# Food or Fuel: The Energy Transition’s Battle for Land

An episode of [Switched On](https://invisiblenetwork.ai/podcast/1469286286), 7 Aug 2024, 30 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/01a10738-3608-4dec-883c-ae3c00026b36/54451b6f-24dc-4077-b8b9-b1c5007d9226/audio.mp3?utm_source=Podcast&in_playlist=6d114f63-833d-4b78-bbf5-ae3c00026b44

What do biofuels, renewable power, and the food on your plate have in common? They all need land, and lots of it. While the technologies required to reach a net-zero future are expanding alongside rising energy demand, growing populations and higher living standards could require roughly a fifth more land be cultivated for agriculture by mid-century. Of the available land on Earth, decisions must be made regarding whether to devote it to agriculture, biofuels, bioplastics, power generation, battery metals or nature conservation. The challenge is profound, yet key solutions are emerging, including co-location and innovations to improve energy output and agricultural yields. On today’s show, Dana is joined by Hugh Bromley, BNEF’s Head of Food, Agriculture and Nature, and Kostas Pegios, who specializes in modeling at BNEF. Together they discuss the vast quantity of land required for the energy transition, which renewable energy technologies can be co-located with existing agriculture, and the competition between food crops and biofuels for suitable land. Complementary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal or on bnef.com Links to research notes from this episode: New Energy Outlook 2024 - https://about.bnef.com/new-energy-outlook/ See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: This is Dana Perkins and you're listening to Switched on,
[0:03] Speaker 1: the podcast brought to you from the BNAF team at Bloomberg,
[0:07] Speaker 1: where we bring our analysts on the show to share
[0:09] Speaker 1: their most recent research. Today, we've got one of those
[0:12] Speaker 1: topics that spans the whole world really and so many
[0:16] Speaker 1: different parts of the economy. The topic is land use,
[0:19] Speaker 1: and it's a really simple term for something that is
[0:21] Speaker 1: anything but simple. It's what we humans decide to do
[0:24] Speaker 1: with the land that we have accessible to us on Earth.
[0:27] Speaker 1: We're on the blue planet, so over seventy percent of
[0:30] Speaker 1: the surface is covered in water, with the less than
[0:33] Speaker 1: thirty percent that's left, how much of it will be
[0:35] Speaker 1: dedicated to growing food or power generation, or to cities
[0:39] Speaker 1: or perhaps wildlife. When we think about the future of
[0:42] Speaker 1: the solutions in the energy transition, do we have enough
[0:45] Speaker 1: land for everything that we want to do, from the
[0:47] Speaker 1: space required for renewable energy for green hydrogen to the
[0:51] Speaker 1: crops required for sustainable aviation fuel. How much did these
[0:55] Speaker 1: compete with food for humans and what is the impact
[0:58] Speaker 1: on biodiversity. Today I am joined by Hugh Bromley and
[1:02] Speaker 1: Kostas Pegios, and they talk about some of the parts
[1:05] Speaker 1: that were featured in bn EF's recent New Energy Outlook,
[1:08] Speaker 1: where it addresses land use. BNF clients can find the
[1:12] Speaker 1: full New Energy Outlook at BNF on the Bloomberg terminal
[1:15] Speaker 1: or at BNF dot com. For those who are not
[1:17] Speaker 1: yet subscribers, they can find the executive summary and some
[1:20] Speaker 1: really great data at about dot bn EF dot com
[1:24] Speaker 1: forward slash New Dash Energy Dash Outlook forward slash. You
[1:28] Speaker 1: can also find that link in the show notes. Right now,
[1:31] Speaker 1: let's jump into our conversation with Hugh and Kostas about
[1:34] Speaker 1: land use. Hugh, welcome back to the show.
[1:47] Speaker 2: Great to be here. Thanks, Thena and cost.
[1:49] Speaker 1: Us, good to have you here for the first time.
[1:51] Speaker 3: Thanks very much, very glad to be here as well.
[1:53] Speaker 1: So we're going to talk about land use, but as
[1:56] Speaker 1: we do with most of our shows, we're going to
[1:57] Speaker 1: start with some definitions and also the why why we're
[2:00] Speaker 1: looking at this. So as the energy transition increases in
[2:03] Speaker 1: peace and we start talking about technologies, why have the
[2:06] Speaker 1: two of you started to look at land use and
[2:08] Speaker 1: why is it so important during this next phase in
[2:11] Speaker 1: the energy transition.
[2:13] Speaker 2: Sure, I think I think you know in the last
[2:15] Speaker 2: few years been as SCO has expanded quite a bit, right,
[2:17] Speaker 2: So we moved into food and agricultural as a sector
[2:20] Speaker 2: beyond the energy and the transport transitions, and really for
[2:24] Speaker 2: us that completes the emissions part. We can now talk
[2:25] Speaker 2: about emissions across the broader economy. We also move beyond
[2:28] Speaker 2: as climate and start to talk about nature and biodiversity
[2:31] Speaker 2: as issues and challenges facing all the sectors that we cover.
[2:34] Speaker 2: And if you think about where that intersects with the
[2:36] Speaker 2: energy transition, it's really land. Land is the one resource
[2:40] Speaker 2: that's constrained on both fronts that affects food and is
[2:42] Speaker 2: competing directly against the energy transition and the need to
[2:46] Speaker 2: restore nature and biodiversity. So when we think about land use,
[2:49] Speaker 2: we're thinking about this tension on those three front's, food, nature,
[2:52] Speaker 2: and the energy transition.
