How BNPL works and how it’s spreading after the pandemic crisi

Although Buy Now Pay Later (BNPL) emerged before the pandemic, the attractive e-commerce payment option is soaring on post-COVID adoption.

BNPL provides short-term financing to online shoppers, allowing them to split the cost of purchases into affordable installments. For most shoppers, BNPL is a comfortable payment alternative since it lets them enjoy goods instantly while experiencing the benefit of spread-out, potentially interest-free payments.

While the trend began with innovative Fintech companies, global payment processors and banks like MasterCard and Goldman Sachs have taken notice. Consequently, BNPL is on an explosive growth trajectory, and estimates are that spending using the service will reach nearly $700 billion by 2025.

But what is behind the BNPL rise and how does it work?

How BNPL works

As the name suggests, BNPL lets buyers purchase goods, typically online, and pay later either in a lump sum or installments. As I see it, the process involves three parties: the merchant, the customer, and the BNPL provider.

Between the customer and the BNPL provider, the agreement is that goods will be bought and paid for at a later date (a grace period of sorts), usually within a few weeks or months of the purchase. During this grace period, the buyer can pay installments or the full debt at no interest.

But if the buyer does not make payment within the agreed period, interest may begin to run. Likewise, if the buyer misses an installment, they may be liable to pay late fees in addition to the outstanding installment.

Between the merchant and the BNPL provider, the agreement is that goods bought will be paid for immediately by the BNPL provider. This way, the merchant need not wait potentially several months to receive full payment and can enjoy optimal liquidity. In exchange, the merchant agrees to pay the BNPL provider a percentage of the sale price (between 2-8%) for the service rendered.

Due to the fact that BNPL provides ease and convenience for both buyers and sellers, the payment trend has secured wide approval. Some of the major BNPL providers globally include firms like Affirm, Ant Financial, Afterpay, Klarna, Zilch, Flava, MasterCard, Visa, and PayPal.

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Rapid spread of BNPL

As described by e-commerce platform VTEX, BNPL is currently the “fastest growing way to pay in the developed world.” To underscore just how fast the payment trend has grown since COVID, one study reports that BNPL use quadrupled in 2020.

While the trend is highest amongst younger shoppers, the affordable payment option is popular amongst adults of all ages, according to the BBC. Compared to credit cards, users see BNPL as a simpler and more transparent alternative since it avoids the complex terminology and conditions associated with bank cards.

The top reason why people adopt the payment method is its ease and convenience. Because it is instantly available and potentially more forgiving than credit card loans, buyers feel more confident adopting this payment option.

Likewise, merchants possibly attract higher average order volumes because people tend to spend between 10-40% more with BPNL. They’re also more likely to overcome buyer hesitancy because BPNL encourages more convenient returns – it’s easier to test out a product when you don’t have to pay immediately. It also works wonders for cart abandonment. In fact, Afterpay reports that 69% of millennials and 42% of Gen Z shoppers are more likely to complete the buying journey when BNPL is offered.

However, despite its clear advantages to buyers and merchants, there are several unavoidable red flags with BPNL. In my opinion, unrestrained lending will only help perpetuate the ongoing global consumer credit debt crisis. Besides, consumers are naturally prone to underestimating risks and overestimating benefits, which might work to put many people in more debt than they expect.

While countries like the UK are already working on potential regulations for the sector, the question is: can they work fast enough to pass needed guidance before consumers get in way over their heads?

How could the FED implement Quantitative Tightening?

In the past two decades, national banks pumped trillions into their economies to grapple with recession and stimulate economic growth in a process called Quantitative Easing (QE).

However, with inflation at a 40-year high, the Federal Reserve, alongside other central banks, is backtracking from this policy in a bid to raise interest rates and disincentivize borrowing, according to Business Insider.

While QE may have defined the response to the 2008 global recession and COVID-19, Quantitative Tightening (QT) is “the new watchword”.

