21 September 2021. Transition | Innovation
The transition narrative is now about gain, not pain; how failed innovations teach us about possibilities.
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#1: The transition narrative is now about gain not pain
The post-carbon transformation has moved to a point where there’s more gain to be had than pain—but the current narrative is lagging behind the evidence. That’s the conclusion of a recent article in Carbon Tracker:
Mitigating climate change is no longer an expensive collective action problem; it is a technology revolution with enormous wealth-generating and redistributive potential.
The reason they say this is because of the steepling falls in the prices of some critical transition technologies, notably in the energy sector. And, they say, this change in the narrative has essentially happened since the Paris COP. (The article is one of the rush we’re seeing ahead of COP in Glasgow next month.) But: many business leaders and politicians are still trapped in the “pain” narrative.
Here’s the energy data: a story of falling costs and rising deployment:
As a result of this, renewable technologies have continued to grow exponentially, enabling them to take all the growth in supply in country after country and sector after sector... First in electricity, then in cars, and now innovation is spreading across the energy complex, from hydrogen to steel, from shipping to trucks.
These trends will continue: they may accelerate:
This is because granular renewables surf “sticky” learning curves. With each new unit deployed, costs fall, and as costs fall, deployment rises. Models that factor in continued learning curves, such as that of Oxford academic Doyne Farmer, show that a rapid energy transition would likely mean a net capital saving of over $5 trillion relative to business as usual, without even considering the costs of climate change, more extreme weather events and pollution.
But this is no longer just about economics. The list of global policy benefits from transition also continues to grow. They include:
- energy security, especially in the large majority of countries in the world that import fossil energy
- energy access across the global South
- pollution reduction
- development—which aligns with reducing climate impacts because developing countries have better renewable energy resources
- reducing the externalities from fossil fuel, in the form of subsidies and other costs.
The result of this is a new energy narrative, in which a story about abundance replaces a story about scarcity:
The shift of energy from scarce to abundant; from concentrated to distributed; from decreasing to increasing returns; from extraction by the lucky to manufacturing by the diligent; and from generating rents for a few to bringing prosperity for the many.
All of this sounds great, of course, and the point about abundance echoes Bill Sharpe’s observation that new systems form around sources of abundance, not around scarcity.
But, of course, there are also a lot of incumbents doing well out the the current, failing, system. They tend to be the beneficiaries of lock-in, in the form of regulatory systems, infrastructure, and political access.
Despite the clear technology transition that is taking place, the forces of inertia and incumbency are powerful. Some incumbents seek to shield the status quo through a toxic combination of false analysis, political control, dissemblance and system manipulation. Voters are told that change will be expensive and painful, and high-cost or sub-scale technologies like CCS, direct air capture and tree planting are touted as real solutions which will enable us to carry on with business as usual.
The authors of the Carbon Tracker article, Kingsmill Bond and Sam Butler-Sloss, argue that the falls in renewable costs have worked through the first two barriers to change—the technological and the economic. Now they’re starting to erode the political and incumbency barriers, as in this catchy diagram:
They make four recommendations about what to do to accelerate the transition process:
Clean electrification. The world needs to decarbonise electricity, electrify everything it can, and use some variant of hydrogen for the rest.
Change land from being a source to a sink. Stop deforestation and use the potential of the land and soil to store carbon.
Sequence change by sectors. The easier to solve sectors such as electricity and light transport should be solved first, followed by the harder sectors; only 13% of emissions come from sectors where we do not yet have solutions.
Sequence change by countries. It makes sense for wealthier countries to figure out new technologies first, and then to deploy and scale them in less wealthy ones. It also makes sense for less wealthy countries with lower energy demand per capita to leapfrog to the new technology rather investing scarce capital into the dying fossil fuel sector.
But the main thing to do is to change the story—to move from the ‘transition as pain’ metaphor to one that is about ‘transition as gain’.
#2: How failed innovations teach us about possibilities
The recent death of the British innovator Sir Clive Sinclair reminds me of an exercise I used to do when training people in using futures.
Sinclair made his reputation—and a good deal of money—by developing the ZX pocket computer range. And he lost a bit of both by developing in the mid-80s the Sinclair C5, a small low slung electric car that flopped.
It was easy to write off the whole idea as simply misguided.
But in the early 2000s, we used to use it at The Henley Centre as the basis of a futures training exercise called “The fifth element”—Luc Bresson’s film was still in the popular memory at the time.
(By Prioryman - Own work, CC BY-SA 4.0, via Wikipedia)
My recollection of the exercise (I don’t have the documentation anymore) was that we’d spend a few minutes asking people why the C5 had flopped. That never took long.
Then we’d turn the question on its head. Given that entrepreneurs make bets on a vision of a future that maybe isn’t shared by others, we’d ask participants what Sinclair had seen of the future when he was developing the C5.
And then we’d ask them what other innovations in the past 20 years had built—in different ways—on some of the same insights that had fuelled the C5.
We’d get answers like the rise of lightweight transport (from mountain bikes to scooters) and then rising market for smaller cars, like the Mercedes Smart car. These days you’d add e-bikes to the list.
The exercise was called “the fifth element” because successful innovation requires a whole raft of things to be aligned: technology, processes, user values and trends, social contexts, regulatory environment, and so on. They all have to work. Usually, even where an innovation fails, it tells us something about the latent potential for change in the present moment.
While checking the details for this piece, I found a BBC Futures article from 2014 that explores some of the same ideas. Jack Smith concludes:
In the decades (since the C5 was introduced), battery technology has improved, as have electronic control systems for safety and stability. The appetite for alternatives to petrol-engined cars is growing, with some electric vehicles such as the Tesla Model S, and the Nissan Leaf becoming sales success stories. And cycling is also increasingly popular in cities, some of which have plans to ban cars all together.
Perhaps a version of the C5, if it were to be introduced now, would also be a success.
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