[2:53] Speaker 1: This seems like such a big topic and there are
[2:56] Speaker 1: so many different things that we could bring into this,
[2:59] Speaker 1: and we're looking at the arable land end of things.
[3:01] Speaker 1: When we're thinking about food, also, do you take into
[3:04] Speaker 1: consideration population and where people may end up living and
[3:10] Speaker 1: what parts of the world are changing. And really what
[3:13] Speaker 1: I'm bringing into this is when you look at land use,
[3:15] Speaker 1: are you also taking into consideration the impacts of physical
[3:20] Speaker 1: climate changes.
[3:21] Speaker 2: We certainly take into account population as a driver of
[3:25] Speaker 2: growth in all of these sectors, you know, and in
[3:27] Speaker 2: food in particular, you're thinking about a foods that needs
[3:29] Speaker 2: to expand is to feed the population with numbers are
[3:32] Speaker 2: around twenty percent increase in population by mid century, acquiring
[3:35] Speaker 2: about thirty percent more calories. So accumulation of wealth in
[3:38] Speaker 2: middle economies leads to greater demand for food. Luckily through
[3:42] Speaker 2: greater yields, that's probably only twenty percent more land. But
[3:45] Speaker 2: this is a system that's already on the brick, already
[3:47] Speaker 2: being stretched. So when you couple that with need to
[3:49] Speaker 2: de carbonized renewables having a greater footprint than the fossil
[3:52] Speaker 2: fuels there they're displacing need for fuels, for aviation, for maritime,
[3:56] Speaker 2: for shipping. It creates some really really acute tensions. There
[3:59] Speaker 2: are course other considerations here as well. Climate's going to
[4:02] Speaker 2: affect way you can grow things, how you can use land.
[4:04] Speaker 2: It could even affect where you live. As you say,
[4:06] Speaker 2: there are all things that we now have the capacity
[4:08] Speaker 2: to think about in this model of the exercise, not
[4:10] Speaker 2: explicitly modeling the results, we put out the new energy outlook,
[4:12] Speaker 2: but is something we're looking at.
[4:14] Speaker 1: Okay, So let's dig into the new energy outlook and
[4:17] Speaker 1: actually the part that is nearest to us as BNF
[4:20] Speaker 1: and where we first started looking when we started evaluating
[4:23] Speaker 1: the future of the transition, which is the clean power sector.
[4:26] Speaker 1: So with wind and solar really at the center of this,
[4:29] Speaker 1: you know, what is the land intensity of these sectors
[4:33] Speaker 1: and how does it compare to fossil fuels and extractive
[4:36] Speaker 1: carbon intensive industries.
[4:38] Speaker 3: So utility scales smaller and wind farms need far larger
[4:43] Speaker 3: areas per unit of power energy compared to the fossil
[4:45] Speaker 3: fuel plants they displace. And that's even when you consider
[4:49] Speaker 3: the land used to produce and transfer the fossil fuels.
[4:52] Speaker 3: This is like very This becomes even more evidence and
[4:55] Speaker 3: the highens the competition between renewable sites and other sectors
[4:59] Speaker 3: that can lead to life very specific and localized land shortages.
[5:03] Speaker 3: The main factors that affect the land used intensity are
[5:07] Speaker 3: actually usually physical and design of the assets or operational
[5:11] Speaker 3: climate conditions, as well as the energy intensity of the
[5:14] Speaker 3: energy sources. When we're thinking about renewable assets like wind
[5:18] Speaker 3: and solar, the climate variability often means that renewables can
[5:22] Speaker 3: produce energy at very variable rates, and this also reduce
[5:25] Speaker 3: the duration of far producing periods and therefore increases the
[5:28] Speaker 3: land required per unit of energy produced. At the same time,
[5:32] Speaker 3: as the energy densities of fossil fuels are cyclically higher
[5:35] Speaker 3: than those of renewables, and because the latter other than
[5:38] Speaker 3: geo thermal cannot always take into considerations after energy resources,
[5:43] Speaker 3: terrectrial renewables such as onshore wind or utility scale sort
[5:46] Speaker 3: require more land to generate the same amount of energy.
[5:49] Speaker 3: So yeah, for wind and solar, we have employed some
[5:52] Speaker 3: universal global assumptions, although there are geographic technologic implications for
[5:57] Speaker 3: example single access tracking or placing a solar panel north
[6:01] Speaker 3: or south of the equator. Similarly, for winter binds, there
[6:04] Speaker 3: are a lot of implications around their design and there
[6:06] Speaker 3: are configurations. For example, different manufacturers have different design criteria
[6:12] Speaker 3: based on different capacities, have highest or design so we've
[6:16] Speaker 3: tried to account for as many of them as possible.
[6:20] Speaker 2: So I think what's really interesting is how that energy
[6:22] Speaker 2: dance is going to change in the future. Actually, if
[6:24] Speaker 2: you think about the bulk of renewals deployment in the
[6:26] Speaker 2: new energy outlook is utility scale solar and onshore wind,
[6:30] Speaker 2: they have very different stories. Actually, utility scale solar, we
[6:33] Speaker 2: see cell cell efficiency constantly improved, proving that's going to
[6:36] Speaker 2: rain tru into the future. And what that means is
[6:38] Speaker 2: that that chemistry changes. Greater energy density not only lowers
[6:41] Speaker 2: the cost. You know, the dollar per watt of solar
[6:43] Speaker 2: goes down, as we see on an experienced curve. It
[6:45] Speaker 2: lowers your labor costs. You get more watts per panel
[6:48] Speaker 2: for every every bolt that's tightened, you're racking costs. But
[6:51] Speaker 2: it also requires less land. So suddenly your land footprint
[6:54] Speaker 2: of a mega watter solar is is shrinking over time.
