The last few days as I was watching TV, with so many news on COVID-19, I was looking at images of fashion shows in Italy without spectators. I was listening to the organizers of the Olympics in Tokyo, saying they might consider holding it even without spectators; so I was imagining today I was speaking without an audience. Yet I hear that there are 1,200 of you today and it’s such an amazing feat. Congratulations! It shows your commitment to the environment and the organizing prowess of Green Convergence.
When I first began speaking about climate change issues following Typhoon Yolanda in 2013, a lot of it was about raising awareness within our companies in preparation for what would later be shifts in our company energy strategy. We later escalated our convictions on this such that by 2016 we publicly announced we would have nothing to do and would never touch coal-fired power plants. This was met by investors and energy media with disbelief and shock as if we were committing corporate suicide on national television in the highly competitive power industry. But we kept on and the yearly cover of our annual reports at the parent and our energy companies said it all. My Chairman’s messages as well as that of our presidents Ricky Tantoco and Giles Puno sought to convey our feelings of urgency for action on the issue and also the role we intended to play in the transition to a decarbonized economy. I remember always having to pull together the best studies, data and record-shattering extreme weather events from all over the world just to make the point clearer.
These last few months I’ve hardly had to do that as, despite any climate change denials that are still out there, the images on the nightly news speak so much louder of the changed planet we’ve all created. As I was writing these remarks to you a few days ago, there was this quote many have been using all these years that kept playing over and over in my head: “we’re the first generation to feel the sting of climate change and the last generation that can do something about it.” It kept telling me that the very generation alive today (all of us here in this room) are presented with this opportunity that didn’t exist a few years ago as the signals from a climate changed planet are already here banging at our doors. But it’s only a narrow window of opportunity. And it’s closing fast.
Not too long ago the stocks of electric utilities like Pacific Gas & Electric of California (PG&E) were considered “widow & orphan” stocks for their stability and regularity of dividends. Today the yearly California droughts and wildfires have brought the mighty PG&E to its knees in bankruptcy, and I never thought I’d see that in my lifetime. In Australia, the recent wildfires have directly and indirectly affected the lives of close to three-fourths of their entire 25 million population and scores of unique wildlife. Three million have lost their homes or property, and another 15 million indirectly felt the impacts of the blazes either from choking smog or disrupted vacation travel plans. Australians now fear the onset of summers and a recurrence of the ordeal year after year.
The worst drought in a hundred years have struck Zambia and Zimbabwe, greatly affecting the mighty Zambezi River and Victoria Falls. The latter is named Mosi-oa-Tunya or the “the smoke that thunders” as you can see its powerful water mists from miles and miles away. Last December, and I hear even up to today, that mighty falls has been reduced to a mere trickle.
I also mentioned to you at the Green Convergence Kamayan Forum on Climate Change and Water last September that the Arctic and Antarctic have been heating up faster than anywhere else on Earth. The last five years have been their warmest on record. Well, earlier this month, on Feb 7th, another historic record temperature of 18.3°C was set for the Antarctic continent in the Argentinian research base of Esperanza on its northern tip. Alarming that it’s happening barely five years after a 17.5°C record was set in March of 2015. But given how much potential sea-level rise is trapped in the Antarctic, and the fact that we are a coastal dwelling and archipelagic nation, the warming Antarctic should worry us even here.
For reference, here’s a table that captures the major components of the cryosphere and how much potential they have to raise sea levels. Note Antarctica, which can potentially raise sea levels by 58.3 meters. This is why it’s called the “ice locker” of the world. Note also that sea ice and ice shelves are “zero” because they already displace their volume in the sea and, like floating ice cubes, do not raise levels when they melt. Ice shelves, however, despite the small sea level volumes inherent in them, hold back glaciers from sliding into the sea and if they break or calve--as they say, this paves the way for glaciers and ice sheets behind them to slide in and that raises sea levels.