But with plans to shave roughly $2 trillion off the biggest central banks’ balance sheets, there are concerns over the potential impact of the policy. Just as QE was novel when adopted in 2009, QT has never been done on this scale. How could the Fed implement QT and what effects are likely to result? Here’s what I think.

What is Quantitative Tightening?

Quantitative Tightening is a monetary policy aimed at reducing the size of a central bank’s balance sheet – that is, its assets and liabilities. The policy, also called balance sheet normalization, is the exact opposite of Quantitative Easing. In QE, the central bank buys long-term government bonds in a process that actively increases the size of its balance sheet, thereby flooding the economy with needed liquidity that in turn pushes interest rates down.

As Bloomberg explains it, when a central bank implements QE, “it increases the supply of bank reserves in the financial system, and the hope is that lenders go on to pass that liquidity along as credit to companies and households, spurring growth.” The Fed implemented this policy during the 2008 financial meltdown, increasing its balance sheet from $1 trillion to $4.5 trillion by 2018, and again during COVID-19, leading to an all-time high balance of nearly $9 trillion.

In contrast, the central bank reverses its policy under QT, instead working to lighten its balance sheet and reduce the money supply in the economy. It does this by cutting down on reinvestment of proceeds from maturing government bonds and raising interest rates. The Fed has announced its intention to move forward with QT plans, and analysts quoted by Business Insider suggest that could be as early as summer this year.

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How could the Fed implement QT?

As I see it, the Fed could adopt the same approach it took previously when it briefly implemented QT between 2017 and 2019. The first stage involved a steady tapering of its monthly bond purchases, which were roughly $120 billion a month as of November 2021. Current indications are that the Fed plans to end purchases by mid-March 2022.

At the next stage the Fed maintained its balance sheet for a three-year period during which it focused on raising interest rates. It took the first step towards a rate hike in December 2015, says the Federal Reserve Bank of St. Louis, and completed an increase from 0% to 2.5% by 2018. The Fed could take the same approach this time, although at a much faster speed.

QT will likely start gradually and then build up as it proceeds. Last time, the Fed started shedding its bond holdings at $10 billion a month, which eventually increased to $50 billion monthly at its peak. Projections are that the coming QT will proceed at a much more aggressive pace, possibly at $100 billion per month according to JPMorgan Chase & Co.

The big question though is: what effects will QT likely have on the economy? In theory, if QE helped lower interest rates and increase liquidity, QT should do the opposite and help bring down inflation. But no one, not even the Fed itself, really knows.

The last time the Fed attempted QT, the results weren’t encouraging. While the process started smoothly, stocks fell within three months (the S&P 500 fell by more than 6%), and after ten months of roller-coaster stock prices the central bank eventually pulled the plug. Might the same effects result this time around? I believe only time will tell.

Energy sustainability vs. Energy efficiency

The general view is that energy efficiency is good for the environment. After all, the less energy a device consumes, the better an outcome that provides for the environment.

Therefore, if devices consume less than they would have because of technological advancement, it seems logical to pursue and encourage those advancements that provide efficiency.

However, as I see it, the problem with this position is that while energy efficiency might help individual devices perform better and use less energy, that’s not necessarily good for the environment. If the goal is to eventually create a sustainable future that protects our natural environment, then energy efficiency does nothing for this in real terms.

Instead, energy efficiency only makes power easier to use and access since it is cheaper and more available, thereby increasing energy consumption in real terms. As a result, I argue in this article that while energy efficiency might provide nominal gains in energy usage, the eventual goal should be energy sustainability and sufficiency. And this should not merely be a shift to sustainable energy sources either, but a move towards less energy use overall, and I explain why here.

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Why energy efficiency might amplify energy use

Take the example of LED lighting vs. incandescent lightbulbs. A single incandescent lightbulb consumes roughly 60 kilowatt-hours (kWh) of electricity every 1,000 hours. Compared to this, an LED lightbulb uses 70% less energy, meaning a consumption rate of roughly 18 kWh per 1,000 hours.

