Stocks and Flows [The Climate Leader]

Summary

The video script introduces the concept of 'stocks and flows' as a critical tool for climate leaders. Stocks represent accumulations, while flows depict changes over time. Using the analogy of a bathtub, the script explains how inflows and outflows affect stock levels. Examples include people engaged in climate action, financial balances, and atmospheric CO2 levels. The script emphasizes the importance of understanding this dynamic for effective climate change strategies, highlighting the need for significant emission reductions to stabilize CO2 levels.

Takeaways

• 🛁 Stocks represent accumulations (like gallons or people), while flows represent changes per time (like gallons per day or people per month).
• 💧 The dynamics of stocks and flows can be visualized with icons, similar to how calculus represents integral and differential equations.
• 🚿 A bathtub analogy is used to explain how stocks and flows work: inflow (water in) and outflow (water out) affect the stock (water level in the tub).
• 📈 If the inflow exceeds the outflow, the stock increases; if the outflow exceeds the inflow, the stock decreases; if they are equal, the stock remains in dynamic equilibrium.
• 🌱 Examples of stocks and flows include people engaged in climate movements, personal finances, and levels of hope regarding climate change.
• 💳 A credit card balance is a stock, affected by the flows of charging and payments, illustrating how changes in flows can impact the stock differently.
• 🏭 The construction and retirement of power plants are a chain of stocks and flows, highlighting the long-term commitment to energy sources and their environmental impacts.
• ⚖️ The script emphasizes the importance of understanding stock and flow dynamics for effective climate leadership and decision-making.
• 🌐 The carbon bathtub analogy is introduced to explain the relationship between CO2 emissions (inflow), atmospheric concentrations (stock), and natural sequestration (outflow).
• 🔍 To stabilize CO2 levels, emissions must be significantly reduced, as merely leveling off emissions will not stop the increase in atmospheric concentrations.

Q & A

What is the main concept of the 'bathtub' analogy used in the script?

The 'bathtub' analogy is used to explain the dynamics of stocks and flows in systems thinking. It represents how stocks (accumulations) and flows (rates of change) interact, similar to water filling and draining from a bathtub.

What are stocks and flows in the context of the script?

Stocks are accumulations measured in units like gallons or people, and flows are rates of change that affect the level of stocks, measured in units per time, such as gallons per day or people per month.

How does the script relate the concept of stocks and flows to climate leadership?

The script uses the concept of stocks and flows to help climate leaders understand and communicate the dynamics of climate change, particularly in terms of carbon emissions and atmospheric concentrations.

Why is it important to distinguish between stocks and flows when discussing climate change?

Distinguishing between stocks and flows is crucial because it helps to understand that even if emissions (flows) level off, the concentration of CO2 in the atmosphere (stock) can continue to rise due to the imbalance between emissions and natural sequestration processes.

What is the significance of the integral and differential equations mentioned in the script?

Integral and differential equations are mathematical tools used to model and understand the behavior of stocks and flows over time, which is essential for predicting and managing complex systems like the climate.

How does the script illustrate the relationship between inflow, outflow, and the level of a stock?

The script explains that if the inflow is greater than the outflow, the stock level increases; if the outflow is greater, the stock level decreases; and if they are equal, the stock level remains in dynamic equilibrium.

What is an example of a stock mentioned in the script related to climate change?

One example of a stock related to climate change mentioned in the script is the level of hope that we can address climate change, which is increased by building hope and decreased by losing hope.

How does the script use the credit card balance analogy to explain stocks and flows?

The script uses the credit card balance as a stock, with charging (inflow) and payments (outflow) as flows. It demonstrates that if charging exceeds payments, the balance (stock) increases, similar to water accumulating in a bathtub.

What is the key takeaway from the script regarding the reduction of emissions to stabilize CO2 levels?

The key takeaway is that to stabilize CO2 levels in the atmosphere, emissions need to be significantly reduced, by at least 50%, and possibly more, to ensure that the inflow (emissions) is less than or equal to the outflow (net removals).

