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Future Trends with Dr Nadia Ameli
8 February 2021
Future Trends is a series of interviews with researchers at The Bartlett to hear their take on future trends and developments for the built environment in 2021.
This week, we spoke to researchers across The Bartlett Faculty of the Built Environment to find out their predictions for future developments and trends in 2021.
To kick off our series we spoke to Dr Nadia Ameli, Principal Research Fellow at the UCL Institute for Sustainable Resources. Nadia is an experienced researcher on economic, finance, and policy aspects of climate change and related energy issues. Since starting her PhD, her work investigates questions around financial aspects of green investments and how finance can help boost the low-carbon transition. She’s recently been awarded an ERC starting grant focusing on the role of climate finance to meet the Paris goals (2019-2024).
Which trend(s) do you see developing in your area or discipline in 2021?
More climate diplomacy. After the US election, the three major economies – the US, the European Union and China – could re-join forces to tackle climate change (greater international collaboration on technical development and investment, or action on specific economic sectors). China and Europe committed to net-zero emissions by 2060 and 2050, respectively, while US is re-joining the Paris Agreement.
More touches of green recovery. Many countries are using their recovery plans to support climate priorities. For example, The European Commission recently announced that it will be raising 30% of its COVID-19 recovery fund – EUR225 billion – through green bonds, making the EU by far the largest issuer of such instruments. US President Joe Biden pledged to invest $2 trillion in clean energy.
Market euphoria. Financial markets boomed during COVID-19 and investors have a growing appetite for green assets. The rise in savings among the people who have avoided major damage from the pandemic is increasing the values of nearly all financial assets. Part of such savings could go to green assets as investors’ appetite for such investment is growing. We can expect the sustainable finance market as a whole to continue growing strongly, providing solid returns for investors, and pathways to low-carbon transition.
And lastly, renewable energy getting cheap and cheaper. Wind and Solar plants became 70% and 89% cheaper in the last ten years and, their capacity will exceed coal and gas in less than five years (IEA’s Renewables 2020). In fact, solar power has become the ‘cheapest electricity in history’ even below coal.
What you predict to become a focus in the coming year?
More digitalisation and remote working. During the COVID-19 crisis, one area that has seen tremendous growth is digitisation, meaning everything from online customer service to remote working to supply-chain reinvention to the use of artificial intelligence and health care systems. The great acceleration in the use of technology, digitisation, and new forms of working is also redefining the role of offices. They used to be seen as the traditional centre for creating culture and a sense of belonging and now the challenge is to keep the community together while being away.
Government fiscal response. To face the pandemic, governments have deployed massive help in terms of recovery plans and COVID-19 reliefs, however now they would need to figure out how to address their high levels of public debts. A symbolic case is the US where for the first time after World War II, the US public debt projected to be bigger than the economy in fiscal year 2021.
Portfolio adjustments. I’d expect to see substantial portfolio adjustment as companies with healthy balance sheets seek opportunities in a context of discounted assets and lower valuations. This also complements with the availability of private capital led by increasing savings over the pandemic. Overall, how fast and confidence will recover is an open question.