think the stuff that Michael and Pete are pointing out is something that's much more fundamental and much more important and goes way beyond economics it's about this is about precedent setting this kind of one project is a litmus test because if the US or Obama decides not to pursue this project that will be basically the richest country in the world deciding to leave a very valuable resource in the ground and there's never been an instance in history of the world where that's happened before so that kind of much longer I think that's correct but that's kind of that very sort of long run perspective and thinking about unburnable carbon and that's where those kinds of issues come to play and I think that's why having a program on unburnable carbon in SEI could be a really important contribution that we can make Thanks for the comments and any comments on the comment while I walk over to Eric here It's an easier question because it's about leaving it's about it's actually a question of leaving Canadians Canada's resource in Canada it makes it a little bit easier Yeah so I had a question about renewables versus non-renewable energy sources I do just want to say very quickly there are some traditions in economics where precedent setting can be a valid part of the analysis but so renewables and non-renewables were put on the same graph and they kind of appeared in the same way but they seem to be quite distinct in a couple of ways one of them is that non-renewable sources there's a finite amount of them but it's a very large amount the annual rate of supply can be expanded to a considerable degree depending on well anyway to a considerable degree renewables that's not the case it can be expanded to some degree but it's constrained there's an annual supply the other one that's related to that is that as you keep producing non-renewable resources the energy costs of producing them increase the energy return on investment for tar sands is extremely low and for renewables you can degrade them but in principle it's possible for efficiencies to gradually improve the energy return on investment and so I was wondering if that has any bearing on what you were proposing well anyone who want to respond to that quickly while I walk up to the next question here you can respond well I can just say that I think what I was also trying to point out with the homogenous versus heterogeneous addresses this a little bit because it relates also to risk when you have heterogeneous then you're also reducing your risk which is a slightly different point from what you're saying but related I think yeah hi next question is for me I've got a couple of questions one to Francis you mentioned there were sort of many configurations for bioenergy different technologies and so on so forth I was wondering what do you think are the implications of this opportunities for a lot of small scale innovation more perhaps we might think of as more democratised innovation and you know is this is there great potential for that you know what do you see is the implications of the fact that there are many different sort of technologies and resources bioenergy sources and a question for Marie in your kind of looking at the geopolitical narratives are you focusing on the nation state in those kind of narratives or are you also looking at more kind of networked approaches network society kind of approaches and things like that now we don't wait okay so yeah I would say that because of this great diversity it does allow a lot of experimentation and I would say by nature more inclusive of course it can also be very large scale and can cause in some cases some of the same problems that other large scale energy resources create but the point is that the diversity of applications and scales and resources is so tremendous and people always tend to underestimate it even researchers even many of my own colleagues in fact and so yes I think it's potential for being inclusive but I would say there was a second part to your question no okay I guess that's it Marie I personally tend to be very state centric as I guess you noticed but we are indeed yes looking at narratives created by other actors as well so noting that the world is not just billiard balls Hi my name is MP and spokesperson for the Green Party as coming from outside I just can't thank you for interesting debate and presentations and I cannot hold on not to put your question to apply this analysis on to leave fossil fuels in the ground the dilemma with that and also geopolitics as any of you been looking at the Arctic and the fossil the run for fossil fuel in the Arctic could we pass on the question to Arneko sitting up there yeah and Arneko a short response to that so we could have another question before we wrap up you can't look at the Arctic today without taking into consideration the geopolitics of fossil fuels because it's there and but it's I would also remind you that it's not only the geopolitics of fossil fuels it's the geopolitics of hydro it's the geopolitics of uranium as well of course combined with the military but just taking the energy issues so so yes and I think actually I would like to also to turn around there was a question introducing Maris Magnus is the resource constraints shaping new geopolitics I would also ask the question how do current geopolitical interests shape the discourse about resource constraints because that's also going on there are narratives being created to favour certain interests here and we need to look at that direction as well but yes indeed you can you have to