As discussed in the first part of this blog series A Strong Defense for Low-Carbon Innovation, the U.S. Department of Defense (DOD) has both the demand for and procurement capabilities to advance the development and deployment of innovative low-carbon technologies. This post highlights a variety of leading businesses innovating and creating new opportunities in response to the U.S. Department of Defense efforts, and some of the challenges businesses encounter along the way.
Strategic public-private partnerships are key to helping the DOD meet its energy goals and present significant low-carbon business opportunities. Employing the expertise of companies, such as those specializing in electricity generation or computer technology, gives the DOD access to specialty skills and knowledge needed to advance innovative low-carbon technologies. Businesses, in turn, have the potential to enhance their competencies through government-funded research and development, or provide new technologies for commercial markets after large-scale demonstration through the DOD.
This post is the first of a two-part series on low-carbon innovation in the defense industry. It looks at how the DOD is uniquely positioned to drive low-carbon innovation. The second part in the blog series looks at how businesses are working with the DOD to bring low-carbon solutions to market.
From GPS to the Internet, the U.S. Department of Defense (DOD) has a history of driving the creation of innovative technologies now used every day by Americans. With low-carbon policies a major challenge in Washington today, many clean energy advocates are seeking leadership from the DOD, which is the single largest consumer of energy in the country, to help drive clean energy solutions. Motivated by the need to better protect troops and support its operations, the DOD is becoming more involved in low-carbon technology research, development, and deployment. As stated in the 2010 Quadrennial Defense Review (QDR), this work will shape the future commercial potential of energy technologies, as “military installations [serve] as a test bed to demonstrate and create a market for innovative energy efficiency and renewable energy technologies.”
Business leaders from across the country convened in Atlanta last month to share critical lessons from developing and deploying low-carbon solutions. At our Business of Innovating conference, dozens of company leaders—from Coca-Cola and Mars to Dow and Bayer—discussed new products and solutions that are beginning to drive business growth in clean energy while limiting greenhouse gas emissions. Their efforts reflect a deepening understanding of changes in market preferences and demand for low-carbon solutions.
A recent story on NPR’s Morning Edition about plug-in electric vehicles (PEVs) misses the mark. At C2ES, we don’t believe PEVs are the single answer to our transportation energy security and environmental problems, but we think they could make a contribution if they’re given a fair shot. That’s why we started an initiative on PEVs almost a year ago to take a practical look at the challenges and opportunities of PEV technology.
First, the story mentions plug-in hybrid electric vehicles (PHEVs) like the Chevrolet Volt at the outset, but then ignores how that vehicle type overcomes the problem at the heart of the story – range anxiety. The fear of being stranded due to inadequate driving range and deficient charging infrastructure is a legitimate critique of battery electric vehicles (BEVs). BEvs are battery-only vehicles, i.e. they cannot run on gasoline. But, the Volt and soon-to-be-released Toyota Prius Plug-in Hybrid can run on gasoline or electricity and have the same range as a conventional car. You can travel 25 to 50 miles in a Volt or up to 15 miles in a plug-in Prius without using gasoline and then rely on gasoline to fuel the rest of your trip. It’s difficult to estimate how many trips these electric-only ranges will accommodate, but a plug-in hybrid overcomes the need for a consumer to make that determination. In case you’re wondering, the average car trip length is 9.34 miles according to the National Household Transportation Survey.
In partnership with EDF’s Innovation Exchange, DIG IN, and the Green Innovators in Business Network (GIBN), C2ES co-hosted a “Business of Innovating” Solutions Lab on December 8, 2011, exploring how we conceive of innovation and its role in addressing key environmental and sustainability challenges, including climate change. This event drew on insights from this project’s research of corporate strategies for bringing low-carbon solutions to market. Designed to engage interested business professionals in an ongoing learning community, the Solutions Lab brought together hundreds of professionals engaged in making their organizations more efficient, sustainable, and leading-edge.
