Trends impacting the Energy Transition | Part 3 of 3

This is part 3 of 3 in a series examining trends shaping the renewable energy sector. Check out Part 1 and Part 2 for the first six trends.

We’ve come to the last post of this series exploring trends in the renewable energy sector. We’ll be exploring the last three trends identified by the Responsible Energy Initiative. Do bear in mind that these trends are not absolute predictions or forecasts; they are not linear in nature; and they are not exhaustive, as the future is dynamic and ever-evolving, not an extension of the past.

Check out posts from the previous weeks for an in-depth exploration of the other six trends.

In reading these trends, we must bear several caveats in mind, that trends are not:

1. Absolute predictions or forecasts;
2. Linear in nature; and,
3. Exhaustive, as the future is dynamic and ever-changing, never an extension of the past.

Trend 7 | Ecological emergency: Accelerating biodiversity collapse threatens the foundations of life

The world is now facing a stark ecological crisis due to unsustainable patterns of production and consumption that are extractive and linear. These are driving an unprecedented destruction and degradation of nature, using up natural resources at such a rapid rate that nature is not able to replenish itself. Many scientists are now calling the extent of current and accelerating biodiversity loss the “sixth mass extinction”. The nutritious food, clean water, and productive landscapes that ensure our survival require biodiversity.

Meanwhile, indigenous knowledge systems and other traditional practices related to sustainable management of the environment are under threat.

Against this backdrop, in October 2021, a milestone in biodiversity conservation was achieved as states participating in the UN Biodiversity Conference (COP15) adopted a pledge to reverse biodiversity loss by 2030. Questions remain over the political will and capacity to implement.

Evidence of change

• Biodiversity is declining at alarming rates, globally. More than 1 million species are threatened with extinction and populations of land, sea, and air species are falling precipitously.
• Reduced biodiversity is costing an estimated $125 trillion in ecosystem services, risking millions of lives in floodplains, and severely affecting livelihoods.
• Interface (a global commercial flooring company) has long used biomimicry in innovation, and has been piloting ensuring their factories offer equivalent ecosystem services to surrounding forest areas.

Possible implications for responsible energy

• As biodiversity is increasingly valued, new financial mechanisms and incentives could reward ecosystem stewardship.
• Supporting local land users as biodiversity stewards would contribute significantly towards net positive outcomes, boosting both local livelihoods and environmental outcomes significantly.
• Greater scrutiny, through both formal routes and citizen science, may mean stronger monitoring of the entire value chain.

Trend 8 | Resource overshoot: Tech advances and increasing consumption puts increased stress on raw materials sources

Global resources are generally being used at unsustainable rates as consumption continues to increase and extractive linear models of resource use remain in place. Humanity is using nature 1.7 times faster than our planet’s biocapacity can regenerate — equivalent to using the resources of 1.7 Earths. By 2060, global material use could double to 190 billion tonnes (from 92 billion) if more circular material flows are not implemented at scale.

Growth in renewables, because of its dependence on batteries and metal structures, is driving increased extraction of minerals and its corresponding environmental and human rights risks.

Demand is so high for some materials that deep sea mining is beginning to be considered a viable future opportunity. Experts warn it could have catastrophic impacts on the seabed ecosystem which underpins many important cycles upon which we depend.

Evidence of change

• Demand for lithium batteries is increasing environmentally catastrophic extraction in Australia, South America, and China, and is prompting extraction in new geographies.
• Along our current trajectory, by 2030, demand for water will outstrip supply by 40%. Clashes over water scarcity are already a common occurrence in India’s Northern Plains — once one of the most fertile farming areas in the world.

Possible implications for responsible energy

• Heavy reliance on extractives is likely to lead to an insecurity of supply, which could make circularity more financially attractive.
• Rapid adoption of emerging technologies (such as charging stations that are compatible with single types of batteries) without adequate consideration of their impacts can lead to lock-in risks, where it becomes difficult to transition to other, more preferable alternatives and/or risk future prosecution for environmental damage.
• Association with unsustainable sources of materials may risk social licence to operate.

Trend 9 | Land grab: Intensifying competition over diminishing land resources

As the global population grows, so does pressure on land to provide ever more food, energy, shelter and natural resources. According to a 2019 ISRO report, 97.85 million hectares (mha) of India’s land — an area 2.5 times the size of Rajasthan — has already been degraded. Of this, 3.32 mha — an area 22 times the size of Delhi — has been added between 2003–05 and 2018–19.

Various commitments are being made to use vast swathes of land for particular purposes, sometimes to the exclusion of others such as food, energy and pastoralism. COP proposals to protect 30% of Earth’s land and sea by 2030 are raising concerns about what this means for the rights of indigenous peoples and pastoralist communities. Emerging mechanisms monetising ecosystem services could exacerbate the risk to marginalised communities. Meanwhile, using land alone to remove emissions at ‘net zero’ levels by 2050 would require 1.6 billion ha of new forests — five times the size of India, or more than all the farmland on the planet.

Evidence of change

• In September 2021, the New York Stock Exchange (NYSE) and Intrinsic Exchange Group (IEG) jointly announced that a new class of publicly traded assets called Natural Asset Companies (NACs) will list and trade on the NYSE, creating a new market generating trillions of dollars annually based on ecosystem services. NACs hold the rights to ecosystem services produced by natural, working, or hybrid lands, but raise the question of who has the rights to own these NACs and what it means for communities on the ground.
• Nascent evidence is emerging that there are some conditions under which solar and agricultural activities can coexist on the same land.

Possible implications for responsible energy

• As competition intensifies, all sectors — including RE — will need to find ways of co-optimising their use of land to meet desired outcomes equitably for people, industry, and planet.
• A more systematic approach to landscape level ecosystem strategies may be increasingly taken up by forward thinking governments and communities.
• Marginalised communities will likely become increasingly vulnerable as land competition intensifies.

The Responsible Energy Initiative is looking to connect with others who are also exploring similar questions or working in a related area. Reach out to the programme manager, Saksham Nijhawan at s.nijhawan@forumforthefuture.org for more information.

These trends are written by Anna Biswas, Cynthia Morel, Sangam Paudel, and Saksham Nijhawan from Forum for the Future.