Dire Data, the 2018 Economics Nobel Prize, and Making a Dent in Climate Change

It has been a great week for advancing the climate change mitigation and adaptation agenda. The IPCC (Intergovernmental Panel on Climate Change) just released its latest report asserting that the world has just 12 years to get climate change under control or face the rather dire consequences of a 2-degree celsius rise in temperatures. It conveys a rather scary and bleak message, but also has a hopeful connotation – if economies get a grip on climate change (yes, a big “if”), rising temperatures can be stemmed at 1.5 degrees. According to the Washington Post article on the latest report,

Most strikingly, the document says the world’s annual carbon dioxide emissions, which amount to more than 40 billion tons per year, would have to be on an extremely steep downward path by 2030 to either hold the world entirely below 1.5 degrees Celsius, or allow only a brief “overshoot” in temperatures. As of 2018, emissions appeared to be still rising, not yet showing the clear peak that would need to occur before any decline. Overall reductions in emissions in the next decade would probably need to be more than 1 billion tons per year, larger than the current emissions of all but a few of the very largest emitting countries. By 2050, the report calls for a total or near-total phaseout of the burning of coal.

Alongside the release of this incisive and alarming report, was the announcement of this year’s winners of the Sveriges Riksbank Prize – more often known as the ‘Nobel Prize in Economics’ – was won by two economists who have done much to demonstrate to the world the link between economic growth and climate change and also the power of technological advancements to do something about the challenges emanating from global climate change. This year’s winners are William Nordhaus of Yale University and Paul Romer of NY Stern School of Business and former World Bank Chief Economist. Nordhaus is widely acknowledged as the first person to create an economic model that described the interplay between the economy and the climate. Romer, meanwhile, has shown how economic forces govern the willingness of firms to produce new ideas and innovations – an area I am personally very passionate about. I am particularly excited that Romer is one of two winners. His work has focussed on the positive side-effects of technological progress and has often argued that market economies left to their own devices tend not generate enough new ideas and that there is a role for well-designed government action to stimulate more innovation. This echoes the views and work of Marianna Mazzucato, among others.

I was in the North Central Province this week, and saw the power of technological advancements and economic incentives to promote a more climate-friendly trajectory. Jetwing Lake, a mid-sized hotel located in the Dambulla area owned by local tourism giant Jetwing Hotels, has moved wholeheartedly intro green initiatives. And they are being rewarded for it. Earlier this year the international travel body PATA awarded a ‘Gold’ award to Jetwing Lake for their sustainable operations.

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As I turned off into the dirt road leading to the property, you suddenly come across a solar farm (pictured above). I later learned that Jetwing Lake hosts one of the largest solar installations in a Sri Lankan hotel, generating 300kW. Moreover, their solar installation features ‘bifacial panels’ which generates electricity from both sides of the panel increasing yield by 15%. Apparently its the first commercial project in the country to have these bifacial panels. The solar plant generates over 40% of the hotels daily energy needs.

They’ve also installed solar as the roof for hotel’s guest and staff car park (pictured below).

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They also have an biomass boiler onsite that generates steam using over 2,000kg of cinnamon wood, that is otherwise thrown away by cinnamon peelers. This steam powers  a vapour absorption chiller which generates 100% of the hotel’s air conditioning needs.

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Pictured above is their effluent treatment plant where waste water is treated on-site and reused to irrigate the gardens, as flushing water in toilets, and for the cooling towers.

The circular economy truly at work, right here in Sri Lanka.

Linking back to the Nobel winners – Romer’s work on the potential of technological progress to drive a new growth trajectory is at play here, where with the advancements made in pollution abatement technologies, photovoltaic panels, etc., are being deployed to show how a sustainable growth path can be forged and can also garner valuable global recognition. Imagine initiatives like this multiplied across the tourism sector in Sri Lanka, and multiplied across more sectors in Sri Lanka, and multiplied globally – we can make a dent in global climate change, and hopefully avoid the dangerous 2-degree celcius tipping point.

 

(All images copyright Anushka Wijesinha.)

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