The private sector has made incredible progress in finding solutions to climate change. Businesses had a chance to share their innovative ideas over the weekend at the World Climate Summit, a parallel event to COP19.
Private sector innovations ran the gamut of resource efficiency, clean energy, low carbon mobility, and new financing mechanisms. Innovation will be needed on all fronts if we’re to stay within our global carbon budget.
Technology innovation is the most familiar type, and is most obviously reflected in the renewable energy industries. The price of solar PV modules has fallen by an astounding 80% since 2008, and wind turbine prices have fallen by 30% over the same period.
These innovations were catalysed by government incentives then driven by fierce competition among technology developers. But different types of innovation models were also discussed, like the Carbon Trust’s Offshore Wind Accelerator programme, which relies on collaboration between the big offshore wind developers to lower technology costs.
There are other types of innovation too, like in natural resource sectors. Svenska Cellulosa Aktiebolaget, a Swedish consumer goods and forestry company, has figured out sustainable logging in a big way. Its VP of Environmental Affairs, Patrik Isaksson, explained how through sustainable forestry practices, Sweden’s forest cover has doubled since 1930 while, incredibly, its timber yields have also doubled.
Couple that with packaging and sustainable wood product innovations developed by companies like Stora Enso, and biological and productive carbon capture and storage becomes a genuine opportunity. Building with sustainably harvested timber effectively captures and stores carbon in the walls of homes. It starts to shift the paradigm of carbon capture and storage from an expensive and techno-centric bolt-on technology to an inexpensive, biological resource opportunity. These ideas are pretty cool.
Supply-side technology innovations are necessary and useful, but technology users also play an important role. Many delegates were focused on identifying and removing the multiple barriers that exist to lower-carbon practices and technology adoption.
As always, finance was a major barrier, since many lower-carbon solutions tend to have higher upfront capital costs even though they save money in the medium-term.
Stephanie Miller, Director of Climate Business at the International Finance Corporation, an arm of the World Bank Group, described a tool they’ve developed called EDGE. It’s a fast and cheap way of assessing the financial viability of resource efficiency improvements in buildings. It gives builders and buyers confidence in the benefits of green building design and can help make the financial case for improvements, feeding into innovative financing options like green mortgages.
A lot of delegates at the summit were involved in providing these kinds of resource efficiency diagnostics, which help to improve the carbon literacy of technology users and make the green choice the natural choice.
That was the goal of many participants – figuring out how to make low carbon solutions the most attractive ones, even in the absence of government action. With the possibility of a binding global agreement still many years away, it’s an important and necessary perspective.
I was heartened to see that so many business leaders understand the benefits that can be derived from a low carbon economy. But I’m keenly aware of the scale and speed of change that’s needed.
The private sector has the agility, ideas, and money to invent and implement the low carbon solutions we need. Now they need the policy frameworks to seriously accelerate their deployment at scale.