[6:57] Speaker 1: As compared to previous panels. But how about as compared
[7:00] Speaker 1: to wind, for example, because I imagine you could co
[7:02] Speaker 1: locate things agriculture with wind more than you can with solar.
[7:07] Speaker 2: Yeah you could. So wind's got an enormous footprint because
[7:10] Speaker 2: of all those gaps between the towers, if you like.
[7:12] Speaker 2: And actually that's a very different story because with wind,
[7:14] Speaker 2: what you see is that the energy dancer is going
[7:16] Speaker 2: to decline over time because sure, every tower is going
[7:18] Speaker 2: to get taller and going to get bigger, going to
[7:20] Speaker 2: be holding more megawatts on top of it in that
[7:22] Speaker 2: cell and the hub. But actually that will require more
[7:25] Speaker 2: and more spacing between each tower, so therefore the energy
[7:28] Speaker 2: density of wind declines over time. You're absolutely right. Co
[7:31] Speaker 2: locating of assets is extremely important here. I wouldn't limit
[7:35] Speaker 2: it just to wind and solar, but actually we need
[7:37] Speaker 2: to be thinking across the entire economy. You know what
[7:39] Speaker 2: can graze or be grown under wind turbines that can't
[7:41] Speaker 2: be grazed or grown under a solar plant. That's quite
[7:44] Speaker 2: a lot actually, as well as using it for other
[7:47] Speaker 2: industrial applications or for fuel production.
[7:50] Speaker 3: To name some examples. For example, wind can be often
[7:53] Speaker 3: integrated into grazing pastures and some cropping and forestry operations.
[7:57] Speaker 3: At the same time, solar panels can be deve up
[8:00] Speaker 3: on regularly shaped land, which is adjusting to cropped fields
[8:03] Speaker 3: without inpacting agricultural activities. So these are some examples to
[8:07] Speaker 3: the chronologies.
[8:08] Speaker 2: Yeah, and we start to see that in land zoning
[8:11] Speaker 2: rules at laws. At the moment, I think we're in
[8:13] Speaker 2: early days, we're seeing the concern of food versus fuel
[8:16] Speaker 2: versus electrons. Now really start to rethink how we use
[8:20] Speaker 2: land or do we want our best cropping resource to
[8:22] Speaker 2: be covered in solar or even wind if it is
[8:25] Speaker 2: disruptive for the operations, and suddenly you think it, well, actually,
[8:27] Speaker 2: solar could go on the least productive field on the
[8:29] Speaker 2: edge of the farm if you like, or a carbon
[8:31] Speaker 2: forestry project could be put in one part of the
[8:33] Speaker 2: farm that was not otherwise productive. So when do you
[8:35] Speaker 2: think about these different asset class and how they could
[8:37] Speaker 2: each be deployed on the same parts of the land
[8:38] Speaker 2: without undermining what we need food.
[8:41] Speaker 1: As a research project, I can see this getting very specific,
[8:44] Speaker 1: very quickly, because when we look about when we look
[8:47] Speaker 1: at renewables deployment, we're certainly aware of certain locations and
[8:51] Speaker 1: you had already highlighted you know, further north from the
[8:53] Speaker 1: equator that changes the capacity factors for solar and then
[8:57] Speaker 1: for wind you know variably you have to be in
[8:59] Speaker 1: a place where there is the presence of enough gusts
[9:02] Speaker 1: of wind in order for it to work out. So
[9:04] Speaker 1: when you were looking at I guess at region by
[9:07] Speaker 1: region or country by country, how did you approach some
[9:10] Speaker 1: of these regional differences both now and then what are
[9:14] Speaker 1: your ambitions for the future, Because I can see this
[9:16] Speaker 1: getting very granular, very fast.
[9:19] Speaker 2: You're right, Dan, it's a really granular exercise. So actually,
[9:21] Speaker 2: the way this is a model that basically drawing a
[9:23] Speaker 2: square kilometer grid over the entire earth and identifying the
[9:26] Speaker 2: characteristics required to cite a good wind project or grow soy,
[9:30] Speaker 2: or build a hydrogen electrilizer. So what costasis build this
[9:34] Speaker 2: grid around then throw these characteristics out of you know,
[9:36] Speaker 2: for example cost us you could talk to some of
[9:38] Speaker 2: the characteristics for some of these technologies.
[9:41] Speaker 3: Yeah, some of the characteristics into account were physical constraints
[9:47] Speaker 3: like slope elevation or their presence of water water bodies,
[9:51] Speaker 3: rivers and lakes. A lot of these for you mentioned
[9:55] Speaker 3: soy crop suitability, where we created some layers trying to
[10:00] Speaker 3: identify suitable soil intern characteristics for each crop we're looked into.
[10:05] Speaker 3: Also a lot of infrastructural layers we're taking into accounts,
[10:08] Speaker 3: such as railways, roads, industrial areas, and mining areas, which
[10:12] Speaker 3: were in some cases excluded or looked into more detail
[10:15] Speaker 3: in our analysis for their renewable asset side of things.
[10:19] Speaker 3: Renewable resources like windspeed and solar radiance were also accounted
[10:23] Speaker 3: for and allowed us to filter appropriate locations for the
[10:27] Speaker 3: development of those assets.
[10:29] Speaker 1: My favorite thing that you took into consideration was biodiversity
[10:32] Speaker 1: in these areas where maybe doing nothing is the right
[10:36] Speaker 1: thing from a land you standpoint, But let's delve into
[10:39] Speaker 1: the areas of the world that are available to us.
