 Good afternoon, everybody. I'm Jake Reynolds from CISL. That's the Cambridge Institute for Sustainability Leadership And I'm I'd love to welcome you to this webinar Starring Dr. Bosun Wang who's going to be talking with us about assessing climate risks and aviation this is Directly drawn out of his research program, which is very kindly supported by Heathrow Before we get into into my introduction to Bosun and something a little bit about what he's going to be saying I'd like to note that the participation for the event is is what I would say usefully diverse we have Participants from the energy sector from the transport sector perhaps not surprisingly But also many financial institutions have joined and a number of other business sectors and foundations It's quite a mix and I think when we're looking at the issues that Bosun is going to be covering today. It's clear that Where we're focusing on climate risks in aviation there are very parallel Conversations taking place right across the economy, and I hope that Those of you coming from different perspectives different sectors Are able to translate some of what we learned today into your own practice So just a note first of all before we get into the webinar about the program that Bosun participates in it's called the Prince of Wales Global Sustainability Fellowship program we kicked this off at CR cell in 2018. We have 11 fellows who are all Undertaking projects with us which have a strong research in most cases strong academic research foundation But not uniquely perhaps but less usually have also a very strong Application focus a strong focus on where does this research actually drive? sustainability impact and it's not surprising that in many cases the The fellowships have been supported by industry but by corporate by companies and That is actually an illustration. I think of the relevance and the relationship between the challenges which those companies are facing and the need to access in a digestible form the best of academic evidence and Thinking which is what the fellowship programs all about is about Harnessing what we understand from within universities and other research institutions I'm bringing that to bear on business problems particularly Acute ones such as the one we're looking at today So I should say also in the case of Bojan his fellowship is very integrally Tied into work. We are wider work. We're conducting in CISL through our centre for sustainable finance. In fact Bojan more or less sits in a virtual sense alongside Dr. Nina Seeger who's within the Centre for sustainable finance and they work very closely together in fact Bojan has other Cooperative links in CISL for us. That's very important because Working as a researcher one needs to find partners both inside the organisation and externally to Design the research and implement the research with of course that helps with the generation of impact along the way So very pleased about that What I would say is that um, you know, Bojan is came to us Very qualified for this work. He joined in April 2021 and prior to that was a postdoc Research in sustainable aviation at Shanghai Zhou Tong University in China. He actually has a PhD in energy and transport And an MSc in in energy and environmental economics Both of which are from University College London UCL and has a quantitative research background, although He promises not to put too much of that quantitative work into the presentation today. He also has a A background in transport economics and data science and scenario modeling And that experience has been applied in aviation shipping animations trading So that's that's Bojan's background His fellowship if I could just very briefly summarize before we get into the detail It's one of the first in-depth financial risk assessments that encompasses both transition and physical sources of climate risk through scenario analysis And the outcomes that he's looking for are to understand the economic and financial implications of climate related risks In these transition pathways to net zero We hope it will help the aviation industry and policy makers to better understand the trade-offs between slow and late transition And sudden and disorderly transition All of which are our permutations, which might or might not Unfold So the goal is to research and policy makers on on the kind of interventions which they might make to smooth that transition to net zero to and to support The allocation of capital in a climate climate resilient fashion for airports For airlines for everybody involved in that industry Given that we have a warming climate so with that If I may I'd like to introduce Bojan Dr. Bojan Wang to talk us through his work If I may encourage you though to pose questions using the question feature That will help. I mean I would if I you know if I was in your shoes I would put them in as soon as you think about them We will then see them and by the time Bojan comes to a conclusion We'll have a set of questions which we can then play back to him to continue the conversation So don't forget to ask your questions and put them in at any time Bojan I'm going to hand over to you Thank you, Jake very much for this excellent introduction and hi everyone Thank you so much today for joining us on this webinar The topic of today's webinar is assessing climate risks in aviation or systematic review This is a part of my research here at CISL under the fellowship supported by Heathrow So without further ado, let's get started Back in 2017 the task force on climate related financial disclosures or TCFD as we know it Published their recommendations on measuring and disclosing climate related risks The TCFD defined climate related risks into two broad categories One is transition risks which refers to the risks associated