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SIPs competition: the finalists

SIPs competition: the finalists

20 May 2020

From over a hundred entries, we picked the seven that would have the biggest impact, that are presented below in no particular order. For more competition entries and other suggested SIPs, please visit

Central bank "brown" collateral haircuts

Suggested by Andrew McConnell

Sensitive Intervention Point:  Climate change takes place in a socio-economic context fraught with barriers and limitations that inhibit effective mitigation. Despite the increased frequency and intensity of extreme weather events associated with climate change and our ever improving understanding of the dramatic consequences of inaction, politicians are still failing to enact adequate policy measures. Structural characteristics of liberal democracies, credibility, short-termism, high levels of public and private indebtedness, and a failure to adequately price climate risk in the financial sector are among the key limiting factors impeding conventional climate policy. In light of these limitations, increased attention has been devoted to the role of central banks in climate mitigation and how green monetary policy might be able to circumvent many of the pitfalls of conventional climate policy. Despite their enormous power to influence markets, central bankers are hesitant act for climate mitigation.

However, unlike other “green” monetary policy instruments, reducing the value of collateral posted with the central bank based on its carbon intensity is an effective and unobtrusive way to shift investment from “brown” to “green”. As we have seen with COVID19, effective crises responses require strong policy initiatives from both governments and central banks. Given that the effects of climate change on both human life and economics will be considerably larger than those of COVID19 we will require central bank intervention in the mitigation process. A “green” reformulation  of central bank collateral frameworks is a good place to start.

Actor: Central Banks (specifically the ECB).

Trigger (intervention): Introducing “brown” collateral constraints for central bank liquidity issuances. When large financial institutions receive liquidity (credit) from central banks they are required to post assets as collateral for the credit. In order to compensate for unpriced carbon risk, central banks could reduce the value of assets posted as collateral based on their carbon intensity. This would (a) decrease the price and demand for carbon intensive assets and (b) increase (decrease) the financing costs for “brown” (green) investments leading to an cheaper, faster, and hence easier green energy transition.

Criticality: Currently there is significant interest and willingness by central bankers to participate in climate mitigation. That sentiment should be capitalised upon with the implementation of a policy.

Feedback Dynamics: If even one of the major central bank starts to include “brown” haircuts into their collateral framework the financial industry will knock on the carbon risk price adjustments into assets markets. These price adjustments would then perpetuate to some extent through the global financial system without the need for international political agreements. Additionally, if one of the major central banks introduced “brown” haircuts it will set a strong precedent in policy for others to follow, in turn strengthening the price adjustments.

Timescale and scalability: Given that most central banks already have a comprehensive collateral framework and already apply collateral haircuts adding an additional carbon risk parameter could be quickly implemented. Furthermore, the carbon risk assessment used by central banks could be used as a template for fund and assets managers.

Net zero aviation

Suggested by Ben Watson

Sensitive Intervention Point: Greenhouse Gas Emissions from Aviation are responsible for 2-3% of emissions worldwide. Jet planes have lifetimes measured in decades and take decades to develop, meaning jet planes that burn kerosene will continue to be around for decades. Electric planes can only carry smaller numbers of people and travel limited distances (a few hundred miles), while Hybrid Electric planes are more promising they still require years of development till they are available on the market, whereas current planes rolling off the assembly line will be flying in 2050 and beyond. A better solution is net zero synthetic jet fuel. This is synthetic jet fuel made from a combination of C02 pulled out of the air and hydrogen from surrounding air/water – powered by renewable electricity. This solution can be a full substitute for traditional jet fuel, truly carbon neutral, and displaces no food and agriculture.

Actor(s): This intervention exists in early stage pilot form and requires policymakers as well as the flying public and large corporates to demand sustainable aviation fuel of airlines.

Trigger (intervention): Sustainable Aviation Fuel is in the process of going through international standards. Once a standard is achieved various organizations, policies, and purchasing policies can incentivise use of standardized sustainable aviation fuel.

Criticality: Currently, many airlines are being bailed out due to Coronavirus. Some of these bailouts, such as Air France’s, contain strict carbon reduction clauses which may induce airlines to enter into supply agreements for SAF in the absence of a carbon tax.