Millions of devices, appliances, and other energy-consuming products operate on this same premise: comparing the device’s energy usage now versus what it could have been. Considering this, the world should consequently see a net reduction in energy use since millions and millions of everyday devices and industries now prioritize energy efficiency.

However, since energy efficiency became a big deal in the 2000s, the world has not seen a net reduction in usage rates. Instead, energy use has ballooned – global energy consumption has increased by 1% to 2% almost every year for the past half-century (per 2019 figures). The only exceptions are 1980 and 2009.

Putting this information in graphic terms, the World Atlas of Light Pollution reports that 83% of the world’s population (and 99% of Europe and the US) live under a night sky that is 10% brighter than normal. And estimations are that the world’s energy demand will only increase by as much as 37% by 2040, according to the International Energy Agency.

Why is unbridled energy use wrong?

The basic answer is that energy resources are not infinite. On the contrary, they are limited, particularly in the case of fossil fuels, and will eventually run out.

But I’m sure this is no news. A significant part of the green energy drive is founded on the acceptance that the development of renewable energy sources is necessary to prevent (or at least prolong) the depletion of fossil fuels.

However, rampant energy use is still undesirable, even with limitless amounts of renewable sources to call on. I have written in the past about how the exploitation of resources for sustainable energy can be detrimental to the environment, society, and economies of the countries where these resources are sourced.

The experience in countries like Venezuela and the Congo, which are significant producers of cobalt – a primary resource in lithium-ion batteries, is a testament to the dangers of an unbridled pursuit for greater efficiency.

Perhaps rather than look to create more efficient electric vehicles, we should promote bicycles and the use of public buses. Also, maybe buildings should incorporate more natural lighting and ventilation rather than mega installations of HVACS and temperature control systems.

World Bank: growth down, towards a two-speed recovery

The World Bank has warned in a recent report that, due to headwinds such as inflation and vaccine inequality, the world faces a two-speed recovery that could damage prior strides in global economic development.

Although there’s likely to be a general slowdown after the strong rebound in 2021, the results and any eventual recovery that follows are liable to create unequal outcomes.

The developed world could pull away from emerging economies as the former experience a sharper post-pandemic rebound compared to a slower recovery for developing countries.

Despite the strong demand that drove record levels of global trade in 2021, international growth now looks to be set for a contraction. In its Global Economic Prospects Report, the World Bank states that world growth will slow from the 5.5% recorded in 2021 to 4.1% this year and 3.2% in 2023.

Myriad factors will spur this slowdown: the exhaustion of pent-up demand, acceleration of new COVID variants, upsurge in inflation, intractable supply chain disruptions, and more. As I see it, this was always going to be the case since the shockwaves caused by the pandemic continue to reverberate in various sectors worldwide.

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In the same vein, I believe the anticipated “hard landing” that will create a chasm between the growth rates of advanced and emerging economies was also predictable. International development institutions such as the World Bank, the African Development Bank, the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development have warned of this.

Speaking at the time on the 6% global growth projected in 2021, Kristalina Georgieva, IMF Managing Director, noted: “The composition of the 6% is changing, with advanced economies broadly accelerating growth, whereas most emerging markets and developing economies are falling further behind. This is a dangerous divergence.”

However, despite early warnings, the world looks to be on track for precisely this dangerous divergence. The World Bank said that, while advanced economies will likely see a growth decline from 5% in 2021 to 3.8% and 2.3% in 2022 and 2023, respectively, they will return to pre-pandemic levels by 2023. But growth declines elsewhere will be steeper.

Comparably, 2023 will see emerging and developing economies still 4% below pre-pandemic levels. Worse, fragile and conflict-affected economies will fall 7.5% below their pre-pandemic path by that time, and small island states will likely be even lower, at 8.5%.

The rich forge ahead, as the rest fall behind

The causes of this anticipated two-track recovery are obvious and have been here for a long time. Massive debt levels, income inequality, infrastructure deficits, and reliance on commodity exports (subject to notorious boom-bust cycles) already put developing and fragile economies on a path that would see them unable to respond robustly to the pandemic.

