"We have to start thinking out of the box" – Pachauri

World’s leading climate change expert sees entrepreneurs at the forefront of the drive to tackle global warming. Interview by Martin Wright.

Innovation and enterprise are key to tackling global warming: without them, we will struggle to make meaningful reductions in greenhouse gases. That’s the view of the world’s leading expert on climate change, Dr Rajendra Pachauri.

“We have to start thinking out of the box,” he told Green Futures. Entrepreneurs who respond to the challenge will reap commercial success – while businesses which fail to do so face oblivion, he says. “There are opportunities in just about every sector of the economy,” from construction to energy to transport, added Pachauri, who, as chair of the Intergovernmental Panel on Climate Change, shared the 2007 Nobel Peace Prize with Al Gore.

Some of the innovations are small-scale in themselves, but have a tremendous collective impact – like solar power for Indian homes, which is transforming the quality of life of millions of the country’s rural poor, Pachauri says. At the other end of the spectrum are technical breakthroughs in areas such as sophisticated control systems which can dramatically cut energy consumption in buildings, or complete redesigns of every aspect of motor vehicles, from fuel and power trains to materials and IT.

But innovation isn’t just about technology, says Pachauri – it’s about methods and institutions, too. Take that solar scheme. Local village women borrow money to buy a small photovoltaic panel. Installed on the roof of their homes, it provides power to charge a dozen or more solar lanterns. The women rent these out to their fellow villagers at a rate high enough to allow them to service the loan – but which works out cheaper than the cost of fuel for the kerosene lamps which are the only other source of light for the community.

On the surface it sounds straightforward. But for years, it was assumed that electricity – let alone clean, emissions-free solar power – would be far out of the reach of many of India’s poor. The fact it became possible is down to a mix of innovation in both technical design and the creative application of microfinance. There’s social innovation at work too: in the way in which local women have been enabled to become solar entrepreneurs.

It’s this sort of fresh thinking which is the focus of the FT Climate Change Challenge competition, a collaboration between Forum for the Future, The Financial Times and technology giant HP. It is offering a US$75,000 prize for the most exciting innovations which directly address climate change and which can be brought to market as viable, going concerns. Dr Pachauri, who sits on the judging panel, believes it offers an opportunity for ‘climate entrepreneurs’ to win much-needed profile, as well as investment. “There are clearly going to be commercial successes emerging. You don’t have to be doing this for altruistic reasons. The future is low-carbon. So those who are ahead of the game now – who see the way things are moving – will reap the benefits.”

They will also, he believes, bask in the prestige accorded them by a world increasingly focused on the need to find climate solutions. “Society will really look up to innovators in this area. So in both a commercial and a social sense, people who succeed in this endeavour are going to come out much better off.”

He is quick to dismiss the suggestion that concerns over the recession should take priority over the environment. “We simply do not have the option of delay. But a lot of the actions we need to take now to reduce greenhouse emissions can also help revive the economy. They all have substantial co-benefits. That makes it worthwhile doing those things anyway” – whatever your view on climate change science. It’s something he believes the incoming US President grasps – he talks enthusiastically of Obama’s drive to “revive the economy by creating green jobs”.

As far as energy is concerned, Pachauri adds, the search for secure supplies and stable prices plays into the hands of those pushing for more emphasis on efficiency and on renewable power. These will make it one of the most promising areas for innovation in the coming years, he believes.

So is business doing enough? “It’s a very mixed picture. There are some companies who are ahead of the curve; who realise this isn’t just about responsibility – it’s an opportunity, too. In hydrocarbons, for example, you have BP and, to some extent, Shell, who have at least tried to address the problem. Then there are others which I won’t name, although I think it’s fairly obvious who I’m talking about, which have actively placed barriers in the path of those who want to take the action we need.”

And as the world inexorably shifts to a low-carbon economy, such companies will struggle to survive, he added. “Look at General Motors. This was one company which did not read the writing on the wall, and as a result they are virtually in a state of bankruptcy. If they had only responded the way Toyota did seven, eight years ago, identifying and pursuing low-carbon opportunities, they would have been in a pretty strong position today.”

Martin Wright is Editor in Chief of Green Futures.

9 January 2009

Martin Wright