Navigant Research Blog

Smog Settles on Beijing as World Leaders Gather for Paris Summit

— December 8, 2015

As we enter the second week of the 2015 United Nations (UN) Climate Change Conference in Paris, nearly 150 world leaders representing 195 countries have called for action on the issue of climate change. French president Francois Hollande told the delegates of the conference that “the stakes of an international meeting [have never] been higher” and the fate of the world depends on the Paris climate deal; Prince Charles of Britain told fellow delegates that climate change is the world’s greatest threat and leaders must act now; and the UN climate chief, Christiana Figueres, said “never before has a responsibility so great been in the hands of so few.” While this responsibility technically lies in the hands of 150 world leaders, many experts and think tanks have argued that China and the United States play a leading role and will be the keys to success for the summit and in mitigating climate change.

The two countries bring to the Paris summit a joint presidential statement, which was made in Beijing in November 2014. The statement emphasizes the presidents’ commitment to targets reducing their respective nations’ carbon emissions. Essentially, the United States brings to the table the Clean Power Plan, which is currently taking heat on the domestic front, and China brings the world’s soon-to-be largest cap and trade program, a pledge to have carbon emissions peak around 2030, and a $3.1 billion contribution to help developing countries fight climate change. Chinese President Xi Jinping stated at the summit that the Paris agreement should chart a course for green development, put effective control on greenhouse gases, and excite global efforts to cut emissions. He also stated that addressing climate change should not impair countries’ ability to develop.

However, these statements come at a time when President Xi’s domestic environment is in dire circumstances. On December 8, Beijing issued the city’s first ever red alert pertaining to smog levels. The red alert is the highest possible alert and results in the city effectively shutting down, meaning closed schools, halted outdoor construction, and cars with odd and even numbered license plates banned from driving on alternate days. The order will last from 7:00 a.m. local time Tuesday to 12:00 p.m. local time Thursday, when a cold front is expected to push the smog away from the city. The poisonous smog over Beijing covers an area of North China the size of Spain; it’s caused by burning coal for industry and heating and dust from construction and exacerbated by low wind and high humidity. Air pollution monitors in the capital showed that areas of Beijing had more than 256 micrograms per cubic meter of poisonous particles, a number much higher than the World Health Organization’s unsafe level of 25 or more.

Smog in Beijing, December 1st and December 2nd

Paige Smog Blog(Source: British Broadcasting Corporation)

Perhaps President Xi’s attendance at the Paris Climate Change summit comes at a time when the country needs it most. Though a strong global agreement on climate change from the Paris summit, as well as President Xi’s efforts to mitigate greenhouse gases and develop more sustainability, will not immediately solve China’s air pollution issues, these efforts are a step in the right direction. China’s goals and participation in the Paris summit could play a major role in not only solving the country’s air pollution issues in the long term, but also in helping to mitigate global climate change.

 

Buildings and Climate Change

— November 6, 2015

Telescopers_webAccording to the United Nations (UN) Environment Programme, the buildings sector is estimated to be worth 10% of global gross domestic product (GDP), or roughly $7.5 trillion. Currently, buildings consume about 40% of global energy, 25% of global water, and 60% of global electricity. Buildings also emit more than 30% of global greenhouse gas (GHG) emissions. Under the business-as-usual projection accompanied by rapid urbanization, emissions caused by the buildings sector may more than double by 2050.

However, the buildings sector has among some of the most cost-effective and proven solutions for reducing energy consumption and GHG emissions. There are commercially available technologies that can reduce energy demand in buildings by 30% to 80%. Investment in building energy efficiency will lead to significant savings that will help offset incremental costs, providing a quick return on investment. Also, because existing buildings perform far below efficiency potentials in general, there are enormous opportunities for reducing energy consumption. Meanwhile, due to population growth and increasing urbanization, a new construction market is growing in developing countries, where construction activities account for up to 40% of GDP and provide opportunities for adopting energy efficient technologies.

UN Buildings Day

The buildings sector can play a critical role in mitigating climate change by reducing energy consumption and GHG emissions. Consequently, for the first time in the history of climate negotiations, a Buildings Day will be held on December 3, 2015 at the COP21 UN conference on climate change in Paris. This meeting is a mandate from the Lima-Paris Action Agenda of 2014, and it aims to discuss ways to limit global warming to a maximum of 1.5°C to 2°C. The Buildings Day at COP21 will showcase actions already taken by the buildings industry and will serve as an opportunity to encourage communications, collaboration, and implementation among various stakeholders.

In addition, a Global Alliance for Buildings and Construction consisting of governments, companies, financial institutions, organizations, academia, associations, professionals, and user networks will officially launch on that day. By putting the buildings and construction sector on the below 2°C path, the alliance commits to helping countries realize their Intended Nationally Determined Contributions, which are essential drivers for achieving the ambitious global climate goal.

 

Australia Picks Up the Smart City Challenge

— October 26, 2015

Recent U.S. government support for smart cities research and the announcement of the selected cities for the Indian smart city program are just two signs of the continuing momentum behind urban innovation across the globe. Such developments only increase the pressure on other national governments and city leaders to clarify their own programs and ambitions around urban development. Australia is a good example of how that pressure is hard to avoid.