As a case in point, while advanced economies could push massive spending budgets to aid their economies and provide stimulus, emerging and vulnerable economies either could not afford a stimulus or had to withdraw them before recovery in response to inflationary pressures. Unsurprisingly, Financial Times, quoting the World Bank, noted a 5% rise in per capita income within advanced economies in 2021, compared to a 0.5% increase in low-income countries.

Likewise, vaccine inequality, exemplified by the developed world purchasing five billion more doses than it needs for its citizens (enough to vaccinate Africa twice), and the stuttering rate of global vaccination showcases the difference in outcomes.

In the aftermath of the pandemic, these emerging and vulnerable economies are now faced with the bill of nearly a year of lockdowns and painful health-motivated restrictions. They are in deeper debt (global debt is at its highest levels in 50 years), inflationary trends are contracting savings and investments, and they now have less money to fund capital projects and economic initiatives.

As a result, we’re now going into a critical period for world peace and stability. Prosperity increases stability and vice versa. With the harsh incoming times for the developing world, we could see the hard-fought gains in global development over several years wiped away in just a few, making political and economic instability more likely.

I think the lesson here is that global peace and prosperity are a collective effort. The world now has a difficult task to manage the incoming challenge to foster and preserve a collective global charge in the right direction post-COVID.

China is rapidly converting to a Green Economy. What is changing and why?

Rapid industrialization and economic development have made China one of the world’s most influential and prosperous countries. The country’s meteoric rise in just under three decades is nothing short of amazing. However, the same factories and industrial centers that fueled Chinese economic growth also threaten its natural resources and create health problems for its citizens.

To the government’s credit, rather than deny the threat of climate change or double down on ineffective rhetoric, they made a concrete commitment to a green future and set out actionable policies to achieve this.

Today, China has made giant strides in its dedication to reducing pollution and, in my opinion, is also staking a credible claim as a global climate leader. As the Center for Strategic International Studies (CSIS) reports, while the country is currently the world’s largest emitter of greenhouse gases, it is also a powerhouse in renewable energy and is leading the race towards a sustainable future.

How did things change, and what did China do to reach this point?

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China’s green track record

When China started its drive towards economic prosperity in 1978, it was fueled primarily by coal. However, with the country taking over as the world’s largest climate offender in 2006 and spurred by studies establishing pollution as a cause of one million Chinese deaths yearly, the government has made sustainability a core policy goal, and this commitment is paying off.

China currently leads the world in the production of renewable energy sources. The country is the largest producer of wind and solar energy worldwide. Likewise, it is the largest foreign and domestic renewable energy investor and is one of the foremost manufacturers of green tech globally. In 2019, the country held the most world-class patents in water, waste treatment, and recycling. Likewise, Chinese environment-related patents have ballooned by 60x since 1990, compared to just 3x in the OECD area.

With the government’s move away from coal, the World Economic Forum reports that “huge progress has been made on air quality, and there are now fewer smog days in China’s largest cities.”

How did the country get here?

As I see it, China has achieved its current sustainability status due to concrete and measurable planning towards climate goals. The country has made the drive to a green future a part of its government planning since 2001. Since then, each of the country’s five-year plans (FYPs) has included revised and steadily improving objectives for reduced pollution and greater climate action.

Further, as the Mercator Institute for China Studies reports, the country progressed under its 13th FYP (2016-2020), with virtually sixteen out of sixteen green targets met, thereby laying a foundation for more significant action in the 14th FYP.

The government has backed its climate commitments with funding too. In July 2020, the country set up an ecological environment fund that raised 88 billion Chinese yuan (CNY) as of January 2021. The fund is on track to become the second-largest national fund in the country.

Apart from this, China is using various strategies to procure its climate change objectives. This includes designating special green development zones such as Shenzen, Guilin, and Taiyuan. These cities focus on specific sustainability goals such as sewage treatment and waste utilization, desertification, and air and water pollution.