with our transitions towards net zero The risks could come from the changes in policy and regulations changes in technologies and market demand and changes in reputation or public perceptions The other category is physical risks which refers to the physical impact of climate change on the routinely business and operations of different economic sectors These physical risks could be acute risks such as extreme weather events or could be the chronic ones For example the gradual changing patterns of climate change rising sea levels or rising temperatures The platform provided by TCFD really wants to emphasize one concept which is climate change is a financial risk to all sectors It tries to link the risks that we just described from the transition of physical with the strategic planning risk management and financial impact assessment of different sectors Trying to quantify their material impact in terms of their impacts on companies income cash flow and balance sheet In order to do that we need to press into climate related risks into the daily risk assessment and investment decision-making This research therefore is one of the first in depth sectoral basis assessment on the climate related risks to the aviation sector Aviation is a faster growing sector and is also a major contributor to climate change Over the past two decades the global aviation demand measured by revenue passenger kilometers or RPK has increased by 7% per year between 2009 and 2019 before the COVID-19 pandemic The fuel usage of aviation thanks to the improvement of the aircraft engine efficiency has increased slower compared with the RPK increase In fact the carbon intensity of aviation has declined by 70% since 1970 As a result of both the greenhouse gas emissions of global aviation sector currently account for about 2.5 and 3% of the global total CO2 emissions And if we also take into account the non-CO2 emissions global aviation industry is responsible for about 3.5% of the global warming effects We all know that the COVID-19 pandemic has hit the global aviation industry badly but all the industry protections say that the strong growth in demand will continue after we recovered from the pandemic The growth rate is expected to keep at 3 or 4% per year by 2050 In that case if we keep a business as usual measure then the emissions from the aviation sector could double or even triple by 2050 So it poses a tremendous challenge for the aviation sector to decarbonize while the demand is still growing very fast The good news is that the aviation sector is committed to achieve net zero by 2050 In fact a range of transition pathways or scenarios have been published by international organizations, different governments, and also the industrial bodies Those scenarios cover different scale For example the IEA Sustainable Development Scenarios and Air Transport Action Group Scenario and also the Mission Possible Partnership Climate Ambition Scenario as a global coverage to say how to achieve net zero of the global aviation industry We also have the country and regional based scenarios especially the US which is the world's largest domestic aviation market published their 2021 Aviation Climate Action Plan Scenario just before the COP26 last year And Europe also have its own Destination 2050 net zero aviation scenarios For the UK the six carbon budgets published six different transition pathways for the UK aviation sector to achieve net zero by 2050 While aviation sector is a complex system and the net zero transition of this sector may involve many different stakeholders That's why not only airlines and airports but also much wider stakeholders such as policymakers and aircraft leasing companies and banks need to understand the implications of net zero transition in the aviation sector So broadly speaking we have four different options to push the aviation sector towards net zero Cobing, demand growth, fuel switch, technology and operation improvements and auto sector offsetting Given the time constraints I won't go through every stakeholders involved in those processes but if we look at fuel switch Fuel switch means we're going to need low carbon and sustainable aviation fuels to displace petroleum based jet fuels That may involve fuel suppliers and they need to consider the production cost and market risks of producing the sustainable aviation fuels And we're also involved OEMs such as Boeing and Airbus to consider the revolutionary redesign of aircraft called hydrogen or battery electric aircraft Of course airlines and airports will have to face the increased operating cost and capital cost in terms of infrastructure changes and operation changes required Also aircraft leasing companies need to make the decisions on whether they start to purchase the hydrogen electric aircraft once the technology is ready I'll keep to purchase the majority of the conventional aircraft in the fleet And finally of course financial industry and banks need to start to evaluate their emissions intensity of the aviation portfolio and whether this portfolio is in line with their net zero transition allowing their target One of the key two bucks for aviation sector to decarbonize is carbon offsetting Carbon offsetting and reduction scheme for international aviation or COSTIA as we know it It was introduced in 2016 by the UN body international civil aviation agent organization or ICAO COSTIAO requires airlines to offset any growth in international aviation emissions above the 2019 and 2020 baseline from 2021 onwards It has three basis and not until 2017 sorry not until 2027 COSTIAO will remain voluntary basis And airlines will get the offsets by purchasing the CO2 emissions credits from the global carbon market Whereas despite its global coverage of COSTIAO literature has listed a long