[10:42] Speaker 1: So invariably this work fed into the New Energy Outlook,
[10:46] Speaker 1: and then we have these two scenarios that we look
[10:48] Speaker 1: at within the New Energy Outlook. So in the first scenario,
[10:50] Speaker 1: which is the economic transition scenario, the name really tells
[10:54] Speaker 1: you what it is that we're looking at, which essentially is,
[10:56] Speaker 1: with the economics as we see in the energy transition
[10:59] Speaker 1: as it is right now, how could the future play out?
[11:02] Speaker 1: And that's kind of forgetting policy and leaving that to
[11:04] Speaker 1: the side. And the second scenario is our net zero scenario,
[11:08] Speaker 1: which starts with a different premise, which ultimately is if
[11:11] Speaker 1: we reach net zero by twenty fifty, what things need
[11:13] Speaker 1: to be true in the years leading up to that
[11:15] Speaker 1: in order for that to be a potential reality. So
[11:18] Speaker 1: within these two scenarios, within the New Energy Outlook exercise,
[11:22] Speaker 1: the work that you did, did you find that it
[11:25] Speaker 1: is possible for us to have these transitions? Do we
[11:29] Speaker 1: have enough land? Essentially, is it even physically technically possible.
[11:33] Speaker 2: Well, it's worth point that the numbers are staggering regardless. Right,
[11:36] Speaker 2: So in clean power, the land footprint of solar and
[11:39] Speaker 2: wind is going to grow roughly five fold onto the
[11:41] Speaker 2: economic transition scenario that doesn't hit net zero leads us
[11:44] Speaker 2: above two degrees of warming. To hit net zero, we
[11:46] Speaker 2: need two point nine million square kilometers of earth. That's
[11:49] Speaker 2: that's over seven hundred million acres of land. To give
[11:53] Speaker 2: some perspective, that's larger than the land mass of India. Right,
[11:56] Speaker 2: it's absolutely enormous that we cover in wind and solar.
[11:58] Speaker 2: Do we have enough land? So, yes, we have enough
[12:01] Speaker 2: land that has suitable solar resource and terrain or wind
[12:04] Speaker 2: resource for that sort of capacity, but it's probably being
[12:06] Speaker 2: used for something else. And that's the real constraint here
[12:09] Speaker 2: is we're probably going to run out of sight, what
[12:11] Speaker 2: disrupt other applications in deploying these the renewables. The biofuels
[12:15] Speaker 2: numbers are even more staggering and much more difficult to
[12:17] Speaker 2: co locate as well or to think about multile applications.
[12:20] Speaker 2: But in a net zero scenario, biofuels need three point
[12:23] Speaker 2: seven million square kilometers of earth. You know, that's one
[12:26] Speaker 2: point two billion acres, or an area larger than the
[12:28] Speaker 2: European Union, eighty percent the size of of the continental US.
[12:32] Speaker 2: It's enormous, and that is cropland, cropland that will be
[12:35] Speaker 2: used to grow soil, your canola or sugar into in
[12:38] Speaker 2: the future.
[12:39] Speaker 1: And with biofuels application really being limited to just those
[12:42] Speaker 1: parts of the economy where we don't have other alternatives
[12:44] Speaker 1: because it's not the first choice, for example, for energy generation,
[12:48] Speaker 1: but it certainly is when we're looking at sustainable aviation
[12:50] Speaker 1: fuel because that's the technology that's available to us right now.
[12:54] Speaker 2: Well, what's amazing about that three point seven million dollar
[12:57] Speaker 2: figar is that's a scenario where biofuels of road transport
[13:00] Speaker 2: fades away to zero, right So really that number rou
[13:02] Speaker 2: just reflects sustainable aviation fuels, some shipping, and a few
[13:06] Speaker 2: other other sectors our economic transition scenario that suggests we
[13:09] Speaker 2: don't hit net zero. It sees a lot more biofuels
[13:12] Speaker 2: being directed into fuels, but really actually that the market
[13:15] Speaker 2: overall shrinking into twenty fifty because there's electrification happening and
[13:18] Speaker 2: aviation fuels never really take off, so therefore we don't
[13:21] Speaker 2: hit net zero. So it's absolutely crucial if we want
[13:23] Speaker 2: to decarbonize aviation and the only technology we have available
[13:27] Speaker 2: to us really decide of around twenty forty when e
[13:29] Speaker 2: fuels and some other technologies start to come about. It's
[13:31] Speaker 2: absolutely crucial that we electrify road transport. So we need
[13:34] Speaker 2: that land, We need that feedstock to grow fuel, feedstock
[13:37] Speaker 2: for other applications.
[13:39] Speaker 3: Some interesting numbers. China, the US, and India alone account
[13:44] Speaker 3: for just over half of the global land required to
[13:47] Speaker 3: accommodate our onshore wind and until the skills sol are
[13:50] Speaker 3: by twenty fifty under then at zero scenario, but none
[13:53] Speaker 3: of them are likely to face any land constraints or
[13:55] Speaker 3: a competition that would prevent clean energy roll loud. In
[13:59] Speaker 3: other areas like Australian Brazil, our analysis shows that the
[14:03] Speaker 3: solar and wind capacity require under below one percent of
[14:07] Speaker 3: the suitable land given their ample size. However, there will
[14:10] Speaker 3: be other implications, especially in Brazil, where there is a
[14:14] Speaker 3: lot of areas of high bidiversity value and protected areas
[14:18] Speaker 3: which will potentially constrain the area suitability even more so.
