A sárga, hogy találom, hogy mi Mindzsor-t, mandatítják valószínűleg a színtetet. Amikor játta is következtek, megyekünk az SN-t, így sosem Fozcs, mint T. Smalovic és kindutási cél, amikor fekondi a színtetet, brackettál. T. Smalovic amikor kérdődik, megpíldi a színtetet, The similarities between the two companies? Not their stickers symbol, of course. But let's talk about their open source. I have been involved with open sourcing much longer than this 21 years. I've end been open sourcing with projects like Velocity, project likes Hibernate or many other years. I tried many many different size frames. I went from small startups to big entapiices.  A Dartmouth-ségébenlag a Súlyan festivalin nem nem ezt is foglalkontok gyilvánk. Ha együtt, hogy hagyjátunk egy különbözők együtt, de amikor a különbözők betegére, akkor az az első különbözőséget kezdik. De a patreonok, ami az eredik időt, hogy észsik oohújt is zenebb élübg, ami a előleg, hogy kicsi év, amikor különbözőséget, amit gukász beújtunk, Menjünk egyik kérdés, mint az utolját, amit jön a lőkéred, és mindenki is, hogy kérdés vagyunk. Hát, kérdése, hogy kérdése vagyunk. Igen, hogy kérdése vagyunk. Én az utolsó, hogy kérdése vagyunk. Én kérdése vagyunk. Jó életet kéred, hogy kérdése vagyunk, és az utolsó, hogy kérdése vagyunk. Én kérdése vagyunk. És az amikor egy nagyon szép hörőműködésre is lehetnek, hogy egy minden certify-t vagy egy ugyan gittub-t támogatások, és ez egy jó arraok és hörőműködésre. És hogy nem tudsz, hogy ez az egyik minden certify-t, hogy nem tudsz, hogy nem tudsz, hogy egy minden certify-t, hogy egy ugyan certify-t, hogy nem tudsz, hogy nem tudsz, hogy éről egy ugyan certify-t, és egy kérdés, hogy ezek egy kérdés, hogy ezek ezt egy ugyan certify-t, Is ez an important question, to know whether they are going to be used? I think the answer for this is a very complex sentence. Is the foundation architecture aspiration of a pluggable platform. Okay, again. What? What did you just say? So, for me, when you are pluggable, and pluggable in a way, that not only pluggable in an open source component way, but pluggable even in a closed component source way, you don't really know when you start your open source project, whether it's going to be used. And actually that question is not necessarily the important part. Sometimes this open source project is not really for you to figure out people who are going to use it. Rather, and I will talk about some of the other use cases we found, why doing open source is important, what other benefits an open source project might be having. Beside you are able to say that it's a marketing value, it has a hiring value, and it has a usable value, what other big benefits it might have had. And the other thing is your company does not necessarily have to own every line of the code that you have. This is an interesting approach. Is it a problem if I don't own it? Yes, we know about supply chain attacks and the other problems that might come if you don't own every line of the code. But all those problems can be mitigated, it should be mitigated anyway. Because you are going to use open source components anyway. So this has to be looked at. So after these two things I can say that if you're architecture, you plan it to be a pluggable architecture in a way that you are able to allow either an open source or a closed source, even proprietary, even something you might be paying for by a commercial vendor to be able to plug it in. That is really the problem. That is really the solution for this whole problem about whether my project is going to be used. Ok, this problem now aside, let's talk about what I actually came to talk about. Why going open source? Let's say there is a vendor. I'm not going to name the vendor. This vendor really wants to sell their stuff to us. So this vendor came, looked around all the open source projects we have and found a project called desktop JS. Ok, this is not the slide. Sorry. A one slide ad. So being open source meant that vendor could look at the projects that we have and we wrote any red tape. We wrote signing an NDA. They could start integrating with us without waiting for all this to happen. So now comes the actual use case, sorry. So this was, there was this vendor. They tried to sell the control to us. So they looked around and they found a library called desktop JS. Desktop JS is a common API for you to write your application once and to run in different UI containers, whether that UI container is a proprietary one, whether it's an open source one, it's up to you to use it. It allows you to write once and run in any of the container. So what this vendor did, that they presented a sales demo. Why their sales demo they were showing, they actually explained this sales demo is using desktop JS. And we said, oh, that's absolutely cool. Can you give us the URL you are just showing? They give up the URL and during their demo we were able to take their application that they were demoing the control and put it into or internal proprietary solution and try it out. So their sales demo, which was totally isolated from us sales demo, became sales demo, we could very closely interact with it and live with it and it became very close to us very, very quickly. Of course, after that, it was an instant win of both sides. It was an easy choice for us to try and to buy the solution because we already knew it was going to work in our proprietary approach. This is one of the use cases that we have seen. Of course, I didn't come to show you only one use case. I came to show you multiple use cases. So let me talk about one of the other use cases. The other use case is that OSS is a tool to work with the industries. OK, what does it mean? Open sourcing enables you to outsource and buy features of the shelf that gives a commercial momentum for a faster delivery. What does it mean? You can get bonus brownie points for having a project in the open source that is useful for driving the roadmap of some other company than yours by being able to add the use case that the FinServe developers would require. Yes, we are the different FinServe developers that we have to be taken consideration and many of the vendors doesn't really understand that, doesn't really get what FinServe developers are different. So let me show you that use case now. Brian Ingenito and myself, we wrote a US strategy which have been presented through one of the open source project called Compose. We actually sit down with one of the vendors and discussion based on this open source project and the whole US strategy we presented there resulted in one of the vendors pivoting of their solution. And this is big. Actually, let me use a quote from actually the VP of director of the project management from the company. Morgan Stanley helped influence us on the importance of having a strategy of hybrid style application that merge web technologies and native technologies. We, who are just a customer of that company, we were able to influence their strategy, their long time strategy by us open sourcing some of our strategical thinking. The other companies, mostly tech companies who have been doing this, I did actually work with tech companies who produces their internal strategic meetings to YouTube. We are not there yet. We are okay producing our US strategy to there. This is already a big thing. This cooperation actually resulted in a video showcase with that particular company, which was a very wide viewership on YouTube. So we feel like it's a win-win for both sides. They have been able to tell that they have been working with us and we have been able to tell that they are doing something that's going to be usable for us. This was another thing, another use case for us. Let's me talk another completely different use case now. When you are going open source, it does enable you to look at step augmentation a different way. And I'm not speaking about trying to hire people from Fiverr or something to do your work. No, no, no, but still gives you a different way, a different approach to start working with companies that are in a different situation. So because going this open source eliminates all the needs of onboarding, eliminates all the needs of overhead, many cases the management overhead and so on, and does result in immediate participation of those step augmented people in your processes. I'm going to bring an example for this as well. This is going to my use case 3. So let me talk about turntable. Turntable is a company which is in Ghana, in Acca, and they are doing enterprise quality driven software consultancy there. Of course anyone can work with them, but to do that you have to go to all the red tape and the processes and everything, and correct me if I am wrong, most companies does not have a working relationship with Ghana, the country. And it's not like working with a company in the UK. It's going to be usually much harder than just, hey, I need a consultancy resource here and there. So what we did, that we are working with them because this is an opportunity to give back. Ghana is a place that you would like to give back. And if you are working in open source, this giving back is actually much easier. They have been working with us on a project called Crossroads, and actually based on the success of this project, now we are doing two more projects with them, also happening in the open source. So this is actually a big opportunity for us, because this gives us really a kind of both feeling the giving back and getting quite the resources in this way. There is still more. There are some more benefits. If you are going open source, this usually means that you are using open source and or standard tooling. If you are in using GitHub, let's say one of the open source vehicles that many people are using, this will mean that you are going to use the standard tooling that is available for us. You are not going to use your company's internal tooling or internal approaches. This means that you are going to be more standard than even possible. It will allow you to keep yourself outside of the bindings that could have there to use your internal tooling. This is good, I'm telling you. By using this kind of off-the-shelf infrastructure pieces and GitHub, in our case, we are able to swiftly both adopt and leverage the industry wide DevOps tooling ourselves. This is, for us, one of the fourth benefit next to the obvious ones, which is we are doing something that people are going to use. We are doing something which might be a hiring vehicle. We are doing something which does have a marketing value. This thing that it is allowing us to make sure that we are going to do something which is standard, which is something probably OSS as well, and not going to bind us or block us or get us into a lockdown situation. It will help us there. As originally in this session was going to be a lightning talk, a 10-minute lightning talk, I actually here to answer any of your questions there. I know this is a 30-minute session, but originally, as I mentioned, it was for 10 minutes. I'm open for any questions on our approach. You can see our web page and or you may address where you can ask questions about this. And again, sorry if you were hoping to hear about blockchain or legend. That's in the other room. Yeah, sure. The question was what is the biggest challenge adapting open source? It went in stages. First, this was the usage of open source. Many companies still don't really have a process for doing it. And actually having someone who is your head of open source is really help. That's probably was one of the first thing in Grapp's presentation. There was this slide about how many companies do have a head of open source and not every company was able to say, yes, we do have a head of open source or actually some companies. We do have, but I don't know who he is. So actually starting from that first, get to the point where you are able to use open source. That's really the point one. The second point is actually the legal. So actually there is as part of this whole Finos Foundation, there is a smaller group, which is talking about these legal challenges. And those are actually probably the biggest one. What are the paperwork needed to be able to go open source? Whether you are able to go open source natively or you are going to use some of the solutions which enables you to go like in a sandbox, first semi-open source and when everything is okay, then actually doing the real commit, doing the real PR, doing the real change in the outside open source world. So actually that I think is the biggest challenge to have someone at a firm who is designated as the head of open source and do have actually the tools to achieve what he wants. So that person do have access to the legal resources, to the technical resources. So it's able to do this. No, no, no, they are not working free. So they are consultancy resources. We are paying them as consultants. The giving back is really enabling them to work with a company like Morgan's Telling. Normally a company like Morgan's Telling would need such a red tape and such processes for hiring a company from Ghana that would be open source is the vehicle there. Yeah, open source is the vehicle because we are able to tell them you are going to work on open source. Therefore, most of the red tape we would otherwise imply on you because you would be able to log in to our systems. You would be able to make changes. You need the mandatory trainings and most of them doesn't really apply to them because they are not going to log in to our system. They are not going to make changes to our systems. They would work on an open source project. Sure, more questions? Yeah, so the question was about how this work with an open source, a company like this and going to the public cloud can work together. They don't have to work together hand in hand.  