For added reference, I’ve also included an informative diagram of the climate change feedback loops and the many complex inter-relationships that affect the world of the cryosphere (which is the world of ice in both places, including the Himalayas).
I won’t discuss this diagram in detail today. However, one worrying part of it I’d like to talk about relates to the boxes showing the melting of permafrost. In the past, many thought of Arctic Siberia, Alaska and Northern Canada as “unbroken deserts of ice and thin soils dotted with sage”. The discovery of abundant fossils of mammoths and other large grazing mammals now paint a different picture of once “fertile grasslands rich with herbs and willows”. The consequence is that Arctic permafrost is much richer in carbon and methane than scientists once believed. (Note: as a greenhouse gas, methane is 28 times more potent than carbon dioxide.)
Globally, permafrost holds a gargantuan 1,600 Gigatons (GT) of Carbon/Methane (the atmosphere currently contains 850 GT, the world emits 40 GT per year, remaining budget for 1.5°Celsius is about 570-770 GT) and scientists now suspect that for every 1°Celsius of warming in the planet’s average temperaturebeyond the pre-industrial level, the permafrost could release the equivalent of 4-6 years’ worth of coal, oil and gas emissions. That’s 2-3 times more than what they believed just a few years ago. If we don’t stop further warming, the effect of permafrost could be like adding the emissions of another China (which today emits about 13.2 GT/yr. And this time, there’s no government that can stop you because it’s nature).
The upshot of all this is that we may have to cut emissions eight years sooner than the latest UN IPCC Special Report (2018) suggests, if we want to keep warming to just 1.5°C. Permafrost occupies an area twice the size of the entire United States and we’re only discovering now how fragile and destabilized the landscapes that surround it really are. Many of them. known to have melted only inches a year, are now subject to “abrupt thaws” as rapid as 10 feet in days or weeks. The threat of runaway warming is real and most climate models to date have not factored these in. The excellent cover article of National Geographic last September tells this story quite vividly and disturbingly.
These all have major implications for sea level rise. The UN IPCC projects in their 5th (and latest) report published in 2013 that sea levels could rise a maximum of 3 feet two inches. As a point of reference, 100 million people worldwide live within 3 feet of mean sea level. Note however that the report issued in 2013 did not yet take into account massive melt occurrences in the entire surface of ice sheets in Greenland the year before and various new findings on the fragility of the West Antarctic ice sheets and now the effect on permafrost. The IPCC is known to be ultra conservative in its pronouncements and systematically errs on the side of “less drama” as many have criticized. The fact that real-world melt is happening much faster than climate models have predicted shows how little is known of the cryosphere or how conservative to a fault scientists have become. NASA’s James Hansen (one of the first and the few scientists who has been boldly sounding alarm bells on climate change since 1979) published a paper in 2015 saying we could see as much as nine feet of sea level rise by 2100. (Food for thought: 125,000 years ago during the last Interglacial period, when temperatures were very similar to what we have today (1-2°Celsius) sea levels were twenty to thirty feet higher. 3-3.3 million years ago when atmospheric carbon dioxide levels were like today’s, sea level was 20 meters higher (66 feet)). This is the kind of fire we’re actually playing with.
It’s nice to think that technology will rise in time to save the world: think renewable energy, electric vehicles, artificial intelligence, internet of things, and maybe even 5G. But technology also has a dark side and we’re seeing algorithms that polarize nations, communities and even families; the rise of companies manipulating them for political ends. (I guess many of you heard Cambridge Analytica that was manipulating social media in order to manipulate politics all over the world.) Sometimes even the rise of wholesale bullying and social comparison that deepens social isolation even as we remain electronically connected. Social media along with stress and opioid abuse are among the prime suspects in why suicide rates in the US are at their highest since World War 2.
Populist politics is also on the rise, possibly a symptom of widening inequality gaps globally where the richest 10% controls 82% of the wealth. Economic development as we’ve known it these past decades have left too many behind. Climate Change is also a poverty multiplier and it’s expected that inequality will widen as the poor find it even more difficult to avoid all the ravaging effects of the climate crisis.
