Frank Pegan is the CEO of Catholic Super, an Australian superannuation fund currently managing AU$5.21 billion. He spoke ahead of the UN Climate Leadership Summit about the value of carbon pricing for investors.
In the rarified atmosphere of Aspen, Colorado, last week, I attended the 11th American Renewable Energy Day Summit. Over the years, the event has grown into a fascinating brainstorming and networking event bringing U.S. domestic and international figures in the renewable energy business together – financiers, technology entrepreneurs, government officials, activists, and scientists from across the energy challenges and opportunities.
We talked about international climate negotiations and renewable energy progress in China and India, but the strongest focus was on the challenges and great potential for U.S. innovation and how to bring climate change and energy policy back from partisanship.
Henry Ford once famously said that if he had asked his customers what they wanted they would have asked him for a faster horse. If he had listened to his customers, the Ford Motor Company may never have existed, or would be called the Ford Faster Horse Company. The automobile became what is called a “disruptive innovation” meaning that it radically displaced the incumbent technology (the horse and carriage) by not listening to the demands of mainstream consumers, but trying to uncover their real needs.
This is the approach the World Bank is now prototyping in Indonesia: Trying to uncover the real clean energy needs of rural communities by understanding their underlying energy-related problems rather than simply asking them what technologies they want. The Indonesia Green Innovation Pilot Program is prototyping a new approach to fostering green disruptive innovation. The first stage of the program is being launched this week, and consists of identifying possible challenges – or problems – linked to energy in rural communities. In keeping with the logic of disruptive innovation, the program does not start with a market demand study, or a survey of clean energy solutions in the market, but with uncovering stated and unstated needs that affect the population of a rural community in their everyday lives. This is being done in three ways: One is through field research by a team of designers from Inotek and Catapult Design, a second way is through consultative workshops in Jakarta and in the rural communities, and a third is through a “call for challenge” where the program is using a crowdsourcing approach to collect problems linked to energy in rural Indonesian communities. If you are in any way familiar with rural Indonesia and its energy challenges, the program invites you to submit a challenge through this website.
Semi-constructed skyscrapers dotting the horizon, shoppers, commuters and students flooding the sidewalks and a sea of trucks, cars and buses - all fighting for their own space along Bole road, Addis’ main thoroughfare. The signs of a decade of 10% annual economic growth for Ethiopia were evident in the cab ride to the hotel. The energetic vibe of Addis also reminded me that despite rapid advancements, it was still a country with one of the highest poverty rates in the world, large rural populations without energy access, significant bio-diversity and environmental risks and a nascent private sector to deal with it all.
To engage the private sector was the reason I was in Ethiopia. I was preparing for the business plan development of an Ethiopian Climate Innovation Center (CIC) similar to the Kenyan CIC launching later this year. The $15 million program will invest in and support early-stage companies wanting to become more involved in the booming local and international cleantech markets while becoming profitable and competitive.
However the suite of services developed for each CIC look different in each market and is therefore designed via a rigorous gaps, opportunities and needs analysis with local stakeholders. While in Ethiopia, I met with a few of the 100-plus stakeholders that will take part in the design phase of the Center. Public and private sectors, development partners, NGOs and academia were eager to share their expertise and experience of what was needed for a CIC in Ethiopia. These are my thoughts following those discussions:
As WDR 2010 observes in the opening paragraphs of Chapter 7, "Technological innovation and its associated institutional adjustments are key to managing climate change at reasonable cost." The development as well as diffusion of climate-smart technology was an important part of the debates leading up to Copenhagen. A recent blog by Professor Geoffrey Heal of Columbia University, whose work on climate change damages is referenced in the WDR, addresses this topical and controversial issue. Writing at voxEU.org, a policy portal set up by the Centre for Economic Policy Research, Heal argues that
..."neither costs nor capital requirement will prevent us from decarbonising the electricity supply. The real obstacle to doing this largely with renewables is our current inability to store power, and as long as we cannot store power we will need to use non-renewable sources like nuclear and coal with carbon capture and storage."
Heal's blog can be found at http://www.voxeu.org/index.php?q=node/4138.
The author, Sophie Bathurst of Australia, won first place in an international youth essay competition sponsored by the World Bank and other partners. She answered the question "How can you tackle climate change through youth-led solutions?” The awards were announced in Seoul in June, 2009.
|Photo © Sophie Bathurst|
My vision for Australia is that of a nation where healthy people live in a healthy environment. I believe that Australia's future social and economic prosperity as well as the livelihoods of our Pacific Island neighbours depend on our response to the climate challenge. An effective response demands the engagement of all sectors of society and involves both responsible adaptation to existing environmental problems as well as the mitigation of further climate change.
If we ignore the warnings, we will not only damage our precious ecosystems and lose our water resources but will also have to contend with disruption of services; decline in key industries such as agriculture, tourism and fisheries; and increased health problems for society’s most vulnerable, particularly the elderly and remote indigenous communities.
If we think long-term and embrace the challenge, however, climate change can present an opportunity for youth. It can contribute to the establishment of an energy sector based on renewable and clean fuels, the development of world-class research centres and the implementation of globally recognised education programs in sustainability.
Education lies at the core of an initiative that I proposed recently. I envision a series of new projects for primary schools that will be led by a 'Green Taskforce' composed mainly of unemployed youth. The projects are designed to build confidence and to equip young people with some of the skills required for permanent employment in environmental trades. At the same time, these projects will create a culture of ecological awareness and healthy living within primary schools and teach students to reduce their carbon footprint.
Development Marketplace (DM) is a competitive grants program administered by the World Bank that identifies and funds innovative, early-stage projects that deliver results and have a high potential for scale-up.
This year's global competition on Climate Adaptation (DM 2009) focuses on (i) Resilience of Indigenous People's Communities to Climate Risks; (ii) Climate Risk Management with Multiple Benefits; and (iii) Climate Adaptation and Disaster Risk Management.
For every annual DM global competition, over 200 assessors (including some World Bank staff) volunteer to review proposals and select finalists. We are seeking development professionals with expertise in climate change adaptation to help identify the 100 finalists. Assessors commit to volunteer approximately 5-7 hours between June 4-10, 2009 to review 30-40 proposals and submit online the ranking of their top eight most innovative proposals.