They don't have to. The project that we did work is actually a specialized build tool that we created, not cloud specific. And the new projects that we are working on also not cloud specific tools. These are more about desktop development tools that they are working on. If we would have these projects connected with the public cloud, a different problem would arise how they are going to have and who would be paying for the subscription in the public cloud. If your company is paying for the subscription, that means actually then you again fall into the whole red tape situation because if they are using your subscription, all the liabilities actually is going to be yours and not theirs. So I can see benefits going to the public cloud there, but also at the same time I can see why it might actually not really help you, rather the opposite. Of course, the question was what is the future stages open source. I am not the head of open source at Morgan Stanley. I do see the head of open source at Morgan Stanley in the room. So I will be very careful in the next few sentences I am going to make. So as I mentioned, we already have more than certified projects on open source. We are actually looking into increasing these numbers and where we are increasing we are not shooting for the numbers. We are shooting for the quality, so we are definitely not looking for the quantity. What we are trying to do, we are trying to get into areas we haven't been involved yet. So we are looking at things that we haven't been done in the open source world, whether it is in areas like desktop computing or whether it's... So areas that we haven't done yet. And we feel like that we do have the competitive advantage that we can turn into an open source project. Also, going back to the use cases, many of the cases we see a value of going open source there, where it would help us working with other vendors. So that's really... We are trying to move open source more as a vehicle for many of the use cases you have seen. Instead of just being able to say, it is open source now, because that's not really a value anymore. Everybody is doing that. No, it's actually different. So when we are owning, fully owning a project in some way that's easier, because then we control everything. We control the license, we control who can contribute to it, we can control everything. If you are actually contributing to someone else's open source project, you do provide the PR, and what happens if someone takes your commits, not your PR, just your commits, so your legal disclaimer is missing them, and takes those commits and merge it. Now, what does it mean from your legal perspective? They didn't merge your PR, so your disclaimer is not part of their code base, but they did pick your commits. So, yes, it's very nice to be able to contribute individual pieces to other projects, but generally, it might be from the governance point of view, it actually might be a harder one. And actually, I don't know whether you have met the toxicity sometimes you find in open source projects, especially maintained by smaller, not companies, maintained by individuals. It might be not even a good experience for your people. Yeah, that's the other point, yeah. So, yes, many cases we actually contribute to external projects just in this year. I think we are close to 200 now just this year, but in some way we might prefer actually open sourcing projects ourselves because that process just from the government's perspective and just from the level of anxiety, the people who are doing it might be an easier one, I would say. So, we have been using open source for quite a while. That has been always the case. Actually, we started first contributing PR, so we started that way, that there were a few cases. We said, oh, that project is very nice. We need one extension point that's missing for them. Let me just add the ability to add one extension point to that project. We figured out what is the process for doing that. We did it, we learned from the process this way. Then came the point where we figured out that it might be valuable for us to start contributing back full projects. So, we started actually from, hey, this project needs one small thing for us to be perfect. And usually this was just an extension point that we put our proprietary plugable part in it. I think back to one of my slides when I was talking about the whole plugable infrastructure point. I don't know whether I fully answered your question. I mean, we kept ourselves to the open source guidelines and how a fork process is happening. So, the answer is yes. We don't see the full room. We don't see whether there are any more hands. But if there are no more hands, then I would like to thanks everyone for coming and joining me. Thank you.


Welcome to today too, and I'm delighted to have Sheila Whitley of the Overseas Development Institute as our moderator for the first session. Take it away, Sheila. Thank you so much, thanks everyone for coming and for being here for the very first session of the day. It should be a really interesting session and it's actually going to be slightly, I guess, more narrow in a way than the title suggests. What we're going to be talking about this morning is really the question of assessing and managing risk in low carbon transitions. So what are the tools that are available and what are the approaches that are being taken by governments, by companies, by investors to try to assess and manage these risks that are presented by the transition, particularly obviously those that are operating in fossil production or that are investing in supporting fossil fuel production. One of the, I guess, in terms of the relation to the work that we do at the Overseas Development Institute, a lot of our work in this space is focused on fossil fuel production subsidies. So the support that governments are providing to fossil fuel production through direct spending and tax breaks, through public finance and then also through supporting state-owned enterprises. And what we've found is that initially a lot of the, I guess, fight against fossil fuel subsidies has come a lot from civil society organizations, but more recently we had three major insurance companies worth 1.3 trillion call for an end to fossil fuel subsidies. And I would say most interesting for this session, we had the Institute of Actuaries sign up to that statement. So actuaries are those that are primarily tasked with assessing risks, mainly for insurance companies, but also for major businesses, and they are now calling for an end to fossil fuel subsidies. So I think we have an increase in, I guess, awareness of the risks that this transition presents. How are we going to manage and how are we going to achieve an orderly transition to low carbon energy? And we're really, really fortunate to have two excellent speakers today, both of whom are looking at this, I guess, from their own institutions and companies perspective, but also are involved in initiatives that are really looking at this at the global level and helping others at the global level to navigate this transition. We're going to have the two speakers present one after the other, and then what we hope is that actually this session will allow us, because we only have two speakers to have a little bit more time for interactive discussion, to not just get questions from you, but also to hear your thoughts on what tools are available or what gaps are actually available in terms of data that's needed for assessing and managing these risks. So first, we have Christoph Maglade. You will have heard of some of his research with Paul Ekins yesterday. He'll speak about that briefly, the research that they've been doing at UCA. And he'll mainly be speaking in his capacity with the International Energy Agency. He's working on the next World Energy Outlook and looking at the questions of stranded asset risks for that World Energy Outlook report, which is coming out, I think, on November the 16th, you said. And so I welcome Christoph, and then I'll introduce Alistair after that, and then we can have an open discussion in questions. Thank you. And yes, as Sheila mentioned, so I'm going to give a little bit of a brief background on some of the issues which were raised as part of the nature paper with which Paul talked about yesterday. But then, mainly, we'll use that to move on to the main subject of my talk, which is to look at, if we are to transition towards a two-degrees future, what does that mean for the fossil fuel industry, and what potential losses are there coming through? We often heard a lot yesterday about the issue of stranded assets and the potential losses to the industry. But we wanted to look at what's the IA's thinking about this position and what are some of the potential numbers that could be for the fossil fuel industry. So I'm sort of talking with two hats here, and hopefully it'll be clear which I'm talking with at which time. So before going into the real meat of the talk, I think it's worth just trying to disentangle some of the issues which are often conflated in discussing this issue and the losses that it could be to the industry. So the nature paper written with Paul was obviously very much focused on this, this idea of the leave it in the ground campaign. There is a lot more fossil fuels out there that we can safely afford to burn if we want to stay within two degrees. And that therefore means that there's a lot of these reserves that are unburnable. But that's a quite a separate discussion, although it's obviously related in some ways to the work which is often seen and been led by the carbon trike initiative on the carbon bubble. So this idea that there's going to be huge losses, potentially huge losses to the fossil fuel industry, and that could lead to widespread disruption throughout the economy. But in separate to that also is the idea that there's potentially stranded assets out there. So stranded assets I'm defining here to be a much narrower sense, which is capital investment which has been made, which you then don't get your money back because of the introduction of climate policy. This is steel or concrete that you've paid some money for, but as a result of climate policies, you can no longer get your money back which you spent on that. So thinking a little bit initially about one of the issues that constantly came up whenever we were discussing the nature paper, and that was this idea which Paul touched on yesterday, which is the countries and companies often say that, well, you know, it's all well and good you saying 80% of coal has to stay on the ground, but our reserves are burnable and we think there's no issue with using and utilising our stuff, is everyone else that will have to stay on the ground. And this is in many ways perfectly correct, but