August 18, 2019

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Creating The Future, Part 2: Innovation, Competition, Coordination

This is the final blog post in an eleven-part series on CSRwire that summarizes key lessons from the new book Cold Cash, Cool Climate: Science-based Advice for Ecological Entrepreneurs.

Jonathan_koomey

By Jonathan Koomey

“I’m skeptical that a problem as complex as climate change can be solved by any single branch of science. Technological measures and regulations are important, but equally important is support for education, ecological training and ethics -- a consciousness of the commonality of all living beings and an emphasis on shared responsibility.”

– Vaclav Havel (NY Times, 09/27/07)

As I've described in the first chapter of Cold Cash, Cool Climate, the climate problem is big, it’s urgent, and its misunderstood, which makes it fertile ground for new business ventures.  The changes we need are so large that no part of the economy will remain untouched, and that means opportunity. In fact, we’ll probably need to scrap some capital in the energy sector, given the rate of emissions reductions that will be required to maintain a livable climate.

A Task-Based Approach To Cutting Emissions

Entrepreneurs can lead the way by designing new low-emission products, services, and institutional arrangements that are so much better than what they replace that people are eager to adopt them (and to scrap some of their high emitting existing capital along the way).

Whole Systems Design

Emissions reduction opportunities start by focusing on the tasks we want to accomplish and associating those tasks with flows of energy, emissions, and costs, which you then work to minimize. This focus on tasks frees you from the constraints of how they are currently accomplished and allows you to capture compounding resource savings upstream.  

By considering the whole system and designing to approach theoretical limits of efficiency, it is often possible to achieve drastically reduced emissions while also improving other characteristics of products or services substantially.

The Role of Information and Communication Technology

Information and communication technology (ICT) is accelerating the rate of innovation throughout the economy, and that development has implications for business opportunities in this space. ICT speeds up data collection, helps us manage complexity, allows us to restructure our institutions more easily, and lets us rapidly learn and adapt to changing circumstances.  

It also creates a continuously renewable source of emissions reductions, and is a great place to look for opportunities because it generally offers rapid speed to market and low startup costs.

The Role of Government

When considering the climate issue, we can’t avoid the issue of institutional governance. Government has an essential role to play in defining property rights, enforcing contracts, and internalizing external costs. No other institution can do these things, so we need to ensure that these tasks are performed windmillsin a way that leads to the kind of society we want.  When it comes to government, more is not better. Less is not better. Only better is better. And better is what we as a society should strive for.

The Triple Handed Approach: Innovation, Competition, Coordination

Surviving this stage of human development means we’ll need to evolve as a species to learn how to face challenges like this one.  We’ll need to foster rapid innovation, fierce competition, and active coordination between businesses, all at the same time.

We’ll also need to change how we think about our responsibilities to each other, to the earth, and to future generations.  Innovations in our values can be as powerful as those for new technologies in opening up new possibilities for the future, and these we also need to explore.  

The technology now exists for us to move past combustion in most applications, but scaling it up to meet the demands of a modern industrial society won’t be easy. Of course, not doing so will be harder still, because of the damages unrestricted climate change will inflict on the earth and on human society.

It’s long past time to get started. There’s simply no more time to waste.

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Creating the Future Part 1: Iterative Risk Management

Read the rest of the series:Cold Cash, Cool Climate: Science-based Advice for Ecological Entrepreneurs

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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