How does the script suggest communicating the concept of stocks and flows to non-experts?

The script suggests using the 'bathtub' analogy to simplify and clarify the concept of stocks and flows, making it more accessible and understandable for non-experts, such as museum visitors or the general public.

What is the role of systems thinking and system dynamics in addressing climate change as per the script?

Systems thinking and system dynamics are crucial for understanding the complex interactions and feedback loops in the climate system. They help in developing strategies and policies that effectively manage and mitigate climate change.

Outlines

00:00

🛁 Introduction to Stocks and Flows

The speaker introduces the concept of stocks and flows as a fundamental tool for understanding and addressing climate change. Stocks are accumulations measured in units like gallons or people, while flows are changes to stocks measured per time. The analogy of a bathtub is used to explain how inflows and outflows affect the stock level, with the potential for overflow or emptying depending on the balance between inflow and outflow. The speaker emphasizes the importance of understanding this dynamic for climate leaders.

05:02

🔄 Applying the Bathtub Model to Climate Change

The speaker applies the bathtub model to the climate change scenario, explaining how carbon dioxide emissions (inflows) and natural sequestration (outflows) affect atmospheric CO2 levels (the stock). Despite emissions leveling off, CO2 concentrations continue to rise due to the imbalance between emissions and removals. The speaker recounts a past experience where they struggled to explain this phenomenon to museum designers until they adopted the stock and flow perspective, which provided clarity.

10:03

🌱 The Carbon Bathtub and Climate Action

The speaker delves deeper into the 'carbon bathtub' analogy, illustrating how even with emissions leveling off, CO2 concentrations in the atmosphere continue to rise due to the persistent inflow of emissions over outflow of natural sequestration. To stabilize CO2 levels, a significant reduction in emissions is required, not just a leveling off. The speaker advocates for an 80% reduction in emissions by 2050 to achieve this stabilization, highlighting the importance of this insight for climate leaders.

15:04

🌐 Spreading the Message of Stock and Flow Systems

In the final paragraph, the speaker calls for the audience to disseminate the understanding of stock and flow systems widely. They emphasize the importance of this concept in systems thinking and system dynamics, particularly in the context of climate and energy systems. The speaker concludes by encouraging the audience to use this knowledge to inform and influence climate action strategies effectively.

Keywords

💡Stocks

In the context of the video, 'stocks' represent accumulations or quantities of something over time. For example, the amount of water in a bathtub or the number of people engaged in a climate movement. Stocks are measured in units such as gallons, people, or dollars and are influenced by inflows (adding to the stock) and outflows (reducing the stock).

💡Flows

'Flows' refer to the rates at which stocks increase or decrease over time, such as water flowing into or out of a bathtub. Inflows and outflows are measured in units per time, like gallons per minute or people per month. Flows are critical to understanding dynamic systems, as they determine how stocks change, as explained with the climate movement example.

💡Dynamic Equilibrium

Dynamic equilibrium occurs when inflows and outflows are balanced, keeping the stock level constant. For instance, if the water flowing into the bathtub equals the water flowing out, the water level stays the same. The video uses this concept to explain how certain balances can stabilize systems, such as maintaining a stable concentration of CO2 in the atmosphere.

💡Bathtub Model

The 'bathtub model' is used as a metaphor to explain the behavior of stocks and flows. The level of water in a bathtub is the stock, while the faucet (inflow) and drain (outflow) represent the flows. This model is applied in the video to explain how CO2 concentrations in the atmosphere are affected by the rates of emissions (inflow) and carbon removal (outflow).

💡CO2 Concentrations

CO2 concentrations refer to the amount of carbon dioxide in the atmosphere, often measured in parts per million. The video explains how these concentrations behave like a stock in the bathtub model, with inflows from emissions and outflows from natural removal processes. Even when emissions level off, CO2 concentrations can continue to rise if inflows exceed outflows.

