Resistance vs. resilience
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There is an old fable from the French author Jean de la Fontaine that talks of a great oak tree. This tree stood next to a certain stream, whose clear, crisp water helped the tree to grow.
The tree grew tall, and was proud in its strength and size. It did not take notice of winds, nor even storms, and instead, stood firmly and unswaying no matter what the weather of the day might be. Contrarily, the tree looked down upon the reeds located at its base and laughed at the ease with which the winds seemed to sway them. The oak saw these reeds as weak, as they simply bent or folded over whenever any type of wind came. Yet one day a violent storm of a strength never seen before came unexpectedly, and knocked the proud tree down with one mighty gust, leaving only splintered remains. The reeds simply bent as usual when the wind tried to knock them down.
The messages intended to showcase the error of pride in the French fable can easily be used to showcase the current problems in the mind-set of the infrastructure sector. Like the tree, the sector used to operate under the assumption that if infrastructures were built stronger, they were also building better and their strength was their asset; however, as disasters worldwide have shown, better is not stronger. Instead, specifically for the energy system, we need smarter designs in order to cope with the unpredictability; mainly for those events whose violence and frequency was unknown till now, but yet have become the new normal for the energy industry. The energy industry needs to move away from the mind-set of the oak, and instead, become more flexible like the reeds in de la Fontaine’s story.
The fundamental and underlying cause of many of our problems today is without a doubt, climate disruption - and this is especially true for the energy sector. Only a short time ago, business leaders were reluctant to acknowledge the changing shift in our natural ecosystems, and thus, in the need to change within our global political economy. Now, CEO’s and scientists alike agree that action is imperative. As evidenced by the WBCSD’s and World Energy Council’s Global Electricity Initiative survey, 100% of CEO’s in this sector believe that climate change is a reality, and that it is a business disruption that must be addressed now. They understand that adaptation measures are as important as mitigation. Unfortunately it can easily be shown that our “oak-thinking” has been the crux of these actions. Resisting the idea of climate change, and thinking that we could adapt by hardening the existing infrastructure has left the energy sector as exposed to destruction as the old tree was in the fable. Unknown to date extreme weather patterns, as a result of climate change, are affecting the energy sector now, making the need for adaptation both urgent and necessary. Yet, unfortunately, today’s winds are stronger, the rainfall is harder, and as a result, the predictability of flooding and drought patterns become increasingly difficult. On top of that, the acceleration of melting of snow and ice caps is creating further stress on the system. Recent science has shown that extreme weather patterns will occur with four times more frequency than they have since 1980. The energy sector and its stakeholders have been ignorant of acknowledging the need to adapt, thinking instead that climate change was a burden left to future generations. Business-as-usual has continued, ignoring the dire demands of scientists to change both our lifestyle and business patterns. Yet, if we accept the need to adapt, we also can move away from resistance, and instead embrace resilience. We need to build systems that accept unpredicted events in frequency and strength and come back to operation quickly after the event, even in a deteriorated mode. We need smarter, not stronger, solutions.
Smarter solutions are increasingly necessary when considering the Pandora’s Box that we have now opened through continued negligence and disregard for our natural ecosystems, which clearly indicate that traditional hardening is no longer an option. Instead, today’s infrastructures, the critical backbone of our economy, must change in both their conceptualisation and operation. The sheer frequency of extreme weather events alone demands a critical revaluation of the information the energy industry uses to both create and finance energy infrastructure. Including accepting these costs in the base for the building of tarification. Rather than preparing single energy assets for a one-off event, as traditional hardening measures would recommend, the energy sector could be better prepared by viewing energy systems as a whole. This would move from preparing for the impact of a single event, to adapting to a series of events. An example of this can be seen when looking at the Philippines. The country now understands that they would not have finished with dealing with the consequences of one typhoon, when another storm hits. Now, the country is including emergency preparedness and back-up measures for the impact of another typhoon to hit, as part of their rebuilding efforts. This type of thinking helps to move the energy sector away from relying on the past, and instead, allows the energy sector to better prepare itself for the future. Taking resilience through a systemic lens may also help to cut down the costs of hardening measures by increasing preparedness for the impact of an unanticipated event, rather than investing in just enough, which will simply lead to a repetition of failures.
