By Michael Barr
Satellite technology could improve the way we monitor emissions and other potential environmental impacts - what could this mean for investors?
Climate change remains a pressing issue globally, with many scientists highlighting the potential impacts if the Earth's temperature rises above the 1.5°C increase targeted by the Paris Agreement. Accordingly, many governments and corporations have pledged to reduce their carbon footprint and emissions that contribute to climate change. In our view, satellites can play an increasingly valuable role in the accurate monitoring of their progress.
Thanks to an ongoing reduction in launch costs and resulting acceleration in the deployment of satellites to space, monitoring capabilities across the globe have expanded. Historically, emissions "self-monitoring" was far from reliable, with reports of carbon emissions being underestimated by around 5.5 billion tons. In addition to the challenge of monitoring the quantity of emissions, the precise location of emissions has also been difficult to track.
The proliferation of satellites and companies dedicated to tracking and tracing emissions has provided better and more uniform data sets to analyze as society commits to manage these and other climate-change issues. Importantly, it's not just the measurement of emissions, but also the accurate tracking of deforestation, rising sea levels and temperatures, water and gas leaks, and other issues that are involved here - highlighting the challenges and potential opportunities. As the old saying goes, if you can't measure it, you can't manage it. Now, we have reliable assets to help measure, monitor, and manage emissions on a global scale.
So, what might this all mean for the space economy? First, satellite-enabled remote sensing has the potential to provide a transparent, scientific baseline to help manage and track variables related to climate change. These data sets can help mitigate the risk of inaccurate or inconsistent self-reporting and allow the global community - both governments and corporations - to not only manage their carbon footprints but also to quickly and easily understand where any potential issues arise. Additionally, we believe satellite-enabled remote sensing should create a trustworthy system for carbon regulation and/or taxation systems, and have the potential to hold entities accountable for their net-zero emission pledges. While beneficial for the environment, this effort is also likely to create new business models around the capture and analysis of this data.
With improving technology, satellites' role in combating climate change is becoming increasingly apparent. Both governments and corporations are deploying spacecraft to monitor and track our progress. While many terrestrial technologies will hopefully emerge to help stop or reverse climate change, the first "small step" in this process, will not be on the ground, but in space.
This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice. This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Investment decisions and the appropriateness of this material should be made based on an investor's individual objectives and circumstances and in consultation with his or her advisors. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. The firm, its employees and advisory accounts may hold positions of any companies discussed. Any views or opinions expressed may not reflect those of the firm as a whole. Neuberger Berman products and services may not be available in all jurisdictions or to all client types. This material may include estimates, outlooks, projections and other "forward-looking statements." Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed.
Investing entails risks, including possible loss of principal. Investments in hedge funds and private equity are speculative and involve a higher degree of risk than more traditional investments. Investments in hedge funds and private equity are intended for sophisticated investors only. Indexes are unmanaged and are not available for direct investment. Past performance is no guarantee of future results.
This material is being issued on a limited basis through various global subsidiaries and affiliates of Neuberger Berman Group LLC. Please visit www.nb.com/disclosure-global-communications for the specific entities and jurisdictional limitations and restrictions.
The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC.
© 2009-2022 Neuberger Berman Group LLC. All rights reserved.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
This article was written by