[14:22] Speaker 1: Simply put, is it right to say that if you
[14:25] Speaker 1: are a big country and physical size, you have more
[14:28] Speaker 1: to play with, so you have fewer constraints, and if
[14:30] Speaker 1: you are a smaller country in physical size, this may
[14:34] Speaker 1: end up proving to be a challenge. And this in
[14:36] Speaker 1: the challenge is really reaching a net zero target. Because
[14:39] Speaker 1: most countries around the world have a net zero target,
[14:42] Speaker 1: many of them aligned with twenty fifty, although not all.
[14:45] Speaker 1: Is it right to say that the size of the
[14:47] Speaker 1: country gives them more flexibility? And therefore I guess who
[14:52] Speaker 1: are some of the countries that we need to be
[14:54] Speaker 1: most concerned about.
[14:55] Speaker 2: Yeah, size and population matter, clearly, So big land masses
[14:59] Speaker 2: have lots of fleck ability and what technology is that
[15:01] Speaker 2: to data data deploy so long as it's not forest
[15:03] Speaker 2: covered or other resources that we really need to need
[15:05] Speaker 2: to protect. It also creates some opportunity, right, so you
[15:09] Speaker 2: think about what large land masses like like Brazil could
[15:13] Speaker 2: do for Latin America for other areas with less land suitability.
[15:16] Speaker 2: There's a proposal in Australia right coming probviously kind of
[15:20] Speaker 2: the pet project of two billionaires to develop a huge
[15:23] Speaker 2: solar array in the north of the country in the
[15:25] Speaker 2: desert with an undersea cable connecting to Singapore. Clearly, land
[15:29] Speaker 2: constrained and populous. From an Australian perspective, that sounds wild,
[15:32] Speaker 2: why do we need to build a massive solar product
[15:34] Speaker 2: up there? But from a Singaporean perspective and from a
[15:36] Speaker 2: Southeast Asian perspective, it starts to make a little bit
[15:38] Speaker 2: of sense to think about that sort of dynamic, and
[15:40] Speaker 2: that's really where we see the constraints being hit. So small, populous, mountainous,
[15:44] Speaker 2: forested countries are where we're all likely to hit a
[15:47] Speaker 2: constraint and even run out of land. That means on
[15:49] Speaker 2: our modeling, South Korea is likely the first to run
[15:52] Speaker 2: out of suitable wind sites, certainly without disrupting its food
[15:56] Speaker 2: production system. And forested areas Japan, Vietnam, Indonesia are the
[16:01] Speaker 2: places that we should be aware of as places that
[16:03] Speaker 2: will face constraints. But even in Western Europe, you know,
[16:06] Speaker 2: areas that don't have that same forest cover. We're already
[16:08] Speaker 2: seeing some infringement upon agricultural areas in the deployment of renewables.
[16:14] Speaker 3: Another factor which we have not explicitly accounted for in
[16:17] Speaker 3: our analysis, but could potentially reduce the amount of land
[16:21] Speaker 3: which will be eligible for our wind and asset is
[16:25] Speaker 3: I guess is great infrastructure and proximity to create as
[16:29] Speaker 3: well as grid stress. That is something that we have
[16:32] Speaker 3: not explicitly looked into in our analysis, and that's also
[16:36] Speaker 3: a big topic which could definitely create additional constrain the
[16:40] Speaker 3: available land of these big regions in the future.
[16:44] Speaker 1: Here they are grids rearing their head again. They feature
[16:46] Speaker 1: in so many shows. Okay, so we've talked about wind
[16:50] Speaker 1: and solar, we talked about biomass, and ever so briefly
[16:54] Speaker 1: in passing at the very beginning of the show, we
[16:56] Speaker 1: mentioned hydrogen. Are there other technologies that have the potential
[16:59] Speaker 1: to really take up a lot of land that we
[17:01] Speaker 1: should be thinking about.
[17:02] Speaker 2: It's not just the amount of land we should be concerned,
[17:04] Speaker 2: but we should really be concerned by by what is
[17:06] Speaker 2: that land currently used for and what's what's sitting adjacent
[17:09] Speaker 2: to So another sector we dove deep into is critical minerals.
[17:12] Speaker 2: Where are the minerals needed for ev batteries and transition metals,
[17:17] Speaker 2: Where are they going to be sourced from? Actually, what
[17:18] Speaker 2: you find is that a lot of that resource sits
[17:20] Speaker 2: in the tropics underneath quite valuable biodiversity regions. So you know,
[17:25] Speaker 2: the numbers not enormous there, we're going to see roughly
[17:27] Speaker 2: a fourfold increase in the amount of land needed for
[17:30] Speaker 2: those critical minerals to around one hundred and sixty thousand
[17:33] Speaker 2: square kilometers by twenty fifty. So that's small than the
[17:36] Speaker 2: clean power footprint today. You know, it's not an enormous number,
[17:39] Speaker 2: but it's in areas that are really really important to preserve.
[17:42] Speaker 3: For the extractive sector, we looked into where current mining
[17:48] Speaker 3: activity takes place. So we've analyized thousands of mines using
[17:53] Speaker 3: geospecific geospecial layerrors and basically the assumption is that a
[17:58] Speaker 3: lot of the additional and will be met by expanding
[18:02] Speaker 3: the current mines and where they are located instead of
[18:05] Speaker 3: it's not very likely that we identify a lot of
[18:08] Speaker 3: additional resources in new areas that we haven't explored yet.