range of shortcomings of this carbon offsetting program First of all the coverage it only focused on CO2 emissions So the non CO2 emissions is not covered in this And also it doesn't include all countries globally For the least developed countries and other small countries on small island developing countries They will not be covered by this scheme In addition, it only focused on carbon neutral growth Which means it doesn't require absolute reduction in CO2 emissions relative to the baseline 2020 and 2020 emission level from the aviation sector Also COSTIAO heavily relies on the low-cost forest-based project to generate carbon credits Whereas we all know that the increase in wildfires and forest fires puts those forest-based projects at risk So the credits are not necessarily reliable to make sure sufficient carbon sinks through those projects But the most important thing I think is the low price of COSTIAO It doesn't stimulate any improvement or development of the new propulsion technologies of low carbon fields in the aviation sector So because of its limited impact COSTIAO will only address 33% of the aviation overall contributions to the global warming effects Clearly it's not enough That's why we have to pay attention to other two bucks that are available Fuel stretch is a major part We're trying to use low carbon fields to replace petroleum jet fields And broadly speaking, we have four different options to choose Biofields, synthetic fields, battery-electric aircraft and hydrogen The first two biofields and the synthetic fields also known as sustainable aviation fields or SAFs has the biggest advantage of being a droplet field which means it doesn't require any changes to aircraft or airport infrastructure In addition, because those fields are produced from either biogenetic field stocks or non-biogenetic field stocks and eventually it's very similar to petroleum jet fields it doesn't have any limitations on the range for aircraft to use those fields In comparison, battery-electric aircraft and hydrogen are more destructive technology which is not yet available, at least by 2030 And even if they are available, there is limitations on the range They are all for shorter range airline markets, which only account for about 30% of the total airline markets Therefore, we can see that SAFs are the only feasible option for low carbon fuel switching in mid to long range markets through 2050 To put that into perspective, here I summarized all the major transition options available and assessed in all the existing transition scenarios that we just saw before And broadly speaking, we have five different transition options avoided demand, improved operations, improved technologies sustainable aviation fields, and offsetting So this box showed that the different CO2 emissions reduction potentials relative to the baseline case scenarios or business as euro scenarios So 100 means the baseline emissions level And the box refers to different emissions reduction potentials As we can say, the market-based offsetting, colored in pink, is a dominant lever in short-term but will be gradually displaced by the option of scaling up SAFs once this technology becomes more mature And by 2050, all the existing transition scenarios assumes the most CO2 emissions reduction comes from SAFs and in fact the medium amount of emissions reduction as percentage from SAFs is about 40% as we can see in year 2050 So SAFs is a really important lever for aviation sector to decarbonize Given its importance, let's discuss a little bit more about SAFs A few key facts in SAFs First, the production volumes is still pretty low It's less than 0.01% of the total aviation fields in 2019 SAFs is currently still very expensive The production cost is about two to six times of the price of jet fuels And the climate benefits of SAFs have to be calculated on the life cycle basis And the life cycle emission savings Finally, it depends on SAFs feedstocks and conversion processes Especially, we need to take into account the indirect emissions on land use changes Policy, strong policy push are required to support SAFs development To make sure that SAFs will be more widely available and cost competitive In relatively short term Here, we see some milestone policies that specifically for facilitating SAF development Especially in 2020, the EU Refuel EU Aviation Initiative set specific Binding targets for volume shares of SAFs That must be used in the European aviation sector by 2050 Also, the USA also launched the Sustainable Aviation Fuel Ground Challenge To produce at least three billion gallons of SAFs per year by 2030 All those policies will give the push that SAFs needed for scale-up If we look at more specifically what policy measures to consider to promoting SAFs One is SAFs' blending mandates SAFs' policy set binding targets for aviation sector to Utilize a certain quantity of SAFs by a target date While this policy has its advantages and disadvantages The advantage is that it creates a market and guarantees the supply of SAFs By placing an obligation to supply SAFs on fuel suppliers And also potentially place an obligation to yield SAFs on airlines And it can also set subset targets for synthetic fuels For synthetic fuels, given that the current price of synthetic fuels Significantly higher than some relatively cheaper options such as HEVA So these sub-targets will avoid synthetic fuels to be crowded out By other cheaper options The disadvantage of this policy is that it doesn't directly address the substantial cost of disparity between SAFs and jet fuels It only creates a market that hopefully the price will go down But it will require time Also the mandatory blending mandate requires to set this specific level of the target Whereas we have uncertainties in the availability