Feedback Dynamics: Social network effects are helpful here because the ecosystem for corporates and organizations (from aviation climate extinction protesters, to google employees on walkout) demand progress that is more than offsetting emissions in other places. This solution changes the pollution from every flight flown with it, without stranding the assets of airlines or major oil producers providing an avenue for systemic change.

Timescale and scalability: available in smallbatch currently on select flight routes, programs are underway to fund more broadly at the single airport level within the next year or two. This approach would require large public adoption to roll-out; but, it can be done within 5-10 years.

Post-carbon corps network

Suggested by Topo Mokokwane

Sensitive Intervention Point: A key discussion point in climate change mitigation is the balance of responsibility between individuals and corporations. Though individuals are increasingly motivated to reduce their carbon footprints, this is a necessarily slow process because it implies a change in behaviourally ingrained social practices. The incidental changes in business practices that follow and support these social changes are therefore also slow, in light of the 1.5℃ and 2℃ Paris Agreement ceilings. Consequently, expecting demand-side changes to lead supply-side changes will almost certainly leave mitigation targets unmet. However, each unit from the supply-side (corporations) captures a much larger proportion of CO2 emissions than demand-side units (individual consumers); corporate action is therefore critical.

Actor(s): Operated by an independent body (the key actor), such a standard would create transparency by avoiding the greenwashing associated with sustainability self-reporting. Especially as the standard develops, government will be another key actor. Its backing/accreditation/partnership will be vital in granting legitimacy and in allowing governments to more carefully monitor business operations and apply any legal/regulatory repercussions as necessary for CPR. The more widely advertised and known the standard the more effective a selection pressure it would create.

Trigger: That targeted selection pressure be designed to propel mitigation efforts among corporations. This would take the form of a standard against which corporations can be audited/measured for the sustainability of their operations.

Criticality: The growing tide of mandatory corporate responsibility (CSR) schemes is the criticality which is paving the way for change.

Feedback Dynamics: Organisations operating favourably by this sustainability standard would join a publicised network of other such organisations, celebrated with an annual gathering to create an accessible selection standard in people’s minds showing them where to dedicate their business to live more sustainably, more effortlessly; thereby producing a feedback loop. Transmitted up the value chain, this knowledge could promote additional feedback by promoting restructured professional networks favouring the operation of sustainable businesses.

Timescale and scalability: The scale of possible impact is theoretically worldwide (geographically) whilst impact-wise it is proportional to the demand for sustainable lifestyles and technical capacity of corporations to change. Therefore public figures would also be important actors , as their influential voices reach far and wide. I envision this intervention in two timescales : Stage 1 can be rapid - whereby businesses are joined to the standard and marketing makes it widely known (1 – 2 years); whereas Stage 2 involves refinement of the standard and partnerships long-term (2+ years).

Carbon-free careers:  a manifesto from UK students and universities

Suggested by Alice Evatt

Sensitive Intervention Point: A public Manifesto signed by student bodies and universities across the UK demanding viable, hard net-zero commitments both from their own universities and the companies that recruit within them.

Actors: I would initiate this SIP as the Outreach Director of the Oxford Climate Society, and look to collaborate with the Student Union, Oxford University Careers Service, and academics/administrators across Oxford.

Trigger: Uniting students and universities across the UK to sign the Manifesto with the aim to announce it at pre-COP, followed by a series of high profile events, targeted media, and dissemination to key stakeholders (parliament, WEF, etc).

Criticality: This SIP would unite complimentary but as yet unconnected actors and developments, including Oxford Careers Service’s recent introduction collecting recruiters’ net-zero information (this has received international interest), the OCS/SU Oxford Climate Action Plan, Although Student SIPS (Fridays for future, Greta) have been powerful, there remains a lack of unified University-level SIPs. The Manifesto would empower students to leverage their talents with the corporate sector to demand change, and build on momentum regarding corporate social responsibility at Davos WEF. Crucially, this SIP would present a way to ensure that such corporate responsibility and change are realised.

Feedback Dynamics: This SIP can be self-reinforcing. As students demand more net-zero business models, businesses and organizations will increasingly prioritise these models to improve their recruitment effectiveness. In turn, this may drive young people who are not already focused on those values to include them in their employer selection criteria when seeking education and employment.

