Posted in GreenBiz
February 21, 2022

How can businesses trigger cleantech tipping points in the 2020s?


You hear a lot about “tipping points” in climate discourse. Environmentalists are haunted by the fear of the nightmarish, but all-too-plausible, thresholds the world risks passing as society pumps ever more greenhouse gases into the atmosphere and plays Russian Roulette with natural systems that could trigger devastating and often irreversible changes to the planet’s climate. Barely a week passes without updates on how close Antarctic ice sheets, Amazon rainforest biospheres, Arctic permafrost and tropical corals may be to catastrophic collapse.

But there is another form of climate-related “tipping point” that is rather more positive in nature. The tipping points that mark the point at which cleantech deployment rates become exponential are in many ways the last best hope against averting runaway climate change.

Time is incredibly short. In order to avoid the most catastrophic climate impacts, scientists have calculated that global greenhouse gas emissions must fall by 45 percent by 2030. Yet as the global economy emerges from the COVID-19 pandemic, emissions are on the rise once again, presenting a monumental challenge over the next eight years if the world is to keep to the 1.5 degrees Celsius global warming target countries signed up to in the Paris Agreement on the table.

Meanwhile, the advance of low carbon alternatives to the hydrocarbon-driven economy has been far too slow to meet that challenge. The best — and perhaps only — chance of delivering such deep decarbonization within the current decade, therefore, is an exponential uptake of green technologies, financial flows, economic systems and human behaviors: positive tipping points, in other words, which must be reached as soon as possible.

“For me, this is probably the only way now that we can get the kind of rate of change we think we need in order to hit the target of limiting global warming to well below 2C and somewhere near 1.5C,” climate scientist Professor Tim Lenton, director of the Global Systems Institute at the University of Exeter, said. “And I think the same argument would hold for other goals like reversing the decline of biodiversity and trying to become so-called ‘nature positive’ by 2030. It requires tipping points — self-accelerating change. That’s exactly why I put my focus on this, because it can happen and it does indeed happen that way.”

The tipping points that mark the point at which cleantech deployment rates become exponential are in many ways the last best hope against averting runaway climate change.

A year ago, Lenton and his colleagues published their first paper on the topic. While warning the world is teetering “dangerously close” to several negative tipping points that could accelerate climate change, it also highlighted a number of examples of how ‘positive tipping points’ could well soon reshape the global economy in a greener mold. In particular, the paper pointed to the rapid march of renewable energy technologies and electric vehicles (EVs) as leading examples that hold the potential to trigger further “upward scaling tipping cascades” that would then accelerate global adoption.

Lenton and his co-author Simon Sharpe, a policy associate at UCL and deputy director for policy campaigns at the UK government’s COP26 unit within the Cabinet Office, argued that by working together to drive down costs and build new markets, small coalitions of countries would be key to triggering these positive tipping points.

It is a school of thought that informed the COP26 launch of the ‘Glasgow Breakthroughs’ initiative, which saw 40 nations covering 70 percent of global GDP back plans to accelerate the adoption of low carbon steel, hydrogen, power, agriculture, and road transport technologies. Led by the UK, the aim of the wide-ranging initiative is to make clean technologies in these areas “the most affordably, accessible and attractive choice” by 2030, with estimates suggesting that doing so could create 20 million new jobs and deliver a $16tr boost to both emerging and advanced economies.

Lenton says he was “heartened” to see countries adopt this approach, which he describes as “the first time a large group of countries has agreed on joint climate change goals in the form of economic tipping points”.

And now, a year after their first paper, Lenton and his colleagues have sought to flesh out their vision, to better explore why economic and societal tipping points occur, and how they can be activated to accelerate deep decarbonization and build a net-zero emission economy.

“There are a lot of people who would like some clues and advice on how we can make the great transformation to net-zero and nature restoration happen faster, so what I’m trying to do with this paper is bring existing knowledge, theories, models and experience together to begin to draw up some kind of recipe for how to find and trigger positive tipping points,” he explains. “I think a lot of people have got some sense of what we need to do, but not so much who does it and how we do it.”

Lenton is hoping to put together a specific “recipe” for businesses to help trigger these positive green tipping points in the near future, but in the meantime, there are still some key takeaways from the latest research, which has today been published in the journal Global Sustainability.

