Fighting Climate Change is a Business Model

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Published on February 8th, 2010  |  Discuss This Article  

Last month, the blog Solve Climate published a report detailing Bell Labs’ new initiative to make the systems that power the Internet more energy efficient by convening a “Green Touch” consortium composed of industry, universities, science labs and non-profits. The consortium is committed to find open-source solutions to energy efficiency, with the goal of making communications networks “1,000 times more energy efficient” within the next five years.

But what interested me most about this report was a nugget buried in the middle of the text:

Recently, the industry lost its battle to have the information and communication technology sector (ICT) included in the ‘Copenhagen Accord’ that came out of the two-week talks in December. Advocates believe that getting mention of ICT into the UN Framework Convention on Climate Change (UNFCCC) text would unleash dollars and innovation.

Making no mention of failed global climate policy, Bell Labs insisted Green Touch would deliver a radical re-engineering of global networks by 2015.

Essentially, because governments decided not to include cutting emissions from the ICT sector, an industry leader has taken it upon itself take on that challenge. As world governments continue to struggle with attempts to solve the climate change crisis and limit greenhouse gas emissions, businesses — especially in the tech sector — are stepping up to the plate to fill the void.

Why? Because they know it will eventually help their bottom line. If Bell Labs and others can create a scheme that allows networks to achieve 1,000 times greater efficiency, it will make economic sense to rebuild the network, which in turn will create massive business opportunities across the sector.

Another example of this leading-edge thinking is Google, one of the biggest believers in fighting climate change as a business model.

The company is developing software to monitor home-energy use, working to develop “utility scale renewable energy cheaper than coal,” and accelerating the commercialization of plug-in vehicles. (Solve Climate has a great rundown of all of Google’s forays into the clean energy sector.)

All three initiatives are under the google.org umbrella, but I’m willing to bet a month’s salary that Google plans on turning all of these initiatives into for-profit ventures.

This can be read in the tea leaves of Google’s recent request before the Federal Energy Regulatory Commission to become an electricity marketer. The company made no public statement when it filed the request, but told reporters that the move is designed to help it better manage energy supplies for its own operations and give the company better access to renewable energy.

But there’s more. According to The Wall Street Journal, Google’s application reserves the right to “’act as a power marketer, purchasing electricity and reselling it to wholesale customers,’ and trading ‘in the bulk power markets, such as arranging…transmission and fuel supplies.’”

In short, Google reserves the right to be your power company.

It’s not hard to see how this plays out. Google becomes a renewable power company, signs up homeowners who install the Google power meter, and buy the Google plug-in vehicle, which they power with Google Energy.

So why are these smart companies stepping up now — and potentially investing millions — when the world’s governments continue to drag their feet in providing the all-important “regulatory certainty” that clean energy technologies will be needed? After all, we could continue to dig and drill for our energy without limits and all of Google’s clean energy investments would be for naught.

Certainly, Google and Bell Labs are betting governments will eventually provide that regulatory certainty. But they’re also well aware of two certainties — inevitabilities, really — that will define all businesses in the long-term:

  1. Climate change is real — and, as we continue to see its effects, people will demand action (and Google, Bell Labs and others will be there with solutions).
  2. Even without climate change, you can’t dig and drill for energy forever. (When the wells run dry and all the mountains are blasted, Google, Bell Labs and others will be there with solutions.)

Smart companies inherently get these two certainties (and the near certainty of eventual government regulation) and are making plans to adapt their businesses to them so they can stay profitable at a minimum and — in the best case — boost their profits during the change.

Dumb companies bury their heads in the sand and wait for that next mountain top to be blasted, or the next well to be drilled.

(Image by H2SO4/Flickr through a Creative Commons license.)

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3 Responses to “Fighting Climate Change is a Business Model”

  1. Interesting analysis, and I couldn’t agree more with your conclusion that business is where the change action is at the moment. Copenhagen certainly confirmed that for me (although I guess we shouldn’t forget what’s happening in the states) Glad to have found your blog, and look forward to future posts.

  2. [...] 11/02/10 Fighting Climate Change is a Business Model (Cool Green Science) via blog.nature.org [...]

  3. So far we’ve got a lot of dumb companies in this country. (and state governments)

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