Also quite disturbing is that we’re finding microplastics everywhere from the depths of the Marianas trench to the peaks of the Himalayas! In fact, they’re in many parts of our food chain already. Our Pasig River is the 8th most plastic polluting river in the world and its only 27 km long. All the other top ten rivers on that list are thousands of kilometers long.
The latest COVID-19 crisis also appears to have zoonotic roots, that is borne out of a spillover from animals to humans. If you trace the practices back to the Wuhan food market where it began, you see a pattern of poor hygiene and the trade in exotic wildlife (e.g. horseshoe bats, bamboo rats, civets)for food--- much of it borne, not out of need, but from conspicuous consumption and the belief in spurious medicinal benefits. The count isn’t over but in the 1st quarter of this year alone the COVID-19 crisis has caused a precipitous fall in tourism and airline revenues, a plunge in auto sales, the first quarterly plunge in oil demand in the last 10 years, a steep fall in Chinese GDP from its normal 6% down to 4.5%, the shutdown of Chinese factories of giants like Apple and Nissan, and the cancellation of many important trade, fashion and sporting events around the world, just to name a few.
It’s likely if this continues, carbon emissions will fall or show a slowing of its rise. I don’t think it’s the solution we’ve been hoping for but what the COVID-19 crisis is telling us is that it is eminently possible to curb emissions if our lives depended on it.
Ironic to think that the future of humanity is at stake but we must upgrade to the latest iPhone, or have that $40,000 Birkin Bag, or shop several times a week at a fast fashion store for clothes designed to be worn only 10 times.
The way the world works today is severely broken. Much of what’s broken with it is finally coming to roost. A combination of the mindless consumption economy and unbridled capitalism which prioritizes shareholder interests and the bottom line above all other stakeholders. It’s this economic model of “Take, Make, and Waste” and “Extract Value” that’s killing us. Someone once used the analogy of a bacterial culture multiplying in a petri dish till all the nutrients are used up. What happens next, of course, is all the microbes then die in a sea of their own waste.
Sustainability is now going mainstream. It’s about time and God bless everyone pursuing it genuinely and authentically. We’re even seeing the rise of agencies and bodies willing to certify your “greenness” for a measly Php20 MM. Certifications and external validation exercises have a role to play in all these so consumers and investors need not sort through all the data themselves, thereby facilitating buying and investing decisions. However, it wasn’t too long ago that some of these same bodies certified vast sub-prime loan portfolios as being credit-worthy instruments, ultimately triggering the Financial Crisis and Great Recession of 2008.
However, despite how happy I am to see sustainability gaining ground in the business world, I welcome it cautiously as it still stems from the old paradigm of “extracting value” from people and planet, albeit in a less harmful way. Consumerism and the drive to incite spending way beyond our needs as well as shareholder/bottom line primacy before all else still underpin the paradigm that’s causing us to use up 1.7 Earths each year. (the US lifestyle, which everyone aspires to, uses up 4 Earths each year). Sustainability alone no longer cuts it in a world where all our planetary support systems -- from our air, oceans, soils, forests, biodiversity and freshwater supplies (90% of the world’s glaciers are in retreat and will have a big implications on the water supply for hundreds of millions of people all over the world) -- are all spiraling downward in decline. Aiming for “Less Harm” is no longer enough.