Confirmed catalyst presenters include:
- Andy Hargadon, Professor, UC Davis Center for Entrepreneurship (Download PDF presentation)
- Bob Hilton, VP, Power Technologies for Government Affairs, Alstom Power (Download PDF presentation)
- Stephen Todd, Distinguished Engineer & Director, Global Innovation Network, EMC
- Kathrin Winkler, VP & Chief Sustainability Officer, EMC
Interactive Innovation Breakout Sessions with:
November 16, 2011
On E&E TV's OnPoint, Eileen Claussen discusses goals of the newly-launched Center for Climate and Energy Solutions (C2ES) and assesses the current state of energy policy talks in Washington. Claussen also gives her views on the Obama administration's handling of energy policy. Click here to watch the interview.
Click here for additional details on C2ES.
For those of you who came to our website today expecting to find information and resources from the Pew Center on Global Climate Change, please don’t click away. Today we announced an exciting transition. We are now C2ES — the Center for Climate and Energy Solutions. In addition to changing our name, we’ve refreshed our mission and strategic approach, updated our website, and made other changes to ensure that we can continue to craft real solutions to the energy and climate challenges we face today.
Yes, a great deal has changed in the last 24 hours. But what hasn’t changed is the need for straight talk, common sense and common ground. Today’s climate and energy issues present us with real challenges — and real opportunities as well. This is about protecting the environment, our communities and our economy. And it is about building the foundation for a prosperous and sustainable future.
This blog post is co-authored by Engelina Jaspers, Vice President, Sustainability at HP
How can we address climate change and achieve robust economic growth? Innovation in low-carbon technologies is critical, and businesses are the engines of innovation. With this in mind, we—the C2ES and HP—set out to explore how leading companies successfully execute low-carbon innovation strategies, with the aim of sharing lessons learned. Today we release the key findings in a new report, The Business of Innovating: Bringing Low-Carbon Solutions to Market, which will also be the focus of a conference in Atlanta on October 25-26.
Our partnership leveraged the insights and expertise of C2ES staff, members of the Center’s Business Environmental Leadership Council (BELC), and HP’s commitment to applying innovative technologies and approaches to environmental challenges. The report’s author, Andrew Hargadon, Professor at University of California, Davis’ Graduate School of Management, studied the BELC members and other leading companies, including an in-depth study of eight low-carbon solutions from HP and three other companies: Alstom, Daimler and Johnson Controls. The report outlines the barriers particular to low-carbon innovation efforts and provides a set of seven practical lessons for companies.
Climate change—and efforts to mitigate it—are creating an increasingly uncertain future for businesses. The long-term effects of a warming climate are enormously difficult to predict. In the near term, however, new policies, technologies, and market preferences are already altering the competitive landscape of entire industries. That is creating opportunities for companies that effectively produce and manage low-carbon innovations in their markets—and threatening those that, by choice or circumstance, do not.
Today’s policy environment, particularly in the United States, is creating an extraordinarily uncertain environment for business decision-making. In the face of such uncertainties, corporate executives must still make decisions that affect their company’s strategy and competitive opportunities for years. The challenge is to walk a narrow line, investing in low-carbon innovation strategies that keep them competitive without moving too far ahead of the curve. Some companies, like those in the transportation sector, have some regulatory certainty in the form of fleet fuel economy standards, which enables them to commit to low-carbon innovations. But without such industry-wide standards in many sectors, the demand for low-carbon innovations is less clear.
Opportunities for low-carbon innovations exist throughout the economy, especially anywhere that energy is used in the manufacture, delivery, and consumption of goods and services. And with world energy consumption expected to grow by 40 percent in the next two decades,1 these opportunities are growing. The replacement value of today’s aging global energy supply infrastructure is estimated to be $12 trillion, and that of existing energy consuming technologies is even larger.2 Global revenues from new low-carbon energy solutions, energy efficiency technologies and services, and other climate-related businesses reached $530 billion in 2009, and are projected to surpass $2 trillion by 2020.3 Moreover, between 2010 and 2020, the projected cumulative total investment in clean energy generation alone is expected to reach $2.3 trillion.4 Companies able to bring low-carbon innovations to market quickly and at scale will gain early advantages over competitors, such as product leadership, higher market share, and influence over emerging policies and standards.