[18:12] Speaker 3: So on the metals and mining, we've essentially stressed test
[18:16] Speaker 3: the current mines. The way we've done that we have
[18:19] Speaker 3: created up to five buffer zones around each mine of
[18:24] Speaker 3: one kilometer each, and essentially what we find is that
[18:28] Speaker 3: a lot of the mines where they are now, they
[18:30] Speaker 3: currently overlap with protected areas of our areas of high
[18:34] Speaker 3: bidiversity values. As you mentioned, this is very evident in
[18:38] Speaker 3: South America, in Brazil, Chile, Peru where mining activity is
[18:42] Speaker 3: very high. But there are also some of the regions
[18:45] Speaker 3: with the most biodiverse areas globally.
[18:48] Speaker 2: Mining and mining related.
[18:49] Speaker 3: Infrastructure drives a lot of the deforestation in those regions.
[18:54] Speaker 2: So what we found in the critical minrum mining is
[18:57] Speaker 2: it about eight thousand square kilometers of mine area today
[19:01] Speaker 2: falls within a protected area that's an environmentally biodiversity sensitive area,
[19:05] Speaker 2: around seven or eight percent of total mining activity today.
[19:08] Speaker 2: But what we think is those minds are going to
[19:09] Speaker 2: expand over time. That's more likely than building new minds
[19:12] Speaker 2: just because of permitting and resource barriers. So as those
[19:14] Speaker 2: minds expand, we draw these one kilometer incremental rings around
[19:18] Speaker 2: them and think about how they'll grow into the future.
[19:20] Speaker 2: We arrive at that sensitive area tripling more than tripling,
[19:24] Speaker 2: in fact by twenty fifty so to over twenty nine
[19:26] Speaker 2: thousand square kilometers, and that disturbance is really there to
[19:29] Speaker 2: fuel the demand for battery metal. So we're trading off,
[19:31] Speaker 2: if you like this, a response to climate change, to
[19:34] Speaker 2: a greater biodiversity crisis.
[19:36] Speaker 1: So for the areas where it's really a good place
[19:40] Speaker 1: for us for a number of factors, including biodiversity for
[19:43] Speaker 1: us to be thinking about putting increasing amounts of renewables
[19:46] Speaker 1: or bio fuels or what have you on that space.
[19:49] Speaker 1: What are some of the ways to increase efficiency of
[19:53] Speaker 1: the use of that land? And we had already mentioned
[19:55] Speaker 1: earlier on colocation, So that's where you have more than
[19:58] Speaker 1: one technology. Are you're paying the same space? You know,
[20:01] Speaker 1: we often talk about it with wind and solar where
[20:03] Speaker 1: you have win turbines above and solar panels down below
[20:06] Speaker 1: and they both get to work in concert. What are
[20:10] Speaker 1: some of the other ways people are thinking about making
[20:13] Speaker 1: land more productive?
[20:15] Speaker 2: Sure, so I'd hesitate to say any of these there
[20:18] Speaker 2: are great for biodiversity, really looking for the least worst
[20:20] Speaker 2: outcomes here in causing biodiversity in nature damage. But you're right,
[20:23] Speaker 2: there's a number of ways. But we can think about this.
[20:25] Speaker 2: Co location has come up a number of times in
[20:27] Speaker 2: this conversation. So what else can you do on a
[20:29] Speaker 2: wind farm to mean that that application, that production system
[20:32] Speaker 2: doesn't need to move elsewhere cause more deforestation in cropping systems?
[20:36] Speaker 2: We need all this land for biofuels, Can we think
[20:38] Speaker 2: about where that's grown and whether something else could be
[20:40] Speaker 2: grown in the off season what we call double cropping.
[20:42] Speaker 2: Growing one crop in in the spring, for example, one
[20:45] Speaker 2: in the fall winter could be a food plus fuel
[20:47] Speaker 2: cropping system. We could also really think about, in the
[20:51] Speaker 2: case of critical minerals, much greater investment in battery recycling.
[20:54] Speaker 2: Do we need the virgin resource at all if we
[20:56] Speaker 2: can improve our recycling networks. So there's a number of
[20:59] Speaker 2: different Each technology pathway here, whether it be the power system,
[21:03] Speaker 2: the fuel system, or battery metals, has its own set
[21:06] Speaker 2: of solutions here. They might not get you to no damage,
[21:10] Speaker 2: but I think they can certainly alleviate some of these
[21:12] Speaker 2: massive numbers of land footprint.
[21:14] Speaker 1: So let's talk a little bit about agriculture and the
[21:17] Speaker 1: food system. And you're spending a lot of your time
[21:19] Speaker 1: focused on that these days. And when we think about
[21:22] Speaker 1: biofuels and bioplastics, we often talk about them and frame
[21:25] Speaker 1: them in such a way where we say, okay, well
[21:27] Speaker 1: are they being competitive with crops that are then being
[21:30] Speaker 1: used for food. And once we add this layer of
[21:34] Speaker 1: looking at the world in terms of land use, in
[21:36] Speaker 1: all of the different needs that we have for land
[21:38] Speaker 1: in addition to arable land for food, and you'd already
[21:41] Speaker 1: mentioned with increasing population in certain parts of the world
[21:44] Speaker 1: decreasing population in other parts of the world. But if
[21:46] Speaker 1: we look at the planet as a whole, what are
[21:49] Speaker 1: the implications for food production.
[21:52] Speaker 2: Yeah, so I think this research, this modeling exercise, really
[21:56] Speaker 2: highlights that we don't have enough land to go about
[21:59] Speaker 2: food production plan decarbonization in the way that we're currently doing.