I’ll be even more provocative and ask: could it be the old paradigm trying to extend its life and adapt to the times in an effort to “change in order to remain the same”? When we talk about paradigm shift, we think about slavery and how it was normal before but today, it’s a bad thing. The paradigm shift over slavery, for example, though formally abolished by the 13th Amendment after the US civil war in 1865, continued well past the mid twentieth century for another hundred years through what were known as Jim Crow Laws. Laws and practices that segregated and facilitated the arrest of free African Americans and imposed unaffordable fines that forced them back into bondage. Grounds for arrest of African-Americans in rural Alabama in 1890 included petty things like gambling, changing employers without permission, false pretense, even "selling cotton after sunset". The State of Alabama regularly arrested and leased such prisoners to the coal, lumber, steel and brickmaking industries. The sub-human living conditions, the chains and the torture continued as if slavery never ended. And up until 1951, these weren’t occurring outside the law. These are all well documented in Douglas Blackmon’s Pulitzer Prize-winning book, Slavery by Another Name. But even taking it to today, Michelle Alexander’s very powerful and important book, The New Jim Crow documents how racial caste in America never really ended but has merely been “redesigned”. There were mass incarcerations in the U.S. and in Washington, D.C. alone, three fourths of black males get to taste prison in their lifetimes, and 100% are poor black males. Never underestimate the interests working to preserve old paradigms.
Einstein liked to say that, “we cannot solve our problems with the same thinking we used when we created them”. This is why I really like the title of our summit this year that emphasizes the need for a “Paradigm Shift” that Heeds Nature. The climate crisis we face today is a golden opportunity for humanity to reexamine our way of thinking and begin rewriting the rules of how our world works. You all know that periods of great change are both challenging and dangerous times. Immense upheaval that underpins any paradigm shift will always be greatly difficult and can even lead to despair in some. However, Jane Goodall reminds us that “it’s knowing what can be done that gives people the will to fight”.
This is why it’s high time we rethink, reimagine, redesign and rebuild how our world works. It’s a paradigm shift like the world has never seen before. How we get our energy, the design of our cities, buildings and homes; the materials we use; what we eat and how we grow our food, how we handle our waste, how we use and recycle water; our transport systems and what powers them; ideas like regenerative agriculture, permaculture, the circular economy, cradle to cradle, net positive buildings, the sharing economy; we will also need to see inclusive business models that creatively deal with major social inequality and environmental problems. In short, everything must change. We are living through what will be history’s greatest paradigm shift. We no longer have a choice.
I know there’s a lot to do. But each of us needs to think about where our unique strengths are, and apply those strengths creatively to strategic nodes where we can have the greatest impact on shifting the paradigm. For the energy companies under my wing, we are focused on the mission of “forging pathways to a decarbonized and regenerative world”. We know there is no single silver bullet but we are using our intimate knowledge of the power industry and where technology is headed to steer through the many hurdles, obstacles, and barriers that will surely be encountered along the way. The challenge before us is to keep your lights on even as we make the fastest transition to a decarbonized world.
Our spearhead is of course our geothermal energy platform Energy Development Corporation which can deliver a kilowatt-hour of electricity with only 0.0001 tons of CO2 emissions; that’s 9.5 times lower than a coal-fired power plant. Geothermal power is the only renewable energy source capable of delivering on a 24/7 basis continuously. Today we’re focused on utilizing technology to keep reducing our costs and drive up efficiency so we can fight head-to-head against our coal-fired competitors. Sadly, even if we’re clean, when we go to our customers they still require us to match coal prices. And it’s a challenge we don’t shy away from.
Solar PV & Wind
We’ve also been active putting up other types of renewable energy plants like wind (we have the largest wind plant in the country, in Ilocos Norte) and solar PV on rooftops. Although this has taken awhile to takeoff, I believe cost reductions in solar technology are fast getting to the point where more customers are now ready to put them on their rooftops and the economics make sense. We’re guiding them here so they have a good experience and it encourages more take-up from others.
Pump Storage Hydro
Now one aspect of the transition to more renewable energy is that solar and wind power are not always there -- when the wind’s not blowing, or the sun’s not shining at night, or there are clouds. Storage batteries, like lithium ion, would solve this but, although costs are dropping here too, today they’re still considered expensive. To encourage the public to use more of renewables, it’s important that this intermittency problem is addressed seamlessly. This is why we’re also developing pump storage hydro plants that act like huge batteries so the grid can store energy from renewables and other sources for use later. Storage solutions like these help usher in the world of renewable energy. But even then there are still not enough opportunities because they are very ‘location-specific.’
