Sep 17, 2012
Doing well by doing good: a scientist frames climate solutions in business terms
Review of Cold Cash, Cool Climate: Science-Based Advice for Ecological Entrepreneurs by Jonathan Koomey, Analytics Press, 2012.
Entrepreneurs and investors alike will profit from Jonathan Koomey's new book on how to cool the climate while garnering some cold cash. Starting with a well-reasoned case for urgent action to slash greenhouse-gas emissions, Koomey dispenses tips for innovators who can help turn the tide. While targeted at the business community, students, policymakers and even the general public will find this compelling book an easy read full of actionable suggestions. Koomey's blog summarizes the arguments.
Few of today's climate and energy analysts have the skill or take the time to communicate their insights accurately to non-specialist audiences. Koomey – a seasoned energy and environmental researcher – effectively positions this book between the "hardcore technical" and "readable but imprecise popular". He combines methods from multiple disciplines and boils an enormous literature down to its essential messages.
In a punchy foreword, Saul Griffith of Other Lab provides a great bird's-eye view of how to pinpoint efficiencies in any sector. My only quibble is that his clever set of conceptual formulae focuses on power and not energy, thus skipping over the important role of utilization (behavioural effects) and controls, an area of critical emerging technology. Readers must wait until chapter 5 for an introduction to the importance of operational efficiencies.
Koomey is a big proponent of effective data visualization, as described in his previous book Turning Numbers into Knowledge; the graphics in Cold Cash reflect care and craft. In one example, he provides a novel fusion of much-reported ice-core data on atmospheric carbon-dioxide concentrations spanning the last 400,000 years with directly measured values from the last half-century. The chart makes a far stronger point about the unprecedented pace of emissions’ growth than the ice-core data alone.
In a "safer climate" scenario of possible global emissions pathways, Koomey impresses on readers the importance of thinking in terms of an emissions budget, the recklessness – and higher costs – of dithering, and the implications of the carbon budget approach for conventional reserves of fossil fuels. We will need to keep much of those reserves in the ground or figure out a safe way to sequester the emissions from burning them. Moving comfortably between atmospheric science and economics, he deftly lays out the deficiencies of economic models and describes an alternative way of approaching the future, one that recognizes the path-dependent reality in which we live. We do not get to the hands-on discussion of opportunities for entrepreneurs until chapter 6, but it is well worth the wait.
Koomey "boils an enormous literature down to its essential messages"
Koomey is no shrinking violet and does not take any prisoners in critiquing the faulty logic of naysayers. He is rightfully tough on those who advocate delaying action:
"If we want to prevent global temperatures from increasing more than 2 Celsius degrees, we have a fixed emissions budget over the next century. If we emit more now we'll have to reduce emissions more rapidly later, so delaying action (either to gather more data or to focus on energy innovation) is foolish and irresponsible. If energy technologies improved as fast as computers there might be an argument for waiting under some circumstances, but they don't, so it's a moot point."
Entrepreneurs and investors must "fail fast" and iterate rapidly towards improvement, because "learning by doing only happens if we do". In a discussion of the economic logic – and necessity – of retiring certain inefficient and polluting infrastructure early, readers learn that "it's your job to make existing capital stocks obsolete more quickly" by bringing compelling new technologies to market and being innovation "insurgents". The audience is encouraged not to create "artificial obstacles" by thinking too incrementally or succumbing to "feasibility blinders", institutional inertia or the "wilful ignorance" of climate-change deniers.
Traditional venture capitalists (VCs) somehow escape Koomey's scrutiny. One of the dirty little secrets of the "clean-tech" revolution that could have been addressed is the way impatient VCs without subject-matter expertise can swoop in and push innovators out or otherwise cut corners before innovation has had a fair chance to take root.
While private-sector initiative is clearly the missing link in cooling the climate, Koomey recognizes a key role for entrepreneurs in the public sector as well. To Libertarian idealogues he has one message: "When it comes to government, more is not better. Less is not better. Only better is better."
Koomey recognizes that his audience will collide with climate deniers who try to thwart incipient climate-related businesses. It is a pity that the mis- and disinformation on climate change has required Koomey to spend so much time on dealing with these distractions, but it is a necessary evil. He lays out an excellent set of tools for avoiding such ambushes, and makes no bones about his view – which I share – that the root of climate denialism is not an honest scientific difference of opinion. Rather, it is typically some combination of unstated religious beliefs, cloaked ideological antipathy towards government and misunderstanding about the nature of property rights.
While most readers may be technologists, it is important also to think about innovation in services and business models. For example, the fees received by facility design teams are typically defined as a percentage of capital costs, rather than as a function of energy/economic/environmental performance; realigning such incentives can lead to big changes in institutional behaviour. As Koomey notes, new information and communication technologies are key to creating better measurement systems for benchmarking and performance optimization, and to modifying incentives and institutional structures to better reflect economic and environmental realities.
The book ends on a highly optimistic reminder that the future is still ours to choose. The energy and economic pathways in front of us have never before been so divergent. Koomey's book will help us choose wisely, and laugh all the way to the bank.