Despite being one of the most urbanized countries in the world, with around 90% of the population living in urban areas, Australian cities have played a relatively subdued role in the development of smart city ideas. However, there have been a few high spots. The Smart Grid, Smart City project in Newcastle is one notable smart grid pilot attracting global attention, but despite positive results, the follow-up has been limited. Sydney and Melbourne have also been leaders in promoting building energy reporting and energy efficiency, and a number of cities also have sustainability goals, such as the Sustainable Sydney 2030 program. However, there has been little in the way of a significant focus on the issues of urban innovation and sustainability. A recent report from the Australian Council of Learned Academies, for example, highlights the need for Australian cities to put much greater emphasis on clean and efficient mobility solutions if they are to sustain their growth and citizen expectations.

Waking Up to the Challenges

That report is among a number of signs that Australian cities and the Australian federal government are waking up to the challenges presented by globalization and climate change, as well as the opportunities offered by new forms of urban innovation. Adelaide, for example, has launched a number of initiatives including the creation of an Internet of Things (IoT) hub in association with Cisco. Melbourne has recently created a new post of Chief Digital Officer to lead its Smart City Office and has also presented its plans to become a smart city to a committee of the Australian parliament. The federal government is also taking cities more seriously. The new prime minister appointed the first Minister for Cities and the Built Environment in September, reversing the lack of focus on urban development issues shown by the current government so far.

Despite the environmental goals set by some Australian cities, the country’s record on emissions reductions remains poor compared to other developed economies.  Australia has one of the worst records for per capita climate emissions, on a par with the United States. However, whereas the United States has been making reductions in recent years, Australia has done little to mitigate its emissions. The rejection of a number of clean and efficient energy programs by the previous prime minister has not improved the situation. Australian cities have the opportunity to pick up the baton and show there is a better way forward.

 

VW Diesel Cheating Threatens Consumer Trust of Automotive Software

— October 19, 2015

In late 2007, U.S. gasoline prices were headed toward an all-time high of $4 per gallon and the financial collapse was still a year away. With more restrictive emissions standards being phased in and Congress moving to impose dramatically increased fuel economy standards, automakers and suppliers were scrambling to figure out how to comply without making vehicles so expensive that mainstream consumers could no longer afford them. Tesla was already on its third complete redesign of the Roadster transmission and was months from starting customer deliveries of its then unproven battery technology. Thus, many automakers were looking to the European market, where diesel technology was already so popular.

At the 2008 Detroit Auto Show, we saw an array of diesel-powered production and concept vehicles from Audi, BMW, Mercedes-Benz, Cadillac, Saturn, Jeep, Hyundai, Mitsubishi, Acura, and Land Rover. Several of these automakers, along with suppliers such as Bosch and Honeywell, openly talked about diesel capturing 10% to 15% of the American market by 2015, while J.D. Power and Associates projected that 17% of American cars would be diesel-powered. Prior to the current Volkswagen scandal, diesel cars accounted for just under 2% of sales in 2015.

Diesel has been an appealing solution for American drivers who do a lot of intercity highway driving, where the regenerative braking benefits of hybrid technology are less of a factor, as well as in larger vehicle segments where greater hauling capacity is required. The inherent efficiency of the diesel engine meant that CO2 emissions could be slashed by 25% or more, and technologies—including common rail fuel injection, particulate filters and selective catalytic reduction—would address the traditional noise and emissions issues associated with compression ignition. At least, that was the theory up until the last few weeks.

Special Code

Volkswagen (VW) and its premium brand Audi have acknowledged using special code in the powertrain control software that specifically looks for the conditions associated with running an emissions test in the lab to trigger a fuel delivery strategy that enables cleaner emissions. On the open road, the engine management strategy switches to one that delivers better fuel efficiency and performance but also increases NOx emissions, which contribute to smog.

Several factors contributed to VW’s ability to do this, including the use of standardized lab tests for fuel economy and emissions certification. When the test conditions are well-known and limited, it is quite straightforward to develop control software that meets the letter of the law in the lab while violating it in real-world conditions. Since the source code is closely held by the manufacturers, it’s difficult to verify cheating, logical flaws, or security vulnerabilities.

A Matter of Trust

Since gaming emissions requirements is comparatively easy and not unprecedented, as others (including Ford and Honda) have paid fines for installing defeat devices, the current scandal has the potential for a much more wide-ranging impact on the transportation industry. In addition to electrification, manufacturers are relying on connectivity and automation to enable both efficiency and safety improvements in the coming years. Navigant Research’s Autonomous Vehicles report projects that by 2035, more than 80 million vehicles will be sold annually with some degree of autonomous capability. However, if consumers don’t feel that they can trust manufacturers such as VW, they are far less likely to be willing to pay for the premium features.

When automakers break consumers’ trust, they jeopardize the potential benefits to society and the environment from these technologies. Regulators and manufacturers will need to act decisively, such as the Environmental Protection Agency’s decision to road test all diesels, to ensure consumer trust can be restored.

 

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