The potential of technology is constrained only by the laws of physics, whether classical or, increasingly, quantum. As the power of technology increases it allows us to understand the world in a lot more detail – including why the current path to net-zero isn’t going to work.
The disruption to asset owner portfolios from the rapid advances in technology will likely be greater than any impact on portfolios from factors such as geopolitics, the Top1000funds.com Fiduciary Investors Symposium at the University of Oxford has heard.
Senior fellow at Stanford’s Freeman Spogli Institute for International Studies and the Kleinheinz Senior Fellow at the Hoover Institution, Stephen Kotkin, said there is scarcely an area of human endeavour not being reshaped right now by technology, in one form or another.
“The tech disruption that we’re seeing is much bigger than geopolitical risk in terms of what’s going to happen to your portfolios,” Kotkin said.
But to fully grasp the potential impact of technology, one must understand the laws of physics – classical and, increasingly, quantum.
Wykeham Professor of Physics and Tencent Chair in Theoretical Physics at the University of Oxford, Shivaji Sondhi, said that the limits of technology are set by the laws of physics.
“Things are going on, transformative stuff in biology and computation, broadly,” Sondhi said.
“So you might say, what’s the importance of physics? Well, the first thing is really always to recognise that technology is limited by physics.
“The other thing, metaphorically, is that physics bridges software and hardware. By software, I want you to think very broadly that if you have lots of things that you’ve made, and you now want to combine them to do things. So in a computer, you have bits, and it’s using these bits and operations of them – [in] a quantum computer [it] will be qubits – and putting those things together.”
Sondhi (pictured) said there is potential for the power of quantum computing to overtake the power of classical computing, and “in the quantum realm [it] is the case where you see it’s the limits of physics which are now giving you the limits of technology”.
“You have computers, and a physicist says, ‘Well, you know, at the most microscopic level, nature doesn’t work like that.’ It’s not a classical world, it’s a quantum world, can we not do information processing at the most microscopic level, using the laws of quantum mechanics?
“Clearly, it can be no less powerful than what we can do with classical computers, because classical systems are made out of quantum systems, but maybe it could be more powerful.”
Sondhi said the physics department at the University of Oxford is “exceptionally broad”, studying fundamental physics, “which is physics which only physicists care about”, applied physics, and what it describes as “policy-relevant” physics, which itself is quite wide-ranging, but includes studying issues such as climate change.
“If you read a headline, anything that happened in the weather, you can find a headline that says it was climate change,” Sondhi said.
“Oxford is leading the way in trying to combine weather forecasting models, which cannot do centuries, but they’ve become very, very good at doing a week, a week and a half.”
Sondhi said Oxford physicists are conducting “multi-scale analysis” which allows big-picture forecasting to be combined with much more granular, localised analysis to make very accurate predictions about local weather events.
“You can take inputs from the longer running ones and match them to the more fine-grained ones,” he said.
“You can start to bridge the gap between what’s going to happen at the local level in a given region, which is the question of interest, economically [and] personally, to what the large-scale sort of movement is.”
Sondhi noted that also on the issue of climate change the concept of net-zero originated at Oxford, but since then the measurement and therefore the mechanisms developed to achieve it have drifted from the original concept.
Its analysis shows the current path to net-zero isn’t going to succeed.
“The initial formulation of net-zero was the idea that human activities, not counting the biosphere, not counting trees, not counting oceans, was going to go to net zero,” he said.
The actions of trees and the biosphere would continue, separate from steps taken by humans to address carbon emissions, which meant “you would get a decline back to much lower levels, you would get an actual lowering” of carbon in the atmosphere.
“Now, what’s happened in practice is that people have come to count if you have trees, then you say, ‘Well, I’m absorbing carbon’, and it’s absolutely allowed under the rules,” Sondhi said.
“But what this analysis shows is that that’s not going to work. And so perhaps interesting to you would be the idea that at some stage, the underlying science and the exact prescriptions and what the rules are will probably have to come into alignment.
“You may want to watch out for that when that happens.”
