Did you know that 1,360 companies in British-Columbia are involved in clean tech (hydrogen, fuel cells, wind, ocean and solar power, and so on)? The number surprised me, but it was reported in BCTIA's annual snapshot of BC's technology industry. With such a strong presence, it also seems surprising that the clean tech sector in this province is not well understood. The companies in clean tech includes well-established corporations such as Nexterra and Ballard, but also many small startups with innovative ideas and not much governmental or financial support to move them from concept to commercialization. The good news is, BCTIA identified the need to gather more data on the clean tech sector and is working with KPMG to prepare an annual survey to better assess the health of the industry.
Yes, today's BCTIA TechForum presentation on the opportunities of climate change was definitely about clean tech (and to some extend, about clean IT). Can't tell the difference between the two? Clean tech encompasses several different technologies that seek, as a common objective, to address environmental challenges. I would consider clean IT to be a subset of clean tech, but the focus in clean IT is on improving the efficiency of existing IT solutions. A server that requires 30% less energy to operate is clean(er) IT. When the remaining energy required to operate the server is generated using solar panels, then you are also using clean tech.
The first speaker at the TechForum was Chris Sullivan, the Vice President of IDC Canada. IDC is a research firm that offers, among other services, market research on IT, telecommunications and consumer technology. Recently, the analysts at IDC started researching clean IT, not only because their customers expressed interest in the sector, but also because the analysts themselves were interested in the technology and how it could help address some of the challenges of climate change. "Climate change is becoming part of people's daily lives", mentioned Sullivan.
The current drivers for clean IT include regulation, a push from consumers, a heighten interest from investors, rating agencies and venture capitalists. Companies who invest in green IT do it mainly for the cost saving opportunities (over 80%), but also in response to regulation (over 50%) and to a push from the top to favour green products (one third). Interestingly enough, over half of IT managers (those who are responsible for the technology assets of a company), when asked whether they felt climate change could have a positive or negative impact on business, provided a neutral answer (no positive or negative impact). This feeling could change quite rapidly as corporations start incurring additional costs because of new legislation such as the carbon tax.
Sullivan then shared with the audience other data that emphasized the opportunities that are presented by green IT. For example, going green simply makes good business sense when 81% of consumers say they care about climate change. Investing in green IT also makes sense when VCs pour over $5 billion into the clean tech sector (a clear show of support from the financial community). And when the cost of managing, powering and cooling servers is increasing eight times faster than the cost of purchasing new servers, one would wonder why anyone would think business as usual is even an option.
Canadian companies are coming up with green IT solutions, but so far, the examples have been hard to find. Sullivan named five examples: Longpen (a long-distance pen and ink signing device invented by Margaret Atwood), Artex Environmental (disposal of electronic waste), FifthLight (dimmable electronic ballasts), SkyMeter (vehicle use tracking system) and LComm Global Solutions (wireless). However, looking at the LComm site tonight, I couldn't really figure out why they were singled out as a green IT vendor.
The second speaker was Peter Robinson, CEO of the David Suzuki Foundation and a member of BC's Climate Action Team. Robinson spoke about a new brand of environmentalism starting to emerge. Instead of pinning itself against corporations and urging businesses to slow down and reduce, environmentalism is starting to look at corporations for potential solutions. At the same time, corporations are being asked to look beyond the silo of their solution and understand the consequences of some of the technology they are developing.
The solutions that exist today can help us address some of our environmental problems, but the remaining gap will pose the greatest challenge, as well as represent the greatest opportunity. Tackling climate change can no longer be seen as a hindrance on economical development, and some countries in Europe have the results to prove this. For example, Sweden, while seeing its economy grow, was able to reduce its per-capita emissions. If you look at greenhouse gas emissions of developed countries, you'll see how Canada and the US fare poorly in comparison to European countries. I found some data on the Green Party of Canada's web site that illustrates this (from December 2007). According to Robinson, the global average, today around 3-4 tonnes per capita, must be reduced to 1.5 tonne per capita if we are serious about addressing climate change.
Robinson described three challenges faced by businesses as they embrace clean tech to address climate change. First, it is important for businesses to look beyond the traditional quarterly results and understand the long-term impact of clean tech investments. Second, any solution should also be evaluated for unintentional consequences. The most common example cited for "unintentional consequences" is quite understandably biofuels. The embracing of biofuels as an alternative to fossil fuels was done before we took a hard look at the actual greenhouse gas emissions generated by their production (especially corn-based biofuels), or the consequence of using food for fuel on the availability and price of this food to feed humans. Finally, businesses must also understand the complexity of problems we are facing. An example of this is the effort to turn dead pine trees into biofuels, as the pine beetle makes its way through our forests. The issue behind this approach is that we do not fully understand the complex role of dead trees in the whole lifecycle of the forest. By removing the dead trees, we are preventing increases in greenhouse gas emissions but also potentially removing a key element from the forest's complex cycle.