of SAFs So it's really challenging to determine when to set the target The target level of the mandate and which fuels are eligible Currently the EU Refuel EU Aviation Regulation already introduced this blending mandate And the UK DFT is also doing a public consultation on this policy measure The second option is prioritizing SAFs through multipliers It's setting a multiplier for the amount of SAFs used in aviation In calculating its contributions to climate targets The advantage of this policy is that it provides immediate incentives for fuel providers To produce more SAFs over other biofuels used in transport sector Whereas the disadvantage is that it may only divert existing production from road sector Rather than stimulating new advanced SAF production So there is a trade-off between boosting the short-term production And stimulating the long-term SAF development In fact, research has found that using multipliers may reduce the immediate overall climate Benefits of the fuel policy, given that it suggests reductions in the biofuels Provided to other transport modes on the ground transport The final policy measure to be considered is of course direct financial support Including productions after this, grants for capital spending, price guarantees All of them can be used to bridge the gaps between production costs and market price of SAFs The advantage of this is that we have EU ETS and COSIA Which could potentially generate a funding pool for directly financing those SAF projects And it could directly address the expensive capital costs of SAF projects And also support the most efficient SAF producers By subsidizing the market price of SAFs up to a price flow level Whereas the disadvantage of this is that it does require a substantial amount of public funding And because those funding are mainly from government and public sectors It is riskier due to the potential government spending cut And also the scale of the direct financial support could be limited to only a number of fuel suppliers So to sum up the materiality of transition risks in aviation We know that air traffic demand growth, curbing air traffic growth demand Would be the most significant transition of risks for the aviation sector The less than expected revenue growth during the transition Through curbing the demand growth Would be very harmful for the industry development and also bad for the GDP growth In terms of risks from the technology changes We have three options, dropping SAFs, hydrogen-based aircraft and battery-electric aircraft Well, due to its dropping characteristics SAFs would be the transition options with the lowest level of risks It only increased airline operating costs And to some extent decreased revenue due to a cost-pass through impact on demand But it doesn't require any changes in aircraft and infrastructure So that's not a systematic change But in comparison, for both hydrogen aircraft and battery-electric aircraft It would require significant changes in aircraft and infrastructure And for the short-haul original jets It could become a stranded assets Once those hydrogen and electric aircraft become available Of course, it will also increase airline and airport capital and operating costs For policy, we already know that COSIA is not enough To facilitate the low-carbon transition of aviation So if we're relying on COSIA too much It would probably lead us to a too slow or too late transition Well, we can definitely have this targeted policy such as SAF blending mandate But it also has issues about investors' confidence in SAF field stock availability And technological limits Now, let's look at the other side of the equation Climate-related physical risks Compared with research on aviation's impact on climate change The impact of climate change on aviation is relatively less researched And the figure here shows what we already know from the existing research About the possible impact from climate change on aviation Including the change in wind patterns, rising sea levels, rising temperatures And more extreme weather events Well, the challenge is that we not just need Not only need to assess this impact But also need to translate those impacts into the financial terms So that we can understand the magnitude of those impacts to the aviation sector This is actually quite challenging to do because it requires to link the climate models With economic and financial impact analysis Starting by using general circulation models The ones used in IPCC report For projections of future daily temperature, precipitation, and wind On a given warming scenario And then we need to use those projections downscaled In order to match those projections to individual airports, geo-locations Or flight corridors So that we can start to assess the material impacts Of physical risk drivers to aircraft, airport, and airlines After assessing those impacts We then need to translate those impacts And in other words, pricing the physical risks As financial risk analysis variables In terms of revenues, capital costs, and operating costs An example is to quantify the physical risks That cause severe aviation system disruptions Those disruptions could come from the sea level rise And coastal flooding Could come from severe thunderstorms in summer seasons And not blazers and heavy snows in winter seasons Climate change literature already suggests that As global warming effects All those three physical risk drivers will become more frequent or intensified For example, under a high warming scenario Global airport and coastal flooding risk could more than double by 2100 And in terms of its network scale impact Up to 20% of the routes between the at-risk airport And the remaining airport could be disrupted Well, we also know that thunderstorms Runs number one in terms of