it's also quite disingenuous when you look at the numbers. So at the top there we have the 50% chance for two degrees budgets from the IPCC, so around about 1,000 gigatons. And then below that, the emissions that would result from any of the different fossil fuel reserves within different countries. So there are absolutely huge reserves of coal in the United States, for example, and if you were to burn all of the coal that existed in the United States, you would only reach 600 gigatons. So you would be perfectly possible of burning all the coal in the United States or burning all of the coal in China and so on and so forth, and you'd still be able to stay below or within the two degrees budget. Now, that's one way of doing it. You could burn all of the coal in the United States, but it obviously leaves a very small amount of budget available for everything else. And so whenever people talk about, well, our stuff is burnable, you can always say that that's correct, but then what's gonna be left in the ground as a result or what else has to, where is the restraint elsewhere in the system as a result of you developing your stuff over somebody else's. And the other thing that this leads on to is the idea that all of the fossil fuels are clearly very different, and talking about fossil fuels in a holistic sense is perhaps also a little bit disingenuous. So I mean, we can see, for example, for gas, the Middle East holds the largest gas reserves in the world, and if you were to burn all of those gas reserves, it's an awful lot lower than India's coal, for example. So gas is obviously in a very different position and coal is also in a very different position as well, given its use within the transport system. So one of the things we try to do as part of the nature paper was really differentiate between the fuels and say which do you really need to push back on and have more restraint on. But then coming on to this idea of what does it mean for losses of value, and one of the other questions that we were constantly asked to Deanus Paper is what does all of this mean? Where's the loss of the system as a result of having to leave a lot of this stuff in the ground? And I'm going to just talk briefly through two of the ways in which you could do this, although this first one I certainly wouldn't recommend because I think it suffers from quite a few deficiencies. So whenever you look at the cumulative production that there is of fossil fuels out from, this is using the IA numbers from 2015 to 2040, how much coal and gas is used and then how much of the reserves are therefore not used and how much is unburnable or unusable within a two degree scenario. One way in which you can convert that into value is simply by saying, well, let's just take those volumes that are not used, multiply it by current market prices for these stuff, so take a price of $50 for oil, $4 per pound BTU for gas and so on and so forth and convert that all into a potential loss of revenue streams to all of the fossil fuel industries. Now this generous and absolutely huge number, so close to $100 trillion is greater than GDP, global GDP last year, but it's not particularly useful number that comes out of just this simple multiplication factors for a variety of reasons. First of all, it's completely unclear whether any of these unburnable reserves would actually be used to present yesterday the differences between a two degree scenario and a much higher degree scenario. If these reserves are not going to be used under a business as usual case or a case where you completely ignore climate change, can you really say that that's a loss of value as a result of climate policy coming through it? I would argue you probably can't. Similarly, the idea that you could just multiply by current prices is a bit misleading because what prices will be in the future and when you actually produce this stuff in the future will obviously be very important. And similarly also what the costs will be for this oil, gas and coal in the future is going to be very different from now. So this is one way in which you can try to get a first impression of the potential loss that there could be for the fossil fuel industry as a result of climate policy. But I would say it's probably not the best approach that can be taken for looking at this. Another way of looking at this, and this relates more to the idea of the carbon bubble story, the idea that there will be a huge potential loss to the fossil fuel industry is by looking at what happens to net revenue streams. So here we have on the left hand side historical net revenue which is the oil and gas prices. This is just for oil and gas. Oil and gas prices historically minus the cost of production on a global basis. So this doesn't take into account any transfer of rent between companies and countries. This is just taking the full amount of net revenue there is. Obviously we saw a very big drop in 2015 because of the drop in oil prices and what happens under the new policy scenario. This is the new policy scenario is our central scenario which takes into account the pledges that were made as part of the Paris Agreement except the, so taking into account the INDCs that doesn't take into account the two degrees and limits that were also part of that. And what happens if you do then take into account the two degrees limit and you see that there's hopefully that's come out of quite a large loss of revenue. So the net revenue that the fossil fuel industry, the oil and gas industry would receive is a lot lower. So by 2040 this is about a trillion dollars lower that they would receive than under the new policy scenario. And so this is obviously a very important number and it's a very relevant number if you're worrying about potential loss of value. But I would still argue this is not really completely the same as a stranded asset. Just because you haven't made as much money as you might have hoped you were going to make that's not a stranded asset. That's a loss of value or a loss of revenue as a result of climate policy. And I think it's worthwhile keeping these two things quite separate and discussing them in a different sense. But coming on to stranded assets themselves and our thinking on stranded assets and potential values here. So as I said, it's the capital investments, the money that's already been spent or will be spent on capital investments which you then don't recover as a result of climate policy. And again, it's important I think to differentiate between the different fuels that there are. So for coal for example, really if you look at upstream coal mines it is actually the amount of capital which is invested into a mine. And if you open up a new mine it's relatively small compared to some of the oil and gas upstream assets. So a coal mine around about a quarter of the total investment which will be required into that mine over its lifetime will be in capital, the rest is in labor. This is not the case for downstream assets and as a result of climate policy the biggest potential loss that there could be because of capital which you will not recover because of climate policy is therefore likely to be in the downstream sector. So likely because of you bring in some climate policies in different countries and coal fire plants which have either been built already or will be built in the future will have to be shut down before they've recovered all of their full economic costs which went into them. I should have mentioned is there's two potential ways in which stranded assets can come about. One is that you have to shut something down before it's recovered all of its costs. Or the other is that you can keep producing you keep running this piece of kit until it's the end of its life but as a result of drops in prices you don't ever actually recover back your investment. And that second point is particularly important for oil and gas because we saw with the drop in oil prices there were very, very, very few fields that are actually shut in as a result of prices dropping from well over $100 down to 30 or 40 at the lowest point. These things kept running because the price was still higher than their operating costs but a lot of the capital that was put into those fields was written off. So I think it's both of these things can count as stranded assets. There's obviously some crossover between the two but for oil and gas it's particularly important to reflect on both. But also for gas I think it's worthwhile saying that the biggest risks that there exist for financial gas are likely to be in the midstream so the transportation infrastructure that exists. So the reason for this is that in an upstream sense gas is often seen as this transition fuel and again the poll presented yesterday you see that under a two degree scenario quite often gas consumption is higher for a period of time under a two degree scenario than under a business as usual case. So actually the issues that there could be for upstream gas infrastructure is potentially a lot less than for oil given that you have this ramp up in consumption under most two degree scenarios but that's not the case for a lot of the infrastructure that exists so under a two degree scenario you often hear there's obviously gonna be an awful lot more renewables out there and one of the ways in which you require back ups of renewables when the sun's not shining or the wind's not blowing is to have gas there and gas to be able to come on stream very quickly to offset the losses. Now that means that you only have pipelines in place or energy terminals in place so you can get that gas to where it needs to be but in a carbon constrained world you're not going to be able to use that infrastructure to any large extent so potentially you've built a very large pipeline which you're expecting to be used at a large amount going forward but as a result of climate policies these infrastructure can't be used so this is not to say that there is no risks in the downstream for gas or in the upstream for gas but the biggest risks look like they lie in the midstream for gas and for oil it's different again so it looks like upstream is where the potential biggest losses could exist for oil and I'll come into that in a bit more detail on the next slide but one of the things that we find under our modeling is that if the transition to two degrees is well signposted and policy makers are very clear and determined in policy action and companies take good attention of what the policy makers and direction are pushing in there's no huge need for there to be a massive amount of loss under any of the fossil fuels going forward there will be some coal power plants which will have to be shut down and we did a study in 2013 looking at the potential stranding of coal power plants and the numbers there were around about 250 gigawatts of coal power plants which would have to be shut down before they recovered the full costs and that loss was around about 200 billion so there will be some losses if under a two degrees transition but our argument is certainly for oil and for gas is that there's no intrinsic need for there to be a massive loss of or a massive amount of stranded assets going forward if the transition is well signposted and the reason for that is because of the declines that you see in the field so if we were to look at what happened in the new policies scenario oil demand going forwards we have rising from current levels up to just over 100 million barrels per day by 2040 under the 450 scenario, the two degrees scenario this demand peaks much sooner than that and falls to around about 75 million barrels going forward but if we look at what happens if we were to immediately stop now all investment into all oil assets and this is just oil I'm presenting here we would see this very rapid drop off in production going forward so we often talk about this as a natural decline rate if you stop in the absence of all capital investment going forwards into fields roughly speaking production will drop off globally at about 9% per year now there is obviously an awful lot of investment which is ongoing into fields and will continue to keep going into fields over the past few years around about 60% of investment which goes into oil and gas assets is into keeping production from these fields stable and as a result of all