The presentation from Peter Robinson ended with recommendations for green tech companies. First, green tech will need to build trust in its solutions, not only with customers but also with the public at large. Some of the negative consequences of food-based biofuels might have tinted the public's view of all biofuels. Then, be ready to face consultation hurdles as you present solutions to the public, to communities. Regulatory hurdles will also be a challenge, as regulation can't keep up with the pace of clean tech development and might end up hindering initiatives. Clean tech companies should anticipate new legislation and be aware of legal changes happening elsewhere in the country and around the world. And even with all the recent interest in clean tech by VCs, clean tech companies should be thoughtful about their investments as financing is still tentative. Finally, solutions often skip directly to the ultimate outcome, but companies should not overlook the opportunities around transitional technologies.
Showing posts with label climate change. Show all posts
Showing posts with label climate change. Show all posts
Wednesday, May 7, 2008
Thursday, April 10, 2008
Review: Business, Energy and the Greening of British Columbia
It is my pleasure to share my thoughts about an event I attended last night at the Morris J. Wosk Centre for Dialogue at SFU. The event included a presentation by Dr. Mark Jaccard on the past 20 years of government policies on climate change and why these policies have not prevented greenhouse gas (GHG) emissions from increasing at an alarming rate, followed by a discussion between Dr. Jaccard and members of the audience. Tamara Vroomnan, CEO of Vancity and Bob Elton, CEO of BC Hydro were also asked to comment on the topic from the corporate point of view. Before I jump to the topic, let me first share my impressions of the Centre for Dialogue itself.
I had no idea we had such a presentation space in Vancouver. We might have others that are similar, but for me, this was a first. Think of the mental images you have of international leaders meeting at the United Nations to discuss policies, replace the country cards by name cards and voilà, you get the picture. OK, fair enough to add that the presentation was only in English, so we didn't get to test out the language selection controls. Next time maybe.
The evening started with a brief introduction of Dr. Jaccard. You are probably already familiar with some of Jaccard's work, including his latest book called Hot Air: Meeting Canada's Climate Change Challenge and his work on the Global Energy Assessment. The title of Jaccard's presentation was The Tipping Point? (note the strategic use of a question mark). In this presentation, four approaches (actions) to addressing climate change were introduced: energy efficiency (if using fossil fuels), renewable energy, emissions control and operational efficiency (don't quote me on that last one). Governments, not being in a position to act (although that's debatable in my mind, shouldn't we also look at the energy efficiency of our government offices?), create policies that will encourage others to act (businesses, individual citizens). Those policies can foster action by informing, subsidizing, regulating, or imposing financial penalties.
Over the past 20 years in BC (and at the federal level), the government has focused on encouraging energy efficiency. In 1998, the government was told that a carbon tax of $150 per ton was needed to allow Canada to meet the Kyoto targets. The tax was never implemented and carbon emissions have gone up since. Policies were implemented to inform and subsidize, both insufficient to reduce or even slow down emissions. Dr. Jaccard presented a few reasons that explain why these policies have failed: first, efficiency was more costly than was initially thought and we own more devices that run on energy (more or bigger devices). For example: as fridges became more energy efficient over the years, people also bought bigger fridges, separate freezers, wine fridges, and so on. Information-based policies were trying to compete with very successful lifestyle marketing messages.
The "tipping point" area of the presentation highlighted the kind of policies we need to have in place to curb emissions: command-and-control regulations (standards), financial charges (GHG emissions tax) and market-oriented regulations (cap and trade, niche market regulations such as vehicle emission and renewable portfolio standards). Such compulsory policies could reduce emissions by more than 50%, argues Dr. Jaccard. Is the carbon tax in BC a sign that we are indeed reaching this tipping point, that governments are willing to look beyond the next election and implement policies with delayed benefits?
Dr. Jaccard ended the presentation by encouraging attendees to pressure the government towards implementing compulsory policies and inviting business leaders to participate in designing realistic policies. The presentation was then followed by a response by the CEOs of Vancity and BC Hydro, both presenting their thoughts on the climate change challenge for businesses.
What became interesting at that point was that while Dr. Jaccard was insisting on the necessary involvement of businesses in policy development, the business community's response was that of uncertainty around their role in shaping policies. There was no strong resistance to the idea of compulsory policies, there was even a mention of going beyond these policies and becoming more engaged. Although this sounded wonderful, I'm not so sure the dialog would have remained so civil had it included cement producers and gas companies (top 10 emitters of GHG in BC according to a recent Vancouver Sun's article).