its impact on airport operations And under severe thunderstorms An airport throughput could be reduced by up to 75% Which is a huge impact on airport operations And we also know that blazers and snowfalls Are the dominating causes for flight delays and cancellations After exceeding certain thresholds It would lead to flight cancellations and closures of airport So what does it mean to airport in terms of its financial materiality? We can see that the materiality of severe aviation system disruptions Can come from the cost of flight delays Cancellations, flight diversion, all the worst-case scenario Airport closures The straight-up table shown here comes from your control Give us an idea about the cost of flight cancellation, diversion, and flight delays Also previous research suggested that a one-hour closure Of London-History airport at its business hour Could lead to an economic loss of 0.7 to 1.25 million euros just for an hour That would be more than interested to discuss with our colleagues from History Whether this estimation is reasonable Apart from the severe disruptions to airport operations Climate change will also pose other physical risks Such as rising temperatures and heat waves Increased frequency and intensity of hot extremes Due to climate change Could put on weight restrictions on aircraft takeoff rates Which means aircraft have to reduce their payload And fuel capacity in order to takeoff Especially in airports with relatively short runways To put that into perspective A 1% reduction in Boeing 737-800, which is a narrow-body aircraft Will translate to about 6 passengers that will not be carried by the flight And a 1% reduction from the Boeing 737-300, which is a larger, heavier, wide-body aircraft Will translate to 24 passengers not carried by the flight So these warming effects and weight restrictions Will directly lead to the revenue losses for airlines and airports On the other hand, warming effects will also cause reductions in aircraft Fuel efficiency With current engine technology and airline network being fixed Research found that under the high warming scenarios The annual aviation fuel consumption in 2100 would be about 1% higher than level of 2010 Well, the percentage increase is not large But if we consider the huge amount of fuel consumption by the global aviation sector This would still lead to a considerable amount of extra cost Due to the actual fuel burn Lastly, we also have physical risk drivers from the changing upper-level wind patterns So global warming will increase both the vertical wind shear instability And the horizontal wind speeds at the crossing level The increase of vertical wind shear instability Will directly lead to greater risks of clear air turbulence Which means the aircraft bumpiness on the sky So the kindly change would increase the frequency of severe cats globally And at a very significant amount, as you can see Because turbulence is a major hazard for the aviation sector The increased frequency of cats would lead to an increased insurance cost and compensation For turbulence induced injuries Which currently at about 10 million dollars a year And it also increased the operating cost From for airlines to to when encountering and avoiding turbulence So airlines have to fly in a less optimal road Lead to a more fuel burns At the moment, it's about 16 million US dollars per year cost in this regard On the other hand, the increased horizontal wind speed Will lead to a round-trip flight journey time increase Existing research from that in the North Atlantic corridor between London and New York The round-trip flight journey will increase And this increase will directly lead to an increased operating cost due to the actual fuel burn To conclude with some remarks We know that the transition of aviation sector will involve Mining stakeholders And because it is a complex system All the stakeholders involved must understand The implications of the natural transition in the aviation sector And what they have to adjust In terms of their investment decisions or in terms of their financial risks analysis We also know that Closia as a major offsetting program Is not sufficient to reduce sales to emissions from the global aviation sector So relying on public offsetting in short to medium term May put us in a too late or too slow transition On the other hand, fuel switch is a much promising option Scaling ourselves is an elderly transition path Despite the necessity of strong policy push In comparison, introducing hydrogen and battery-electric aircraft Has higher transition risks For three reasons One, it requires significant changes in aircraft and airport infrastructure Two, once those technologies are available for the short-range market It will put some regional jets and existing flights Into the risk or at the risk of stranded assets Third, those technologies are still under development So if we want to wait until they become available By 2050 at the earliest Then it could lead us to a too late and too slow transition So overall the transition risk of these two technologies is higher For the physical risks We know that delays in fuel switch To face out petroleum jet fuels in aviation Could lead to higher physical risks Particularly from severe system disruptions Caused by climate change And finally Further research is needed To assess the combined impacts of transition and physical risks In the aviation sector For example We know that SAF will play a major role And the synthetic fuels which is produced from Using renewable electricity and water and industrial CO2 This transition option would be in doubt If we consider that electricity supply Becomes increasingly renewable Or vulnerable to the extreme heat Because of climate change So the next steps of my fellowship Is to start