Private companies are also participating vigorously in the green drive. For instance, Alibaba helped create a Green Digital Finance Alliance, pulling other private corporations into the sustainability race, and launched an app (Ant Forest) to gamify carbon tracking. The app is already reported to have helped save 150,000 tons of CO2 as of February 2017.

There’s still work ahead

While the Chinese progress has been impressive, it’s important to clarify that the country can still do more. For instance, the Chinese share of renewable energy in overall power generation is still 12.7% (as of January 2021), compared to 14% in the EU. Also, while the country continued to implement many green targets in 2020, China added nearly 20 gigawatts of coal capacity in the first half of the year and approved another 48 gigawatts of additional power from new coal-fired plants.

However, as I see it, the Chinese progress on climate looks likely to bear positive fruits for the overall transition to clean energy. Western nations will be hard-pressed to emulate the Chinese to compete in green tech and allied advancements and show that the West is just as invested as the East in the move to arrest harmful climate change.

Inflation hits middle-class consumption and remains an uncertainty for the economy

As the world looks to bounce back from the 2020 COVID-induced slump, inflation is playing a larger role than anticipated in global economies. A slower than expected economic recovery, a flagging labor market, and supply chain disruptions have created concerning inflationary conditions, affecting middle-class families globally.

For instance, the UN Food and Agriculture Organization reports that food prices rose for the third straight month in October 2021, climbing to their highest levels since 2011.

Likewise, in Europe, annual inflation was reported at 5% in December 2021, with energy costs driving higher figures at a rate of 26.5%. The higher cost of energy is in turn pushing up the prices of necessaries, from heating to transportation, food, and gas.

While inflation is a global concern, data shows that middle-class families are feeling the pinch of rising prices more. Here’s why I think that might also be bad for the global economy.

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Many teams perform well on some of those traits, but few perform strongly on all four. Executive teams that make time to talk about previously undiscussable topics, including ideas seen as above criticism as well as strained relationships, can bring attention to their shortcomings and accelerate overall results.

Inflation has hit the middle class hard

As a general rule, inflation impacts individuals and families by reducing their spending power. However, the trend is usually tougher on lower-income families because they have less money to spend than the upper-middle class and the rich. For instance, the IMF found that people who identify themselves as poor are 10.5% more likely to name inflation as a major concern than those who identify as rich.

According to the Penn Wharton Budget Model, low and middle-income families spent 7% more in 2021 on the same products they purchased in 2020 and 2019. On average, they spent $3,500 more on the same products as they did two years earlier.

Similarly, the World Economic Forum states that one survey of 20,000 respondents from 30 countries found that at least half reported higher healthcare, clothing, housing, and entertainment costs. Seven out of ten people said that they expected the price of food, gas, public transport, and groceries to increase even further.

According to Reuters, Argentina reported the highest inflation rates, with prices rising to 54% as of October 2021. While countries such as China and Japan have reported the least inflation figures (at 1.5% and 0.1%, respectively), the general trend paints a troubling picture overall.

Food prices are more than 6% higher than in 2020, and gas prices jumped to 58% at the end of 2021, forcing these families to devote more of their budget to necessaries. In many cases, the inflationary trend is forcing middle-class families to explore cheaper alternatives to everyday staples, according to NBC. More people with incomes ranging between $50,000 to $100,000 are looking for deals in stores that traditionally serve rural and low-income shoppers.

Why this is bad for the economy

The middle class is a vital driver of business within the global economy – they sit at both ends of the table as business and consumer.

I see one reason for this as their overwhelming representation in the ownership of SMEs, which constitute the vast majority of businesses worldwide. Without a strong and financially stable middle class, more businesses will likely suffer cash flow issues and struggle to keep shelves stocked or services going.

As consumers, inflation takes more money from middle-class households in return for fewer goods. Therefore, they suffer reduced purchasing capacity and are ill-equipped to provide the demand that helps businesses arrest cash flow concerns. In effect, each phenomenon reinforces the other and produces a risk that all players will be caught in a vicious cycle.