1. Tipping points are not just needed in technology

Although the Glasgow Breakthrough agenda launched at COP26 largely focuses on accelerating adoption of green technologies, which are clearly hugely important to decarbonizing vast swathes of the global economy, the paper makes it clear that tipping points aren’t just required in economics and engineering.

“It’s not just about technology, and it’s not even just about how society interacts with technology – although that’s crucial,” Lenton explains. “It’s about pure societal tipping dynamics, and how these intersect with technology and ecology. Through the so-called ‘social contagion’, alternative behaviors or uptake of alternative products can spread by people imitating each other through word of mouth and so on.”

He cites green protest movements and activism, spurred in part by Greta Thunberg, Extinction Rebellion, and David Attenborough documentaries, for building ripe conditions for social tipping points. Similarly, the rapid uptake of plant-based diets in recent years continues to grow, driving the development of alternative meat products, which Lenton believes may already be on the cusp of a tipping point.

Businesses looking for the adoption of new green goods and services should not just think about their product offering, but should also focus on how they can work alongside consumers and communities.

“We’re seeing these interesting coalitions forming between civil society actors, policy, and finance,” he says. “And although I don’t claim to have the full recipe, it feels that in some cases the positive tipping point is going to happen sooner if you have the right coalition behind it acting together.”

Businesses looking to push forward the adoption of new green goods and services should not just think about their product offering, but should also focus on how they can work alongside consumers and communities to drive change.

2. Tipping points are not inevitable

A transformative shift to a net-zero economy may look increasingly likely over the long term, but in many parts of the economy and society, the transition is far from guaranteed. And, with time so short to drastically cut emissions if the 1.5C or well below 2C temperature goals are to be met, there is an urgent need to “force” the requisite tipping points to occur as soon as possible, rather than sit back and hope they emerge of their own accord, according to the paper.

“To bring a system to a tipping point typically requires some forcing,” it states, and that is done firstly by creating “enabling conditions”. These typically include supportive social and community networks; competitive prices and affordability; product desirability, accessibility, and convenience; impressive performance and quality; and clear information and high levels of public awareness.

In many ways, these enabling conditions echo the approach taken by Elon Musk to turn Tesla from a niche interest to the world’s most valuable car brand and best-selling EV maker. Irrespective of the fact they are electric, Tesla has made its cars desirable and increasingly affordable to wider sections of society, by initially targeting a smaller subset of wealthier consumers to help build engagement and awareness.

“We need to find and trigger these things,” said Lenton. “They are not inevitable.”

At the same time, simple changes can help overturn incumbent and established ways of thinking, the paper suggests. For example, placing plant-based alternatives and climate messages more prominently on restaurant menus can help drive demand with recent research suggesting the approach can double plant-based meal sales.

Businesses, therefore, need to be active participants in driving these sorts of changes, be it through engaging with consumers, advocating for supportive policy, investing in greener goods, services and research, or teaming up with other partners to drive down costs.

“We need to find and trigger these things,” said Lenton. “They are not inevitable. In fact, there’s a body of literature in academic circles — transitions management, they call it — where they’re rather locked into the thinking that we’ve seen similar transitions in the past which have transformed energy systems. But they have always been pretty slow, perhaps 50 years or so, and if it takes that long then we might be doomed. We really need to find out what can make them happen sooner and more effectively.”

3. Tipping points can be driven from the bottom-up as well as top-down

While investment and national policy frameworks have helped to accelerate the rollout of renewable energy technologies such as wind and solar worldwide — the UK’s Contracts for Difference subsidy auction scheme being a case in point — the transformation can also start with grassroots communities, the paper contends.

Co-author of the paper Dr. Tom Powell, also from the University of Exeter, highlights the example of a carbon offsetting scheme supporting regenerative farming and afforestation which has gained traction across Kenya, Uganda, Tanzania and India. “A farmer-led scheme called TIST has spread to over 150,000 subsistence farmers in East Africa, because it supports farmers to share these practices and learn from one another,” he explains. “International voluntary carbon markets have enabled TIST members to collectively access payments for carbon sequestered in trees on their land, building in a further reinforcing feedback.”

The Norwegian pop band Aha played an instrumental part in EV adoption by refusing to pay tolls and road taxes on their custom-made EV in the 1980s. The resulting tax breaks still exist today.