Timescale and scalability: This SIP can be swiftly implemented, to be presented at pre-COP. It has strong scalable potential. The Manifesto could be adopted by students, colleges, and universities world-wide. Importantly, it could be extended to schools, as not all those entering the workplace will go via university. This SIP therefore has the power to create a global movement for carbon-free careers.

Road transport decarbonisation: back to the future

Suggested by David Hendry

Sensitive Intervention Point: There is a potentially revolutionary solution for decarbonising vehicular transport beyond the current emphasis on battery powered electric or hydrogen fuelled cars. Tesla recently demonstrated a simulation of an electric vehicle that sandwiched graphene nanotubes (GNTs), which are electrode supercapacitors, between two Faraday cages for the roof and the inside of a car. By doing so, the car itself becomes the battery.

Actor(s): Major transport manufacturing companies such as Tesla.

Trigger: Lowering the cost of making graphene nanotubes from a current high to a low would be a 'sensitive intervention point'. Researchers have already developed `graphene in a flash’ from plastic waste which could lower graphene prices dramatically.

Criticality: The transport sector urgently needs a low carbon solution. GNT technology could solve many existing problems such as range and recharge rate for cars.

Feedback Dynamics: Experience curves, Wright or Moore’s law for the GNT tubes in particular. Further feedbacks or spillover effects going from advances in road transport to other forms of transport - rail systems not yet electrified could have diesel trains replaced by GNT-supplied pure electric ones without having to electrify the enitre line (very expensive); and given GNTs are so light, we could even possibly see short-haul GNT electric aircraft.

Timescale and scalability: By not demonising road transport for its CO2 footprint, GNT vehicles would allow old cars to be replaced at a rate matching the extension of renewables needing increased storage. This could be quite rapid as the basics of battery-electric cars are established, so employment can be maintained in vehicle manufacture and all its ancillary industries as well as new graphene-based ones, which would be especially beneficial for the first producers who could create large export markets,

Impact traffic-lighting for everyday products

Suggested by Grace Budgen

Sensitive Intervention Point: People in many countries will be familiar with the “traffic lights” food-labelling system whereby a product’s fat, saturates, sugar and salt content are ranked by colour. One sensitive intervention would be to introduce an environmental ranking system which indicates the product’s impact over several domains. A label of this kind could state per-unit greenhouse gas emissions, loss of biodiversity, water usage and single-use plastic, with an overall composite rating. This would enable consumers to make informed choices at the point of purchase and would compel retailers to consider the impact of their supply chains.

Actor(s): This project would begin by engaging with food and clothes retailers, because these two industries have an enormous impact on climate change. The food industry accounts for 26% of global greenhouse gas (GHG) emissions (Poore and Nemecek, 2018), while in fashion, the production of polyester alone is responsible for more than 706 million tons of GHGs per year (Muthu, 2016). Each of these industries therefore has the potential to create positive feedback loops across other sectors through their supply chains.

Trigger: The intervention for this SIP is to introduce an environmental ranking system on retail products which indicates the product’s impact over several domains. The label could state, for example, per-unit greenhouse gas emissions, impact on biodiversity, water usage and plastic production. Ideally, the label would also contain a qualitative category for cyclic/linear production and an overall composite rating. The system would enable consumers to make informed choices, increase climate literacy, and “nudge” retailers towards more responsible choices.

Criticality: Our system is ripe for change in several ways. Society cares increasingly about climate change and sustainability. There are many existing climate labeling schemes, the proposed traffic light system could build on these bodies’ methods for impact measurement and verification. Many consumer-facing retailers are already primed for this intervention. Fast-fashion businesses are scrambling to be recognised as climate-conscious, as evidenced by a stream of sustainability pledges from the industry. More and more clothing retailers are also committing to sustainability schemes such as the Better Cotton Initiative and CottonConnect. The proposed intervention should ride this wave of green marketing to gain traction.

Feedback Dynamics: The implementation of traffic light impact labeling will:

  • Create a bandwagon effect: this intervention will have cascading impacts on peer retailers through a ‘race-to-the-top’ effect (both in the UK and more widely).