developing the scenarios That looks at both the transition and the physical risks In the scenarios And also assess the interplay between those two That's all for my presentation Thank you very much And I hope you enjoy it Now I'm more than happy to take the questions Over to you, Jake Thank you so much, Bajan That was really interesting And I would encourage Participants to log their questions In the question facility So that we can make sure your voices are heard You've achieved quite a lot, I think, Bajan Basically the first year of this So really excited to see how This research is going to develop Over the entirety of your fellowship I mean, I have to say, listening to you It's a very challenging It's a very challenging presentation For the industry And for anyone who is engaged with aviation So many questions, so many risks, so many shifts On the horizon I just wanted to ask One general question One specific one While we're waiting for a few more questions to arrive The general one is how I mean, do you detect an alignment Between the various stakeholders engaged in aviation Whether that's aircraft manufacturers Or airports, or airlines Or engine manufacturers Or the travel industry more broadly Is this something the industry Is really closely looking at And looking at in an aligned sense Or do you see lots of different alternatives And has running and different approaches Which haven't yet resolved Into a common strategy for the industry Yeah, sure, thanks, Jake Well, the good news is The industry and also the policymakers Have generally quite good consensus On what options are available For aviation sector to decarbonize So we have market-based measures We have policies to curbing demand growth We have fuel switch using especially SAFs And also out-of-sector offsetting So the options available are kind of in consensus The difference is really across different Existing transition scenarios Is to what extent different transition options Develop are needed in order to achieve This net zero transition For example, some scenarios For example, the UK's six carbon budget scenarios The balanced net zero pathways Put a great emphasis on out-of-sector offsetting So not only from those forest-based projects But also technological approaches Such as direct air capture So it doesn't require the absolute reductions Of significant emissions reductions Within the aviation sector Instead, it requires airlines to kind of pay For the out-of-sector offsetting program The question is how reliable those offsetting projects are On the one hand, we already seen that the forest-based offsetting projects The effects could be compromised by wildfires, forest fires On the other hand, the technology-based ones Such as direct air capture This technology is very costly And its development is still kind of in the early stage So airlines can't rely on such technologies To achieve the out-of-sector offsetting Well, yes, I agree The offsetting question still looms quite large In terms of reliability It's possible we should run an entire webinar On that question We have quite significant resources in the university In fact, a new centre looking at offsetting strategies But yes, it's a big question mark Before I go on to an audience question The other one I had was about I may be mistaking misunderstanding But I think you were sort of indicating SAFSA as a sort of lower risk strategy For fuel shift as opposed to hydrogen and battery electric Are you taking into consideration there some of the system Links, for example, if it's biofuels-based What we already know about the sustainability of biofuels And the potential for competition between different forms of land use Energy, fibre, food, etc Is that or are we looking at this in very much in isolation As a fuel source for the aviation industry I wanted to see how embedded and contextual your thinking was there Sure So in terms of SAFSAs One thing I need to highlight is that SAFSA is the only feasible option To cover the long-range aviation market Which accounts for more than 70% So hydrogen and battery electric aircraft Even if the technology is available It still only covers the short range Hydrogen has the potential to go to the long range But it would require revolutionary redesign of aircraft So in terms of SAFSAs Yes, indeed, we need to consider the life cycle Emissions implications of using SAFSAs So we have crop-based feedstocks and non-crop feedstocks For biogenetic or biofuels So the one you mentioned is indirect emissions from land use Is mainly a constraint or challenge for the crop-based feedstocks for SAFSAs Whereas the good news is that we can use For example, the municipal solid waste As non-crop-based feedstocks And also wasted Or unused oils as non-crop-based feedstocks So it doesn't compete with the land As ever, it's a more complex question Which I'd have to simplify Great question from the audience here Which is demands, we look at this at a fully macro level So the question is to what extent Could the negative impact of demand reduction In aviation on GDP Could that be offset by passengers Shifting to other mass transit options? So in other words, is there going to be a lasting GDP effect If passengers simply use other transport modes It's just trains Obviously particularly with short haul in mind And the subsequent growth of those industries Sure, that's a great question I think the first part is relatively easy to answer If we look at the impact of COVID-19 To aviation sector and the knockdown effects On the global economy growth That's a straightforward answer So if we try to rely on the policies to curb demand It will definitely hurt the GDP growth And it's very hard to kind of Make up to these losses Or negative impact from curbing the demand So these kind of policies are not