How satellite technology and space exploration could be the key to addressing climate change—and could be central to sustainable investing in the coming years.
Do humans need to leave the Earth to save it? The concept is far from new. As far back as 1889, the famed novelist and futurist Jules Verne—sometimes called the father of science fiction—flirted with space exploration, climate change and melting polar ice caps in his novel, The Purchase of the North Pole. Since then, pop-culture sci-fi has returned time and again to the idea that humans will eventually need to rely on technology to save their degrading natural environment, a growing subgenre known as “climate fiction” or Cli-Fi.
The notion may not be mere fiction. As the new space economy develops, it increasingly overlaps with sustainability in areas such as Earth observation, energy and communications. These developing technologies from both public and private companies may soon become a new avenue for investors interested in pursuing the twin goals of sustainability and investor returns.
“Satellite technology and space exploration offer a potential new frontier of opportunities to assess and address climate change and sustainability on a global scale,” says Audrey Choi, Morgan Stanley’s Chief Sustainability Officer and Chief Marketing Officer. “In the coming years, these technologies could enable us to have a have a more powerful global view of climate data and environmental science. Those insights, in turn, can help enable a deeper integration of sustainability considerations into investment decisions.”
In fact, Morgan Stanley Research believes that sustainability may be one of the more exciting and underappreciated subdomains of the emerging space economy. “Space and sustainability could increasingly align, thanks to innovative applications of satellite technology and the many exabytes of data that space infrastructure will produce over time,” writes Adam Jonas who heads the Space Team at the firm.
While increased space exploration could certainly present new sustainability issues—space debris and the potential impact of increased launches on the atmosphere among them—there are many potential benefits emerging from the space theme such as:
- Food security: Earth observation from satellites helps monitor illegal fishing, improve traceability of products and support predictive models for food supply around the globe. Combining imagery with weather, temperature or air pressure could optimize agricultural yields and help farmers improve efficiency.
- Greenhouse-gas monitoring: Companies and governments are using satellites and spectroscopy to monitor emissions data, helping to detect CO2 emissions and natural-gas leaks from a range of sources, including oil wells, landfills, industrial operations and farms.
- Utilities: Satellites are helping utilities optimize renewable energy infrastructure, using predictive models of sunlight and cloud cover to locate solar panel installations and monitoring patterns of energy usage to help balance the load between renewable and nonrenewable generation sources. Satellite thermal signatures also can help utilities and forest-management authorities identify and put out fires faster and more effectively.
- Access to Renewable Energy: Satellite technology could also enable greater access to renewable energy. “Around 80% of world energy demand is still accounted for by fossil fuels. Growing the amount of clean power is a vital component of the decarbonization of the global economy,” says Jessica Alsford, Head of the Global Sustainability Research Team. “These satellites could help discover remote areas that have ideal solar or wind conditions and create greater amounts of renewable energy sources.”
- Supply-demand optimization: Satellite data can help monitor the global supply chain, including mining, ground transport, shipping and port activity, as well as activities that create demand, such as building demolitions, construction
- Internet access for billions of people: The deployment of satellite constellations could bring Web access to three to four billion more people who live in regions where rolling out traditional internet access infrastructure is uneconomical or unfeasible. “A United Nations study found that 52% of the world’s population still lacks access to internet, and 90% of those people are from developing countries,” says Alsford. Research has shown that access to internet use could mean up to a 2.5% difference in a country’s GDP.1
- Tertiary benefits: Deep space exploration could offer benefits to adjacent sectors, such as hydrogen fuel cell technology, robotics, propulsion, computer hardware and software, health care, and other disciplines. For example, establishing long-term remote space outposts would require a greater understanding of human physiology in space, not to mention the lack of a natural protective barrier against solar flares, cosmic rays and other radioactively charged particles. The technology for human survival in such an environment could ultimately be applied to cancer prevention and treatment research.
Finally, from a data perspective, satellite technology and remote sensing could introduce real-time, high-frequency tracking of relevant environmental data. “Remote sensing via satellites, particularly on a daily basis, could reduce delays in the collection and analysis of key sustainability data points that financial markets increasingly rely on,” says Matthew Slovik, Head of Global Sustainable Finance at Morgan Stanley.
Not all environmental or sustainability issues are observable from space, and interpreting the data requires knowledge of asset locations and financial models that haven’t been created to handle satellite data. However, the boom in data collected from space and the associated geospatial analytics could reorient market perspectives on how to approach sustainable finance in the coming years.
1 Source: Countries that Expand Internet Access and Use Can Spur Digital-Economy Growth, BCG, 2014