look at the Arctic in this context I know that David has been waving a long time up there so while you walk around David I could add also to what Annika just said there are also geopolitics of shipping very much in play in Arctic that's an example how a changing ecosystem is opening up new avenues and new playgrounds for geopolitical contests David Perky from the US Centre and I have a request once again a small and short first of all a request could Maris circulate about the best geopolitics for dummies article that she knows for us physical scientists in the Institute thank you and my question is and we've been talking a bit with Michael lately and his group about what are the sort of local impacts on water resources of these fossil fuel development ideas and projects and could that somehow be used to decide which ones get left in the ground and which ones are burned along with the equity issue that you raised that Chiven's working on do we have a governance system in place that could actually decide and allocate those sort of development rights and if not what would it take to put one in place anyone want to respond to that there are so many dimensions to what is perhaps one of the biggest industries in the world and the governance question you could ask that governance question about the UNFCC and what its its throw weight is right now in terms of the overall equity conversation as it is I think it's worth sort of upsetting not upsetting the conversation but adding this dimension to the conversation so that we're a little bit more honest about the implications in the ongoing context in which equity is invoked whether it's response measures that Saudi Arabia may invoke where it's already you can look at this from the standpoint of rents the economic profits that have been accrued from fossil fuel production historically and who's benefited and who's not and there's an interesting analog there to the conversation about common but differentiated responsibilities and capacities and the two can be connected the solution space is very difficult it's a minefield and that's why I think we welcome ideas about how to approach this from a political economic perspective because at the heart of this is interest politics and how decisions are made at national levels and that's some of the stuff that the new climate economy is taking on from a rather savvy approach I think thanks to Perin his input yes and in on dummies about geopolitics I think the one of the later issues of the climate policy journal from autumn 2013 is about the geopolitics of climate change it's a special issue and where we actually contributed a piece about how China, India, Brazil and South Africa are collaborating on what that means for climate negotiations and the wider ramifications and why they're collaborating so I think you should pick that up in that whole issue there is no definition on what geopolitics means I thought it would be the bible it was not we recommend our article there is nevertheless it's a good read hi my name is Bart Wickel from the Davis office in the US by no means an extractives or fossil fuel expert but there are some examples I think where fossil fuels are left in the ground in the Netherlands for example there's very strong opposition to gas exploitation based on earthquake risk and environmental degradation or risk Peru or western Amazon where oil is left in the ground for the moment because of deforestation risk and so so I'm just wondering if there's any thinking in that direction where you can combine a localized environmental degradation and risk and carbon emission risks and if that is sensible and from my perspective what resource degradation risk in particular seeing all the accidents that are happening with coal oil transportation in the US recently for example yeah thanks Bart there's no reason why not I think that'd be a great research to pursue interested in what other SCI researchers are working on in that topic but many of the several of the areas where there's more intense fossil fuel development likely to take place I think Michael mentioned some of them but maybe water stressed areas and I know you're working in Mongolia so that could be one example and bringing in other more localized factors absolutely it's worth remarking that the classic case of this is Ecuador and some of you followed Yasuni ITT which was just that type of we'll leave it in the ground well that program has been canceled in fact it's gone rather starkly 180 degrees in the other direction which is a bit shocking which invokes there is a parallel here to red if you follow the red conversation you know it's basically deforestation issue how do you ensure that you can actually keep it in the ground forever because administrations change politics change context change so we need to really think creatively in that area we have a quick question from Roger Casper so okay just a quick question there have been a number of comments about how a geopolitical perspective doesn't help us out very much but I'm sitting back here looking at a number of major books that have come out on global governance and I'm wondering whether or not that's had any effect on you thinking like dead silent here young people don't read books nowadays that's the problem I don't know whether I'm addressing Roger's question but it's just linked to earlier Anika's question about the neo-geo or the changing geopolitical dynamics and how we start to thinking really this changing pattern how that impact on the environment and the developing questions that we are looking