We've looked at the current situation for the global energy mix as well as the future outlook on energy change. To round that all off this post will discuss research on industry and investment’s role in a "greener" future. Economic management is an important issue for people, in the previous election it was the number one deciding issue for voters. Jobs, salaries, pensions, these all must be taken into account as we push for a zero emission future. Thus, recognising the opportunities and problems being encountered in the markets, and guiding our rhetoric with that awareness, would help greatly in working with businesses as opposed to against them.
Weick and Jain (2014) examined the common traits behind innovative companies (like Google and Tesla) solving the biggest problems of our time. They pointed to the central role of research and scientists in guiding the companies’ spending. Partnerships are established between ‘scientists, engineers and business functions’, as well as strong links with universities. Weick and Jain highlight the importance of consistently funding basic research alongside development in order to achieve the innovative (and lucrative) breakthroughs. Sarkar’s (2013) work on eco-innovations further stresses the importance of aligning enterprise with environment.
Oxford University’s Sustainable Finance Programme has worked on the issue of stranded assets and provide a compelling argument for divesting from carbon-linked investments. In a recent report they noted the global population of Ultra High Net Worth Individuals was worth US$29.7 trillion in 2014, compared to OECD pension funds with assets of US$24.7 trillion. They have therefore been identified as key targets to attract investment from and could be swayed by the argument to divest.
Of course this isn’t all to suggest that there will be no losses moving into a renewable energy-led world, and we should not be overly-apologetic about them. Indeed, Lucas (2016) presents a compelling argument for the acceptable contraction to come in Australia’s coal industry. What is important is that the risk of losses can be leveraged by the renewable energy industry to attract investment from people, pension funds, corporations etc.
Renewable energy ultimately requires investment in the trillions (USD 44 trillion by 2050) and significant technological development in order to hit our global emissions targets. These trillions require both governments (which have shown lacklustre resolve in maintaining funding levels) and industry. Whilst Weick and Jain’s hopes for the restructuring of most companies towards these “innovator setups” are unlikely to come true, the fact that such setups work and can be learnt from are key insights for the businesses of now and the future.
Weick and Jain (2014) examined the common traits behind innovative companies (like Google and Tesla) solving the biggest problems of our time. They pointed to the central role of research and scientists in guiding the companies’ spending. Partnerships are established between ‘scientists, engineers and business functions’, as well as strong links with universities. Weick and Jain highlight the importance of consistently funding basic research alongside development in order to achieve the innovative (and lucrative) breakthroughs. Sarkar’s (2013) work on eco-innovations further stresses the importance of aligning enterprise with environment.
Oxford University’s Sustainable Finance Programme has worked on the issue of stranded assets and provide a compelling argument for divesting from carbon-linked investments. In a recent report they noted the global population of Ultra High Net Worth Individuals was worth US$29.7 trillion in 2014, compared to OECD pension funds with assets of US$24.7 trillion. They have therefore been identified as key targets to attract investment from and could be swayed by the argument to divest.
Of course this isn’t all to suggest that there will be no losses moving into a renewable energy-led world, and we should not be overly-apologetic about them. Indeed, Lucas (2016) presents a compelling argument for the acceptable contraction to come in Australia’s coal industry. What is important is that the risk of losses can be leveraged by the renewable energy industry to attract investment from people, pension funds, corporations etc.
Renewable energy ultimately requires investment in the trillions (USD 44 trillion by 2050) and significant technological development in order to hit our global emissions targets. These trillions require both governments (which have shown lacklustre resolve in maintaining funding levels) and industry. Whilst Weick and Jain’s hopes for the restructuring of most companies towards these “innovator setups” are unlikely to come true, the fact that such setups work and can be learnt from are key insights for the businesses of now and the future.
Great work.Do post more
ReplyDeleteEnvironmental Change