Big Pivot: Business Can Play a Profitable Role in Combating Climate Change, with Andrew Winston

Andrew Winston is a bestselling author and business strategist who has advised some of the world’s top companies on environmental matters. In his new book, The Big Pivot, Winston advocates for a major shift in business priorities away from short-term earnings and toward long-term sustainability. Despite outside pressure to achieve quick wins, Winston believes the business community can help tackle some of the world’s most pressing issues (such as climate change) “using the tools of capitalism, markets, and competition to do it most profitably.”

In his recent Big Think interview, Winston calls climate change “arguably… the greatest challenge we face for humanity.” Not only does it have a negative effect on our environment, climate change has been and will continue to be catastrophically expensive for both the public and private sectors. Yet, thanks to efforts to raise awareness about its many costs, Winston expresses confidence that the growing environmental movement can make a lasting impact. All they need is help from the outside.

Winston illustrates two key reasons why the business world is sometimes sluggish on environmental issues. The first is that common myths still plague sustainability, most notably the myth that “there’s this fundamental trade-off between trying to manage these big challenges in a profitable way and just managing your bottom line in a normal way.” For a long time, green products and services were known to be quite expensive. That dated reputation has persevered despite the fact that it’s no longer steeped in truth. Businesses are slowly coming to realize this:

“There’s a whole category of things that companies do that save money very quickly. All things that fall under kind of the banner of eco-efficiency or energy efficiency. I mean, in part, green is about doing more with less. That’s just good business and so that part of the agenda has become much more normal in companies and they’re finding ways to cut costs dramatically.”

More than just these quick and easy fixes, it’s never been more economical to do something like install solar panels on the company’s roof:

“The cost of that has been dropping dramatically, 70-80 percent reduction in cost of, you know, using solar power in the last five years. So the economics have shifted. This is now very good for business. Almost all of the agenda of The Big Pivot is good for business in the long term, in the medium term and very often in the short term. So there isn’t this tradeoff. This is the path to growth. This is the path to innovation.”

The second obstacle facing Winston’s big pivot is the media, specifically its unsettling reluctance to cover issues related to climate change. Winston points to the recent climate march in New York that drew 400,000 people to the Big Apple yet was barely a blip on the press’ radar:

“There’s a very strange thing that’s happened where, I don’t know, climate change is boring, it’s not sexy, it doesn’t seem exciting and so it doesn’t get the coverage it needs… And it’s a shame. I think there’s an opportunity to highlight how far we’ve come and the opportunities we have to change our lives for the better and make business a part of the solution and make it more prosperous and more profitable. And I think we’re missing out on telling that story.”

So Winston’s goals for enacting the ideas espoused in his book are to dispel the common myths about the monetary price of going green and to raise awareness through media channels. Once those benchmarks are cleared, there will be little standing in the way of a business-led environmental revolution.

Citation: Winston, A.[Big Think]. (2014, November 5th). Business Can Play a Profitable Role in Combating Climate Change[Video file]. Retrieved from https://www.youtube.com/watch?v=N3CxMZOmCgo

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A Tricky Transition From Fossil Fuel: Denmark Aims for 100 Percent Renewable Energy

Denmark, with a pioneering wind-power program, is above 40 percent renewable power on its electric grid. It wants to be off fossil fuels by 2050. Credit: European Press photo Agency/E.ON/HO

Denmark, with a pioneering wind-power program, is above 40 percent renewable power on its electric grid. It wants to be off fossil fuels by 2050. Credit: European Press photo Agency/E.ON/HO

COPENHAGEN — Denmark, a tiny country on the northern fringe of Europe, is pursuing the world’s most ambitious policy against climate change. It aims to end the burning of fossil fuels in any form by 2050 — not just in electricity production, as some other countries hope to do, but in transportation as well.

Now a question is coming into focus: Can Denmark keep the lights on as it chases that lofty goal?

Lest anyone consider such a sweeping transition to be impossible in principle, the Danes beg to differ. They essentially invented the modern wind-power industry, and have pursued it more avidly than any country. They are above 40 percent renewable power on their electric grid, aiming toward 50 percent by 2020. The political consensus here to keep pushing is all but unanimous.