  • Create systemic positive feedback loops through supply chains (non-linear amplifiers).

  • Create social network effects: the scheme will improve climate literacy and increase public salience for ambitious climate action at the national policy level more broadly.

  • Drive cost dynamics: as more people buy sustainable products, they will become cheaper over the medium-term.

Timescale and scalability: These sectors both have widespread and undiscriminating visibility - we all interact with these industries in daily life. By launching this SIP as a voluntary scheme, we can bypass the constraints, delays and unpredictability of a policy-based intervention. Working closely with the pioneering retailers, we can ensure the SIP is implemented with speed and agility.

True permanence

Suggested by Stuart Hillen

Sensitive Intervention Point: We have a carbon storage problem. All credible emissions reduction pathways with a good chance of keeping warming under 1.5°C, in line with the Paris Agreement, require large volumes of permanent, geological storage of carbon. But the technologies required have not been deployed at a scale large enough to drive needed cost reductions, and few policies explicitly support the growth of this sector. A new, net-zero compliant carbon offset product based on permanent storage would harness the private sector’s willingness to pay to go “net-zero”, and offer a new stream of financing to get carbon removal projects off the ground.

Actor(s): The number of organisations making net zero emissions commitments is snowballing. New carbon capture and storage technology pathways (remineralisation, direct air capture, etc.) and companies are proliferating, but they struggle to finance projects without long-term certainty that someone will pay them to store carbon. The missing element is a set of actors with an innovative business model and product, linking those who demand affordable decarbonisation with those who can provide that service. Ultimately, enduring policy support for carbon storage will be needed, but early action in the voluntary carbon market is the SIP to drive the system to the point where governments will be compelled to act.

Trigger (intervention): Create a net-zero compliant carbon offset product for organisations with net zero targets, backed by a portfolio of both geological and nature-based carbon removal projects. Harnessing funds from the voluntary carbon market - which is set to multiply in response to today’s net zero zeitgeist - to fund projects that are not otherwise being underwritten otherwise will be catalytic. By aggregating demand for negative emissions among smaller entities, larger carbon storage projects can be certified and financed on the basis of secured offtake agreements. Just as Power Purchase Agreements (PPAs) supercharged renewable energy deployment, standardised “Carbon Storage Agreements” between negative emission providers and organisations who want verifiable proof that they have neutralised their unmitigable emissions could tip the scales and inspire a first wave of carbon storage projects.

Criticality: Conditions are ripe for a paradigm shift in how we manage our carbon stocks. There has never been more enthusiasm among companies and non-state actors to drive climate action, and the coronavirus pandemic doesn’t seem to have meaningfully sapped this energy. Oil & gas giants, once staunch opponents of climate action, are suddenly committing to go net-zero (see Total, BP and Shell), including by decarbonising the carbon embedded in their products. Age old enemies of the environmental movement may no longer pose a roadblock, and could ironically become critical allies.

Feedback dynamics: The more people understand that achieving net zero requires high-quality offsets backed by geological storage of CO2, the more demand for such projects. The more CCS projects that are built, the faster costs fall through learning-by-doing and cost-of-capital reduction due to lowered perception of risk. The cheaper projects get, the more carbon storage can be delivered to offsetting entities per unit invested - firms with lower willingness to pay are then able to offset, which drives further demand and therefore scale benefits. As soon as carbon storage can be delivered at scale, companies can find innovative ways of paying for it (e.g. green cement, “decarbonised” natural gas) and policymakers can justify new support models (e.g. contract-for-difference for CCS, a carbon take back obligation, etc.).

Timescale and scalability: Carbon storage needs to scale up from 36 million tons of CO2 per year (MtCO2/yr) today to several billion tons/yr over the next 30 years. This will require robust policy support (e.g. governments paying or requiring carbon-intensive industries to pay for sequestration) and a massive mobilisation of human and financial capital. But before those pieces come together, the voluntary carbon markets can act as a catalytic force to finance the first wave of projects. In 50 years, we will look back at Carbon Storage Agreements for carbon storage much as we look back on Power Purchase Agreements as the force that drove solar and wind power from niche, expensive applications to omnipresent providers of clean energy.

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