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Disruptive Innovation needed, submit your ideas now

Jean-Louis Racine's picture

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.

Crystal gazing with McKinsey on resources for the future

Alan Miller's picture

In 1980, the biologist Paul Ehrlich and business school professor Julian Simon famously wagered on the likelihood of resource scarcity over the coming decade. Based on his expectation that population growth would lead to a rapid growth in demand for basic resources, Ehrlich bet that the prices of five commodity metals would increase; Simon, argued that rising prices incent human innovation and consequently that resource prices should be stable or declining. In the decade that followed, despite population growth of 800 million, the prices of all five commodities chosen by Ehrlich declined and he paid the bet. In July 2011, the investor Jeremy Grantham noted that if the bet had been extended to 2011, Ehrlich would have won – by a lot. 

McKinsey Global Institute, a research arm of McKinsey & Company, recently revisited the debate about economic growth and resource scarcity with the release of a major study, “Resource Revolution: Meeting the world’s energy, materials, food, and water needs”. One of the lead authors, McKinsey partner Jeremy Oppenheim, recently visited the World Bank in Washington DC to describe the report’s conclusions and discuss its implications for development strategy, particularly for the World Bank. His presentation captivated a large audience and provoked a lively discussion.

The key findings of the report can be summarized in two categories – challenges and opportunities. The former starts from the projected increase of up to 3 billion more middle class consumers in the next 20 years, driving up demand at a time when finding and extracting resources is becoming increasingly difficult and expensive, while also resulting in enormous environmental pressures.

The good news is the existence of sufficient technically and economically feasible efficiency improvements and alternative technologies to meet nearly 30 percent of predicted demand and offset much of the projected growth. Some of these measures are already identified and well understood, such as improving the efficiency of buildings and irrigation – a “resource productivity revolution”. These measures would, however, not be sufficient to alleviate poverty and avoid global warming in excess of the two degrees Centrigrade widely considered the threshold.

To meet these goals, McKinsey outlines an additional level of ambition with respect to clean energy and carbon sequestration.

What did Durban deliver?

Andrew Steer's picture

At 4.30 on Sunday morning, after 36 hours of overtime (a record), the 194 country members of the UNFCCC pulled a rabbit from the hat. Special flights had been put on by South African Airways as a way to encourage delegates not to leave.

Putting the Puzzle Together

Three big pieces of the jigsaw needed to fall into place in order to clinch the `Durban Platform’. First, a new commitment period of the Kyoto Protocol, without which developing countries would have walked. Second, a road map towards a truly global deal to be effective by 2020 at the latest, without which the EU wouldn’t sign on to a new Kyoto. Third, the launch of the Green Climate Fund, without which developing countries wouldn’t sign on to such a global road map.  

Putting the pieces together required compromise and was accompanied with brinksmanship, emotion, and millions of words spoken, usually repeating what had already been said. The outcome, however, is highly positive for the long term prospects for a deal, and delivered all that could reasonably be hoped for (see my earlier blog: Will Durban Deliver?).

Thus, in a nutshell, delegates left Durban having agreed on:

  • A new commitment period under Kyoto for the EU and 11 other countries beginning January 1, 2013.
  • An agreement to negotiate a global deal by 2015, which would be effective from 2020 with "legal force" applying to all countries.
  • A Green Fund launched, with regional groupings to nominate board members in the coming three months. Board selection will be very important since most operational details yet to be designed.

Making carbon finance work for the poor

Rachel Kyte's picture

During this week in Durban, we announced two new financial initiatives designed to help the least-developed countries access financing for low-carbon investments and enable them to tap into carbon markets after 2012 - the Carbon Initiative for Development (Ci-Dev) and the third tranche of the BioCarbon Fund (BioCF T3).

The funds, focused on agriculture and access to energy, are designed to strengthen links to private sources of capital via carbon markets for some of the world's poorest communities.

The new instruments will help client countries to buy carbon credits from a range of projects including household biogas systems in Nepal, cook stoves in Africa, reforestation in the Democratic Republic of Congo, soil carbon in Kenya, and municipal solid waste in Uganda.

Ci-Dev, aiming to raise USD 120 million, is a partnership of donor and recipient countries, where public and private sector are pledging their support to capacity building and carbon market development in the poorest countries of the world.

The second initiative, the BioCF T3, will focus on reforestation and agriculture projects.