at I think it's a lot of those I cannot maybe should go in the lens that how that was we would say is a very inconsistent of this general discussion in the global governance institutional max service so what is there what is the lack of there but in relation to that maybe I can just one minute use a specific example also address Anika's question of course we see that on a time that the increasing global resources scarcity together with the changing geopolitical economic power pattern they interact that they mutually reshape each other one example is the rare earth in China and we have a discussion brief hopefully soon we'll be ready and if you look at 20 years and China from period of absolutely reached the dominance of supplying the world with the rare earth and reached a point that they start to cutting it to make the long story short that in the further the earlier part you would say the more or less China's increasing is say the resources scarcity China used that as an economic advantage really to grow there in a way you would say is that pattern at that time shaped China's notion on the resource at that time but as China getting richer and more leverage on the geopolitical power stage in the world they start to cut this and of course other people are not happy and there's dispute about this but it's really typical question that that quite symbolic of a lot of those issues we're going to face and how those changing geopolitical power pattern on one hand interact with the growing resources scarcity issues and there and this whole issue range for example now a lot of those things settled in the WTO mechanism which arguably a lot of people think it's only international governance mechanism that exists but there's a lot of issues to say clearly WTO is not the mechanism or adequate mechanism and handling those issues okay final question Sveta yeah I'd like to take the opportunity to congratulate SCI for a fantastic day before I make my comment since I know you're going to continue the discussions I'd like to make a comment on this idea of the geopolitics I think this is really an area where SCI can make a difference though I would like to see a broadening of the dimension of course it's in SCI DNA to look at from the resource point of view but also we know that a state centric approach won't do it because you have companies that have much much larger resources in terms of financial resources than GDPs of many countries and we have also trying to solve of course climate change has triggered a number of transformations and continues doing so and but we're still trying to solve them with old formula for example with a state centric that we thought that we could sit in the UN headquarters and decide what's going to be done and realize that that's not the case yeah in other headquarters other important decisions are being made so unless we actually connect those we actually we cannot really change the way things operate I think broadening to have the dimensions of this changing dynamics of environment how they are triggering actually a change in the geography of power of course and that we can we already see the signs that Europe is recognizing that we can see G20 is much more important than G8 today we can see that Europe is actually calling for new ideas of how we should understand development aid because development aid is not anymore about ethical responsibility it's also about how we can keep the welfare in Europe so it is a completely different picture where of course climate change has triggered this but we actually still on the surface and I think a place like SCI so many competences and so many dimensions where actually where there is really tentacles all over from Mongolia to Africa to everywhere in the world can really make a difference thank you thanks a lot Simran I will not invite the panel to comment on your comments but I think for a personal reflection work that we did on the basic countries understanding why China India Brazil and South Africa collaborated we needed to go outside of the environmental or climate negotiations scope and understand the broader spectrum of why they collaborated in WTO and in BRICS and IBSA and other constellations and then a broader pattern is emerging which actually explains some sort of shifting patterns in how countries are collaborating and how they take positions COP 15 now so thanks a lot for your comments I think they were well taken a big hand to the panel and Per is going to make his final comments so a few reflections from Per about what did you learn and take home to report back to the new climate economy governing council well that nefarious body here so I've got one minute and it's always nice to be the guy I'm not quite the last guy standing between you and refreshments and all the rest because Eric has a dubious honour but I'll try and be a little bit brief and just offer a few reflections here and apologies to everyone external it turns a little bit sort of SCI centric as we think through what SCI can do and where SCI can be but I think one of the learnings here is that these are very disparate areas and yet I think there is a common theme there is a long debate about how to secure energy at different stages of development and it has come, it's had a very often collided head on with the climate discussions and climate debate simply from the reasoning that green is more expensive than brown and that more expensive is bad for the economy and pretty much that's where you go I think the themes that come out of this discussion are bringing in a richer set