As more and more renewables penetrate our power grids and rooftops, and large scale batteries that can solve the related intermittency problem aren’t yet economically available, there will be a need for more power plants capable of fast ramp up. This is important for our power grids to keep the lights on and a vital link that allows a higher penetration of more intermittent renewable energy in the transition. The best alternative for this large scale job right now are natural gas-fired power plants. Those in our fleet running on local Malampaya gas are capable of this and can deliver power cheaper and with just one-third of the CO2 and one-tenth of other toxic emissions of coal-fired plants. Imported liquefied natural gas, if it is brought in today is even cheaper than indigenous Malampaya. This is why we believe natural gas-fired power plants are key to the transition. Having said that, they are still fossil fuel based and greenhouse gas emitting and thus should be phased down and run at progressively lower levels over time purely just to complement renewables as more and more renewables come to the grid. Eventually, these natural gas plants will be phased out (not just sold to someone else who will only be incentivized to keep them running) as soon as the renewables-batteries combinations become economically viable. The same nat-gas plants can be powered by much cleaner hydrogen in the future if and when this becomes feasible. We’re watching this closely too, knowing our plants are capable with little modification.
The electricity industry is complex and oftentimes difficult to understand. Thus, we take pains to guide our customers through the maze so they can enjoy cheaper, cleaner power. We’re also doing the heretical which is enabling them to use less power and to find pathways to more efficient use of electricity. Believe me, there is a tremendous amount that can still be done here! A kilowatt-hour saved is the cheapest and cleanest power source there is, but sadly traditional distribution utilities like Meralco (which we used to run and control, but no longer do after we sold down to the Indonesians) will only do this grudgingly, if they do so at all.
Resiliency and Microgrids
Decarbonizing our energy system is one thing but just as important is that we ensure resiliency and reliability of our power systems, consistent with the demands of a climate changed and more extreme planet. We were front row witnesses to this fury during Yolanda and many other typhoons after and we’ve since been redesigning facilities like our cooling towers for higher 310-kph wind ratings and using LIDAR to map and identify where we must reinforce our facilities exposed to geohazards. Aside from this we are also building distributed microgrids for off-grid communities so they can enjoy the benefits electricity brings under conditions more resilient than centralized powerlines from local cooperatives.
This brings me to my final point and probably the most difficult part of any paradigm shift: our own thinking. The dominant thinking behind our current paradigm has been with us for hundreds, if not thousands of years since the dawn of agricultural societies. It’s a very human-centric way of thinking about the world: that nature is something to be dominated, conquered, and extracted from for human betterment. The patterns of Take, Make and Waste are directly derived from this thinking which, by extension, treat our oceans, rivers and air as open sewers. We never measure what we take from nature and how much waste we leave behind for her to attenuate. They’re just called “externalities”. Humans need to shift into recognizing we are part of nature and not apart from and above it. (e.g., lifeshed vs watershed)
Related to this is also how we measure success in the world: revenue and net income growth, high stock prices and shareholder value, personal and material wealth, countries look at GDP growth. All marketing and advertising we’re bombarded with every minute of every day is geared to raising these numbers for some company or another. We’re convinced that we’ll be happier, our lives will become more complete, we’ll be more attractive, become better husbands, wives, fathers, mothers if we buy this product or that. We spend money eating more nutrition-less calories than we need and then spend more money for gym memberships to bring that excess weight down. In addition, when economies sputter, many leaders’ first response is to fire up growth and consumption, effectively trying to consume our way out of a crisis. That’s the thinking behind stimulative fiscal and monetary policy we learn in our Economics 101 classes. All things being equal and presuming we don’t do anything differently from today, if we wanted to stay within the IPCC’s 1.5°C by 2100 and reduce emissions down to net zero by 2050, GDP needs to come down by 7% annually till then. That was only achieved in the years 1929-32, during the Great Depression and the Spanish Flu Pandemic of 1918. No political leader would ever cause a depression or a pandemic deliberately. (As Jean-Claude Juncker former President of European Commission liked to say, “we all know what to do, what we don’t know is how to win the next election afterward”). Needless to say, it’s our thinking that has to collectively change, away from mindless consumption and the pursuit of bottom line growth at all cost simultaneously with an ability to decouple carbon emissions from GDP growth and our own definition of general prosperity.