Their policy is similar to that of neighboring Germany, which has spent tens of billions pursuing wind and solar power, and is likely to hit 30 percent renewable power on the electric grid this year. But Denmark, at the bleeding edge of global climate policy, is in certain ways the more interesting case. The 5.6 million Danes have pushed harder than the Germans, they have gotten further — and they are reaching the point where the problems with the energy transition can no longer be papered over.

The trouble, if it can be called that, is that renewable power sources like wind and solar cost nothing to run, once installed. That is potentially a huge benefit in the long run.

But as more of these types of power sources push their way onto the electric grid, they cause power prices to crash at what used to be the most profitable times of day.

That can render conventional power plants, operating on gas or coal or uranium, uneconomical to run. Yet those plants are needed to supply backup power for times when the wind is not blowing and the sun is not shining.

With their prime assets throwing off less cash, electricity suppliers in Germany and Denmark are on edge. They have applied to shut down a slew of newly unprofitable power plants, but nervous governments are resisting, afraid of being caught short on some cold winter’s night with little wind.

The governments have offered short-term subsidies, knowing that if they force companies to operate these plants at a loss, it will be a matter of time before the companies start going bankrupt.

Throughout Europe, governments have come to the realization that electricity markets are going to have to be redesigned for the new age, but they are not pursuing this task with urgency. A bad redesign could itself throw customers into the dark, after all, as happened in California a decade ago.

Denmark is geographically lucky. It has strong electrical linkages to neighboring Sweden, with plentiful nuclear power capacity, and Norway, with power available on demand from dams. But Swedish politicians have vowed to shut down the country’s nuclear plants and go renewable, and Norway’s cheap hydroelectric power is in rising demand, with a supply line under consideration to energy-hungry Britain. So the Danish electricity industry sees trouble coming.

“We are really worried about this situation,” Anders Stouge, the deputy director general of the Danish Energy Association, said in an interview. “If we don’t do something, we will in the future face higher and higher risks of blackouts.”

The government is somewhat dismissive of that notion but well aware that it needs to find a way out of this box. Environmental groups, for their part, have tended to sneer at the problems the utilities are having, contending that it is their own fault for not getting on the renewables bandwagon years ago.

But the political risks of the situation also ought to be obvious to the greens. The minute any European country — or an ambitious American state, like California — has a blackout attributable to the push for renewables, public support for the transition could weaken drastically.

So the trick now is to get the market redesign right. A modest version of reform would essentially attach a market value, and thus a price, to standby capacity. But Rasmus Helveg Petersen, the Danish climate minister, told me he was tempted by a more ambitious approach. That would involve real-time pricing of electricity for anyone using it — if the wind is blowing vigorously or the sun is shining brightly, prices would fall off a cliff, but in times of shortage they would rise just as sharply.

As Denmark, like other countries, installs more smart meters and smart appliances able to track those prices with no human intervention, one can imagine a system in which demand would adjust smoothly to the available supply. Most people would not care if their water heater were conspiring with other water heaters to decide when to switch on and off, as long as hot water reliably came out of the tap.

Yet, even if Denmark can figure out a proper design for the electric market, it has another big task to meet its 2050 goal: squeezing the fossil fuels out of transportation. Prematurely, perhaps, the country embraced a proposed system of electric cars in which depleted batteries would be switched for fresh ones in minutes, but only a few hundred cars were sold before that overly ambitious plan flopped.

Mr. Petersen told me he still felt electrification of cars was the way to go, but the cars themselves were not really ready.

“We need longer range and lower prices before this becomes a good option,” he said. “Technology needs to save us here.”

Citation: Gillis, J. (2014, November 10). A Tricky Transition From Fossil Fuel: Denmark Aims for 100 Percent Renewable Energy. Retrieved November 11, 2014, from http://www.nytimes.com/2014/11/11/science/earth/denmark-aims-for-100-percent-renewable-energy.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=1

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Hey there world. My name is Brandon Gerel and this is my blog. My story starts in Ulaanbaatar, Mongolia where I was born and raised. Due to the twists and turns life provides you with, somehow I have ended up in Vancouver, Canada, a place I consider to be my home and where I live to this day. But most importantly, I like to consider myself a Global Citizen. I believe that regardless of where you are from or how you look, we humans share a common destiny to transcend the antiquated prejudices and enmity only together.

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