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Citizens will demand more action on sustainability and climate action.
It is not a new revelation that we are in the middle of a climate crisis; there is currently more C02 recorded in our atmosphere than at any other time in history, with concentrations in 2021 averaging at over 417 parts per million. In 2022, we experienced unprecedented heat waves across the globe and increasingly common natural disasters, both resulting in unnecessary deaths and higher adaptation costs for individuals and businesses. We also saw extinction rebellion groups such as ‘Just Stop Oil’, and ‘Insulate Britain’ make multiple headlines for protest tactics that looked to highlight the perils of the climate crisis. Therefore, it is predicted that 2023 will see greater and broader demands from citizens for climate control measures and sustainable practices, placing pressure on governments to act. Citizens who are feeling both the environmental and financial pinch may demand more subsidies for EVs, greater public transport links, and taxation on domestic and international aviation.
The U.S. inflation reduction act will empower domestic EV production but will create unsustainable tensions in transatlantic and international relations.
The Inflation Reduction Act (IRA) was a ground-breaking piece of legislation signed off under the Biden administration with the largest pledge addressing the climate crisis by the U.S. The IRA included tax breaks for domestically produced electric vehicles to incentivise automotive manufacturers to invest their efforts into U.S EV production. This is achieved by introducing domestic production and mineral sourcing quotas as part of the eligibility criteria for the tax incentives. However, the Act has already begun to cause disruptions between the U.S and their international partners. Leaders of nations such as France and South Korea have called the Act discriminatory as they worry EV manufactures will reduce funding into their own countries and relocate investment into the U.S. Leaders have begun talks to reduce the friction but final solutions to please all parties will be needed in 2023.
The cost-of-living crisis will have a negative effect on green developments.
2022 left us with an astronomical cost of living with predominantly high inflation rates and numerous tax rises. This has largely been caused by Russia’s war of aggression against Ukraine, and the sanctions placed on Russia which resulted in a 115% increase in the price of wholesale European gas and electricity between 23rd February and 31st July. It has been speculated that surging fossil fuel costs may act as an incentive to hasten the transition to greener energy systems, and, whilst this may play out, it can also be predicted that faced with immediate emergencies, governments may choose to spend time, resources, and political capital on the crises of the present rather than on investments for the future. Furthermore, the rise in interest rates makes borrowing more costly, which may be a particular obstacle for investing in renewable energy investments, which are typically characterised by high upfront costs.. The Energy Outlook 2023 by The Economist Intelligence Unit predicts that, in the coming year, coal consumption will grow to compensate for gaps in gas supplies, and investment in renewables will weaken.
Transport industry strikes will put unsustainable pressure on the UK Government
The second half of 2022 saw a rise in strike action from the public sector, in particular was the transport industry which included rail, public transport, highways, airports and customs. The strikes have caused a ripple effect resulting in businesses to be unable to easily move goods and people to and from the UK. Consequently, people and businesses have turned to motor vehicle movements; the opposite of Government objectives to increase sustainable travel habits. To resolve the strike issues transport operators and backbench MPs are likely to increase pressures on number 10. By the end of 2023, it is hoped that the strikers will receive increased salaries. Dr Dimitris Potoglou from Cardiff University commented his thoughts on whether he believed that the strikes were causing more people to drive:
“Rails strikes are a disruption, especially for people who regularly commute by public transport. A lot of them will have to make changes to their travel arrangements either by shifting to car or other modes, but also consider working-from-home should their jobs and employer allow that. It is not a matter of driving more but rather observing modal shift or working from home. This might have an impact in the long-term (given the current prices of rail travel) as commuters may remain captive to their choices following the disruption and discontinue using rail.”
Hydrogen will become increasingly popular.
The year 2023 may see a large global increase in the interest and popularity of the green Hydrogen industry, with a wave of government subsidy schemes coming into place that place H2 projects as a possible front-runner for the fuel of the future. The USA’s Inflation Reduction Act includes ‘hydrogen tax credits’, which offer to pay producers up to $3 per KG of green H2. Canada is set to unveil a similar tax credit system in spring this year, alongside the ‘Contracts for Difference’ subsidy program from the EU and UK, following Germany’s ‘H2Global’ scheme which will provide financial support for clean hydrogen imported from outside the EU. Alongside these subsidy schemes, governments and industries may also turn to hydrogen for power generation as natural gas becomes more expensive and coal becomes politically unsustainable. At the end of this year, we will perhaps see interest in hydrogen-powered aviation or maritime operations peak as lessons learned on the ground may act as a catalyst for the application or infrastructure of hydrogen in other industries.
The Introduction of FuelEU Maritime initiatives will see greater exploration into alternative fuels.
Currently, the maritime sector accounts for around 75% of EU external trade and 31% of EU internal trade, with around 400m passenger ships embarking and disembarking in EU ports each year. This means that efficient maritime transport connections are essential to the mobility of EU citizens and to the EU economy as a whole. In 2019 the maritime industry was responsible for 144m tonnes of CO2, meaning that to reach the Commission’s proposal of cutting greenhouse gas emissions by 55% in 2030, significant measures need to be taken, including the introduction of renewable and low-carbon fuels. The 2030 Climate Target Plan notes that ‘the maritime sector will need to scale up efforts to increase the use of sustainably produced renewable and low-carbon fuels. The necessary technology development and deployment must happen already by 2030 to prepare for much more rapid change thereafter”. As a result of this, the European Commission presented the FuelEU maritime proposal within its Fit for 55 Package, introducing increasingly stringent limits on the carbon intensity of the energy used by vessels, obliging them to use alternative fuels. Presently, the maritime sector is highly dependent on fossil fuels with no clear alternative frontrunner, caused by a lack of mature, affordable, and globally utilisable technology. A development executive at BAE Systems spoke to us about possible alternatives to fossil fuels in maritime including nuclear, hydrogen, electric, and even the re-introducing of sail as a means of propulsion; it is predicted that with the new FuelEU regulations, 2023 will see a greater commercial and scientific exploration into these alternatives.
Dr Ruth Potts from Cardiff University was asked for her own thoughts and predictions in regard to the 2023 sustainability and transport sector and she discussed the following:
“There is a tendency to think that electric vehicles are the solution to our pollution and CO2 emission woes. They are seen as particularly clean and green as a mode of transport. However, the reality is that they still release similar levels of particle pollution to traditional diesel or petrol run cars, require large quantities of minerals and metals that can only be obtained through unsustainable means from developing countries, and do not require any form of behavioural change. What is needed to make our world more sustainable is a massive change in human behaviour towards carbon free modes of transport such as walking, bicycle riding, and where longer distances are needed, greater use of mass transit such as buses and trains. Despite this, I predict that governments will continue to invest in electric vehicles and their infrastructure because they are palatable politically, rather than any significant investment in buses, trains, or creating more compact walkable settlements (which is what we need to address the climate crisis meaningfully from an urban perspective).”