This is why I know I am setting a higher bar for our group of companies when I say we will “forge pathways to a decarbonized and regenerative world”. We can no longer measure our success purely by bottom line growth and shareholder value. My own measure of success will be judged by how well we can aid the decoupling of GDP growth from carbon emissions. And on top of that, I believe it must be the role of businesses like ours to go beyond sustainability and into discovering creative new ways to improve and regenerate everything we touch: from our customers to our co-creators (employees, suppliers, contractors etc.), the Earth, communities, and our shareholders or investors. Every decision we make must consider the betterment of all stakeholders in that order. It no longer works the other way around when you consider shareholders the priority because there’s nothing left for the Earth. Now I say this but I know this is not easy. (The book, ‘The Enlightened Capitalists’ by James O’Toole talks about a lot of dilemmas of capitalists that try to do good and many of them are actually taken out of the game.) I believe enlightened shareholders also realize that there are no jobs, profits or even remnants of shareholder value on a dead planet. Companies need to remember we work amongst unique and nested systems – from our stakeholders to communities, ecosystems and nations -- with each having a reciprocal role to play in the development of each’s potential. Like every organism in an ecosystem, we need to find the regenerative role we are meant to play in a world that needs to be healed and strengthened.
These thoughts make me feel small and humbled. Because now everything we’ve been doing so far just feels like a tiny first step on a long, thousand mile journey. And no matter where we each are in this continuum today, we will all end up doing it together. We cannot succeed otherwise. We’re all imperfect beings, with imperfect abilities, in an imperfect, maybe broken world but it never means losing the courage to make things better. As the songwriter and poet Leonard Cohen wrote:
Ring the bells that still can ring
Forget your perfect offering
There is a crack in everything
That’s how the light gets in
Paradigm shifts of this scale and magnitude can never be easy, especially in the early days as we strive to gather momentum. But remember that every caterpillar harbors dormant imaginal cells; each waiting with the potential to transform into something else. As cells morph, the immune system of the caterpillar attacks them as if they’re enemies. But as the transformation persists and the number of imaginal cells multiply beyond a critical tipping point, the body stops fighting them, changes over and begins the process of nourishing those same cells instead. An unformed, nascent wing may start out with just 50 cells but grow to as much as 50,000 when fully formed. The anguished and labored metamorphosis of a butterfly that can take to the sky in flight, only begins the moment it’s willing to give up being a caterpillar.
Let me end my remarks to you this morning with an old Sufi story about two young and mischievous boys conspiring to trick a wise old man. But let me alter the story a bit for the times.
So I’ll make this a story about two prominent world leaders wishing to test the maturity and wisdom of a young 16-year old girl. Let’s call her Greta for the moment. With a live bird in hand, the two adults conspire with one another and say they will ask her if she knows whether it’s alive or dead. If she says it’s dead, they would simply open their palm and let the bird fly. If she instead says it’s alive, they crush the bird and give her a lifeless corpse, proving her wrong either way. So with live bird in hand they accost her and ask mockingly, “Young girl, hidden in my hand is a bird. Since you have great wisdom and like to tell us adults what to do, can you tell us if it’s alive or dead?” The wise teenage girl then looks them in the eyes, and with a gentle smile replies, “The answer is in your hands”.
It’s in OUR hands.
3rd Philippine Environment Summit
28 February 2020
Grand Caprice Convention Center, Cagayan De Oro City