Leading companies are already bringing low-carbon innovations to a wide range of markets, offering valuable lessons for others facing similar opportunities and uncertainties. This report documents the challenges and best practices of these companies, distilling insights for other businesses pursuing low-carbon innovation strategies. It was developed by the report author, by Center staff, and with members of the Center’s Business Environmental Leadership Council (BELC). The research project included a detailed innovation survey of BELC members and other leading companies, a series of BELC workshops, broader research on innovation, and in-depth case studies of eight low-carbon innovation projects from four large multinational companies:
Taken in its entirety, the report presents a set of practical lessons for organizations pursuing low-carbon innovation strategies. The results should be of interest to corporate decision-makers who are developing or considering low-carbon innovation strategies and to others seeking to understand how companies can effectively bring low-carbon innovations to market, including financial analysts, institutional investors, state and federal officials, non-governmental organizations (NGOs), scholars, and participants in international efforts to address climate change.
The report is authored by Andrew Hargadon, the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis and a Senior Fellow at the Kauffman Foundation. He is the author of How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press 2003).
Check out our podcasts on low-carbon business innovation
|Learn about the top three technologies available today that will have the biggest impact on achieving low emissions growth.|
This Q&A orginally appeared on Singapore International Energy Week's website.
Q1. The Kyoto Protocol expires in 2012. Do you see an agreement on its successor during negotiations at Durban later this year? Or is an extension of the Kyoto Protocol or a move to a transitional framework a more likely outcome?
Eileen Claussen: The Kyoto Protocol has played an important role in advancing climate change efforts in some parts of the world. Most notably, the European Union established its successful Emissions Trading System and other policies in order to fulfil its obligations under the Kyoto Protocol. However, because developing countries are exempt from Kyoto's emission targets and because the United States has chosen not to join, the Protocol covers just one-third of global greenhouse gas emissions. Japan, Canada and Russia have made clear that they will not take on new binding targets post-2012 without commensurate obligations by the United States and the major developing countries, which are not prepared for binding commitments. Hence, there appears very little prospect of new Kyoto commitments being adopted in Durban.
While our ultimate aim should be a comprehensive and binding international climate framework, we must accept that getting to binding commitments will take time. The Cancún Agreements made important progress in strengthening the existing frameworks in the areas of finance, transparency, adaptation and technology. Further incremental progress in these areas will promote near-term action and will strengthen parties' confidence in one another and in the regime, thereby building a stronger foundation for a later binding agreement. At the same time, countries must continue strengthening political will and policies domestically. In Durban, parties should make concrete progress in implementing the Cancún Agreements--for instance, by establishing the Green Climate Fund and agreeing on stronger transparency measures--while affirming their intent to work toward binding outcomes.
Q2. Global GHG emissions increased by a record amount last year. Is the goal of preventing a temperature rise of more than 2 degree Celsius just a "nice Utopia" as IEA's Dr Fatih Birol put it?
EC: Long-term goals are tricky. On the one hand, they provide a rallying point to help focus attention and orient action, and a yardstick for measuring progress. On the other hand, they are meaningful only if they can be operationalized, and if interim efforts don't appear to be on track, people may be discouraged as a result and the will to act may actually weaken. In the case of climate, a temperature goal is appealing because it is easily related in the public mind to the core issue--global warming. But as a metric, it is several steps removed from the action that is needed: Reducing emissions. From a practical standpoint, a global emissions goal might be more helpful.
Countries' pledges to date clearly do not put us on the path to meeting the 2 degree goal. While achieving the goal is not yet out of the question, it would require a dramatic acceleration of efforts around the globe. The bottom line is that we know what direction we must go. Whatever our long-term goal--indeed, whether or not we have a long-term goal--the immediate challenge is the same: Ramping up our efforts as quickly as possible.
Q3. How much of an impact will the recent nuclear power crisis in Japan have on GHG emissions reduction?
EC: It is still too early to know what impact the Fukushima disaster will have on energy choices and greenhouse gas emissions around the world. The most dramatic example is the recent decision by Germany to completely phase out nuclear power. While many in Germany believe that the gap can be filled by renewable energy and improved energy efficiency, others are deeply concerned that the country will deepen its reliance on coal, making it impossible to achieve its ambitious greenhouse gas reduction goals.