💡Carbon Emissions

Carbon emissions are the release of carbon dioxide into the atmosphere, primarily from burning fossil fuels. The video discusses how emissions act as an inflow in the bathtub model, contributing to the stock of CO2 in the atmosphere. Reducing emissions is crucial to stabilizing CO2 concentrations, as explained through the example of emissions leveling off around 2030.

💡Net Removals

Net removals refer to the amount of CO2 removed from the atmosphere by natural processes such as absorption by plants, soils, and oceans. In the bathtub model, net removals represent the outflow, helping to reduce the stock of atmospheric CO2. However, the video highlights that current net removals are much lower than emissions, leading to a continuous rise in CO2 levels.

💡Climate Leadership

Climate leadership involves taking action to address climate change by understanding and managing key factors like carbon emissions and CO2 concentrations. The video emphasizes the importance of climate leaders understanding stock and flow dynamics to explain the need for significant emissions reductions to stabilize atmospheric CO2 and combat climate change.

💡Power Plants

Power plants are used as an example in the video to explain stock and flow systems in the energy sector. Stocks include power plants under construction or in use, while flows represent the rate of construction or decommissioning. The long lifespan of power plants locks in certain energy sources, making decisions on coal or gas plants critical for future carbon emissions.

💡80% Reduction by 2050

The 80% reduction by 2050 refers to the significant decrease in carbon emissions needed to stabilize CO2 concentrations in the atmosphere. The video explains that simply leveling off emissions will not suffice; instead, drastic cuts are required to bring inflows in line with outflows, much like reducing water flow into a bathtub to stop it from overflowing.

Highlights

Stocks represent accumulations and are measured in units like gallons or tonnes.

Flows change the level of stocks and must be measured in units per time, like gallons per day.

Clouds in diagrams represent the source or destination of flows, which are assumed to be infinite but should be questioned.

Calculus can represent stock and flow systems through integral or differential equations.

A bathtub analogy is used to explain stocks and flows, where the faucet represents inflow and the drain represents outflow.

If inflow exceeds outflow, the stock accumulates; if outflow exceeds inflow, the stock depletes; if they are equal, the stock remains in dynamic equilibrium.

Examples of stocks include people engaged in the climate movement, measured in people, and flows are the numbers getting engaged or disengaging per month.

Another example is cash flow, where income and spending are flows measured in dollars per month, and the cash balance is the stock measured in dollars.

Hope levels can also be considered a stock, increased by building hope and decreased by losing hope.

Credit card balance is a stock, with charging and paying being the flows that affect the balance.

Reducing charging does not necessarily reduce the credit card balance if charging remains above paying.

To reduce debt, one must pay more than they charge, aligning the payment flow above the charging flow.

Power plants can be seen as a chain of stocks and flows, from construction initiation to retirement.

Investing in coal or gas plants is a long-term commitment to carbon emissions due to the long lifespan of power plants.

The stock and flow concept was used to explain a career-saving moment involving climate change models and museum exhibit design.

CO2 in the atmosphere is a stock, with emissions as the inflow and net removals as the outflow.

Even if emissions level off, CO2 concentrations will continue to rise due to the imbalance between emissions and removals.

To stabilize CO2 levels, emissions need to be significantly reduced, by around 80% by 2050.

Stock and flow thinking is a fundamental building block of systems thinking and system dynamics.