Lenton, meanwhile, cites the Norwegian pop band Aha, who played an instrumental part in laying the foundations for electric vehicle adoption in the Scandinavian country by refusing to pay tolls and road taxes on their custom-made EV in the 1980s. The resulting tax breaks still exist today in Norway, where EVs made up 65 percent of the car market last year.

For Lenton, it shows that almost everyone can potentially play a part in triggering positive tipping points to combat climate change, which can in turn help to counter widespread feelings of disempowerment in the face of such a monumental challenge.

“These changes often start with small groups of people with a big idea,” says Lenton, “These can become networks of change that grow into large movements with a major impact.”

4. We don’t have to wait on government and policy

The distracted state of the UK government as it tries to battle pandemic party controversies, a crisis in Ukraine, and soaring energy costs is no doubt frustrating for green businesses which are desperate to see more policy detail to build on last year’s Net Zero Strategy. That distraction has opened up space for bad-faith actors in Parliament and the media to question the merits of decarbonizing the economy.

But while supportive policies can really help to move the dial — the UK’s 2030 ban on petrol and diesel car sales providing a prime example — Lenton suggests “there are other ways and other actors who have got quite a lot of power to create change”.

“It is sad that we don’t always have better political leadership, but I suspect everybody throughout recent history would have had the same lament most of the time,” he says. “At the end of the day, it may be a clumsy system, but if politicians do really care about the court of public opinion. If that shifts, politicians will follow the public’s choices and dynamics.”

Lenton is particularly animated about the potential of the financial sector, and investors, to drive positive green tipping points, as “moving capital around has got enormous leverage”.

“Because they’re both invested in supply chains and other businesses, and are often advising businesses as well as investing in pension funds, they have an unusual position whereby moving investment and advising companies they can help propel the change,” he says.

5. Volatility is inevitable

The longer we leave it to decarbonize the economy, the shorter the time we have left to hit climate targets, and ergo, the greater and more sudden the required changes will be if disaster is to be averted.

That of course means huge and growing risks for established business models, geopolitical power structures, and those working in carbon-intensive industries.

Another separate study released by sustainability consultancy Systemiq in November warned that billions of dollars worth of high-carbon infrastructure could be left stranded as a wave of positive green tipping points are triggered over the next 10 to 15 years and result in massive fossil fuel demand destruction.

But that same study also predicted that a wide range of clean technologies will become cost-competitive with polluting incumbents over the next decade, with green market tipping points expected in sectors that account for 100 percent of global emissions by 2035.

Even so, is there a risk of the transition moving too quickly, upending economies and losing social acceptance for change?

“Transition risk is certainly a real risk, but it all comes down to risk management,” Lenton says. “We’ve got to weigh up the relative risks and make ethical and value judgements taking into consideration not just present generations, but future generations as well.”

One study also predicted that a wide range of clean technologies will become cost-competitive with polluting incumbents over the next decade.

Policies and governance to ensure a “just transition” for those adversely affected by positive green tipping points are going to be key, but ultimately he argues “volatility for the old way of doing things is almost inevitable when the transformation starts to come”.

But these risks can and must be considered alongside the huge opportunities ahead that these positive tipping points offer.

“Some incumbents, unless they reinvent what they do, are set to lose big time,” he explains. “But other actors are set to gain big time. In a profound transformation of the economy, energy and everything else, we’ve got to make new infrastructure or retrofit old infrastructure, and we’ve got to learn to do things differently. So businesses that embrace the change are certainly going to be looking at opportunities to thrive as the change happens.”

The world may have left it too late to tackle climate change incrementally — back in the 1980s, just a couple of percentage points a year knocked off global emissions might have done the trick — but that ship has sailed, and we now need close to 10 percent annual emissions reductions to keep 1.5C alive.

Yet, if the world can deliver positive tipping points in these areas and more, there are reasons to think catastrophe can be averted. Exploring how we can build the conditions for triggering these tipping points could scarcely be more important, and businesses that do so first are likely to reap the benefits.

“Businesses are the backbone, the mainstay, of the economy,” says Lenton. “You can choose to make your business and flourish one way, but there’s a whole new load of ways for businesses to flourish in the new economy. If the transition is going to unfold anyway, then the ones at the front of the queue driving this are probably the ones that are going to win biggest.”

February 21, 2022 at 02:09PM

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