Eventually, the economy bears the brunt of middle-class woes. Research shows that higher middle-class incomes presage better economic growth overall. Likewise, an ailing middle class is bad news for the economy, as high inflation levels leave them with less money to save, invest, or spend.

Unfortunately, it’s not certain how long this inflationary trend will continue or what might be done to arrest the trend. Seeing as the root causes are numerous, it is more likely that countries will provide whatever support they can through subsidies and stimulus payments while looking to the market to correct itself in due course.

Moving Towards Renewable Energy Sources – The Journey So Far

The world uses more energy today than ever before – roughly 575 quadrillion Btu (2015), according to the US Energy Information Agency.

Although serious improvements in how we create and store energy mean the resource is cheaper and more accessible than ever, we’re still largely drawing from a finite and quite problematic well.

Thankfully, renewable energy sources have the potential to fuel our energy appetite without destroying our planet, and this is driving a race towards the green economy. But how’s that going?

The journey towards green energy

For several years now, renewable energy has been steadily gaining on fossil fuels as a major energy source. In 2020, renewable energy production reached an all-time high of 200 gigawatts, outpacing new installations in fossil fuels. In fact, of the entire energy sector, green energy was the only part to experience growth in 2020.

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In my opinion, much of this growth can be attributed to changing attitudes towards sustainable energy sources, both from within corporate boardrooms and government chambers. There’s a steady recognition that:

  • Fossil fuel sources are exhaustible and not easily replenished (often taking millions of years). While the world still has massive stores to draw on, these will eventually run out.
  • Fossil fuel use is not only decimating our physical environment; it’s slowly warming up the earth – and this is a critical precursor of devastating climate change.

Although there’s still significant pushback from global political and industrial action groups, countries and corporate bodies around the world are taking concrete action with increased investments in solar, wind, hydropower, and geothermal energy sources in what is now being termed something of an “energy arms race”.

Are we making any headway?

Despite all of the noise about green energy, however, there has been much less progress than desired. According to the Renewable Energy Policy Network for the 21st Century (REN21), while the share of new clean energy installations has outpaced new fossil fuel installations, the big picture still looks bleak.

Global energy demand has matched pace with renewables since 2009, meaning that in real terms, sustainable energy still only contributes a negligible amount to global consumption. REN21’s Renewables Global Status Report 2021 indicates that renewable energy accounts for only 11% of global energy use, up from 9% in 2009.

Although clean energy in electricity generation particularly is steadily growing, there are still significant questions over application in energy-intensive industrial processes. For instance, cement kilns require up to 1,400° C of heat, but this is challenging to produce without burning energy-dense fuels that sustainable sources do not currently provide at scale.

In addition to this, there is still significant foot-dragging from the worst climate offenders, with many lacking the political will to do more than make minute adjustments. As REN21 reports, “Most of the world’s largest countries and greatest emitters of greenhouse gases lack clear, economy-wide objectives to shift to renewables in all sectors.”

As I see it, more targeted and sustained action is necessary if we are to meet the demands of clean energy investment and truly begin to chart a course towards a world powered by renewable energy.

Where finance must meet science

I believe that some of the biggest obstacles we currently face in pushing towards green energy are difficulties of science and finance, and this is also where we might find their solutions.

While we have seen great leaps in renewable technologies like solar photovoltaic cells and artificial carbon sinks, the technology doesn’t scale well enough at present. But this might be due to insufficient investment in the necessary science.

REN21 reports that global investment in green energy reached $303 billion in 2020, a mere 2% increase over the previous year, while annual investment must at least triple by 2030 if the world will reach its climate and sustainable development goals.

With greater investment in clean energy tech, the world stands a better chance of creating a breakthrough that not only makes a wholesale shift to a green economy possible, but also profitable. However, this progress might only come when the world of finance pushes on by itself rather than wait for government to lead the way.