necessarily Very popular within the industry On the other hand, for mode substitution In fact, my PhD thesis specifically Assess the substitution effects of high speed rail And short range air transport in the Chinese market What I found is that the substitution effects Of high speed rail, which is the only Kind of available low carbon high speed transport modes Compared to aviation It only generates positive emissions savings In the short to medium ranges What we are talking about is about 500 kilometers to 800 kilometers Above that level, aviation is still the dominant in transport mode And can hardly be replaced or substituted by other transport modes So yes, indeed we can Encouraging using high speed rail But it has implications for different country settings For example, the cost of land Is very cheap for China because the Chinese government owns the land Whereas for the UK, the high speed rail too Has been in debate on decades But it's the cost of construction And also use high speed rail Would not necessarily be as competitive As those in China due to the cost issue Thank you, Boshan And I guess that question of Part of this comes down, I think To the public's expectations about how it wants to travel So how easily do we want to be able to travel to the other side of the world At a moment's notice I mean, obviously going back in time historically, that wasn't possible So people found, accommodated that And found different ways to relate to the outside world Maybe to jump on a ship or something like that And it would take six months It's all, I think what you're saying is sort of Must be set within the context of public expectations About mobility generally And also the different modes within it But it's all clearly nested But a good question here from Matt Gorman at Heathrow Which is how do you see the wider The wider transition in the economy Enabling, helping to enable or perhaps inhibit Aviation to decarbonize For example, the need for hydrogen That's not something which is specific only to aviation That's potentially something in steel manufacturing For example, or other parts of the economy How is all that going to come together? Well, that's a great question I think the aviation sector It wouldn't mean possible for aviation sector To achieve its natural transition Without the transition of the entire economy Give you two very quick example One is hydrogen as you mentioned Hydrogen need to be produced from renewable resources We have two categories One is green hydrogen and one is blue hydrogen If we use blue hydrogen, which is produced from natural gas Then the climate implications is actually higher For using hydrogen to fuel aviation sector Because both the synthetic fuels and the hydrogen-based aircraft Requires quite a lot of hydrogen And if hydrogen produced from roughly dirty electricity That would be an issue So we need to decarbonize how hydrogen is produced The second related example is about power generation sector So we know that if we want to transition To synthetic fuels or hydrogen Then still we need a tremendous increase In the electricity production and the grid capacity So those electricity has to come from renewable sources And that has implications of the cost of synthetic fuels Once we have the renewable electricity becomes cheaper Then it has direct knock-on effects on the synthetic fuels The production costs of synthetic fuels will also become cheaper So in other words, in order to use those advanced low carbon fuels In the aviation sector We need the faster transition for the whole economy Thank you, Bergen, that's really interesting And presumably those interlinkages are part of the modelling effort A bit behind the work Recognizing the interdependence of the different factors you've mentioned Another great question here which is How do you see transition risk, let's say in aviation Evolving over time, particularly given that The policy measures which you've outlined May not happen at the speed which would be optimal For example, meeting net zero We might not get the stimulus for the South market, for example At the right time So what does that mean in terms of transition risks? Is that are we looking at a kind of escalating set of risks or is it manageable? Again, that's a great question I think when we consider transition risks Often we only consider elderly transition or disorderly transition But indeed we also need to consider the risks of the failure of the transition So that could pose perhaps more significant impact on our economy So we know that we have the options available South seems it's an elderly transition option So we need a strong policy push It doesn't necessarily mean a sudden transition Because the good news is for example The binding mandate of the South adopted by the EU It only requires a gradual increase of the amount of Souths to be used in aviation It creates a market It not necessarily will require all the airlines Immediately use Souths and without using any other existing technologies So we give us an opportunity to kind of have this smooth and elderly transition Why not take it? The policies we need have been extensively discussed in the same times And also international organizations Just as we're seeing in this in our presentation We have three different options to promote Souths And although those policies have its advantages and disadvantages But I'm sure the policy makers can find some spaces To take advantage of those The advantage of those policies Whereas even have a mixture of different policies to encourage the Souths I would say the most unwise option is to wait and say And wait and see a strategy where put us into much worse future And when you say wait and see Do you mean the policy community waiting and seeing? Or do you mean the industry? Well