Written by Catherine Loke
As we begin 2023, it is timely to review the year 2022 and what has happened post-COVID – have we learnt anything?
In my article The Economics of Sustainability published in March 2021, I wrote “As we get back on our feet, we can do one of two things: Go back to business as usual; back to our old consumption habits …; or Take this as an opportunity to reinvent our economic system, to create the right incentives for behaviour which supports the well-being of the planet”.
Looking back at 2022, it seems we have chosen the first path – back to our old consumption habits.
One of the biggest events in 2022 was the Singapore Grand Prix (SGP). After a two-year hiatus, Singapore was once again abuzz with the Formula 1 Night Race from 30 September to 2 October 2022.
According to the Ministry of Trade and Industry 1, the 2022 event welcomed a sold-out record crowd of over 302,000 people from all over the world, the highest attendance ever since the inaugural race in 2008. Foreign visitors accounted for 49% of total race-goers. 90% of the race organisation was sub-contracted to Singapore-based food & beverage companies and events companies, as well as logistics and transport providers. Since its debut in 2008, the SGP has generated more than SGD1.5 billion in tourism dollars. With such a boost to our Gross Domestic Product (GDP), it is no wonder that Singapore renewed its contract to host the Formula 1 Grand Prix for seven years, i.e. until 2028 2.
Meanwhile, also in October 2022, Singapore announced that it will raise its national climate target to achieve net zero emissions by 2050 as part of its Long-Term Low-Emissions Development Strategy, having stated in its enhanced Nationally Determined Contribution document, submitted to the UNFCCC in March 2020, its target to peak emissions at 65 MtCO2e around 2030 3.
Driving Sustainability?
According to F1’s own detailed carbon footprint analysis, an entire race season generates approximately 256,000 tonnes of CO2e 4. To put things in perspective, 1 tonne of CO2 is equivalent to driving 37,000 km (nearly once around the world) in the average petrol-driven car 5.
F1 has declared that it is on a mission to have a net zero carbon footprint by 2030 by adapting the ways they operate from factory to flag, systematically reducing the CO2 emissions generated by their operations, events, logistics and race cars 6. Figure 1 below illustrates some of the measures taken for the Singapore Grand Prix in 2022:
F1 is not unique in proposing such measures. It has become quite the norm for businesses in Singapore, and indeed around the world, to make similar pledges to achieve “net zero” by using “renewables”, switching to biodiesel, etc., now also known as Environmental, Social and Governance (ESG) business practices. The endeavour is to preserve our current economic activities as a matter of priority, i.e. preserve “business as usual” (BAU), while tweaking methods of operation, equipment, modes of transportation, use of materials, etc., so that we can continue to pursue GDP growth in the form of “green growth”.
Why Net Zero Will Not Save Us
The concept of net zero is simple – if climate change is caused by carbon dioxide emissions, then we can stop it by not emitting more carbon dioxide and/or by removing from the atmosphere what we emit. The latter solution is highly attractive because we can continue with BAU if we can just capture carbon. The world’s current plan is to do this by tree planting and inventing high-tech direct air capture devices, and if we do these as well as reduce our burning of fossil fuels, then hopefully we can reach “net zero” by around 2050 and stop global warming. To reduce our burning of fossil fuels, we simply have to use “clean” energy sources, i.e. those that do not emit carbon dioxide while in use (e.g. solar panels, wind turbines, etc.). And if we cannot generate enough energy from such sources, we can still use fossil fuels, but pay someone else in another country to plant trees to capture the carbon dioxide we emit, i.e. create a carbon market.
In other words, we prefer to treat the symptoms rather than the cause.
Meanwhile, carbon emissions are continuing to rise because our economic activities have not fundamentally changed.
The real problem is not carbon; it is that we have become accustomed to a lifestyle (and the economic activities that come with it) made possible only by the abundance of cheap energy. This abundance of energy has enabled us to consume resources with little effort, simply at the press of a button or flick of a switch, to the point that we are reaching, or in some cases have exceeded, Earth’s Limits.
