November 11, 2012 8:26 pm

Stronger political will is needed to meet goals

Hurricane Sandy damage is seen on the bay side of Seaside, New Jersey©Reuters

Storm damage: New Jersey after hurricane Sandy, which some hope will revive the topic of climate change in the US

As US citizens and agencies embark on rebuilding damaged infrastructure in the wake of hurricane Sandy’s devastation, debates will no doubt emerge on how best to protect against future storms. But while upgrading power, transport and other systems is part of the answer, the clean up may also prompt policy makers to consider the role of green technology in building climate resilience.

The extent to which climate change is to blame for Sandy is unclear. A convergence of meteorological factors could have created such a storm, even without climate warming. But rising sea levels will increase the impact of storms, particularly in coastal areas.

Many hope that as stronger evidence of shifts in the world’s weather patterns emerges, this will drive investment in green technologies – those that not only help prevent climate change by reducing greenhouse gas emissions but that also minimise the effects of climate warming and extreme weather events.

On the global policy front, however, consensus is weak. This year’s Rio+20 summit must have come as a disappointment to those in the clean tech sector. At the summit – so named because it was held 20 years after the first 1992 Rio Earth Summit – few new national commitments were made and previous targets were watered down.

In the world’s largest economy, few US politicians have been willing to broach the topic of climate change until Sandy propelled it back on to the agenda.

Despite the lack of political will, not all is gloom when it comes to green technology. National governments are finding ways to foster the development of the sector and, in the US many local, regional and city administrations are doing the same. Meanwhile, the private sector continues to invest in clean technology.

Much of the funding is being channelled into clean energy – products and services designed to reduce energy consumption and increase the proportion of renewable fuels in the power supply. Nimble start-up companies are driving many of the innovations. Examples range from US-based Aquion Energy, which has developed advanced battery systems based on ambient-temperature sodium-ion technology, to Nualight, an Irish producer of energy-efficient display lights for grocery stores that use LEDs (light emitting diodes).

Both are among those on the 2012 Global Cleantech 100 Companies, a list put together by the Cleantech Group that takes stock of companies and types of companies that are likely to make the biggest commercial impact in the next five to 10 years.

In this year’s report, while the number of solar companies on the list is down 40 per cent since 2009, energy efficiency has 22 companies on the list, up from 15 in 2010.

The report’s authors say companies are increasingly seeking answers to immediate, specific problems rather than investing in longer-term developments with less certain goals. “This leads to a lower tolerance for technology risk and/or a lower tolerance for the big bet,” writes Cleantech Group’s Richard Youngman in the report.

Nevertheless, investment in clean energy continues, rising to a record $280bn in 2011, more than five times the $53bn total achieved in 2004, according to Bloomberg New Energy Finance.

Nor is innovation in this sector limited to small companies and start-ups. Clean tech’s heavyweights include the world’s largest corporations, many of which are making substantial investments in developing technologies that address everything from energy use to water conservation.

One route to doing so is to establish internal research and development centres. Yet companies are also becoming flexible in the way they promote innovation. This includes using web-based crowd sourcing or open innovation to identify clean tech entrepreneurs. While crowd sourcing allows companies looking for clean tech answers to conduct searches among innovators across the world, globalisation of clean tech extends beyond open innovation.

For a start, as emerging economies expand, they will provide new markets for clean tech products. Meanwhile, green technology innovation is also shifting to these markets as they become aware that rising wealth leads to increased resource consumption and the potential for greater environmental degradation.

Many believe Latin America may become a leader in finding ways to deliver economic growth while protecting natural resources and establishing sustainable renewable energy supplies, as Brazil has by developing sugar cane ethanol as a biofuel.

In mature markets, while governments continue to invest in clean technology, some are changing tack to reflect budget constraints or shifts in the market.

A number of administrations – including the UK and Germany – are debating cutbacks in subsidies for renewable energy. On the other hand, new joint venture and technology transfer opportunities exist in China, which provides strong government support for a range of energy efficiency and renewable energy technologies.

Some policy makers are changing the way they spend government dollars. Rather than trying to shape the market, they are investing in clean energy incubators or establishing venture-capital funds to support entrepreneurs with ideas.

The focus of clean technology extends beyond energy. With the world’s water supplies increasingly under pressure, finding methods of recycling and conserving supplies has risen up the agenda for public and private sectors.

And with waste management a problem for all organisations, many are looking for ways of turning waste into a resource or reducing packaging.

In the cement industry, the potential for cement furnaces to become incinerators for waste from steel plants and other facilities is prompting discussions of co-location of these plants – helping cement makers cut carbon emissions and contribute to waste management.

Plenty of ideas and workable models are emerging. Yet the question on the lips of all those who believe developing the clean tech sector is essential to the planet’s future prosperity is how to bring about widespread use of green ideas and technologies.

The trouble is that, with some exceptions, many business models remain in the pilot stage or are limited to certain companies or industries.

Without increased collaboration between public, private and non-profit sectors, and willingness for companies to work together on environmental issues, many fear that green technology will fail to reach the scale needed to halt or reverse the environmental problems it is designed to solve.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from and redistribute by email or post to the web.