This was a disappointment for me. In the room, we did have business leaders and leading scholars, but nobody from the government (at least nobody who spoke) and nobody from the big polluters. The dialogue was very polite and proper, I was hoping for a heated debate on the question. Not a debate about whether climate change is a concern or not, I think we're all beyond this question right now. But a debate about real, applicable solutions and their potential impact on how we should run our businesses going forward.
Great news: Vancity is now carbon neutral, two years ahead of schedule! I'm only half celebrating, since 50% of the reduction was done through offsets. I'm not against offsets (to a certain extent), but this just goes to show how much work still needs to be done. Vancity is a sustainability leader in Vancouver, yet all their initiatives only managed to reduce their actual emissions by 50%.
I had no idea we had such a presentation space in Vancouver. We might have others that are similar, but for me, this was a first. Think of the mental images you have of international leaders meeting at the United Nations to discuss policies, replace the country cards by name cards and voilà, you get the picture. OK, fair enough to add that the presentation was only in English, so we didn't get to test out the language selection controls. Next time maybe.
The evening started with a brief introduction of Dr. Jaccard. You are probably already familiar with some of Jaccard's work, including his latest book called Hot Air: Meeting Canada's Climate Change Challenge and his work on the Global Energy Assessment. The title of Jaccard's presentation was The Tipping Point? (note the strategic use of a question mark). In this presentation, four approaches (actions) to addressing climate change were introduced: energy efficiency (if using fossil fuels), renewable energy, emissions control and operational efficiency (don't quote me on that last one). Governments, not being in a position to act (although that's debatable in my mind, shouldn't we also look at the energy efficiency of our government offices?), create policies that will encourage others to act (businesses, individual citizens). Those policies can foster action by informing, subsidizing, regulating, or imposing financial penalties.
Over the past 20 years in BC (and at the federal level), the government has focused on encouraging energy efficiency. In 1998, the government was told that a carbon tax of $150 per ton was needed to allow Canada to meet the Kyoto targets. The tax was never implemented and carbon emissions have gone up since. Policies were implemented to inform and subsidize, both insufficient to reduce or even slow down emissions. Dr. Jaccard presented a few reasons that explain why these policies have failed: first, efficiency was more costly than was initially thought and we own more devices that run on energy (more or bigger devices). For example: as fridges became more energy efficient over the years, people also bought bigger fridges, separate freezers, wine fridges, and so on. Information-based policies were trying to compete with very successful lifestyle marketing messages.
The "tipping point" area of the presentation highlighted the kind of policies we need to have in place to curb emissions: command-and-control regulations (standards), financial charges (GHG emissions tax) and market-oriented regulations (cap and trade, niche market regulations such as vehicle emission and renewable portfolio standards). Such compulsory policies could reduce emissions by more than 50%, argues Dr. Jaccard. Is the carbon tax in BC a sign that we are indeed reaching this tipping point, that governments are willing to look beyond the next election and implement policies with delayed benefits?
Dr. Jaccard ended the presentation by encouraging attendees to pressure the government towards implementing compulsory policies and inviting business leaders to participate in designing realistic policies. The presentation was then followed by a response by the CEOs of Vancity and BC Hydro, both presenting their thoughts on the climate change challenge for businesses.
What became interesting at that point was that while Dr. Jaccard was insisting on the necessary involvement of businesses in policy development, the business community's response was that of uncertainty around their role in shaping policies. There was no strong resistance to the idea of compulsory policies, there was even a mention of going beyond these policies and becoming more engaged. Although this sounded wonderful, I'm not so sure the dialog would have remained so civil had it included cement producers and gas companies (top 10 emitters of GHG in BC according to a recent Vancouver Sun's article).
This was a disappointment for me. In the room, we did have business leaders and leading scholars, but nobody from the government (at least nobody who spoke) and nobody from the big polluters. The dialogue was very polite and proper, I was hoping for a heated debate on the question. Not a debate about whether climate change is a concern or not, I think we're all beyond this question right now. But a debate about real, applicable solutions and their potential impact on how we should run our businesses going forward.
Great news: Vancity is now carbon neutral, two years ahead of schedule! I'm only half celebrating, since 50% of the reduction was done through offsets. I'm not against offsets (to a certain extent), but this just goes to show how much work still needs to be done. Vancity is a sustainability leader in Vancouver, yet all their initiatives only managed to reduce their actual emissions by 50%.
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