Infrastructure & Investment

First held in 1970, Earth Day is an annual observance on April 22 that promotes the need for environmental protection. Earth Day now comprises multiple events around the world under the coordination of EarthDay.org. The official theme for this year's Earth Day is Invest In Our Planet, To that end, the Earth Day 2022 website states:

Abstract: Climate change mitigation efforts, which require the transition away from carbon-intensive activities, can pose financial risks for owners of fossil fuel assets and investors that the finance companies are engaged in greenhouse gas-emitting activities. For instance, fossil fuel extraction may be significantly scaled-back, and coal-power plants may be idled or even phased out prematurely, thus becoming stranded assets for the shareholders.

Using a global general equilibrium model with detailed energy sector and capital stock structures, we estimate the corresponding stranded assets under various emissions mitigation scenarios. Our findings reveal that, depending on the policy scenario, the global net present value of unrealized fossil fuel output through 2050 relative to a “no policy” scenario is between 21.5 and 30.6 trillion USD, and that of stranded assets in coal power generation is between 1.3 and 2.3 trillion USD.

The analytical framework presented in our study complements existing research, in which macroeconomic variables required for estimating the stranded assets are often derived from models with more simplified assumptions. Therefore, individual firms and financial institutions can combine our economy-wide analysis with details on their own investment portfolios to determine their climate-related transition risk exposure.

 

Executive Summary: 

This report outlines a vision for MultiSector Dynamics (MSD) as an emerging transdisciplinary field that seeks to advance our understanding of how human-Earth systems interactions shape the resources, goods, and services on which society depends. The core objective of this MSD Vision Report is to clarify core definitions, share research questions, highlight scientific opportunities, and provide steps for improving the MSD community’s capacity to support needed scientific progress.

The report has several technical audiences in mind. These include current MSD researchers, scientists working in complementary fields who wish to learn more about opportunities for engagement, and research program managers at the US Department of Energy (DOE). Additionally, the research-to-operations (R2O2R) and community building elements of the report hold value for a broad array of US federal agencies as well as other governments and international organizations. As a transdisciplinary endeavor, the vision presented here should have elements that directly interest sectoral analysts engaged in energy, water, agriculture, transportation, health, etc. We hope these audiences will find the report a helpful reference and a source of opportunities for shaping the future of MSD science. 

The report incorporates ideas and insights from the members of the recently established MSD Community of Practice (CoP). MSD finds its roots in a number of research fields and communities, including integrated assessment; impacts, adaptation, and vulnerability; Earth system science; and complex adaptive systems. However, the MSD CoP draws its conceptual basis from a 2016 workshop sponsored and led by the DOE, "Understanding Dynamics and Resilience in Complex Interdependent Systems: Prospects for a Multi-Model Framework and Community of Practice," organized with other federal agencies and hosted by the US Global Change Research Program. The rationale for the CoP is that research on understanding risks and opportunities arising from tightly connected human and natural systems is fragmented across several fields, requiring improved collaboration and synthesis to accelerate needed scientific advances. A CoP Facilitation Team and a Scientific Steering Group (SSG) were launched in 2019 to advance the needed collaborations and scientific synthesis. Since that time, an initial core group of projects supported by DOE’s MSD research program has provided input to the development of the CoP through activities including a community questionnaire to identify current tools and research interests, regular meetings of technical working groups (WGs), MSD community briefings, research workshops, and the MSD CoP website.

The members of the MSD SSG and Facilitation Team are responsible for drafting this report, based on the above community inputs as well as a formal review of recent research within related fields such as Earth system science, integrated assessment modeling, economics, decision science, socio-ecological systems, socio-environmental systems, complexity science, systems engineering, energy transitions, urban systems, and coastal dynamics. Members of the major projects in the DOE MSD research program provided extensive comments on a first draft of the report (see Chapter 2.2 for descriptions and links to projects' websites for additional information). Robert Vallario, program manager for the DOE Earth and Environmental Systems Modeling MSD research program area, has provided insights, perspectives, and comments that have been critically important throughout the process. The SSG and the Facilitation Team thank these individuals for their many contributions and ongoing support. In addition, the Facilitation Team thanks the DOE Office of Science, Earth and Environmental System Modeling program for financial support of its activities through the Integrated Multisector Multiscale Modeling (IM3) project.

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