Focusing on “net zero” makes us blind to the fact that we are reliant on fossil fuels, i.e. coal, oil and natural gas, for almost every aspect of our industrialised lives. Of the three, oil is the master resource which makes everything else possible, including enabling us to make and power the machines to mine for coal and natural gas. Around 65-75% of crude oil is processed into different forms of fuel (butane, propane, paraffin, kerosene, liquid petroleum gas, jet fuel, petrol, diesel, etc.), while the remainder is processed into petrochemicals, plastics, synthetic fibres (polyester, nylon, etc.), resins (e.g. epoxy), petroleum jelly and bitumen 9. Oil is used directly or indirectly to make over 500,000 products 10 such as clothing, furnishings, packaging, cosmetics, toiletries (shampoo, toothpaste), contact lenses, aspirin, glue, fertilisers, insecticides, as well as what we think will take us to “net zero”, i.e. “renewables” (solar panels and wind turbines).
Renewables are not renewable
Renewables cannot be manufactured, transported, installed or recycled using their own energy output; fossil fuel energy is what makes them possible, including that required to mine, extract and process the rare minerals required to make them, as well as the batteries necessary to deal with the intermittent nature of the electricity they generate 11. Even if we have sufficient resources to build the first generation of “renewables”, which we do not 12, at end of life in about 20-25 years, we will not have enough energy to deal with them at the massive scale needed to replace or renew them.
Not only is it a misnomer to call them “renewable”, it is also making us blind to the fact that our drive to produce massive numbers of solar panels and wind turbines today, to achieve “net zero”, is ironically hastening our depletion of fossil fuels and rare minerals, increasing carbon emissions and leading us to a dead end.
Biodiesel – the choice between food and fuel
Biodiesel presents several challenges 13:
- It is made from 95% vegetable oils (68% soybean, 16% corn, 11.4% canola) and 5% animal fats and grease. About one tenth of biodiesel comes from used cooking oil. Globally, 27.95 million barrels of petroleum diesel are consumed per day, but only 655,000 barrels of biodiesel. To fully replace petroleum diesel, biodiesel production would have to be scaled up 43-fold.
- Soy biodiesel requires 13,676 litres of water per litre of biodiesel produced. Then, in the process of making biodiesel, as plants are 90-95% water, we have to expend energy to remove the water to avoid corroding and clogging diesel engines.
- Plants are chemically different from crude oil. Crude oil is nearly all hydrocarbon chains of 82-87% carbon and 12-15% hydrogen. Plants have hydrocarbons, but also contain oxygen, nitrogen, phosphorus, potassium, calcium, magnesium, zinc, sulfur, chlorine, boron, iron, copper, manganese and more, nutrients that are great for us but which have to be removed to make biodiesel, adding to the energy needed in the process.
- Plant oils are so different from petroleum diesel oil that it is difficult to comply with ASTM D975 Standard Specification for Diesel Fuel which specifies energy density, oxidative and biological stability, lubricity, cold-weather performance, elastomer compatibility, corrosivity, emissions (regulated and unregulated), viscosity, cetane number, distillation curve, ignition quality, flash point, low-temperature heat release, water tolerance, specific heat, latent heat, toxicity, and ash and sulfur content. Fuel which does not conform to these specifications can damage diesel engines. Hence, heavy-duty engine manufacturers have warranties that do not allow biodiesel, although B5 (5% biodiesel, 95% petroleum diesel) can be acceptable. Some warranties prohibit B20 to B100.
According to SGP, for the 2022 race, 48% of power for Zone 4 came from B7 biodiesel (see Figure 1 above). B7 biodiesel is a mix of 7% biodiesel and 93% petroleum diesel, which means that 3.36% of power for Zone 4 came from biodiesel or, rather, 96.64% of power came from fossil fuels … and we have not accounted for the fossil fuels used in the growing, processing and transportation of the soybeans used to make biodiesel.
Since biodiesel is made from something we can eat, it is also a choice between food and fuel – one bushel of soybeans (approximately 27 kg) can yield 1.5 gallons of biodiesel 14, or 108 gallons of soymilk 15. Can we justify using agricultural resources to produce biofuel while 10% of people globally go hungry 16? Frankly, the more efficient way to harness the energy in a soybean would be for us to drink soymilk and ride bicycles.
The Road to Sustainability ends at Earth’s Limits
It is a fallacy that we can continue to live the way we do as long as we can find other sources of energy. Other sources of energy cannot fully replace fossil fuels by a long shot, nor can they create resources out of thin air.
