Disrupt Climate Change, Part I

Our climate has been disrupted. We call this climate change.

The IPCC predicts CO2 concentrations in the atmosphere of between 600 ppm (optimistically) and 1000 ppm (pessimistically) in the year 2100. 1000 ppm is the CO2 concentration level which is reached in a badly ventilated meeting room. Imagine being inside a badly ventilated meeting room, even when breathing “fresh” air, is definitely not a nice thought. Especially when we know so little about the long term effects of CO2 on our bodies, as I have previously written about.

In order to stop this, I believe that we will need disruptive solutions. In other words, we need to disrupt climate change as the title suggests.

Reducing emissions alone is not enough. We need to also start actively removing climate gases from the atmosphere. While some good work has been done on this topic, we still don’t have a clear path of action.

This is the first in a series of articles that suggest actions we can take to disrupt climate change. In this article I will make the connection between disruption and climate change, making explicit what conditions need to be met to enable disruption and how politics is a major underpinning that we should change.

In Disrupt Climate Change, Part II, I will be writing about what might create a demand in the Market, what Business Models might be viable and what Technology we already do have today, making the point that businesses do not have to wait for the politics because opportunities exist already today.

Disruption

Let’s start by trying to understand what disruption is. Clayton Christensen’s 1995 article “The Innovator’s Dilemma — When New Technologies Cause Great Firms to Fail” introduced the concept of “disruption” to the business world. Disruption has since become a big topic, ironically many have seemed to emphasize the technological aspect, as suggested by the article’s title.

I believe however that technology alone is not enough to create disruption.What is needed is a mix of the market demand, the business model and the technology.

Only when all 3 aspects are covered, will a company create a disruption.

As an example let’s look at how Apple disrupted Nokia.

The initial version of the iPhone was a nice piece of hardware, yet Nokia had a similar offering and could certainly compete in terms of hardware development capabilities. What Steve Jobs realized however, and what really disrupted Nokia, was the insight, that people have very different requirements with respect to their phones and that even Apple was not big enough to fulfill them all.

In order to solve this challenge, Apple needed a way to engage the global software developer community and create a way to distribute and earn from the developed apps.

The result, of course was the app store.

Looking at today’s smartphones, every phone is as unique as a fingerprint, identifying the user by the installed apps. The installed apps in this way represent the individual configuration of each users phone, which in turn fulfill the specific users’ needs.

What Apple achieved, was to create a win-win situation, for the developers on the one side and the consumers on the other side. Furthermore the model was created in a way such that it was perceived as being fair for all.

Google was of course fast to realize the real intention of Apple and started building a similar offering.

Nokia, and later Microsoft, only realized what the real value proposition was, many years too late.

So offering the right technology, which is manifested in a service or a product, the way this service or product is sold and the fact that it solves an actual need, all need to come together in order to disrupt an existing market.

How can this concept be applied to climate change?

The answer to this question is, that we need technology to reduce or even remove climate gases from the atmosphere. We need viable business models, so there is an interest to invest because there is money to be earned. We need products that the market wants to buy, preferably even the broader population.

In order to maximise the chances for success, it would help if our politicians set a playing field that supports business initiatives.

We need a stable political environment, where investors know what future they are looking into. Don’t change the laws all the time please! Otherwise investors will be scared away.

The role of politics

Politics sets the playing field for our economy by means of laws. These laws regulate our taxes, subsidies and all of our daily lives.

In the European Union we already today have the European Emissions Trading System or ETS, that regulates climate gas emissions. The ETS however has some fundamental faults:

1. A share of emissions allowances are still allocated for free.
2. Not all sectors are part of the ETS scheme.
3. Only 50% of the revenue has to be used for climate and energy related purposes.
4. Countries outside of the ETS scheme gain a competitive advantage. This has resulted in an actual export of emissions by moving production to countries not part of the ETS.

If we are really serious about doing something about climate change, we first of all need to stop “cheating” with the numbers, be it knowingly or unknowingly. We need to include all the emissions that we are responsible for.

How emissions are calculated

A country’s carbon footprint = direct emissions + indirect emissions ± LULUCF — carbon sinks

Direct emissions are the emissions that are a result of activity within a country, for example caused by burning fossil fuels for heating or transport or industry production.

Indirect emissions are the emissions that are caused by importing certain goods and transporting these into a country or by importing electricity. In most statistics that show the footprint of a region, this parameter is not taken into account.

LULUCF stands for Land Use, Land-Use Change and Forestry. Depending on the activities in agriculture and forestry, this parameter can be positive or negative. If forest is planted and well managed, the LULUCF parameter decreases the footprint. If deforestation is happening or the forest is poorly managed, the LULUCF parameter increases the carbon footprint. In most statistics that show the footprint of a region, this parameter is not taken into account.

Carbon sinks are all of the chemical or natural processes that absorb emissions from the atmosphere. This should also include bodies of water with algae for example. In most statistics that show the footprint of a region, this parameter is not taken into account.

As can be seen, quite a few of the emissions relevant parameters are not taken into account. If we however want to do something about climate change, we need to use a model that accounts as correctly as possible for the emissions that we are responsible for.

Dear politicians

1. Stop “cheating” with the numbers.
2. Make a long term plan for rules and regulations.
3. Kick-start the disruption of climate change by investing 100% of the revenues into technology and businesses. In the long run, this will result in innovation, jobs and increased wealth.
4. Protect the local industry from competition, in countries that are doing nothing (trade tariffs are most likely necessary).
5. Construct the system in a way that makes it advantageous to join for other countries.

These actions should be a good start to get on a track to disrupt climate change and give future generations a prosperous environment.

As a positive side note, I can mention that Ursula von der Leyen is actually mentioning a Carbon Border Tax (at the bottom of page 5) in her “Mission letter” to Phil Hogan, Comissioner-designate for Trade. Furthermore, there are also a lot of politicians who are working very hard on solving this problem. But our politicians need our help. People with knowledge when it comes to information and solutions must become more active.

Even if our politicians are slow to act, this should be no reason to delay action on the part of private businesses. Let’s become the Apple to disrupt climate change. Steve Jobs didn’t wait for the politicians, nor should you.