of discussions which is exactly where the debate needs to be one heading out called optionality and apologies that my economist background perhaps conditions my choice of language a bit here but the idea that the decisions you're making now and especially in a world which is very very rapidly changing if nothing else from the very rapidly increasing claims and materials and resources but also in many other ways the decisions you're making now are much more long lived than is often appreciated so that isn't just about the lock in into one pipeline and the lifeline of that pipeline it's the lock in into a development model in the case of Mongolia China is already facing many lock ins and trying to steer its huge tanker all around and other countries are trying to look at China and see what that means for them if there's any countries like China it's a ridiculous notion but nonetheless there are countries there's very much a space here for recommendations to policy makers to think not just in terms of the short term cost and in narrow economics of the cost of energy or whatever metrics and mental models they're using in their planning and thinking and strategies but also to think about not building long lived assets in a situation like this but do building institutions building niche applications financing systems, supply chains thinking about how your system might need to be redesigned, market regulations et cetera et cetera softer items that leave you with the option in an uncertain world of availing yourself of additional resources should it be the case that coal becomes much more scarce and we thought it would be temporarily or permanently should it be the case that renewables fall more quickly in cost et cetera and to understand that that requires very much its country specific but it goes very much with the issues we heard about here when Goya talks about lock in that is exactly what you need to avoid in order to keep options open for the future when we hear about past energy transitions having been very slow in adopting and when we hear about the infrastructure project so that's one heading I think is there that can actually reach policy makers in this area another heading I would call fairly simply and simplifying insurance again if you're facing a world where there's increasing competition for resources or where there's lots of insurance and there are significant adverse scenarios again bringing the SEI tradition of thinking of scenarios scenarios often used completely in the wrong way or trying to find the most likely scenarios instead of looking at the boundaries and thinking about the most difficult scenarios that you might plausibly face and this of course resonates with the whole climate debate but it also resonates very much with the types of issues we talked about here and it's worth paying for insurance we know that I think that the need here then is to understand pressures in effect on perceived self-interest to bring in the perspective Marie was talking about geopolitics and also the work that Magdu's more alluded to than presented when thinking about exposure and thinking about how different overlap there with climate action which isn't one about short-term growth but it is about robustness and resilience of your entire development model and infrastructure as you rapidly build it if you're a developing country but I think the takeaway here is that when as SEI we talk about these topics we are not just talking about sustainability but we're injecting ourselves into very mainstream preoccupations with a lot of key decision makers and the decision makers who will make the most important decisions over the world's resources in the next decades to come and that this is very much also why SEI is now very well placed to make contribution I think to the new climate economy project because this is a space in which that will also operate so a few remarks, thank you Thanks a lot Per for helping me out here as a sidekick it was really valuable and we also got to know a little bit more about the new climate economy project, thanks lots and over to you Eric So I'm going to say just a very few words first though I want to say invite you all to the reception the reception is actually not for the science form it's for the opening of the new center the I mean the Stockholm center has been around for a long time but we're at new it's a a new location new office space, thank you I'm a little jet lag and we would like to invite everyone over there the way to get there is just like you went to lunch go out that door but then turn right and look for 8070 Lene Gatun and there will be either science or people or a combination helping you up there but I just want to say some short words not in terms of the content because there was a lot of good reflection on that as much as I'm always just amazed, surprised really pleased that SEI is a place where people just think it's the most normal thing in the world to think about some of the biggest questions facing the world and this is a whole day full of it I loved it I'm so stimulated and I just wanted to give some thanks to the Stockholm center because two years ago they said we're tired of having retreats where we just sit down and talk about operations we want to say what we're doing and they did that internally with a few guests next year it was SEI wide this is the third year I think it's a terrific idea and thank you everyone for joining us I hope you enjoyed yourself as much as I did and that you will join us tomorrow as well alright and please enjoy the reception