The agriculture projects are another example of the climate-smart agriculture we have been talking about all week – and deliver a triple win of increased food security and resilience through reduced soil erosion and increased land fertility as well as the access to new carbon markets.

Can the world avert locking itself into an unsustainable future?

Vijay Iyer's picture

“The world is locking itself into an unsustainable future.” That’s the headline on the press release for this year’s World Energy Outlook(WEO). This conclusion, coming from the sober, serious International Energy Agency (IEA), sure grabbed attention at a panel discussion I moderated here in Durban Monday.

In presenting the Outlook, Laura Cozzi, IEA’s Senior Economist, laid out the WEO’s three scenarios for the future. Two of them, the ‘Current Policies’ scenario — that is, business-as-usual — and the ‘New Policies’ one, that is, governments cautiously implement commitments already made — do not get us where we need to be by 2035. Only one of them does that, the third, so-called ‘450 Scenario’, which sets out an energy path consistent with a 50%-chance of holding global temperature rise to two degrees Celsius. Past and current choices have the world ‘locked into’ a high emissions path. Laura showed that the 450 scenario takes the world to a situation of ‘no carbon space left’ for new energy generation by 2017. At that point, either only zero-carbon new energy generation can go forward or, if not, for every power plant commissioned, an equivalent dirtier one will have to be shut down. 

It provoked a lively discussion. Dr. Leena Srivastava, Executive Director of India’s Energy and Resources Institute, pointed out that the ‘lock-in’ is caused not just by current patterns of production, but also by lifestyles and patterns of consumption. This resonated with the other two panelists: Dr. Subho Banerjee, Deputy Secretary of the Australian government’s Climate Change and Energy Efficiency Department, as well as Dr. Lu Qiang, of Beijing’s Energy Research Institute, a think-tank under China's National Development and Reform Commission. They reminded the audience that policy must influence patterns of consumption along with energy generation.

Low Emissions Development: Making the sum greater than individual parts

Aditi Maheshwari's picture

As COP17 enters its second week in Durban, the most striking element for me has come from outside the negotiating rooms: the clear sense of momentum around taking action on the ground, and doing so sooner rather than later. Countries are being opportunistic and seizing the day, while the global deal continues to be worked out. The driving force behind this action is the challenge of delivering on domestic priorities such as energy security and access; productivity and competitiveness growth etc. Lower emissions and the climate imperative are a welcome co-benefit but not the main goal. Nearly 90 countries have registered plans with the UNFCCC to address the emissions intensity of their growth by 2020. This includes more than 50 developing countries (a quarter of which are low-income countries) that are pushing forwards with Low Emissions Development (LED) through outlining nationally appropriate mitigation actions.

This demand for LED has prompted a ‘thousand flowers blooming’ supply of initiatives to support developing countries in their planning and implementation. On Saturday I attended a dialogue on LED hosted by the World Bank that was a genuine conversation and sharing of ideas on how to improve coordination i.e., shift the supply of support from resembling scattered flowers towards becoming the same flowering plant. More than a hundred delegates including senior negotiators, heads of organizations, think tanks, and country practitioners actively participated in the discussion.

Support is coming for all stages of the process from the tools and analysis through to policy and program development and piloting implementation. Many organizations (CDKN, GGGI, CPI, Africa Climate Policy Centre, UNEP Risø, ClimateWorks, CMCI, IDB, CCAP, The Climate Group) active in this space outlined their work and identified opportunities where they would like to see increased collaboration, coherence, and partnerships.

Working together on adaptation-based mitigation

Rachel Kyte's picture

Over the weekend the business community held its meetings coinciding with CoP17.

In Copenhagen, the business community, especially in Europe, had mobilized for a deal and arrived in force. Even the financial and investor communities turned up. But then the negotiation process came unraveled and some blamed the business community for not mobilizing enough.

In Cancun, having licked its wounds and learned lessons, the business community adopted the classic entrepreneurial behavior of “don’t ask permission, just apologize afterwards” i.e. don’t wait for a deal- if it makes business sense go ahead.

There, the focus was on action on the ground, strategies, and innovations for firms across the world.

In Durban, things have moved on yet again – here, there is a greater focus on adaptation and, while the stories of success are powerful, there was a call for action again - for the public sector to set the conditions necessary to move ahead at speed and scale.

Will Durban deliver?

Andrew Steer's picture

The next two weeks will see nearly 20,000 people descending on Durban for this year’s Climate Change negotiations.  What might they achieve? Not much, if you believe some of the pessimistic assessments in the press. Are the gloomsters right? No, not necessarily.

