Add the advances in solar technology to those in battery storage. For decades, the battery changed slowly. It took us ages to go from lead-acid batteries used in cars, to the alkaline ones used in flashlights, to the lithium-iron version now used in our mobile phones, laptops, and cars. This new wide demand has driven the price of modern battery cells down 70 per cent since 2012. Now, scientists at Tufts University have improved on the lithium-ion battery by introducing silicon to boost its lifespan and increase its energy density. Solar power acquired in brief or intermittent sunny periods can be stored longer.
And then add the advances in battery storage to those in artificial intelligence. AI has grown into a powerful tool for technological progress over the past decade and can be applied to a range of climate-related problems. Transportation is a key one: it accounts for about a quarter of energy-related carbon dioxide emissions. Electric vehicles, powered by more efficient batteries, can, with the power of AI, reduce energy consumption, reducing emissions, traffic congestion and inducing eco-driving. In the next twenty years, the UK’s fleet is expected to hit 12 million vehicles.
All these technologies – solar power, battery, AI – are all mutually supportive and are all converging. Together, they create a counterweight in the real economy to the climate feedbacks that are warming our world. Given these developments, it is unsurprising – although historic – that a $100bn capital outlay in wind and solar energy today would produce up to seven times more energy for electric vehicles than would oil at current prices for traditional vehicles, according to a recent BNP Paribas report. The exponential working for clean energy will mean it will beat dirty energy on cost – everywhere in the world.
And these advances can be applied to improve all industries. Aviation may be thought to represent an almost intractable problem accounting for more than two per cent of global greenhouse gas emissions. But technology is changing the story.
AI interventions are reducing aircraft taxi time and congestion on runways, by predicting taxi time and making runway scheduling more efficient, and so bringing fuel consumption down. Neste in Finland have dropped oil from their brand name to reflect their move towards diversification away from oil. Rolls Royce and GE are making hybrid engines (quieter and more efficient). Start-ups all over the world are innovating on design, materials, engines and powertrains. Companies like ZeroAvia are developing aeroplanes that run on hydrogen-powered electricity, which releases only water vapour. This technology has been in development for decades, but has now reached a critical point. The Federal Aviation Administration authorized ZeroAvia to operate its prototype for test flights in 2019. They completed their first test last week – successfully.
It is a race: both global warming and technological solutions are moving at unnerving speeds. Those solutions can be enhanced and enabled by good public policy. It need not have a climate change label. It can be R&D assistance, university science funding, early stage investment incentives, and well-designed and implemented plans for digital infrastructure deployment. But some public policy will have to be deliberately directed towards reducing greenhouse gas emissions and drawing down CO2 from the atmosphere by setting enforceable net zero targets for the whole economy, penalising emissions by pricing them, and therefore valuing their saving or sequestering. The rules of the game in investment itself have to change to properly value the natural systems upon which we depend. It’s that straightforward, which isn’t to say it will be easy for business.
Dealing seriously, consciously, and conscientiously with climate change is hard for any board that has not trained its mind to the task before. Well established assumptions about the role of business and the particulars of a business are now contested. No longer is it sensible to focus on shareholders at the expense of stakeholders, the communities and environments in which businesses operate.
Leaders must face up to the disruptive changes in our climate and embrace the exponential solutions that technology provides. Boards must have members who know how to connect climate change to the business. Members must have the expertise to assess climate risk, preparedness, and integrate climate governance into decision-making. So far, the focus has been on recruiting directors who have climate expertise, but there is a need for the overall board to understand the area.
With a climate-fluent board in place, businesses need the right data, performance metrics, and analytics. This starts with asking the right questions: What are the company’s carbon emissions? What are the emissions of its supply chain and the use of its products and services? How efficiently are its resources used and how much of them are spent on reducing climate risk? The data generated by these questions will inform a plan on how the company copes with climate risk and offer solutions to climate change that are business opportunities.
Pretty much every board will be touched by climate change and some, like the coal companies that have all but lost their value, will suffer or disappear. Others will flourish, and many precisely because they have solutions to real world needs. Because they have really embraced rather than ducked this momentous and critical challenge. The time for box ticking is over.