of that investment we see the observed decline so there is a much lower level of drop off it's around about 4% to 6% a decline from currently producing assets but we can still see this big difference between the observed decline and what happens under the 450 scenario and that means that you therefore require new investments to come online each year if you don't have these new investments coming online you're going to have a real issue because very, very quickly you're going to see a big gap between where you want demand to be in the 450 scenario and where your current production is so you need to have this continual investment into new assets going forwards for oil and as a result of this that actually means that the potential for stranded assets in upstream oil is somewhat limited and probably surprisingly something more limited because the amount of investment required is actually quite large so under the 450 scenario we estimate that around about 7 trillion dollars required between now and 2040 to ensure that this declining oil trajectory is still matched by new supply sources coming online under the new policy scenarios there's obviously a much higher level of investment that is required to require about 11 trillion dollars to be invested between now and then and but I mean that's a 4 trillion difference between the two scenarios but 7 trillion is still obviously a large amount of money and I've mentioned that there's no need for us for stranded assets to come about but that doesn't mean that that won't happen and there's two real big areas of risk where we can see that you could have a much higher level of stranded assets going forwards than would happen under these idealized scenarios the first of it is an inconsistent policy making or if policy makers are not clear about what they're going to do and you could argue that we're actually currently in that situation where you have a Paris Agreement saying well below two or one and a half degrees and the INDC's giving you a huge gap I mean the gap shown here is essentially the gap between those two levels of investment that are required so if policy makers in five, 10, 15, 20 years decided to ratchet this up there's potential that there could be a higher level of stranded assets than there would otherwise need to be if they were much clearer and put in place the policies that are required to lead us towards the 450 scenario the other way that is there could be a high level of stranded assets going forwards is if fossil fuel companies misread what's the direction of policy if companies start to invest on say the new policy scenario trend but suddenly find that we're actually moving along the 450 scenario line so if they invest, keep investing thinking that demand is going to keep on rising but actually find that demand has peaked and has come down there's obviously a much bigger potential there that some of the assets they've invested in won't be required and they'll incur losses as a result but I mean it's also important to recognise here that this four trillion dollar difference between the 450 scenario and the new policy scenario is very unlikely to be realised as a stranded asset you could see that if fossil fuel companies completely misread the 450 scenario and said no we think we're along the new policy scenario but they actually find out that the world is on 450 scenario going forwards at 2040 yes there could be four trillion dollars worth of stranded assets that result but that would require fossil fuel companies to keep investing despite the fact that they can see that their demand is a lot lower than they think it would be and so to have this very large number of four trillion dollars of stranded assets really requires you to think that fossil fuel companies are going to act in a very irrational way going forwards that they're going to keep investing despite the demand for the product not being there so I'm going to finish there to leave us plenty of time to talk I've discussed this in further detail but just to give a few high level conclusions so I mentioned at the start the real importance of differentiating between the different fossil fuels when talking about the risks to the fossil fuel industry as a result of climate policy and also differentiating between the different types of loss that can be incurred from assets which can't which reserves in the ground which can't be produced as a result of climate policy to potential loss of value going forwards and value which won't be realised as a climate policy to actual investments which are made which are not recovered as a result as I say because of the demand trajectory under the 450 scenario drops at a maximum of about one million barrels per day at about one to one and a half percent that's the rate of decline in demand is a lot lower than the rate of decline we see in observed decline from existing fields and as a result of that we still require investments to keep on going to ensure that there's a smooth transition it was mentioned yesterday that there's always some argument of high oil prices or low oil prices are good for the climate agenda last year we looked at a low oil price scenario to investigate this to some extent and found that low oil prices are good in some respect because they give policy makers space to introduce to reform fossil fuel subsidies for example or to introduce carbon taxes et cetera but it's bad from on the whole it's bad if these policies don't change because the efficiency measures which will be put in place under high oil price scenarios don't get made and as a result of the lower prices policy has to ramp up to ensure a similar level of emissions reduction going forwards so generally speaking low oil prices are not good for the environment and higher oil prices are slightly better but the worst of all worlds is to have a volatile price going forwards and if you don't have sufficient investment coming forwards even under a 450 scenario you're unlikely to end up in a situation where oil prices are quite volatile and that's not going to be helpful at all as I mentioned though the risk of stranded assets arises much more if there is inconsistent policy making or unclear policy making or if fossil fuel companies misread what the direction of travel is for oil demand but saying that just to conclude that it's obviously clear that the climate change and climate change policy represents a real fundamental shift for the fossil fuel industry and all of the fossil fuel companies need to be ready to justify the investments they make and stress test their portfolios against a two degree scenario to ensure that we're in we're going in the right direction looking forwards thanks very much thanks so much for that so just quickly in the interest of time I'll hand over now to Alistair Hamlin Alistair is the strategic marketing director for GE Oil and Gas GE is a major service and equipment provider to the energy sector as a whole and Alistair is going to be speaking both about this question of assessing and managing risk both from GE's perspective but also based on some work that is being done by the Energy Transitions Commission which is a parallel commission to the new climate economy thanks Alistair thank you good morning everyone so I'm afraid I missed yesterday's session as I was saying to Michael it's always the people who are closest because I'm based in London in fact West London it's always the people who are closest to who don't make it but I hear you had some very good discussions and what I'd like to do is talk about the way that GE GE Oil and Gas sees investment decisions actually pick up on a number of things that Christof said so I'll try not to duplicate really I suppose my day job is planning strategy we call it marketing but it's basically strategy for our business that provides technology and services to the oil and gas industry so we think a lot and I think a lot about where the industry is going where investments will be made we think about what might be stranded assets for us if we invest in facilities that then don't get used but obviously to do that we need to think about well what are our customers going to be doing how are they going to be making investment decisions so you're talking so second or in some case third order questions of investment but I'm also here as part of GE and GE as a company obviously spans the entire energy space virtually every form of power generation midstream and a lot of energy intensive uses so as GE we think about this a lot and then thirdly as you said in the introduction I'm going to talk a little bit about the energy transitions commission which is a kind of cross industry group very diverse group which we think is quite interesting in terms of framing some of the ways that people can start to move towards common planning assumptions which I think will help with some of the things that Christoph just talked about so in terms of the right one so just a word about GE obviously something's gone slightly strange with the format as the slides come through but just to give you a grounding because this will I think frame a little bit about how I think about this as part of GE you know we've got this very broad industrial portfolio about half of the business is directly concerned with energy production and transmission distribution so oil and gas, power, renewables, energy connections and so on and then a lot of the rest is to do with very energy intensive businesses transport, aviation obviously so it's kind of critical for us and as we think about the way that the energy system is going and the transition that's coming we try to take an end to end view and we're explicitly diversified and we're diversified because we recognise that there are huge uncertainties about technology and policy and that's a very deliberate decision we talk about that and I think that's important when we come back to think about how the industry as a whole will frame this because there are certain things today about technology evolution down cost curves and so on which are unknown and in many ways probably unknowable so we need to have a policy of initiative a portfolio of initiatives we need to place some bets but we also need to try to narrow down that environment so people can make investment decisions within a certain boundary of what they think is going to happen now talking a little bit about the energy transitions commission GE is involved in a number of cross industry groups and this is one that I'm personally involved in because we believe that this is not something that any one organisation can solve on their own and the ETC is set up deliberately with a diverse group of commissioners from different backgrounds you'll see there are industrial companies spanning fossil fuel production, technology, transmission, distribution, retail there are research agencies there are policy groups etc and we brought that group of people together in the full knowledge that there will be strong tensions in the group there are people coming at it with very different agendas, different perspectives but also believing that if we can get that group to think about ways that we can move from the what to the how what practical steps can policy makers can companies take to move forward that will be helpful because if we can get some consensus in that group then it should actually be something we can take out to the world now we're in the middle of work on stuff so I can't tell you exactly the recommendations that will be coming out but I can give you a preview I think of some of the discussions we've been having and some of the emerging findings from the working groups which I hope will be useful but one important point about the ETC is that the kind of grounding principle is that we believe that an energy transition and economic and welfare development are interdependent then they're not contradictory they're complementary and in fact you can't have one without the other because if you don't have an energy transition you will not get economic development because of the problems that will result and if you do not have a strong economy and you do not have welfare and if you do not have public support you will not be able to fund the investments and make the policy decisions required for the transition so those are the kind of principles that we laid out when