domenica 31 gennaio 2016

Humanity’s three biggest and "oldest" challenges

About thirty years ago, in the late '80s, I wrote a letter to my children, indicating what were, in my opinion, humanity’s three biggest challenges that their generation would have to face and try to resolve:
1. The excessive inequality in the distribution of wealth in the world.
2. The excessive global population growth.
3. Pollution and global warming, due to the excessive consumption of fossil fuels.
In 2005, I resumed these concepts in the "Letter from the Founder" of the Pistorio Foundation (
Where are we today?
Unfortunately, on the first point, the situation has worsened: the latest Oxfam report, indicates that the 62 (I repeat, sixty-two) richest people in the world possess the same wealth of 3,500,000,000 (I repeat, three billion and five hundred million) of the poorest people in the world: the 62 richest people have the same wealth of the poorest half of the world population!
I will return to this point another time.

On the second point, the situation continues to be very negative. We are already over
7 billion human beings on this planet and each year about 140 million children are born and about 60 million human beings die: that is, the world's population continues to increase by about 80 million people each year, as if a large population same as that of the whole of Germany is added to the world each year.
WE ARE TOO MANY and the planet and its institutions cannot offer everyone a decent quality of life.
Fortunately there are some signs of a slowdown in the growth of world population and the fertility rate, which is the most important indicator of future trends, is continuously decreasing: major macroeconomic systems, such as the EU 28, the USA, Japan, Russia and all the countries of the former Soviet Union, China, Brazil and many other smaller countries in terms of population, are at a fertility rate equal to or less than 2, which is the equilibrium level of the population after several decades of transition.
They are positive signs, but the process is TOO SLOW.
To this point too, I will return another time.

On the third point, however, I believe humanity is moving in the right direction.
After the Fukushima disaster, the illusion of a possible "nuclear renaissance" has ended: the existing nuclear technologies today are not only unsafe, but also not cost-effective. New technologies which generate commercial energy from nuclear that is clean, safe and cheap will come most likely in the second half of this century. But today, the existing nuclear power is on the decline, worldwide.
On the other hand, fossil fuels are responsible for pollution that causes millions of deaths per year worldwide, while the extreme weather events created by global warming increases in frequency and intensity each year: both these elements create hundreds of billions of $ of economic damage every year.
And also fossil-fuel are at the root of many geopolitical instabilities and often wars, and fund Islamic fundamentalism.

The only solution to the energy challenge over the medium term is represented by ENERGY SAVING AND EFFICIENCY, AND RENEWABLE SOURCES.
Today we have all the technologies to virtually ELIMINATE fossil fuels within two or three decades. The cost of electricity from new renewable sources, both wind and photovoltaic power, would already be today widely competitive with fossil fuels, if these were encumbered with costs from the collateral damage they generate. Unfortunately, today these costs are paid for by the community and are not loaded on the costs of fossil fuels that generate this pollution. The perverse mechanism is simple: profits from fossil fuels go to a few tens of thousands of large shareholders and managers of traditional energy companies, while the collateral damage is paid for by billions of people of the community: it would take only a heavy carbon tax to compensate for the enormous collateral damage (adopted by many, if not all the, countries in the world) to kick fossil fuels out of the market and thus eliminate them in a short time.

Unfortunately the lobbying powers of energy companies are so strong as to influence often governments and delay the decarbonisation of the economy.

But the process is unstoppable and accelerates every year.
  • Many countries have stepped up the decarbonisation process: China today is the country that invests, ahead of many, in renewable sources, because it is forced to by devastating pollution, from both the human and economic perspectives. Japan, after Fukushima, has marginalized the nuclear component of its energy combination. The USA are accelerating their efforts, especially in some states such as California. And if sadly unfortunately Europe has slowed down, the Scandinavian countries and Germany continue with their commitment. Renewables are spreading rapidly in many countries in the world. Not to mention local community initiatives that count now hundreds of small and medium cities, and even metropolises, which are already carbon neutral such as Copenhagen, or have the goal of becoming such within a decade.
  • The technologies continue to develop ever more efficient products and to reduce costs, which also carry on declining with the increase in volumes (learning curve). Today's photovoltaic panels, for example, cost 70% less than what they cost 10 years ago, and it is expected that these costs will continue to fall rapidly in the coming years. In addition, intelligent networks and technologies of accumulation are moving quickly and within the next 10 years we will be able to solve the problem of intermittency in renewable sources at acceptable costs. This technological and industrial development will render the wind and photovoltaic competitive compared with fossil fuels within the next 10 years, even without any carbon tax.
  • Many large and medium-sized companies in the world have taken up the ecological cause and many invest in becoming carbon neutral. Virtually all companies listed on the world's major stock markets have in their Corporate Social Responsibility (CSR) policies an important ecological commitment component. I want to remember that STMicroelectronics launched a massive environmental campaign in 1993, when I was its CEO.
  • And finally the most important component of the world’s economy process of decarbonisation is the realization from hundreds of millions of citizens around the world who care about the quality of life on our planet, both for our generation and especially for our children and grandchildren. And today we also have an authoritative voice, such as that of Pope Francis, who speaks for the benefit of the planet.
It is this widespread and growing commitment that is affecting individual behaviour in the direction of environmental sustainability, and at the same time pushing the institutions to pass laws and regulations to protect the environment.

I am convinced that humanity is winning this great challenge, but all responsible citizens must continue their efforts to speed up the process, to spare millions of lives and to save society from hundreds of billions of economic damage.

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