‘Feedback Loops’ May Supercharge the Low Carbon Transition

Whether it’s the Amazon rainforest omitting more carbon than it absorbs or legitimate (but sometimes misrepresented) concerns about melting permafrost, there’s much talk in climate circles about feedback loops or tipping points. Put simply, these are thresholds that, when crossed, unlock further sources of nature-based emissions that are hard to control or "put back in the box."

Folks are right to be concerned. The fact that there are milestones in our journey toward climate disruption after which reversing course becomes even harder than it already is should make us even more hesitant about every single degree of warming we contribute to According to one recent study, the inclusion of climate tipping points would increase the so-called "social cost of carbon" by as much as 25%.

We should not forget, however, that tipping points can work both ways—specifically in the form of technological and sociological feedback loops that could mean non-linear progress toward a low carbon economy. While there’s a growing body of evidence to suggest we’re closer to many natural thresholds than previously thought.

A new report from Carbon Tracker argues we are also approaching, and may even have crossed, into the realm of rapid transition. This, from the introduction to the report, explains why we should not necessarily look to the past as precedent when it comes to the rate of transition: 

“As one tipping point is breached, so the next tipping point moves forward. The 2020s will be a decade of cascading change, powered by interlinking feedback loops. Investors and policy makers need to understand the dynamics of change if they are to take advantage of the new world that is rapidly opening up.”

Specifically, the report looks at seven different feedback loops which work together to both boost the growth of low carbon technologies, and to hinder the continued dominance of fossil fuels. These feedback loops are: 

The volume-cost feedback loop: As renewable volumes rise, so costs fall which in turn spurs more volumes. Meanwhile, the opposite is true of fossil fuels. Falling volumes mean lower utilization rates which increase costs and further drive down volumes. 

The technology feedback loop: As related technologies are adopted, they work in concert with each other to disrupt the marketplace. More electric vehicles mean lower battery costs, which in turn increases renewable penetration. Meanwhile, a peak and then decline in fossil fuel demand mean declining innovation of fossil technologies. 

The expectations feedback loop: Narratives matter. As renewables grow, old forecasts based on past assumptions begin to lose credibility. As models change, so too do the perceptions and ultimately the actions of investors and policymakers. 

The finance feedback loop: Growth begets growth, drawing in more capital. And this reduces the cost of capital—meaning every dollar borrowed in the pursuit of low carbon tech goes a little bit further. Meanwhile, declining growth in fossil fuels scares off investors, making borrowing harder and more expensive for the incumbent technologies. 

The society feedback loop: Poll after poll is showing rapidly changing attitudes to the climate crisis itself, and to solutions like renewables, electrified transportation, and more livable cities. As more people embrace the new paradigm, learning and network effects bring in an even larger constituency of supporters. Meanwhile, high carbon technologies and business models are increasingly stigmatized. 

The politics feedback loop: As technologies improve, it drives political support for change among voters and policymakers alike. Meanwhile, the political backing for declining industries shrinks—nobody wants to back a loser after all. 

The geopolitics feedback loop: It’s common for politicians and commentators in the West to argue against climate action because China and India are continuing to pollute, but the situation is changing all over the world—remember this 100% electric bus fleet in China? As China races ahead, the U.S. fears losing power and is obliged to retool for a renewable economy. This race for influence will drive the adoption and development of renewable technologies in countries around the world. 

Of course, Carbon Tracker is notoriously bullish on the low carbon transition. It recently issued a report, for example, arguing that peak fossil fuels have already been reached—a finding that is not necessarily shared by every think tank or industry group working in this space. Yet the broad gist of what they are pointing to is plausible. 

Technological disruptions have followed an S curve many times before—appearing almost impossibly slow for decades, and then rapidly picking up pace. Given the unprecedented threat we are now facing from climate-driven disasters, the report’s authors argue that will be additional social, economic, and political pressure that will further shake things up: 

“The incumbent's peak is, in retrospect, a decisive tipping point. It simultaneously initiates a storm of virtuous and vicious spirals for the ascending and descending system respectively. These spirals span technology, economics, politics and society, incessantly feeding off one another along the way. As complexity scholars note, once self-accelerating loops dominate the behaviour of a system, change runs away with itself.8This is where we are today: peak fossil fuel demand was likely 2019, and now the loops of change are gaining dominance. If these self-reinforcing feedbacks loops are the engine of technological revolutions, then the climate imperative adds rocket fuel to this already powerful engine. Technology transitions can be fast; this one may be faster.”

Given the speed at which we appear to be reaching natural tipping points and feedback loops, we best hope the technological feedback loops do indeed do their thing fast.