we started this thing about a year ago now in terms of the emerging views coming out first off there's a natural tension I guess as you'd expect between what I'll describe as the should and the could between ambition and realism and I think they're both important and I'm sure that you talked a bit about this yesterday you need the ambition to drive people to make a difference and you need people to have the call to action then you have the people in the room from companies like RWE or Statenet saying great now I'm charged with delivering power to consumers and to industry and I can't wish for things I have to make them happen in reality so you know that tension is important and I think we just recognize it in groupings like this in groupings like the UTC we recognize that we recognize they're both legitimate and then we'd say right how do we channel both of them together to make some choices and to form policy makers the second emerging conclusion is that the group on energy flexibility is coming out with a view that power systems can absorb extremely high levels of intermittent renewables which I think is something that is quite interesting and we're doing a lot of work to make sure the analysis on this is bulletproof but if that's true and we can quantify it that does change I think the public debate a bit because a lot of debate has been you know you can only have a certain amount of intermittent renewals in the system the investment required to get the bridge to be ready is enormous therefore we can't do it and the view from that group is no we can actually push it a lot further the third view which I think certainly we as GE support is that electrification is very important even in advance of decarbonizing the power mix because of the flexibility it creates it breaks this apparently insoluble problem into two parts and even if you accept that in countries like the UK if you electrified everything today you might actually get an increase in coal-fired power gen in the short term it allows you to separate the front end to the back end and then lastly the view of best uses of fossil fuels so the idea that long distance heavy-duty transportation requires energy density and it's very difficult to move away from fossil fuels in the near term I mean my colleagues in aviation are working on fully electric propelled airplanes but I think that's going to take a while and same for long distance trucking and so on similarly you know coke and coal so we can focus uses on those things then I think it helps advance the agenda so given all of that what do we think as GE and as GE oil and gas I'm not going to make any specific forecasts because if living through the oil and gas cycle for the last two years has taught me anything it's taught me that most people are very bad at forecasting those things but our working assumption is that policy makers and consumers will send the demand signals to lead to a decline in fossil fuel consumption and I think it's fundamental that we think about the demand to do that because the supply side the oil and gas companies will invest to meet expected demand and so we've got to give them some guidance on what they think demand will be so they can make the right investment decisions as Christoph said they're going to behave like rational actors I think largely and the reason I say it's about demand and expectations of demand is that they're going to invest to meet what the barrels they think are required and if the Diff's Invest movement for example succeeded in persuading BP or Shell not to do that then Rosneft or Saudi Aramco or some little independent company based in Oklahoma City will do that and so from a system point of view it doesn't actually make any difference whereas if the entire industry can manage towards a certain expectation and there's a degree of consensus on what that might be then I think that gets us in the right direction but under any reasonable scenario I think oil and gas will remain a big part of the energy mix for a long time as Christoph said that requires a lot of ongoing investment because of the decline rates if you think that if you say 3 to 4 million barrels a day of production of oil are coming out of the production system every year because of decline if you're running at a roughly 1% increase which we have been over the last few years on average you're adding net 1 but gross you're adding 4 so 3 quarters of that thereabouts is simply to the whole production flat so we make some similar assumptions slightly different time frame but we estimate $7 trillion in upstream, midstream oil and gas between now and 2030 of investment you're adding somewhere in the region of 70 million barrels a day of new barrels after the observed decline that's a lot of investment and a lot of that is required just to hold the industry still for us as a technology provider that's investment our customers are having to make and we will invest, we will develop the technology, the products and the facilities to support that now the treadmill of decline rates I think is important and I won't repeat what Christoph said but a couple of thoughts one shale can help here shales had a very bad press in some ways in terms of its impact on total carbon emissions in terms of adding a lot of reserves but if you're talking about a resource with a first year decline rate in excess 40% and an entire kind of across the piece decline rate of 20 plus percent that's an extremely fast depleting asset and that helps minimise the risk of stranded assets in the sense that Christoph said of capital investment which does not return its cost of capital over the life of the asset the second big source of supply is likely to be can a core OPEC and again though very large fields which require relatively limited investment to keep producing again they're not likely to produce massive stranded assets the third source which is more problematic is offshore and particularly deep water offshore now those also have high decline rates but they are extremely capital intensive and typically they're planning for a multi-decade investment horizon so that's where I see more of a risk from our customer's point of view of assets that may become stranded and you talked a bit Christoph about midstream infrastructure particularly gas and our working assumption is that gas will keep going for longer and maybe a complement to intermittent renewables it does depend on the scenario clearly it depends on in particular what we do with coal the interesting thing about many of those midstream investments is where the investment risk lies so traditionally LNG liquefaction plants huge capital intensive plants the recent ones in Australia were truly extraordinary in terms of cost per tons of $2,000 per ton of capacity which is out of line and we don't think that's sustainable but even if you come back to the long-term average somewhere in the region of $800 to $1,000 per ton of capacity it's a very big capital asset with a multi-decade life traditionally those things have been sold ahead and they won't get the final investment decision until they've got to 80% of production locked in the recent US ones have moved to more of a model, a merchant model but they've got take or pay contracts so in a sense they've shifted the risk onto the downstream user in most cases the utility so I don't expect many of those projects will go ahead unless they've got contracts locked in we're in a bit of a lull at the moment because the industry's oversupplied till the mid-2020s we're expecting it to come back and I think your point Kristoff about the risk there is right but the risk will actually sit probably with the utilities who've got those contracts and then lastly from an investment perspective for us we expect technology intensity to keep going up now that's partly to do with the assets you're developing it's partly to do with the policy environment particularly things like integrity flare gas reduction the Norwegian government for example has been particularly strong in mandating integrity management of the subsea field in the Norwegian sector and that means more inspection technology it means more monitoring technology, more digital so the technology intensity of the industry may go up even as in a kind of life cycle view it starts coming to its plateau and then decline phase now for us that's important but I think also for oil and gas companies it's important because it means they need to keep evolving their technology which takes me to my last point which is redeployment so I expect if we're here in 10 years time that kind of long term that we're talking about will fill a lot closer and people will probably have started to modify their behaviors a lot more than they have today but what I expect is that they will have started to apply their core capabilities, technologies to new things so just to give you a couple of examples from our business we apply technologies we've developed for oil and gas to other things we apply for example core rotating equipment compression technology that we developed for pipeline compression for LNG, liquefaction to things like compressed air energy storage or liquid air energy storage now you can take your own view on the merits of those versus large scale batteries etc but they're all part of a portfolio of technologies for large scale grid storage and similarly we've taken technology, kind of organic cycle waste heat recovery technology that we developed for combined cycle power plants and we've put that into thermal renewable sources be that biomass or geothermal so you're reapplying, similarly pipeline if we need to develop very large CO2 mass transport that's very similar to pipeline networks and digital technology I think will apply across the board so to close I think we as a company see the challenges we also see the opportunities we think that technology and technology investment will be critical and to do that and to minimise the risks of people investing in the wrong things I would just echo what Christof said which is firm and clear policy direction that gives companies a planning horizon and where possible a reasonably consistent planning horizon for all of them is the best chance of avoiding asset losses whatever our views on fossil fuels are will hit us all in our pension pots at the end of the day thank you thanks so much Alistair I think we have about 15 minutes for questions and comments so maybe we can do around four and four depending on how much time we have there are, we start kind of going from the bottom across as the hands have popped up so we'll start here with Paul and then Pete and then Mark and then the gentleman in the blue jumper thanks very much Paul Ekins from UCL two really thoughtful and interesting presentations thank you I'd like just to ask two things to link with the discussion last night that we had about compensation fascinated Christof by your graph showing the outcome of the fossil fuel price drop in 2015 that was obviously a market phenomenon lots of both rich and poor countries lost a lot of money due to that market outcome I've not heard anyone talk about the need for compensation that was recognized to be a market risk and people had to lump it climate change clearly is something that we've been expecting for quite some time because the science has been showing it since the 70s but it's not been a public issue for that long and I'm just wondering why there is the notion that market risks fall to market participants but when there's an overwhelming need for public policy and the public policy action needs to be taken people start talking about compensation in that way the second point I'd like to make really is to ask about we've heard the need for consistent public policy and the need for companies to take account of that but of course these two things are linked they are endogenous we know that ExxonMobil has known about the climate change issue since the 1970s it has spent billions of dollars since then obfuscating, confusing the public spreading misinformation in order precisely to stop the consistent public policy that would have been necessary it would have been much easier to solve the problem had we taken action back then so we've got this endogenous issue with the companies not behaving as policy takers but the companies behaving as policy influences