The U.S. Treasury Department recently issued guidance to multilateral development banks (“MDB”) saying the U.S. would oppose involvement in fossil fuel projects except for some downstream natural gas facilities. It also said it would "strongly oppose" coal energy projects across the entire coal value chain from mining to transport, though offered an endorsement of the Asian Development Bank's work to acquire coal-fired power plants and shut them down early (as shared in last week's SFC Newsletter here).

Read the article here (Reuters).

The UK government has published its long-awaited plans for a hydrogen economy, and it is hoping to attract at least £4bn of investment in hydrogen by 2030. It has produced a strategy document that lays out its efforts to attract investment in 5 gigawatts of hydrogen production by 2030, which would mostly power heavy industry, as well as transport and up to 70,000 homes. It suggests hydrogen could cover 20-35% of the UK’s energy consumption by 2050, providing a clean alternative to oil and gas in energy-intensive industries, power and transport.

It proposes a series of industry consultations to help establish a subsidy system to support large hydrogen projects to de-carbonise areas that cannot run on electricity. The hydrogen projects under development include “green hydrogen” schemes, which extract hydrogen from water, leaving only oxygen as a byproduct, and “blue hydrogen”, which extracts hydrogen from fossil fuel gas before trapping the greenhouse gas emissions that are left behind.

Meanwhile, a recent study by academics at Cornell and Stanford universities in the US warned that blue hydrogen could be up to 20% worse for the climate than fossil gas owing to the emissions that escape during its production, multiplied by the amount of gas required to make the equivalent amount of energy from hydrogen. The UK government's strategy paper does not set out a vision for the balance of blue and green hydrogen in the future.

Read the article here (The Guardian).

Louise Pryor, the IFoA president, has worked in various roles throughout her career. She currently assumes responsibilities as a NED at Ecology Building society, chair of the Climate Change Partnership and honorary professor at the Bartlett School of Sustainable Construction. She believes in spending time on things that are “worthwhile” and manages her portfolio of roles with the stringent time and diary management like any other consultant would.

Louise also mentions that working in different roles or keeping on top of changes in the same role can help embrace learning. While she is reluctant to predict what skills would actuaries most require in the future, she feels that understanding the underlying math and its limitations would be of utmost important as decisions are finally made by humans and not computers.
Her view on an actuarial approach towards sustainability involved viewing cash flows as carbon flows and maintaining a balance between their inflows and outflows, to eventually be “carbon solvent”. She also advises that carbon-offsetting plans should be viewed with a level of skepticism as the technology or ideas backing them are not fool-proof. She further talks about the ideology insurance companies should follow in order to maintain a sustainable business before everything becomes uninsurable.

Louise’s presidency entails sustainability as a big theme and plans to being forward a credential in sustainability as “We cannot cope with challenges or take advantage of opportunities unless we are prepared to learn”.
 
Read the article here (The Actuary). 

On an episode of the Cleaning Up podcast host Michael Liebreich spoke to Johan Rockström, the director of the Potsdam Institute for Climate Impact Research and a professor of Earth System Science. He's also the originator of the Planetary Boundaries Framework which looks at the stable area for the Earth's geophysical systems and is the focus of a recent Netflix documentary with David Attenborough. 
 
The Planetary Boundary Framework emerges from 30 years of extraordinary scientific advancement. It's the advancement from the ice core science, showing how the planet has been oscillating over the past 1 million years: in and out of deep ice ages for 100,000 years and then into shorter 15,000 year-long cycles of interglacials and ice ages.

On demand here (Cleaning up with Michael Liebreich).
 

This article, published in the journal Nature Sustainability, discusses how personal carbon allowances (PCAs) could play a role in achieving ambitious climate mitigation targets. The authors argue that recent advances in AI for sustainable development, together with the need for a low-carbon recovery from the COVID-19 crisis, open a new window of opportunity for PCAs. Furthermore, the article presents design principles based on the Sustainable Development Goals for the future adoption of PCAs. It is concluded that PCAs could be trialled in selected climate-conscious technologically advanced countries, mindful of potential issues around integration into the current policy mix, privacy concerns and distributional impacts.

Read the piece here (Nature).