What we can do for a start is to phase out non-essential consumption of fossil fuels. While events such as the F1 races boost our GDP in the short term, in a world that is in a state of escalating climate change as well as energy and resource decline, expending energy and resources on ostentatious consumption, and making superficial tweaks here and there to be “green”, is not the way to secure our future. It is like claiming to want to go on a diet, feasting on a buffet, then drinking Diet Coke to reduce one’s sugar intake. As long as we keep pursuing GDP growth, we will continue to make poor decisions.
All of us, especially ESG strategists, managers and investors, need to think beyond just tweaking existing business practices to actually questioning whether or not most of our current economic activities should (or can) continue at all as energy and resources decline. The first realization must be that we cannot continue with high-energy BAU practices because that is what got us into this predicament in the first place. Trying to go back to pre-COVID business activities is delaying the inevitable – that we simply do not have the energy or resources to fuel a growth-based economic system that evolved only because of an abundance of energy. The longer we leave it, the steeper the descent will be.
Things are about to change dramatically in the coming decade, not in 2050, not in 2100.
As fossil fuels decline, global supply chains will shrink. Casual tourism will become less and less affordable, and eventually not even possible. For Singapore, it’s back to the drawing board in terms of what makes us useful to the world, and how and what we will trade. Fundamentally, a sustainable business is one that is resilient to this inevitability.
Pushing for lower consumption now appears to be a less attractive proposition because it means existing businesses will be disrupted and many people will lose their current jobs. However, lowering consumption does not necessarily mean less employment opportunities. In fact, it could have the opposite effect – as energy declines in the coming years, more things will have to be made by hand using self-powered tools, requiring more people to be skilled at making them. As we need to put in more effort to produce things, we will value them more, not only in monetary terms but also in appreciating the craftsmanship needed to make high-quality products that last. Thus, a lower rate of consumption can result in higher and more meaningful employment, with higher value given to the acquisition of skills.
To be sustainable, we must stay within Earth’s Limits. If we can understand that this is non-negotiable, we can plan for a better future where we value what is truly valuable.
The original spirit of F1 was to spur innovation by pushing the limits of internal combustion engines. The answer lies in preserving this spirit, but pursuing innovation that is founded on the reality of Earth’s Limits.
This article was first published on LinkedIn on 25 January 2023.
Notes
- Ministry of Trade and Industry, Factsheet on Formula 1 Singapore Grand Prix 2022, 2 October 2022
- Channel News Asia, Singapore Grand Prix renews contract to host Formula 1 night race, 27 January 2022
- National Climate Change Secretariat, Singapore and International Efforts
Note: CO2e means ‘carbon dioxide equivalent’, a unit of measure used to represent carbon dioxide as well as other greenhouse gases of varying global warming potential converted to that equivalent to carbon dioxide. - Formula 1, F1 Sustainability Strategy
- Crown Oil Fuels and Lubricants, 1 Tonne of CO2: What Does it Look Like?, 12 November 2021
- Formula 1, Accelerate Technologies That Decarbonise the World
- Singapore Grand Prix, Driving Sustainability
- Hannah Ritchie, Max Roser and Pablo Rosado, CO₂ and Greenhouse Gas Emissions, OurWorldInData.org, May 2017; last revised in August 2020
- E. Allison and B. Mandler, Non-Fuel Products of Oil and Gas, American Geosciences Institute 2018
- Alice Friedemann, How will 500,000 products made with fossils as feedstock & process energy be created post fossil fuels?, energyskeptic, 21 September 2021
- DJ White & NJ Hagens, Renewable Energy – The Right Answer to the Wrong Questions, August 2019
- Simon Michaux, The Mining of Minerals and the Limits to Growth, Geological Survey of Finland, March 2021
- Alice Friedemann, Why it is hard to replace diesel with biodiesel, energyskeptic, 12 April 2022
- F. John Hay, Soybeans for Biodiesel Production, Farm-Energy, 3 April 2019
- Ronald L. Conte Jr., U.S. soybean harvest: how much soymilk?, Hunger Math, 21 October 2015
- Action Against Hunger, World Hunger Facts