I think that's a chicken and egg issue The policy I required for the South market For example for the South industry to kind of guarantee the supply So that few suppliers have this incentive to produce Souths If we only relied on industry movement And we all know that Souths even for the lowest the cheapest ones If I still about two times cost higher than the jet fields So I do think policy makers should make a move first And create a market for the industry to follow Okay now I have another question on transition risk But I'm just going to hold that for one second Ask you something about the physical side Are our airports responding? Are they becoming more resilient in their infrastructure And their management as a strategy alongside Planning for the overall transition of the industry And protection from transition risks What about the rest? Is this something which the industry is locked onto now And giving the kind of attention in your view That is necessary given the escalating challenge Thanks Jake I think if we consider the adaptation and resilience efforts That major international airports have been made It's actually pretty good For example, Land and Heathrow airports have their regular Assessments on adaptation and resilience And they understand quite well about the challenges On the physical side of the risks But we also have to bear in mind That globally there are not only major airports But smaller and poor regions They also have their airports And those airports are much more vulnerable to the physical risks And since aviation sector is quite a special case Because it is a complex system And it has a global network So only guarantee individual airports resilience On the physical side of the risks Such as Heathrow airport and all the Amsterdam ship or airport Those major airports don't justify themselves But their networks, other destination airports Could be very vulnerable And as we can see from my presentation Up to 20% of the roads connecting the major airports Which are at risk and the other remaining airports Within the network could be seriously disrupted By sea level rise So that means policy makers should also consider How to support those smaller airports To improve their adaptation resilience So it's a mixed picture But clearly the network is critical in aviation There's no point flying from a resilient airport Into one which is not resilient Because that won't have the desired effect Back to transition risks again There's a question here Which I think is more to the abrupt end Or disruptive end of the transition risk spectrum What is your view on short flights ban Short flight bans or policies to restrict Short flights altogether Are they effective to decarbonize the sector Should we expect some countries or regions To adopt this kind of policy in the future Perhaps the short or even mid term future Sure, great question I think first of all We need to consider if we want to To use those kind of policies to ban the short term flights Do we have any other alternatives For countries like Spans or Germany Or other European countries that has high speed rail Links fine It could be an option Whereas what about other countries That doesn't have the high speed rail Then banning the short term flights Would mean that the passengers or travelers Will suffer the most And I wouldn't say that's a very smart policy In that perspective And also even if we have a high speed rail for short term Again, as I said before The short range market is the only market That's battery electric aircraft And hydrogen aircraft without the Significant changing aircraft design Could be feasible option So why not banning them instead of encouraging Policies and the investment to Develop in such type of technologies In that sense then the Customers or air travelers will still Enjoy the short range flight Without posing any negative impact on climate But let's draw this to a close I think on More or less positive note The call there from Bojan to The policy community and the industry itself To work on a positive orderly And if the but effective transition And I guess we get into the territory of things like bans Or perhaps more dramatic policies When confidence that you know the industry And not just the aviation industry Of course any industry isn't making those kinds of changes That's when you end up getting into different kind of territory But yes as ever the solutions and the ideas And the thinking is mostly there Not entirely there that gives opportunities For people like Bojan to continue research But the question is how do they come together And how do we build alignment around The various stakeholders involved And in fact elsewhere in the University of Cambridge We have something called the aviation impact accelerator Led by the Whittle laboratory In the engineering department here in Cambridge Which has been looking at some of those system questions Many of which Bojan has touched on And looking at some of the solutions So I think we have some solutions in many cases What we need is the alignment And the commitment to making them effective So I'd like to thank Bojan very much for that presentation Very clear, very concise, quite sobering in places Obviously we'd like to thank Heathrow as well For making this possible through the support That they've provided to CISL to undertake This independent research So thanks very much there And to all of you for taking the time to join us today To hear about risks and solutions in the aviation industry So I managed to finish a couple of minutes To give you all a break before whatever you're doing At two o'clock in the UK Hope you've enjoyed it And we have one more of these webinars in due course Which I hope some of you'll be able to attend Thanks very much indeed Thank you everyone Bye