What could be achieved?   

Here goes… starting with the practical decisions that are on the agenda, and could affect peoples’ lives fairly quickly:

  • A global system of technology centers that would provide access to knowledge and capacity building in developing countries for climate smart technology – which in turn could yield more investment, more jobs and lower costs.
  • A system that would help developing countries prepare and finance their adaptation plans.
  • A decision to incorporate agriculture fully into the Convention (something that, oddly, has never been done), allowing poor farmers to benefit from climate finance.
  • Simpler rules on how to credit greenhouse gases from forests, in turn making it simpler to prevent deforestation, and for forest dwellers to access support.
  • Common rules allowing city-wide approaches to dealing with climate change. (Many cities are showing more leadership than countries).
  • New eligibility procedures that would help bring sustainable energy to the 65% of African households that currently have no electricity.
  • Agreements that would encourage the development of a long-term networked carbon market that would lower the costs of addressing climate change and bring finance and technology to developing countries.

There is a risk that these measures will be crowded out by the big political decisions at Durban. This would be a mistake. While not game-changers individually, they are important building blocks towards an eventual global deal. 

Cool work with heat in Iceland inspires Africa

Vijay Iyer's picture

Iceland’s journey from being a developing country until the 1970s, to a modern, vibrant and developed economy owes much to its ability to tap into and develop geothermal energy. Its inspirational example in this regard can be replicated elsewhere, including East Africa, where geothermal potential is abundant. With this in mind, I visited Iceland last week, to assess how its story and unique expertise might provide lessons for others.

Iceland has achieved global leadership in geothermal technology and business in all its manifestations. It has an installed geothermal generation capacity of 665 megawatts, a remarkable achievement for a country with only 300,000 inhabitants. While 74% of Iceland’s electricity is generated from hydropower, about 26% comes from geothermal resources.

Iceland is also a leader in tapping waste heat from geothermal power plants to heat over 90% of its buildings at low-cost. Given the worldwide push for energy access and low-carbon energy solutions, geothermal is an attractive option where it is available.

One of those places is Africa’s vast Rift Valley, which stretches from Djibouti to Mozambique and takes in parts of Kenya, Tanzania, Rwanda, Burundi and Uganda, among others. Lying under this expanse are 14,000 megawatts of geothermal potential—enough to deliver power to 150 million people. Properly exploited, geothermal could deliver at least a quarter of the energy these countries will need by 2030. And this would be a renewable source, clean and climate-friendly. Can Iceland’s experience provide guidance as East Africans seek to exploit their resources? I think it can, and so do the Icelanders.

From cow dung to biogas to carbon credits for Nepal

Kirtan Chandra Sahoo's picture

Early this year, I visited several households in the small village of Bela located in the Kavre district of Nepal, about 50 kilometers from the capital Kathmandu. Mr. Niranjan Sapkota’s house was located on a steep mountain surrounded by forests. I had to walk along narrow mountain paths, grabbing on to bushes and sometimes hands of accompanying local staff. I was going to verify if the biogas plant Mr. Sapkota had constructed in the February of 2005 was still in operation.  I turned the brass valve in the kitchen and with a hissing sound, gas flowed and the family pointed to the meal that they had just cooked using biogas from cattle dung that they had in plenty.

There are 225,000 such families in Nepal who now have easy-to-operate biogas plants in their backyards. Bela is considered a model biogas village with almost every house equipped with a biogas plant.

Last month, the Nepal’s Biogas Program reached an important milestone: the United Nations Framework Convention on Climate Change (UNFCCC), for the first time approved and issued carbon credits to two Nepalese biogas projects. To date, this is the largest worldwide issuance of carbon credits, or Certified Emission Reductions (CERs), in a Least Developed Country (LDC). Two more similar projects from Nepal are now at an advanced stage of being registered with the UNFCCC. Together, these projects are expected to generate about 170,000 carbon credits per year, which is equivalent to avoiding emissions from approximately 60,000 cars every year.

For most women living in this mountainous region of Nepal, looking for firewood every morning was a daily ritual. This program reduces the time spent collecting firewood and, since they are no longer exposed to the indoor smoke from burning of firewood in traditional stoves, it also dramatically improves the health of these women and their children. Other important benefits of the program are lessening the pressure on deforestation and reducing greenhouse gas emissions.