Managing the energy-water-food nexus can be used as an example of how smarter resilience can decrease risks, and also increase opportunities. The nexus itself refers to the undividable interconnectivity of energy, water, and food; energy requires water throughout its lifecycle both for hydro and thermal and for the new forms of renewable power; water requires energy for extracting, treating, transporting, desalinisation; food requires water and land, thereby competing with energy. Climate change compounds the interconnectivity of all these resources perturbs the equilibrium, and brings to the table new forms of generation with new fuels that are not behaving the same way vis a vis the nexus. Again data from the past is no longer suitable to orient decisions for the future.
In fact these new arbitrage measures are currently established upon a system of values that is no longer valid. How can we make decisions in favour of one or other system if we do not consider true cost, true value and true price of factors like carbon emissions, water or biodiversity? Current decision-making considers these factors as zero inputs, yet this is no longer accurate. We are entering a time where we are no longer managing priorities but sharing scarcity; yet, we are not prepared for this. Only by valuing the services rendered by nature that will we be able to effectively use and preserve what meagre rations remain today.
To encourage these efficient resilience measures, governments must break the silo-thinking to show that they too recognise the importance of integrating resource considerations in decision-making. Globally speaking, only 20 countries have entities that manage both energy and water- every other country sees these as competing and separate resource entities with different priorities, reporting to different ministers or government agency. For a natural resource that infiltrates many supply-chains, most exceptionally energies’, this is hardly useful. To make the most of methodologies that consider climate change both now and the future, governmental intervention needs to be more broadly coordinated. Regulation must take into consideration the interconnectivity of various sectors, and move towards an integrated approach that supports systemic evolution. We need management today that creates real governance, and policies that reflect the interconnectivity of today’s energy systems.
Finally, we need to understand that to cope with the changes in conditions that we have triggered, we need to build resilient systems that are flexible, and reflect the new equilibrium of energy dynamics in its architecture. When considering the uncertainty of risks in the sector today, it no longer makes sense to rebuild to the same degree of resilience as we have before an impact; stronger will not do the job. Instead, energy should embrace resilience not resistance, and move from the strong oak-mindset to that of the flexible reed.
Senior Advisor, Non -executive Director
Mr. Joubert, Senior Advisor and Special Envoy Energy and Climate at WBCSD, currently serves as the Chair of the Prince of Wales’s Corporate Leaders Group on Climate Change, sits at the Advisory board of Cambridge Institute for Sustainability Leadership where he is part of Faculty. He is also Executive Chairman of the Global Electricity Initiative at the World Energy Council. He holds several Advisory positions to the CEOs of major global companies and sits on various Boards and Advisory Boards as Non-Executive Director.
Previously, Philippe was President of Alstom Power and Deputy-CEO of Alstom Group. He left the Alstom Group in June 2014.
Philippe, French and Brazilian, graduated from the Ecole Superieure des Sciences Economiques et Commerciales. Philippe is Chevalier de la Légion d ‘Honneur.
Project Manager, Financing Resilient Energy Infrastructure, World Energy Council
Katrina Kelly is Project Manager, Financing Resilient Energy Infrastructure for the World Energy Council. Katrina manages the World Energy Council’s work looking at the resilience of the global energy system, working closely with project partners SwissRe and Marsh, and supports the Councils efforts to bridge the gap between the financial and energy sectors in order to mobilise capital to accelerate the transition to a resilient global energy economy.
Originally born in Pittsburgh, USA, Katrina has a PhD in Energy Politics and Economics (ABD) from the University of Nottingham and has worked in working in government relations and advised on mark-to-market legislation improvements in the United States. In addition to her current role with the World Energy Council she also acts as an economic advisor to The Climate Institute. She is a founding member of Women in Leadership London, a member of Women in Economics, and a contributor to the European Economic Association.