and policy makers through their lobbying networks and I'd be very interested just in your observations on that from inside the industry where these must be your clients, these guys and also from the IEA given that intergovernmental body it's interested in government policy but obviously it's linked with the industry a very great Great, thank you Paul Hi, Pete Erickson with Stockholm Environmental Institute my question was similar to Professor Eakins' second question but I'd like to add on it's not just that industry is it's not necessarily it's a taker of policy but it's not a taker of demand in a sense either because as markets can get over supplied as you've noted can that not affect price and overall consumption in a way where demand is not purely given to them and so in that world is there a role for limits or other business signals to your supply Great, if you pass it a long time Hi, I'm Mark Fortin, Carbon Tracker so Christoph, thanks very much I thought it was a great exposition of the stranded asset issue and I have to say it's much in line with Carbon Tracker's views that's great but the one thing that I will say you said keep disaggregating well you did aggregate your final comment that we need more investment in fossil fuels to meet decline rates we agree on gas but not on coal using your carbon budget in Woodland Kansas database we need any new coal mines, we don't think so I'd be interested in a comment on that and then finally CCS as CCS fails to scale up are you going to start adjusting your carbon budgets? Mark, if you have to pass it two rows back it's up to you Thank you Roman Menelevich from German Institute for Economic Research my question is seeing in Germany for example the split of RWE and observing that for a long time in one company there has been two developments going on one is renewables and trying to push for new technologies and one is an old business model earning money from coal power plants so my question is from a company's point of view how do you see it's being solved inside of the companies I think it's an issue not just with them but also with GD and others Great, thank you so much for those questions so perhaps both of you could just take them in turn I don't know who wants to go first Kristoffer Great, well, very good set of questions Paul, take yours first on the compensation question look I mean it's a very complicated question obviously it's where you get the boundaries of economics, ethics and so on I think that the difference I would draw this is not GD policy by the way I'll be thinking on this and we have a lot of discussions on this in the ETC I'd say the difference between market dynamics and policy mandated shift is that the market you say this happens then one controls it and the other side is showing that even OPEC doesn't really control it we can debate that whereas if you if you have a mandated policy shift and you recognize that high oil prices are not helpful for that policy shift because they would act as an investment signal then you have to have a policy shift away from fossil fuels whilst keeping prices down and those two things will be intentionally with each other if you are a producer with not much apart from upstream assets therefore I think you put out a legitimate point of view and say well how does that work you know if you want me to support this then is there some kind of transfer involved I think that's how I've thrown it now GD is not involved in that debate it's not something we have official policy on but I think it's part of the ETC we've discussed that and also in the current environment of what should we call it legitimization of disaffection with globalization etc as shown by the Brexite vote as shown by the politics in the US you have to be incredibly careful how you broach that subject in both sides of the debate because on the resource rich countryside there is a question of equity but I think on the point there could be a huge public reaction if you've said well we're going to go down that route so I think it needs to be handled incredibly carefully on the question of policy and lobbying look I mean it's clear that the only next major's have very different positions on this the European companies in general have become more supportive Total has taken a big step I think by buying SAFT and starting to generate equity in battery technology BP obviously went down a route a number of years ago and then came back again what I would say is that they in our interactions with them clearly they are profit maximizing companies as you'd expect they are looking to invest to generate return and that's why I would see the policy signals to give them a view on future demand as very important remember that their return on invested capital halved at the time of the oil price was under $10 so they're under enormous pressure from their shareholders only to invest in things that they're going to return in a share of value over the long term and it's not clear that more mega projects is the right way of doing that so if they can have a view on where the industry is going what demand is going to be in future what's going to come out of their lower cost competitors in places like Middle East or Russia when largely they're focused on more fringe plays and deep water and so on I think that's the best way of focusing on investments in the right place I think they will increasingly have to accept the direction of product policy coming out of question before we move on to the other questions I'll address the next two questions to an interest of time so one of the things was on is there any reason for limits to supply the question over there I think it very much depends on your views as to where that should be happening and also the mechanism that you think it would be able to be brought about the as I mentioned during the talking it's important not to chuck off all investments and chuck off all supply because you're only going to get a real energy security issue and potentially price volatile situation which I don't think will be helpful for any transition looking forward so I think there are as I mentioned the biggest risks that there potentially are on the oil side of things is for long-lived very capital intensive projects and I think it's up to individual companies whether they want to take on that risk involved given what might happen with climate policy going forward whether policy makers themselves are going to be able to chuck off supplies is a much more up-to-question we've seen in the UK for example you have to completely disconnect between what the maximise the revenue of the of the policy and at the same time also not wanting to for other countries to develop their resources given that it will lead to catastrophic climate change so I think it's a bit simple to say we can just cut off supply but I think it's probably for the companies to make that decision on whether new coal mines are acquired I don't think they're necessarily acquired but almost at least some new coal mines would be open still under a 450 scenario simply because they'll probably be cheaper than existing coal mines and some coal mines offer a certain period of time and will acquire and re-investment in some of the infrastructure required for them and so new coal mines might be acquired but obviously the amount of and you're absolutely right to correct me to say that what I was talking about in terms of new investment acquired is mainly on the gas area, how this natural decline is observed decline and it's very different for coal as CCS scales up we'll adjust our CO2 budgets I mean CO2 budgets are independent of your amount of CCS we have there there are hard and fast limits and if you have CCS it's likely to lighten more space to emit slightly more produce slightly more fossil fuels just a much lower level of emissions coming out but certainly have CCS within our modelling and this year within we'll be slightly putting back to lightly on CCS compared to where we've been in the past certainly because the moves in the real world haven't been matching the aspiration that there have been on CCS so we'll be putting back on CCS but that doesn't really affect the CO2 budgets I think the last question is I'll come to the last question but actually just on CCS I mean again one of the discussions we've had in ETC is that CCS is one of the really big unknowns here and it's yet to be proving whether it can be viable at scale economically and it's really important, again back to this question of setting up a policy environment it's important that we know as quickly as possible whether it's going to be viable so you know so if we as GE were quite disappointed when White Riders started last year I think we can get some pilot projects that prove this all show that it's not going to work then we can lock in in the IEA and others can adjust that amount in terms of the question about the tensions within companies I think that's clear within utilities it's been there for a long time when you say well there are companies that are paid here in terms of volume but you're also asking them to reduce volume how does that work I think a number of different models on the utility side sometimes it's a question splitting the company splitting out the renewables, assets different companies taking different points of view I can certainly talk to GE within GE we have the full range we've got people working on nuclear we've got people optimizing thermal coal plants, gas plants we've got an entire business around renewables specifically offshore wind and hydro which is positive with our acquisition of Alstom and the way we think about this is meet demand, the best technology to meet demand we're not going to determine whether a customer decides to invest in a new coal plant that's going to be a decision they make based on the economics of their situation and the policy of their region if they're going to put in a coal plant I would follow up that they put in a very modern, very efficient, very clean coal plant than one that is not given that we're not going to influence that decision over time I would expect that the bits of our business that deal with fossil will come down and the bits that renewable will go up but bigger to GE is and critical as it is to the power generation distribution that works around work we can't influence that the most we can do is advance the technologies as fast as we can in the new areas and areas where the technologies are currently not yet proven at scale or of that cost and I would actually relate that back to the earlier question about are fossil fuel companies takers of demand I think they are I mean no one company can influence demand, I mean yes Aranco and the other core OPEC companies can have an impact on price and demand has been shown to be more expected but certainly if you talk about the publicly traded companies they're too small how big they are their share of the global market is too small for them to be able to have a material on the price so I think they are acting as demand takers price takers and therefore investment decisions will be based on their expectations of whether demand price will be in this time great I think we have time for another round so if we we're going to go up so first Doug and then Steve and then Dennis and then France if I'm getting that right I think you all know to this if you could just pass the link to each other and say Laura just stay there in case these guys if they're really quick we could actually even have a question from someone else I'm Doug Coppola from Earthstrike and I had a question for Alistair one of the ways that we can kind of get a window on what people's expectations are is through the hurdle rates and I'm wondering if three work at GE or with their customers you've seen an increase in the hurdle rates for remote projects, mega projects or in some of the areas Hi Steve Kretzman, Oil Change International question well it's both of you, I think this is a really really important panel and sort of the heart of what we're all discussing here for these two days on the question on the idea that oil and gas companies invest to meet expected demand as Alistair said and that guy you try to meet demand I think there's a little willful not looking at the fact that there's an awful lot of effort into managing and manipulating