Transcripts

hi I'm here to share with you a helpful

trick that saved me in my career and I

think it's gonna be helpful to you as a

climate leader it's all about a bathtub

here we go we'll start with the

mechanics and the icons of stocks and

flows stocks represent accumulations and

are generally measured in units like

gallons people tonnes and so on flows

change the level of stocks and must be

measured in units per time gallons per

day people per month tons per year and

so on here they are shown as an inflow

and an outflow the clouds represent

where something is coming from or going

to right now that's assumed to be

infinite but that should be questioned

calculus captures the same structure

this way first in an integral equation

or as a differential equation but it is

more helpful to think of a bathtub flows

are like the faucet and drain capturing

gallons per minute of water flow in and

out a stock is like the amount of water

in the bathtub an accumulation the units

show the important distinction between

between stocks and flows these flows are

measured in gallons per minute and a

stock is measured in gallons and here's

how stock and flow systems behave note

this may seem quite obvious but it'll

matter later

if the inflow is always greater than the

outflow the tub will overflow if the

outflow is greater than the inflow the

tub will empty if the inflow equals the

outflow the water will stay at the same

level in what we call dynamic

equilibrium there are the basics

stockin flows and their icons and the

ways that you diagram them and capture

them now let's look at some examples

consider this stock people engaged in

the climate movement this is all of us

and lots of other people flows numbers

of people getting engaged every month or

disengaging every month and note the

inflow and outflow would be measured in

people per month and the people engaged

is just measured in people here's

another a stock my cash flows income and

spending measured in dollars per month

they don't just need to be countable

just quantifiable consider the level of

hope that we can address climate change

it's a stock that's increased by

building hope and drained by losing hope

two very different processes by the way

we get to think what's a better way to

address things focus on the first or the

second another good example is my credit

card balance it's best to think about it

as a stock and flow credit card balance

is a stock measured in dollars how much

I owe the credit card company charging

increases the balance pain reduces it

both are measured in dollars per year

let's ignore all the interest charges

for a minute and imagine that my rate of

charging is constant over time and my

rate of pain is also constant but lower

I'm steadily charging more than I'm

paying the difference between what I

charge and what I pay each month adds to

the credit card balance it adds to the

stock so the stock is growing each month

see the balance going up and up it's

just like a bathtub with more water

flowing in than out but what if I try to

solve the problem and reduce my charging

say 20% or so here's where it gets

tricky

if charging goes down as many of you

probably know the balance doesn't

necessary

go down if charging remains above pain

see the little gap here then we will add

that much to the debt every month and

the balance goes up it goes up more

slowly but it still goes up for the

balance to go down and to get out of

debt I'd need to pay off more than I

charge see the charging line dropping

below the pain line now pain exceeds

charging and the credit card balance

goes down just like a bathtub with more

flowing out than in that's how these

bathtubs work that's how these stocks

and flows work sometimes these diagrams

can be chains of stocks and flows not

just a single stock and flow consider

the process of creating power plants

electrical production whether they be

coal gas nuclear wind or solar the first

flow is initiating construction perhaps

measured in megawatts per year then the

stock of power plants under construction

measured in megawatts then the flow

completing construction that builds up

the stock of power plants that are in

use generating electricity

then there's the flow that drains that

last stock called retiring because the

lifetime of a power plant is quite long

they sit in this final stock power

plants in use for an average of 30 years

so when we make an investment in a new

power plant we are locked into that

energy source and it's carbon emissions

for quite a long time so as climate

leaders we should be clear and we say to

the world that in an investment in a

coal or gas plant an investment in

fossil fuel based electrical production

is a long-term commitment to emitting

carbon not just a short term decision

okay that's enough on the stock and flow

concept for now let's talk about how

this idea

he saved me and my work it was 2003 and

I've been working with my friend Tom

finnerman who had been a graduate

student with me when we were together

he had this model on climate change that

was really cool and I was showing it to

some museum designers who wanted to

incorporate it into one of their

exhibits I was making this presentation

and I hit a wall you'll see first I

showed the group this graph of global

fossil fuel carbon dioxide emissions in

a business-as-usual case from 2000 to

the end of the century we burn in this

scenario more coal and more oil and gas

we chop down more trees emissions go up

and up and up i next showed carbon

dioxide concentrations this is the

amount of co2 collected in the

atmosphere no surprise it goes up and up

