Two weeks ago, businesses, investors, and policymakers met in London for the Business & Climate Summit to discuss their goal to reach net zero greenhouse gas emissions over the next 50 years, developing a “roadmap” for short, medium, and long term steps to transition to a “net zero carbon economy.” Numerous leaders from a variety of industries, academic disciplines, and governments spoke about the urgent climate change problem and the immediacy with which members of the private and public sectors must act to mitigate this global problem. More specifically, leaders at this year’s summit discussed the Paris Agreement, collaborations between gas companies and environmentalists regarding Canada’s oil sands, “decarbonization” of transport, financing a low carbon economy, and more.
Renewable energy and the role it plays in achieving carbon neutrality was a featured topic of the Summit, particularly in a session entitled “Going Further, Faster: Accelerating the Clean Energy Transition.” Robin Chase, co-founder and former CEO of Zipcar, opened the session and spoke about a project called PEERS, Inc., which focuses on the shift from industrial capitalism to a more “collaborative economy.” The “collaborative economy”, led by companies like Zipcar and Airbnb, focuses on sharing resources and ideas in a collective environment. At the center of the project is the idea that all players in an economy should do what they do best. For example, large corporations offer capital and experience whereas individuals are better at acting quickly and customizing solutions to problems. In a cooperative economy, both large and small actors bring their strengths to the table and combine them to solve a problem, meet a goal, or develop something great. This kind of cooperation among large and small actors is the only way, Chase argues, to move towards achieving the world’s climate goals.
Chase’s speech was followed by a discussion featuring a diverse panel of world leaders in business, finance, and the public sector. The panel members elaborated on Chase’s ideas of collaboration and discussed how partnerships within and between the business, finance, and the public sectors are, in their views, key to achieving the clean energy transition goals.
The energy-related business representatives focused mostly on, perhaps quite obviously, the importance of investing more in renewables and less in fossil fuels as the best way to push the energy market forward. While emphasizing that expanding investment and development of renewable energy in developed countries is a critical part of reduction of greenhouse gas emissions, they also noted the importance of removing barriers to entry for renewables in developing markets. Rui Teixiera of EDP in Portugal particularly highlighted that changing the regulatory schemes of all countries, but developing countries in particular, to incorporate renewables as a larger percentage of their portfolios, will help to prevent developing countries from facing the problems developed countries are facing currently. Teixiera also emphasized the importance of developing rural microgrids based on renewable energy now instead of trying to transition grids to renewables later as another simple and doable way of preventing future unnecessary challenges.
Perhaps the most interesting and novel ideas came from the representatives from the world of finance. Support and involvement of financial institutions, the stock markets, and large-scale investors is possibly the most important and underexplored part of accelerating the transition to clean energy, according to the panel’s finance sector representatives. In particular, Assaad Razzouk, CEO of Sindicatum, noted the important role the stock market may play in shifting the way financial institutions view renewable energy – by making them more valuable than fossil fuel alternatives. In order to reflect the non-monetary costs of fossil fuel investments in financial statements, Razzouok suggested changing the fiduciary duties of financial institutionsto make it more difficult to invest in dirty energy as the most critical part of changing the financial industry’s involvement in renewable energy.
Lastly, the public sector representatives suggested that achieving collaboration among private and public entities is the fastest way to meet renewable energy goals. While a lot of climate talk is focused on large emitters, Said Mouline of ADEREE and CGEM commented on the importance of small emitters being proactive now so as to never become major emitters. As an example, Mouline noted work being done in Morocco to convince businesses to adopt renewable energy now as part of their business model to stay ahead of the trend towards renewable energy in the country’s regulations.
While the public sector has to play an active role in the transition to renewable energy, it also has to play a support role for the private sector. David Turk of the US Department of Energy commented on the importance of governments promoting innovation to push the transition quickly, particularly as climate and renewable energy goals begin to grow exponentially. Further, he noted the importance of public sector support of companies that have set ambitious goals in order to push what other companies, industries, and governments view as possible.
The ideas presented by these leaders in renewable energy represent hopefully just the tip of the iceberg in what is to come from the Paris climate talks and conferences like the Summit. While the messages were general, the panel representatives presented interesting and possibly impactful theories as to what will push the world to increasingly use renewable energy technology to help achieve climate goals by shifting markets to make renewables more profitable than fossil fuels, being proactive to prevent problems before they begin, and encouraging collaboration. While identifying the problems and general solutions is critical, the specific actions taken by all members of the business, finance, and public sectors to expand upon the goals and ideas of the Business & Climate Summit will be critical to determining the world’s success in making an impact on climate change