demand expectations by oil and gas companies if you read Steve Cole who was the Dean of the Columbia School of Journalism's book he talks about how the idea of Exxon's projections came out of their PR department in the early 2000 and we see a consistent you know the projections of demand coming from IEA from EIA from major oil companies are all A very consistently high and more or less congruent and B consistently wrong specifically on the uptake of renewals and how that has really beaten everybody's expectations except I don't want to put green pieces so I think that there is there's something there about how the demand gets really there's manipulation going on in my humble opinion the second thing is a question for Kristoff which is 450 is not 2 degrees in air I don't know any current climate science that thinks that Michael Mann thinks that 2 degrees is 405 or 410 at the moment and it seems to be moving consistently down from there so on the supply side when we're trying to look at this demand expectations strip out the emissions side of it and just say there's enough carbon that's in the current proven reserves that are currently operating to blow through the IPCC carbon budget and that is just that's not a projection that's just a simple addition and comparison and it's not you know as a policy point it's very very important for policy makers to consider that it's different than thinking about how you manage that transition and there's questions on the management side about whether or not market mechanisms are the most effective there but just looking at the carbon that is in current embedded reserves is certainly a relevant point for this discussion if the next could be quick questions please I'll be very quick Kristoff could you give us a date for when you might stop shooting CCS we'll get invented then friends last and I'm sorry we're going over time yeah no I know well I'll try not to be repetitive but I think it's worth maybe asking in a different way is the tension here I keep these questions is it is the industry you know a passive actor in a market system that it has no ability or intention to influence and I think sometimes the question is phrased the wrong way so I'm going to ask it a little differently is isn't it a rational investment from major companies that have a lot of assets to try to influence policy makers and isn't it a rational decision by individual actors in an ambiguous policy scenario and we're talking about 30 or 50 year projections to make decisions that when you aggregate the industry might seem irrational but for the individual actor thinking of Australia or an individual company to behave in a way that doesn't seem rational if you assume two degrees but it certainly is rational if they're trying to avoid having to assume two degrees great thank you if I can give you each a minute and a half to respond to whichever questions or combinations of questions you would like to and then we're going to move to the next panel I'll try and keep it quick first question hurdle rates look I hurdle rates are kept very proprietary to companies so our customers don't share their hurdle rates with us so I'm not sure I can say that I've seen an increase in hurdle rates what I'd say is in the current not many people are taking forward final investment decisions for anything which is at all risky, remote has technology risk or whatever because it would just be far better to wait and see what happens, anything that goes through at the moment is going to be fairly standard I think look a whole bunch of questions about influence of or guest companies on policy and on demand I'd say I take the point about the views are being put out equally I would say companies are not going to invest to meet demand that they do not believe will be there just because they've said it's going to be there and that would be crazy from their shadow doesn't kill them now if you believe that putting out those views will influence expectations up for the entire system to adjust then find that becomes yes it does become economically rational I just don't believe there are enough people out there making forecasts I don't believe that a bunch of views from Exxon or BP or whatever can shift expectations of demand for an entire industry from something that you can work out through looking at economic growth rates technology adoption, electric vehicle penetrations etc and increase it by one or two points there's enough other people in the world who will counter it I just don't think that would be true I'm sorry can we go to Christoph because I want to give him a minute to respond we're the 450 scenarios 250 scenarios 50% chance of two degrees and this year we'll be explicitly tying it to a carbon budget I've spent quite a lot of time looking at it so definitely is whether CCS will be invented I presume the question is not whether it will be invented has been invented and has been deployed the question is more whether it will be deployable on a commercially viable basis I don't know when we update our scenarios whenever there is sufficient information to adjust an existing assumption and as I say this year CCS has not come through in the way people hoped and maybe there will be with some of the new projects that are planned around the world they'll be shown that it can be deployed commercially in a commercially viable way and then we'll update our scenarios if they're not shown not to be commercially viable and again we'll update our scenarios the purpose of the scenarios is to come up with a reasonable assumption which is transparent to the extent that we can do to say what is the reasonable expectation for how demand might go in the future whether the IEA has consistently been wrong on the renewables this is an issue that was raised yesterday as well and the way in which our scenarios are created is that in the central scenario the new policy scenario we take into account the policies which have already been announced and have not both which have been implemented and which have been announced and over time we've seen that the policies for renewables have ramped up over time and as a result the renewables deployment in our scenarios have also ramped up over time so we haven't underestimated in any sense what's happened the scenarios reflect what policy makers have claimed to do and it's a very good thing that they've been consistently ramped up because it shows that policy ambitions have been steadily increasing very very quickly then on whether all gas companies can manipulate demand going forward I doubt they can really people put out these scenarios the IEA our study at UCL we try and make our assumptions as much of our work as transparent as possible the same is not necessarily true for all scenarios that you see but you can always question all of the assumptions in the publicly available scenarios and they're the ones that I would encourage people to rely on more so than those from ones which are perhaps less transparent great, thank you both so much thank you


Please, the floor is yours. Okay, so thank you for the introduction and so thank you. I'm the first young speaker I would like to thank you for the school and for the possibility you give us to give a little talk over here. And today I would like to give you an introduction on five months. And, in particular, I will focus on the description of their positive and national fires. Because of the schedule I cannot take the advantage of professor figures lectures so I will have to introduce the definition of the maps and things like this and starting from the case and then moving. The three varieties are a billion varieties associated with covers, of course, and they are very interesting things they can be studied by using these covers. In particular, let's start from the definition so. Let's fix a first C in energy. And let us consider a double cover. We have a map of 5 to 1, 25, over the branch divisor B in type C, and let us assume that the degree of B is R, which is strictly greater than zero. And by Riemann orbit we know that R is necessarily E. So using Riemann orbit, so we get that the genus of B is equal to G minus one plus R divided by two. And moreover, associated with pi, we have the normal map, which is the map between the jacobian varieties. And yesterday we saw that the jacobian variety of the term is iso marked to be zero of the term so here we can say that they parametrize the degree zero divisor. So here we take some divisor of the degree two. This is the linear equivalence class and that it is sent by the normal map just to get to four more. So here we have an i pi of pi. And this is the group of momorphism, so we can consider the kernel of this group of momorphism, and this is the definition of the three-variety associated with the cover. Which is also called a block pi, which is the kernel of the normal map. And since we are considering the term five covers, his kernel is connected. The P of B of C, the three-variety, is in a medium-variety of the dimension G minus one plus i divided by two. And in case of R strictly greater than zero, then the polarization is no longer principal and this is different between the classical case, which is the one concerning ethyl covers because the three-variety is a principal polarizer with a variety while in case of R strictly greater than four, the polarization is no longer principal and I call it L. And the type of the polarization is delta, and it is one, one, one, two, two, three times. Next we can consider the mass of the map B, B, R, which goes from R, G, R. This is the start-up notation for the modeling space of isomorphism classes of covers five. And it goes to A, G minus one, plus i divided by two, equalization of type delta, which is the green marker. And the definition is the same in case of R equal to zero or R greater than zero, and it sends the class of pi to the class of its green variety together with equalization. And then in capital R, G, R, you fix the degree of the branch locus or you fix the branch locus? The degree of the branch locus. And I would like to stress that while a total three months have been studied for many, many years, starting from an analytical point of view and then moving to the algebraic point of view, which has been in some sense founded by the work of the first month of the 19th, the year before, this is R equal to zero, and this is the reason why R equal to zero is called the classical case. The 2005 case started to be investigated very, very later, only in 2012 by Marco Cipirola. And the first work, which is the one of Marco Cipirola, deals with a generic Rhele type theorem concerning three months P, G, R with R, 3, 3, 3 greater than zero. So this is the theorem G of Marco Cipirola, then completed by Marco Cinaranco for the remaining cases, and so by Naranco or Tega. And it says that if the three months of P, G, R is generically injected as soon as it is possible, which means that the dimension of R, G, R is less than the dimension of H, G minus one plus. The dimension of this model state is 3, 3 minus 3 plus R because we are moving C in NG, and this is the dimension of NG, and then we are moving also different points. And this is the dimension of the space A, G minus one plus R, G minus one plus, G plus, one half. And we have the exception of G equal to three and R equal to four. Which is, which has been showed by Barbelli, Gilbert Verra, in another work by Nagarai Ramon in 1995, that P, 3, 4 has generically decreased. And then this work, this theorem has been quite recently improved by Ikeeda for the case G equal to one and by Naranco or Tega for all the years. And I think that these works have been published here. And they proved that if R is greater or equal than six and G is greater or equal than one, then the five three months is not only this exactly. We have to stress that this is quite surprising result because if we compare it with the etal case, I hope you can hear parenthesis, it is classically it was known that PG, which is the notation for P, G, R equal to zero is genetically injected. And as it is possible, which means that we are taking G greater or equal than seven. This is the result due to treatment, and growth by kernel, and so on. But it is never injected. And this is due to the tetragonal contraction by energy. This shows that the result