as well

emissions up concentrations up seems to

follow then the exhibit designers asked

for a scenario where emissions level off

around 2030 they don't rise they don't

fall they just level emissions would be

well below the business-as-usual case by

the way this would be great we would

reduce emissions a lot so I went ahead

and made the changes in the simulation

and I watched the results again we look

to concentrations and we saw the second

line right here wait what what is this a

missions level see the flat line right

here but concentrations continue to rise

and rise they rise a bit more slowly but

they still rise so the people looked at

me for an explanation and I muttered

something about the long lifetime of

molecules in the system and this and

that but they looked really lost and it

didn't go well

wah-wah then I immersed myself in the

work of Professor John Sturman at MIT

Sloan in several of his journal articles

he encouraged us to think of the climate

change problem as a stock and flow

problem or a bathtub problem and it shed

light on my awkward stock moment with

the museum designers he said think of

co2 in the atmosphere as a stock an

accumulation measured in parts per

million it's 400 parts per million on

average in 2014 this is equivalent to

the amount of water in a bathtub the

inflow is emissions Giga tons per year

of carbon dioxide mostly coming from

burning coal oil gas and land-use change

the outflow is net removals a large

amount of carbon dioxide gets

sequestered in plants and soils and

absorbed into the ocean note that a

large amount of co2 is moving from the

atmosphere to the plants and the oceans

and another large amount is moving back

in the opposite direction this flow were

showing right here of net removals

captures the net flow from the

atmosphere to the plants and soils and

oceans every year all right let's go

back to me standing in front of the

museum designers with the model the

emissions had leveled in 2030 but those

concentrations kept going up much to my

dismay emissions are an inflow to the

tub here just like this faucet and shown

on the graph here in this line measured

in gigatonnes per year and the outflow

is net removals shown here in this line

and indicating the flows of carbon

dioxide into oceans plants and soils

this bottom graph shows the stock or

accumulation of co2 in the atmosphere

the accumulated co2 is like the water in

the bathtub look at the top graph which

runs from 2000 to

look what's happening in 2020 the inflow

looks to be just about double the

outflow about 42 Giga tons per year here

as opposed to 23 here so we've got a

bathtub with double going in relative to

going out emissions from burning fossil

fuels is about double what's being

removed and sequestered every year with

42 going in 23 going out the bathtub

adds 42 minus 23 or 19 Giga tons per

year so what is that bathtub level doing

of course it is rising look at the

bottom graph in 2020 you can see co2 in

the atmosphere increasing in 2020 the

slope is positive see it going up up up

makes total sense now let's look at what

happens when the emissions a level off

in 2030 right here removals remain down

here below emissions so we kept

emissions well above removals we have a

bathtub with much more water flowing in

than flowing out look here at

concentrations of course co2 in the

atmosphere doesn't level off like it

thought it would of course it's still

increasing

even though emissions are level more is

flowing into the tub than is flowing out

I finally had a crystal-clear

explanation for the museum designers and

you won't have one for the world of

course that's the whole point here right

empowering you as climate leaders so we

have a really important point at least

about what won't work to address climate

change so what do we need to do to

actually stabilize carbon dioxide levels

well think about it for a second we have

a bathtub with double going in what's

going out alright there's about to have

double in going out how much do we need

to redo

the inflow in order to have it

stabilized think about it how much well

about 50% it would at least a 50%

reduction so I ran the next scenario

with a significant reduction in a

mission let's see what happens see the

reduction of emissions here it goes down

and down now look closely at this spot

2065 right here the inflow and the

outflow to the bathtub are equal

emissions equal net removals so the co2

concentration right here is level it's

just like a bathtub and look all here

and see the removals we need to reduce

emissions more than 50% because for

several reasons net removals would

actually decrease so the summary of the

main points about the carbon bathtub are

these first a bathtub is a really

powerful way to think about and just

explain to others the dynamics of

emissions concentrations and net

removals it's a good way to talk to

people about things secondly if all we

do is flatten our emissions we're gonna

have concentrations going up and up and

up temperature up and up and more and

more bad impacts over time third if we

really want to stabilize carbon dioxide

concentrations in the atmosphere we're

gonna need to significantly reduce

emissions on the order of 80% by 2050

and the last point we can do it so

that's it for stocks and flows there are

two main things hopefully you've just

gotten an understanding of another

building block of systems thinking and

system dynamics stock and flow thinking

and stock and flow diagramming and

secondly some insights into its

application in the climate and energy

system all right spread these messages

far and wide go get them

you