Other countries must assess for themselves the implications of Fukushima for their energy futures. For those countries choosing to continue or deepen their reliance on nuclear power, the tragedy clearly offers lessons for improving safety. Given the continued growth in energy demand projected in the future, particularly in developing countries, it is difficult to imagine that we will be able to meet the world's energies needs and simultaneously meet the climate challenge without continued reliance on nuclear power. It is therefore imperative that we continue striving to enhance safety and solve the issue of long-term waste disposal.
Q4. Technology is seen as a key enabler to achieve low emissions growth. In your opinion, what are the top three technologies available today that can make the biggest impact?
EC: There are thousands of technologies available today that could make a huge impact with the right policy support, such as a price on carbon. But the problem, at least in the US today, is that it is unclear when such policy support will be forthcoming. So I will pick my top three based on the ones that need the least additional policy support to make a contribution, either because they yield multiple economic benefits beyond climate, or because they benefit from existing policy drivers.
a. Batteries in cars. Batteries can be used in vehicles in a variety of ways. While a battery-only vehicle may only be able to fill a niche market, hybrid vehicles that run on either gasoline or electricity will likely have broader appeal, and start-stop batteries, which turn off the gasoline engine while a vehicle idles, can be applied to just about any vehicle, achieving modest per-vehicle reductions that add up to significant reductions fleet wide. The combination of new US standards for fuel economy and GHG emissions and electric utility interest in selling electricity can drive battery costs down. The potential emission reductions are enormous, but they depend on cleaning up the electricity grid.
b. Information technology. IT can enable dramatic GHG reductions, for example through energy efficiency (e.g. smart buildings that turn on lights and HVAC when they're needed and turn them off when they're not), substituting videoconferencing for travel, and using wireless communication to optimize transportation routing for people and goods. Convenience and time savings are such powerful drivers of IT that it needs little incremental policy support.
c. Carbon capture and storage (CCS) for enhanced oil recovery (EOR) using CO2. CCS is technically available, and potentially a game changer, enabling us to continue to use fossil fuels but with very low CO2 emissions. CO2-EOR is already economic using naturally occurring CO2, and is close to economic using captured CO2. With very little policy support, EOR using captured CO2 could yield some near-term emission reductions while driving CCS costs down, thereby enabling enormous emission reductions in the future.
Q5. Energy efficiency has long been touted as the lowest hanging fruit to address the energy and climate change challenges. Many Asian countries have announced ambitious targets to cut their energy and carbon intensities. For example, as part of its 12th Five-Year Plan, China has indicated that it aims to cut energy intensity by 16 percent and carbon intensity by 17 percent in the next five years. Do you think Asian countries are doing enough? What more can they undertake to help combat climate change?
EC: Efficiency improvements that generate more economic output with less energy input are important for a variety of reasons, including energy supply security, pollution and greenhouse gas (GHG) emission reduction, and improvement of livelihoods. Countries such as Korea, China and India have taken significant measures to improve efficiency, with the result that the energy intensity of their economies has been lowering over the past decade.
Many energy efficiency measures are classified as "low hanging fruit," meaning the energy savings and other benefits they produce far outweigh the cost of investing in them. Asian countries are currently focusing on exploiting these low hanging fruit, notably in the industrial and power sectors, as well as in appliances and equipment, and large commercial and public buildings. Eventually, achieving additional energy savings will require more expensive investments, and targeting more difficult sectors, such as small and medium enterprises and households.
Asian governments will need to adjust policy tools to meet these new challenges. Policy certainty and appropriate price signals are important to ensure the efficiency improvement potentials of current investments are maximised. One way of providing these is through cap-and-trade type systems, such as those being considered or developed in China, India and Korea. This will also require the phase-out of subsidies that artificially decrease energy prices and encourage consumption rather than conservation. Though progress is slow, several Asian countries have taken or are taking steps in this direction as well.
Limiting the growth of or reducing energy consumption is, of course, essential. However, shifting to less carbon-intensive sources of energy is equally important in the medium to long term. As such, many Asian countries should also be commended for investing in developing less GHG-intensive energy sources.