[22:02] Speaker 2: So we need to either think about agronomic practices, how
[22:05] Speaker 2: do you produce two crops from each part of the land,
[22:07] Speaker 2: or we need to think about alternative technology pathways for
[22:10] Speaker 2: aviation and the shipping sector, and that means pulling forward
[22:14] Speaker 2: technology curves twenty years. Right, that's a huge core. So
[22:17] Speaker 2: probably the agronomic routes that the more realistic. But at
[22:21] Speaker 2: the moment, what we're seeing is incentive schemes such as
[22:24] Speaker 2: in the US with the tax credits available for sustainable
[22:27] Speaker 2: aviation fuels. Yes, encouraging some waste feedstock oils in particular,
[22:32] Speaker 2: but also you know examples of gaming in that system,
[22:35] Speaker 2: but otherwise encouraging food crops, you know, soy and corn
[22:38] Speaker 2: crops going into sustainable aviation fuels. So we need to
[22:41] Speaker 2: rethink what about a policy mechanism would be that doesn't
[22:44] Speaker 2: distort the system like that. There's other food implications here
[22:47] Speaker 2: as well, that in the case of soy or corn,
[22:50] Speaker 2: or even canola, you're crushing that. In the case of
[22:53] Speaker 2: soy and canola for the oil, that's roughly twenty percent
[22:57] Speaker 2: of the crop for soy, the rest of which is
[22:59] Speaker 2: me that meal is the vast majority of or almost
[23:02] Speaker 2: entirely of it is sold as animal feed for chickens,
[23:05] Speaker 2: for pigs in some cases, in some cases cattle, in
[23:08] Speaker 2: which case you're probably going to see this massive glut
[23:11] Speaker 2: emerge over time where feed costs trend to zero because
[23:15] Speaker 2: there's such a huge amount of feed coming into the
[23:17] Speaker 2: marketplace as a result of fuel production. That distorts meat prices,
[23:21] Speaker 2: distorts consumer choices, may or may not have climate outcome,
[23:25] Speaker 2: depending on what animals consume that feed, but it becomes
[23:27] Speaker 2: a really complex system that you need to think about.
[23:29] Speaker 1: So once we start to think about the world in
[23:31] Speaker 1: terms of land use, a lot of industries which seem
[23:34] Speaker 1: like they might be isolated from one another are increasingly
[23:38] Speaker 1: interconnected because we need to think about what we're doing
[23:42] Speaker 1: with land, and invariably, as you started looking at this
[23:45] Speaker 1: in detail, I would imagine that it raised more questions
[23:48] Speaker 1: than it did fully provide us with answers. So as
[23:50] Speaker 1: we embark on researching this more, what are the next
[23:54] Speaker 1: things that you're going to look into.
[23:56] Speaker 2: So there's a couple of big ones in terms of
[23:59] Speaker 2: new areas, new new demand on land. I think one
[24:02] Speaker 2: extra sector that we should probably add to this analysis
[24:04] Speaker 2: in the future is our offset projects forestry in particular.
[24:07] Speaker 2: But you know that's in many cases competing with these
[24:10] Speaker 2: sectors that we've modeled in terms of capability. We really
[24:12] Speaker 2: want to capture climate feedback loop here. So how are
[24:15] Speaker 2: crop yields going to change in the future Where crop
[24:17] Speaker 2: regions shift to some of that will free upland we
[24:20] Speaker 2: can longer crop it all right, but why not go
[24:21] Speaker 2: and put a solar array on it? And vice versas
[24:23] Speaker 2: likely lead to rad constraints where we need need to
[24:26] Speaker 2: extract more crop yield from parcels of land and beyond that,
[24:30] Speaker 2: you know, outside of the land project, this leads to
[24:32] Speaker 2: policy questions. For example, in South Korea, if you don't
[24:35] Speaker 2: have enough citicuitable wind sits and solar sites to decarbonize
[24:37] Speaker 2: your power system, what should you be thinking about? Should
[24:40] Speaker 2: you be thinking about nuclear again, or geotherm or how
[24:42] Speaker 2: are you incentivizing rooftop sol it or bring the capacity
[24:45] Speaker 2: into the urban environment. So lots of lots of technology
[24:48] Speaker 2: questions there as well.
[24:49] Speaker 1: And Hugh, certainly the part of the world you're from
[24:51] Speaker 1: Australia and the part of the world I'm originally from California,
[24:54] Speaker 1: we do love rooftops solar.
[24:56] Speaker 2: We do. We have a lot of land. That's the
[24:57] Speaker 2: thing the intend to for put solar everywhere once it's
[25:00] Speaker 2: cheap enough. But you know this kind of you know,
[25:03] Speaker 2: what this analysis has done is that it said least
[25:06] Speaker 2: cost outcomes need to have this additional filter on top
[25:08] Speaker 2: of it is least cost with available resource and land
[25:12] Speaker 2: here looks like it's going to be a constrained and
[25:14] Speaker 2: biting resource for a decent share of the world.
[25:18] Speaker 1: So really, to sum it up, how should we be
[25:19] Speaker 1: thinking about land and the competition between different things you
[25:24] Speaker 1: can put on that land.
[25:25] Speaker 3: There is a lot of competition for productive and ecologically
[25:29] Speaker 3: viable land and the resources service it provides, and this
[25:32] Speaker 3: is set to intensify more and more over the coming decades.
