De-carbonisation

Good Morning Ladies and Gentlemen

After de-dollarisation, de-globalisation today’s weekly is about my view on de-carbonisation. De-carbonisation has been the keyword in the sustainability strategy of many countries, especially in the West, since the United Nations Framework Convention on Climate Change (COP21) in Paris in December 2015. However, there is a significant challenge; unlike petroleum, which has been used «safely» and reliably for over a century, many energy sources that could fuel the industry’s future consist of unknown, untested technology.

Paris Climate Agreement

First, the Paris Agreement (UPU) was adopted at the COP21 and entered into force in November 2016. It aims to limit global warming to a maximum of 2°C and, if possible, 1.5°C by 2050. Additional information can be found under Paris Agreement – Wikipedia.

How should this be reached?

In order to limit the global rise in temperature and reduce man-made CO2 emissions as quickly as possible, the COP21’s participants agreed to reduce carbon dioxide (CO2). More precisely, the agreement refers to shifting to an economic system that sustainably reduces and compensates for carbon dioxide emissions. The long-term goal would be to create a CO2-free global economy.

Feasibility with the example of electric cars

For example, Ladies and Gentlemen, one challenge is consumer hesitance to adopt electric cars. Another is that the cost to retool a company (even partially) is not insignificant. The entire energy industry was built on fossil fuel extraction, refinement, and consumption. Existing infrastructure may most probably not fully support alternative energy sources. Governments need to build an electric power grid that fully supports electric cars without releasing carbon at the production source. How will they be able to do that, and what about heating, shipping, trucking and aviation?

Same Conclusion

As I had written in my weeklies on de-dollarisation and de-globalisation, I do not expect any immediate massive change on a global scale. De-carbonisation is a process, and we are at the very beginning of it and should not be surprised not to see any immediate result. You know, Ladies and Gentlemen, Russia’s war on Ukraine and the shortage of fossil raw materials resulting mainly from sanctions have relentlessly revealed the dependence and thus also the vulnerability of the global energy procurement system.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day, a great weekend, and above all, peace!

Yours truly,

Stefan M. Kremeth

Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
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Mail: smk@incrementum.li