Can Green and CleanTech Startups Save the World? July 14, 2015 RICCentre An Op-Ed by Wladimir Hinz, RIC Centre Research Associate ‘If everyone does a little, we’ll achieve only a little.’ – David McKay There’s an intense academic debate on whether climate change is real or not, with some experts stating that it’s just being caused by natural conditions and/or that the ‘economy’ would eventually solve any problem if the right incentives exist; according to them, there are no real reasons for concern. However, no climate scientist seems to dispute the fact that there’s a significant (potentially harmful) concentration of in the atmosphere and in the surface oceans. Most of them agree that there could be very dramatic consequences, if these levels of don’t decrease; not only would icecaps melt and seas rise by 7 meters, but global temperature could also rise more than 3°C, which may not seem like much, but Earth hasn’t been so close to those levels for 100,000 years. This could very well affect every ecosystem on Earth with unforeseeable consequences. The climate change problem is becoming more and more urgent by the day. Fossil fuels need to be replaced and this is absolutely non-negotiable. For this to happen, economic activity has to be decoupled from them. This is a controversial statement but economic growth needs to be separated from fossil fuels. Coal is by far the most problematic, as it emits the most carbon. Natural gas is less problematic, but more expensive and still releases sufficient carbon to make it unviable as a long term solution. And nuclear power is very unpopular for understandable reasons. This leaves us with just solar, wind and any other alternative energy source (like algae, ethanol, or waves). Substituting fossil fuels for renewable energy used to be too difficult and too costly, but it’s now marketable and estimated to gradually happen sometime in the future. In fact, in 2013 commercial solar power reached grid parity (i.e. it cost the same to consume solar generated electricity as to consume power from the grid) in various countries in Europe. Wind power technologies are also advancing in the same direction. There’s 15xmore solar power and 3x more wind power in the world than in 2007. This is expected to continue for the next five years, as 80% of new energy sources in developed countries are expected to be renewables. Right now, solar and wind power generate roughly 20% of the world’s total energy. In market terms, this non-fossil fuel technology could have a yearly market size of $3-4 trillion by 2020, according to the IEA. This means that green/clean energy technology could be the single, biggest, global market of the 21st century. So, it would be natural to see startups sprouting up all over the place and this is exactly what’s happening. There are three markets that look very promising for them: smart-grids, energy production, and energy storage (the global ‘holy grail’). All of them are concentrating on technologies that generate low levels of carbon. In either case, the focus of all new technology should be based on current regulations and market conditions. It’s very tempting to think of a better world where conditions are just right. What’s really challenging is following the rules that are already set in place and effectively changing the world. Eliminating fossil-fuel energy sources is at least as much a social and political problem as a technological one. There are studies that suggest that alternative energy sources are displacing fossil fuels very modestly right now, not in the proportion one would expect. The currently established energy industry giants are fighting for their survival and they won’t relent any time soon. The industry has a dominant infrastructure, economic power, and a palpable influence over policy. Given this scenario, it looks like it’s going to take some time before energy sources are replaced. The problem is that if the market is left on its own, it will take too long. Startups need more attention. The idea of sustainable capitalism is just a form of ecological denial. It just doesn’t take into account the destructiveness of the current system. The best way to curb carbon emissions is to alter regulations and markets, which may be a burden too heavy just for private companies. These green and clean technologies could provide the answer to climate change; there’s also promise that they can even reverse it. Yet the power to do so seems to dilute in current processes whether unwillingly or not, and as time continues to go on, the effects of fossil fuels perpetuate even more. Green energy and clean tech startups can save the earth, but not alone. There needs to be a general understanding that, when confronting the idea of a terminal crisis, which threatens most life on the planet, simply introducing green energy isn’t enough. Policy makers should act on these issues too. Renewable energy is not a dream anymore and it’s still not too late to change. There’s always hope as engineers and scientists often achieve the impossible.