The electric revolution in the sky

The electric revolution in European skies could take just a few years. Judging by the speed at which things are moving, particularly in Scandinavia, the first to see the dawn of zero-emission aircraft will be passengers in the far north, where a number of experimental initiatives are taking shape to get small battery-powered aircraft into the air: models that have already attracted the interest of regional carriers.

Some have announced their intention to buy the small, 9- to 19-seat prototype electric aircraft, which are essential for extensive routes in the vast northern region. The new battery-powered fleets would be available from 2026.

The type of demand for air transport is specific to northern Europe, with almost half of the operators covering a distance of less than 200 kilometres and often carrying fewer than 10 passengers.

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Short-haul routes are not economically viable for carriers, except when they are generously subsidised by the state to provide a public service to the community; the advent of electric aviation would open new frontiers to and from provincial airports. But not only that. Although it too is beginning with trials of small aircraft, the aim of the partnership between Wright Electric and the British low-cost carrier EasyJet is to produce 186-seat electric aircraft by the end of the decade. Interest in battery-powered aviation is also growing in southern Europe: in Spain, Volotea and Air Nostrum are partners in a project to convert turboprop Cessna Caravans into electric-powered aircraft, an operation they hope will be co-financed by the Madrid government, as well as the EU Next Generation funds. It’s not just about developing the aircraft of tomorrow. The advent of electric aviation in the next five years will also require strong ground support and the creation of the necessary infrastructure to recharge the batteries after landing.

Northern Europe could therefore be an excellent laboratory for the future of electric aviation, as it is obvious that the needs are very different. From small local flights to transcontinental ones, the solutions will have to be different and will surely involve technologies that are, for the moment, only at an embryonic stage. Europe with seven of its members, has set up a project that some compare to the Airbus project (EBA). It involves all the requisite levels, from basic research to practical application. The first results are expected soon, because in this field as in others, competition is fierce. Japan is a few steps ahead (22% of world production is by Panasonic) and this is due to the fact that historically Asian countries are strongly linked to this sector (China, South Korea).

The conclusion I can draw from this brief prospective view of aeronautics is that in this field too things are clear; there will be no turning back. Fossil fuels will soon be behind us, even in the sectors where this was least obvious to us.

The latest frontier in drinking water production

From my point of view, a sensible ecological transition must not make us forget about mankind. As Westerners, our focus is on increasing the share of renewable energy in comparison to fossil fuels.

The main resource that humans need is fresh water, before any other form of food and energy. I was particularly interested in the work of an innovative NGO.

 

The NGO GivePower has constructed and installed the first solar-powered water treatment plant on the coast of Kiunga, Kenya, to make seawater safe to drink. A revolutionary system that could change the lives of people forced to live in such poverty that it makes it difficult to afford basic necessities and solve the problems associated with the future availability of clean water caused by relentless climate change.

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This system, powered by solar energy, could be a lasting solution to the problem of lack of clean water that affects a large part of the world’s population and could become even more severe due to the dramatic effects of climate change.

Water is a precious commodity and essential for human survival, but the speed at which climate change is progressing suggests that its scarcity could increase, with devastating consequences for all of humanity.

It is estimated that by 2028, half of the world’s population will live in areas threatened by water scarcity. Freshwater, which currently accounts for 2.5% of the world’s water, is being drastically reduced due to global warming, which is affecting glaciers and icebergs and causing them to slowly disappear.

Although these doomsday scenarios are still far from the imagination of the segment of society accustomed to living in affluent conditions, the major problem of inaccessibility to fresh water is real and currently affects some 2.2 billion people worldwide.

A recent report by UNICEF and the World Health Organisation found that one in three people worldwide lack access to safe drinking water and use contaminated or untreated water for washing, cooking and drinking.

The situation is particularly critical in sub-Saharan Africa. That’s why it was decided that Kenya was the most appropriate place to start testing this revolutionary plant, which has been turning salt water from the Indian Ocean into drinking water for about a year, improving the lives of the people of Kiunga.