[25:36] Speaker 3: While some resources, let's say, like fossil fuels or clinical
[25:40] Speaker 3: miners that we've talked about are exhaustible. Others such as
[25:44] Speaker 3: timber or wood for biomass of fresh water, those can
[25:47] Speaker 3: be renewable. Land we can clearly put to different uses,
[25:51] Speaker 3: but there are limits to its abedants, and the quantity
[25:54] Speaker 3: of land is broadly speaking finding. At the same time,
[25:58] Speaker 3: human use and environmental change can also degrade land, which
[26:03] Speaker 3: will eventually diminish its productivity and limit the extent and
[26:06] Speaker 3: range of resources and services it can supply. In other cases,
[26:10] Speaker 3: people often talk about land restoration as well, but because
[26:14] Speaker 3: often the process of restoration of land can take much
[26:17] Speaker 3: longer than the process of degradation, land cannot be considered
[26:20] Speaker 3: a renewable source. The chans why it's so competitive, or
[26:24] Speaker 3: it can be very constrained in different parts of the world.
[26:28] Speaker 1: So, as with so many things regarding nature, we need
[26:31] Speaker 1: to begin with the end in mind.
[26:33] Speaker 3: We do so.
[26:33] Speaker 2: We spend a lot of time talking today about colocation
[26:37] Speaker 2: or doing multiple things on one part of the land,
[26:39] Speaker 2: but that's not always going to be possible, and really,
[26:41] Speaker 2: when it comes down to it, a farmer, for example,
[26:43] Speaker 2: in the future is going to face the choice between
[26:45] Speaker 2: continue to produce a food crop producing instead a likely
[26:49] Speaker 2: subsidized fuel crop, leasing that land to a solar plant operator,
[26:53] Speaker 2: growing a carbon offset project, and a number of other
[26:55] Speaker 2: applications as well that we haven't included in this modeling.
[26:57] Speaker 2: That will be an economic decision in the ad since
[27:00] Speaker 2: the clear policy guidance and zoning and direction on what
[27:03] Speaker 2: that land can be used for. That'll be who pays
[27:05] Speaker 2: the most and gives that gives that farm with the
[27:07] Speaker 2: most certainty. So we're going to hit constraints here in
[27:09] Speaker 2: decarbonization if we're really willing to flex the food system
[27:13] Speaker 2: and push the food system to its brink to lead
[27:15] Speaker 2: to this outcome.
[27:16] Speaker 1: And this list of things to consider when figuring out
[27:19] Speaker 1: what to do with the individual parcels of land. Do
[27:21] Speaker 1: you think for most of the world that's ultimately going
[27:23] Speaker 1: to come down to who owns that land or is
[27:25] Speaker 1: it going to come down to policy decisions and how
[27:28] Speaker 1: to optimize land use.
[27:30] Speaker 2: It will be both. We're already seeing policy moving in
[27:32] Speaker 2: the space. We're seeing some regulators come out with approaches
[27:35] Speaker 2: where they zone land, for example, pre approve one hundred
[27:40] Speaker 2: square columb of parcels for renewable projects for whoever goes
[27:42] Speaker 2: out there and builds projects. In other areas where you
[27:44] Speaker 2: can't develop. As an example, we see kind of disparate
[27:47] Speaker 2: approaches between some European nations Germany which has a renewables
[27:51] Speaker 2: permity approach that makes it really difficult to challenge a
[27:53] Speaker 2: project on the basis of nature of b adversity damage.
[27:56] Speaker 2: I'm kind of somewhat different approach in the UK, where
[27:59] Speaker 2: it's going you can challenge those projects and can be
[28:01] Speaker 2: difficult to build. Similarly, in the US, a real movement
[28:04] Speaker 2: the last few years in states or county level policy
[28:07] Speaker 2: that makes it difficult to deploy renewables where it has
[28:11] Speaker 2: an impact on the agricultural system. Our Burder and Canada
[28:14] Speaker 2: last year put forward policy that makes it really difficult
[28:17] Speaker 2: where it impacts the food system or it impacts views
[28:19] Speaker 2: as an example, and then federally in the US thinking
[28:22] Speaker 2: about ways that they could alleviose those tensions and push
[28:24] Speaker 2: renewables further. So policy is moving in very different directions
[28:27] Speaker 2: right now. It's not clear actually what's going to give here,
[28:30] Speaker 2: but it is very clear that there's this trade off
[28:32] Speaker 2: between nature and decarbonization.
[28:34] Speaker 1: Well, and hopefully as you too and your teams take
[28:37] Speaker 1: ever deeper looks into the different things need to be
[28:40] Speaker 1: considered in order to make these decisions. Hopefully those will
[28:44] Speaker 1: then weigh into what some of the decision makers actually
[28:47] Speaker 1: are thinking about as they move forward. Cost Us, Hugh,
[28:51] Speaker 1: thank you so much for joining on the show today.
[28:53] Speaker 3: Thanks Dana, Thank you very much, Thana.
[29:04] Speaker 1: Today's episode of Switched On was produced by Cam Gray
[29:07] Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a
[29:11] Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This
[29:14] Speaker 1: recording does not constitute, nor should it be construed, as
[29:17] Speaker 1: investment advice, investment recommendations, or a recommendation as to an
[29:20] Speaker 1: investment or other strategy. Bloomberg ANIF should not be considered
[29:24] Speaker 1: as information sufficient upon which to base an investment decision.
[29:27] Speaker 1: Neither Bloomberg Finance LP nor any of its affiliates makes
[29:30] Speaker 1: any representation or warranty as to the accuracy or completeness
[29:34] Speaker 1: of the information contained in this recording, and any liability
[29:37] Speaker 1: as a result of this recording is expressly disclaimed.

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