in case of an anti-prim up goes in the opposite direction to the one that falls in case of etal. And today, and also Naranco and Tega show that we cannot expect the result of such kind in case of R equal to two and R equal to four because they show that the prim up G2, I put here in H, and P, G4, H, which means that they consider ramified covers of verb C, lying in the hyperalytic lock in G machine. This is the restriction of the ramified prim up to the hyperalytic lock, in case of two or four ramification points as positive dimensional. Okay, so today I would like to tell you something about the joint work with Adriani and Naranco, where in some sense we complete the story because we studied the opposite direction of inequality that I wrote before. Because we studied the cases where the dimension of RGR is greater. So if I got to know that the case on C612 was on when G is equal to three and R is equal to four is greater than the dimension of A G minus one plus R divided by two. This inequality is satisfied only in six cases when R is equal to two and G is between one and four and when R is equal to four and G is between one and two. And case by case, we studied the geometry of the generic fiber, which is positive dimensional, and with adopt procedure we give a description of the generic fiber. And I think that the very interesting part of the study is the fact that when you study free mapping for low values of genus and for low values of ramification points, you have the impression to manipulate the object, to control the covariance across and so it is very difficult to study this kind of geometry. And I would like to focus on one of these cases and to try to give you the proof of the description of the generic fiber. But before I have to remark that actually the case G equals to one and R equals to four is two to half because we studied the aberrant surface with polarization of typhoon. Okay, so from now on we will focus on the case G equal to two and R equal to two. So we study B to two going from R to two to A to two. The main two are the polygonal construction. Before I mentioned the tetragonal construction, the tetragonal construction is one among the polygonal construction, which are a very useful tool in case of green theory because they allow you to start from a tower of fours of such kind. So this map is two to one and this map is two to one. And then you produce other towers, A prime, B prime and C prime, of paths of the same degrees, two to one. And also the polygonal constructions produce relations among different varieties. In our case, we, in this case, G equal to two and R equal to two, we focus on the polygonal construction and I would like to give you some details on this construction. This works in this way. So let's start from a tower of fours, two to one, two to one. This one, this map is five, this map is F. Then the polygonal construction produces another tower of fours of the same degree, two to one, two to one, this map is F prime, and this map is F prime. In this way, you see this G12 inside the symmetric product of C twice. Then you have five, twice, and here you have two, twice. And then the three images of this, you guys, one, two, two, five, one. Inside the twice is the tower of D prime. So if you start from a point B here, then considering F, it has two three images, P1 and P2, and both have two three images considering the last five. A1, A2, A1, and the two. So D prime has elements as a map of four to one, two to one, because it sends A1 plus D1, A1 plus D2, and all the other combinations to the point P in P1. And also it carries an involution, given considering it's changing the shift from A1 to A2 and from A1 to D2 and so on. And so we go to C prime, to the quotient of D prime via this involution, and then we get the other two to one. And the regular construction is useful because it allows you to understand one more thing about this tower. We know that the genus of D prime is equal to G plus R minus two in the genus of C prime is equal to R divided by two. So you know that P, DOC, and P of D prime, C prime are dual of the young variety. The regular construction is a symmetric, which means that if you start from D prime, C prime over to one with this map, then applying the regular construction again, you re-get the tower to start with. And finally, it extends to the boundary, which means that if you have a situation like this, you have the point of P here in P1, when you have two elements in the five to F is a tile over P, but Pi is unified over the two images, and you produce an admissible color. And this is the situation star, and you can also do the reverse. Okay, so our theorem is the following, the generic fiber of P22 over this generic in P2 is isomorphic with projective plane minus 15 lines. The idea is the following, we start considering between map to R22, and then we go to A2, and here we have S, and we would like to study the fiber of P22 above S. But then we know that every element B over C in the fiber has a C of genus 2, so it meets a natural P21 map of P21, which is the algorithmic evolution. And then we can apply the regular construction going to be R22. And we know that the regular construction produces a tower, the prime, C prime has genus C0, since I said that the genus of C prime is equal to R divided by 2 minus 1, so if I want, and this is if I want. We can see a tower of this type as an element in the modular space of two collections of points in P1, the first one given by six points, since we know that the branch locus of prime is given by six points, P1 plus P6. So we have to describe the S map, and we consider this map as described by choosing two points in the line, which give the ramification locus of the map of f prime. So we know that we can go to the boundary, and the boundary here is identified by allowing the two points here coming together. So we can put here a line, so considering the sort of partial ramification. Then we compose with the map of f prime, which is the forget the map, so we forget the two points. Then we compose with J, which is just the first map. So we know that we have to study the fiber of P22 above S, we know that this map is inductive. The map B is an isomorphism on the inner wall, because we know that it is inductive, and if we are straight to the image, then we can also do the reverse and the reverse is the regular construction again. So it remains only to study the fiber of if we see S as the Pythagorean on the nitrolytic curve H, then we see H here, as described by the six values first point, then we have to recover all the possible collection of two points lying in the fiber of P over H. But the point here is the crucial point is the description of these values, because we know that we have to understand to control some sense of all these copies of points, because when we, our goal is to recover the element in the fiber of P22 above S. And thus, when we have an element here, we would like to apply the regional construction and to get an element here. But the point is that we cannot admit all the possible copies of points, because we don't want that applying the inverse of the regional construction, which is the regional construction. We don't want a situation like a situation, because it would produce an element which will lie in the boundary of R22. So, to do that, we describe MAP F prime very genetically, because we see P1 inside the P2 via the random embedding of the phonics. MAP F prime, which has an implication of this described by x1 point x1 and x2, can be described as follows. MAP F prime from P1 to P1, then x1 to x1, x2 to x2, then we consider the pole. And I find this slide that considering the projection from the pole. So, here we have z1, which is centered to z2, which is this point here. So, z1 goes to z2. And a configuration like this corresponds to a harmonic crash. We have a harmonic crash here, x1, x2, z1, z2. You can combine this one. So, in our case, we don't want, we have six points of pixels in P1. And we don't want Pi and Pj going via prime to the same point in P1, because this would produce a situation like this, which does not belong to R22 via the regional construction. And so we can, if we call the x-mobile space M0621 mod. We have that, we have that M062 bar mod, which is given by plus plus P6. So, x1 plus x2, belonging to M062 bar, except x1, x2, Pi, Pj is different from one each one, for all I different from there. And we, taking into account the diagram, we have that S is identified with H, which is identified with the six point P1 plus P6. And we have to recover all the collection of points, x1 plus x2, lying in the fiber of H via Pi. But then, if we have x1, x2, Pi, Pj equal to minus one, means that we would have a situation like this. This is Pi, this is Pj, this is the pole, and this is the section of the line, of the line, which goes out from the pole, Pij. And we don't want all these configurations. And this means that we allow all the points x1 plus x2 in S2 of this method product of the line twice, and we identified as a point in the P2 dual, because we identified a line in P2, which is a point in P2 dual. So again, we have to avoid all the points x1 plus x2, which correspond to a configuration like this. So we have to avoid all the lines which pass through the pole Pij. This means that we have to avoid all the lines in the dual space, the Ij, these are 15 lines. This gives the genetic interpretation of the generic fiber in case of P2 dual. The question is similar, we put the three marks of PGR inside the communicative diagram, and we can play with the study of the generic fiber of the three marks in terms of the easier marks, and by means of other pre-generational sections, we lost the genetic representation. And I think that's it. Thank you, Irene, for the beautiful talk. Is there any question, or Mark? I have just one question. You mentioned that theorem by Naranjo as some other people, or maybe. So you said that the hyper elliptic locus is generally contracted, right, by the prem map. So you said that the prem map is the ramified prem map is always injective, so could you please just explain to me what is. Yeah, but there is a difference. Yeah, it is injective when you have a greater than six, but you contract the hyper elliptic locus in case of two and four. Oh, sorry, this is a four. I thought it was some numbers, some h or some. And another question, so you said that you define this D prime curve in symmetric product, and then you said in this big analysis action. You consider a question with some evolution, so I didn't understand what is the evolution, either to define a C prime. Yeah, okay, because the prime, you can consider the fiber above the point three here, you have the four points A1 plus B1, A2 plus B1, A2 plus B2, and meaning one, A1 plus B2. Okay, then attached to pi, you have an evolution, which sends A1 to A2, right? Yes. And then this one induces the evolution D prime from D prime to D prime, which sends A1 plus B1, it comes to A2 plus B2 to change the shape using I. And you really get a curve which is different from C? Yeah, yeah. Okay, are there any other questions? Okay, it seems not. Thank you. Okay, thank you again for this talk.


Ukrainian forces strike Russian targets with storm-shadow missiles. Ukraine has already used long-range storm-shadow missiles obtained from Great Britain to strike Russian targets. CNN was informed about this by two U.S. officials and one official of another Western country who are familiar with the information. CNN's sources did not specify when exactly and for what purposes the Ukrainian side used storm-shadow. A representative of the Ministry of Defence of Ukraine declined to comment. The storm-shadow is a stealth-capable long-range cruise missile co-developed by the United Kingdom and France, usually launched from the air. The range is more than 250 km. These missiles will help Ukrainians to hit the command and control nodes, the logistics, where you have a sort of coalescence of Russian soldiers. Rear Admiral Tim Woods told Breaking Defence, And what that means is you are much better able to starve the front line of direction, logistics, weapons and people. And so yeah, it's critical that we have something with this range because you know that enables them to sort of fight that deep battle better, he added.