A significant revolution for a village that is regularly hit by drought for part of the year, forcing its inhabitants to travel for about an hour before reaching the first available source: a well connected to a reservoir whose water is dirty and contaminated by potentially deadly parasites.

The success of this first plant has prompted the NGO to set up other plants to address and solve the problem of drinking water scarcity in different parts of the world, such as Colombia and Haiti.

The facility developed and built in just one month is called Solar Water Farm and required an investment of $500,000.

The solar farm is a desalination plant. It includes the installation of solar panels capable of producing 50 kilowatts of energy, high-performance Tesla batteries to store the energy produced and two water pumps that run 24 hours a day.

Unlike traditional desalination plants, which consume large amounts of energy and make the process extremely expensive, Solar Water Farm manages to produce better quality water without causing negative environmental impacts, usually generated by the extraction of salt, which produces polluting residues harmful to animals and plants.

The facility, located along the coast of the town of Kiunga, Kenya, uses advanced filtration systems to turn salt water from the ocean into drinking water.

The ambition is big, and it’s all the more inspiring for it! Every 90 seconds a child dies as a direct or indirect consequence of lack of water…

Why hydrogen is becoming more interesting

There is a lot of interest and hope in hydrogen, but what exactly are we discussing?

I hear a lot about hydrogen and it is difficult for me to understand exactly what is involved. So here’s why I’m offering a perspective after doing a fair degree of research.

 

Hydrogen is an extremely common element: 90% of the universe is composed of hydrogen (H) atoms. It is important to note that, like electricity, hydrogen is an energy carrier. It is an element that is used to transport energy from point A to point B.

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The main advantage of hydrogen is its high energy density. One kilo of hydrogen can store three times more energy than one kilo of petrol, and one hundred times more than the best electric batteries!

This characteristic makes it possible to consider hydrogen as a very interesting alternative for the transport sector. Hydrogen increases the range of vehicles, especially those that travel long distances (cars, trains, heavy vehicles). Moreover, hydrogen is a gas; filling up a vehicle with a gas is much faster. While it takes 6 to 8 hours to recharge a vehicle’s electric battery, it only takes a few minutes for an electric vehicle that runs on hydrogen. Hydrogen allows both more energy to be carried, and therefore allows for longer distances to be travelled, and for a faster recharge.

However, at present, 95% of the world’s hydrogen production is made from fossil carbon resources (oil, coal, natural gas). For this reason, it is referred to as grey hydrogen. This production emits greenhouse gases and is therefore unsustainable in the event of a massive increase in the use of hydrogen.

Another option is to produce hydrogen from a very simple reaction: water electrolysis. An electric current is passed through water (H2O), which separates two molecules: hydrogen (H2) on the one hand and oxygen (O2) on the other. This process makes it possible to produce pure hydrogen in a clean way, provided that the electricity used to produce it is clean and therefore of renewable origin. Anyone interested in energy and ecological transition issues has therefore heard of hydrogen. But we can only talk about green hydrogen if it is produced from green electricity. This is where the challenge lies for an industrial scale roll-out.

The obstacles are not technological, since progress in this area has been remarkable in recent years. The issue is rather that of the primary energy source: green electricity, from photovoltaic, hydraulic or wind sources for example, must be available to produce green hydrogen. We know that the production of this type of energy is currently limited, so this is where we need to concentrate our efforts.

The state of affairs has changed considerably over the last 20 years. The technology is now advanced enough to allow its application in industrial tools and systems. The progress in performance is enormous. At the same time, the energy efficiency of fuel cells has been improved and prices have been reduced by a factor of 30 in 20 years. Cheaper and more efficient, the hydrogen sector has reached technological maturity.

At this point, I really think that hydrogen is a major asset in the transition to all-electricity. Europe is continuing to develop the sector, but the example is currently being set by Japan, which has the largest hydrogen-powered car fleet in the world and is aiming for carbon neutrality by 2050, thanks in large part to hydrogen.

I, myself, hope that the Japanese theoretical model can be applied as a practical model.