Climate-KIC statement on global climate change deal: “Now let’s get to work”
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“We need an armoury of silver bullets to transform how we live, what we consume, and how we do business.”
Statement by Bertrand van Ee, CEO, Climate-KIC
President Obama ended his speech at the opening of the COP21 climate change summit with “Let’s get to work.” I would now like to recall those words on the day of the historic Paris Agreement.
The deal struck in Paris today has unlocked a blue ocean of uncontested opportunities for business. The trajectory of staying “well below” two degrees warming is achievable, but achieving it requires a major shift in the global economy. That shift represents a highly lucrative economic opportunity. Already, there’s a $5.5 trillion market for low carbon technologies and products. And that’s just the tip of the iceberg.
The exact working of today’s deal will not dictate the solutions needed to capitalise on the opportunities of the zero carbon economy. A single silver bullet will not be sufficient to bring about the systemic change required. We need an armoury of silver bullets to transform how we live, what we consume, and how we do business.
Climate-KIC has spawned a range of those cutting-edge innovations, from climate change mitigation technologies, such as carbon negative power technology Cogent Heat Energy Storage Systems (CHESS), through to Aqysta, a hydro-powered irrigation pump that can double crop yields in developing countries, without using any fuel or electricity. Last year 40 of our start-ups won funding of over €1 million, with one entrepreneur, tado°, winning €10 million.
However, economic transformation cannot come from invention alone, it is also dependent on the adoption of new, innovative products and services. This diffusion of innovation is dependent on companies having an understanding of climate risk and of the opportunities for climate change to shape an actionable business case for purchasing new equipment, learning new ways of doing things, or adapting existing capital to new business models and processes.
Innovation has played a critical role in most socioeconomic revolutions. Climate change is no exception. The science shows we need to reconfigure the economy in-line with the two degrees trajectory – and innovation must sit at the centre of the transition. Scientists estimate that by deploying technology, business can potentially reduce the emissions intensity of industry by approximately 25 per cent, with innovation reducing this by up to another 20 percent, before technological limits are approached in some energy-intensive sectors.
However, many European business leaders seem to have been lulled into the false illusion that their operations can transition into the low carbon economy incrementally. Many have forgotten how to innovate, or are delaying innovation until they get a policy silver bullet. That strategy doesn’t reflect their understanding of the material risk of climate change; or the realistic timelines to scale up radical innovations to turn the threat into an opportunity.
Sparking an Innovation Step Change, Climate-KIC’s new research of C-level European business leaders – from Chief Executives – to Chief Operating Officers, gives a snapshot of corporate readiness to deploy transformational technologies to turn climate change from a threat into an opportunity. Encouragingly, most European business leaders acknowledge the regulatory and physical risks posed by climate change, and believe responding to climate change would drive growth as demand for environmentally sound products and services increases. However, a surprising amount are not looking to innovation to secure their place in a carbon constrained economy.
Business now faces the choice, either to shape the needs and impacts of a zero carbon future, or to be shaped by it. Post COP21, businesses must actively place themselves on an innovation journey; creating channels for radical innovation to flow into their operations, making them more resilient and equipped to seize first mover advantage in the zero carbon economy.
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On 23 March 2021, EIT Climate-KIC, with the support...