* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Resiliency to climate change Cleantech's other value proposition
Climate change feedback wikipedia , lookup
Climate sensitivity wikipedia , lookup
Fossil fuel phase-out wikipedia , lookup
Climate change in Tuvalu wikipedia , lookup
Climate governance wikipedia , lookup
Energiewende in Germany wikipedia , lookup
Climate change mitigation wikipedia , lookup
Climate change and agriculture wikipedia , lookup
Economics of global warming wikipedia , lookup
Climate engineering wikipedia , lookup
Attribution of recent climate change wikipedia , lookup
Media coverage of global warming wikipedia , lookup
Climate change adaptation wikipedia , lookup
German Climate Action Plan 2050 wikipedia , lookup
Citizens' Climate Lobby wikipedia , lookup
Scientific opinion on climate change wikipedia , lookup
Climate change in Canada wikipedia , lookup
Climate resilience wikipedia , lookup
Effects of global warming on Australia wikipedia , lookup
Climate change in the United States wikipedia , lookup
Surveys of scientists' views on climate change wikipedia , lookup
Carbon Pollution Reduction Scheme wikipedia , lookup
Solar radiation management wikipedia , lookup
Effects of global warming on humans wikipedia , lookup
Public opinion on global warming wikipedia , lookup
Climate change, industry and society wikipedia , lookup
Climate change and poverty wikipedia , lookup
Low-carbon economy wikipedia , lookup
Politics of global warming wikipedia , lookup
IPCC Fourth Assessment Report wikipedia , lookup
Mitigation of global warming in Australia wikipedia , lookup
www.pwc.com/cleantech Resiliency to climate change Cleantech's other value proposition March 2013 Resiliency to climate change The resiliency imperative Scientists and business leaders are increasingly warning that current rates of global greenhouse gas (GHG) mitigation are an insufficient response to the threat of climate change. PwC's research shows that keeping global temperatures from rising above 2°C by 2050 would require at least a 5.1% reduction in global carbon intensity per year for the next 37 years -- quite a jump from the 0.8% a year average decrease of the last 10 years. 1 As PwC’s own research suggests, “Governments’ ambitions to limit warming to 2ºC appear highly unrealistic.”2 If some significant amount of climate change seems inevitable, then it is imperative that society develops adaptation strategies to make the global economy more resilient to the shocks, disruptions, and costs of climate change impacts. Indeed, the US is already experiencing these costs. The average annual costs of climate-related disasters and extreme weather events like Hurricanes Katrina and Sandy have increased from a few billion dollars in the 1980s to consistently over $200 billion a year. 3 Building more resilient energy and water infrastructure to withstand these extreme weather events will likely be critical to minimizing economic losses, keeping critical power infrastructure up and running, and protecting human life. We believe that the cleantech industry has a major role to play in this initiative, and that this role begins with developing a new value proposition: resiliency. Clean Smart Resilient The evolution of Cleantech's value proposition Resiliency: the new narrative Historically, the cleantech sector's value proposition has centered on "clean" -- on dramatically reducing emissions while providing superior performance PwC, “Too late for two degrees? Low Carbon Economy Index”, November 2012. PwC, “Too late for two degrees? Low Carbon Economy Index”, November 2012. 3 IPCC, 2012: Summary for Policymakers. In: Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation [Field, C.B., V. Barros, T.F. Stocker, D. Qin, D.J. Dokken, K.L. Ebi, M.D. Mastrandrea, K.J. Mach, G.-K. Plattner, S.K. Allen, M. Tignor, and P.M. Midgley (eds.)]. A Special Report of Working Groups I and II of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK, and New York, NY, USA, p. 7. 1 2 Resiliency to climate change and lower costs compared to fossil fuel counterparts. An installer of rooftop solar PV panels might, for instance, have discussed how its panels helped customers cut their GHG emissions, save money through lower monthly utility bills, and "do their part" for the environment. These messages stress efficiency and savings. In the last three to four years, the industry's value proposition has grown to incorporate "smart". Smart products promise to both help the environment and to improve users' experiences through new features, greater connectivity, and more information. Smart meters in the home, for instance, combine the advantages of lower monthly energy bills ("clean") with the ability to identify how energy is consumed throughout the home, compare one's energy use with one's neighbors, and other features ("smart"). These messages stress better user experiences and greater insight. While we believe that these two value propositions will continue to be important for cleantech companies, we also believe the value proposition should now include a third lever. Leading cleantech companies have already begun to incorporate components of a "resiliency" value proposition -- such as self-sufficiency, security during disasters, and adaptability -- into their products and services. Below we will examine two case studies that highlight the resiliency value in electric vehicles, small-scale renewables, and energy efficiency. Electric vehicles: an unconventional power source Electric vehicles (EVs) are a prime example of a clean technology with resilient attributes. In Superstorm Sandy’s aftermath, EV and hybrid owners found they had two distinct advantages over conventional autos in navigating the week-long blackouts and gasoline shortages. First, it was easier to fuel up on electricity than gas. The storm’s blackouts and flooding not only disabled the pumps at gas stations, but also shut down two of the region’s six refineries and their fuel truck fleets. This shutdown rendered 80% of New Jersey’s gas stations useless and left large areas without access to fuel. People were forced to line up for hours, waiting for their gasoline rations.4 In contrast, even though millions of people lost power in the storm, the map for electricity outages resembled more of a patchwork quilt of towns without power. While an EV owner’s home might have lost electricity, (s)he could easily drive to the next town to “fuel up” at a public charging station or a friend’s home. Second, enterprising EV owners used DC-to-AC converters to power refrigerators and other critical appliances for up to three days from a single charge of their vehicles’ batteries. This creative engineering made sheltering Bradley Berman, “Electric Car Owners Unfazed By Storm”, The New York Times, 2 November 2012. 4 Resiliency to climate change in place more comfortable, and allowed the EV owners to store perishable food that would have otherwise spoiled. Small-scale renewables & efficiency: security during a crisis There is also a resiliency value proposition in products that reduce consumers' reliance on the electrical grid. Consumers can make themselves more resilient either by developing their own supply of energy (renewables) or by minimizing demand (efficiency). The resiliency logic of distributed, local, small-scale renewables is quite evident. Superstorms like Sandy may wipe out power across large areas for long periods of time. Those consumers with small-scale renewables and storage systems available, such as roof-top solar PV panels and microgrid power management systems, can endure storms, floods, and other disasters with minimal or no disruption to their energy supply. Pittsburgh-based Consolidated Solar demonstrated the power of small-scale renewables during Superstorm Sandy. The company teamed with Solar City to lease a number of small solar generators that provided power to citizens in blacked-out zones throughout New York and New Jersey.5 A similar logic has been applied to larger facilities; New York City’s Co-op City, located in the Bronx, used a combined heat and power (CHP) system to maintain power in homes, schools and shopping centers during Sandy.6 Consumers may increase their resiliency by combining these small-scale renewables with highly efficient appliances and demand-side resource conservation. A highly efficient refrigerator, for instance, allows a family to shelter in place longer and with fewer difficulties, even during intermittent power outages. Similarly, the use of cisterns to harvest rainwater during a storm can help conserve potable water for drinking -- or can provide more drinking water with use of a filtration system. In the case of extreme disasters, simple efficiency solutions such as these can dramatically improve a family's ability to weather a disaster. Implications for the industry We are seeing leaders in the industry, such as Consolidated Solar, beginning to incorporate resiliency themes into the value propositions of their products and services -- and we believe it is now time for the rest of Peter Kelly-Detwiler, "Mobile Solar Generators - One Man's Odyssey to Bring Power Back to New York", Forbes, 14 November 2012. 6 William Pentland, "Lessons from Where the Lights Stayed on During Sandy", Forbes, 31 October 2012. 5 Resiliency to climate change the cleantech industry to assess how they may do so as well. The science of climate change tells us that formerly "hundred-year" storms will likely become more regular, so the market for comprehensive resiliency solutions is likely to be great. Those companies that incorporate resiliency into their value propositions could soon discover it is a key differentiator of clean technologies from traditional energy generation and resource management technologies. However, incorporating resiliency into the value proposition is not simply a matter of changing one's messaging. The message is important, but truly investing in resiliency means looking into product design and innovation (e.g., can an existing product be better designed to meet resiliency needs and/or could a new product fill the need), customer needs (e.g., what the latest climate science identifies as future resiliency needs), and go-to-market strategy (e.g., are particular regions especially able to benefit from these products). Cleantech companies are ideally suited to provide the products and services that will help humanity become more resilient to the challenges of climate change. Those organizations that take a holistic view and incorporate all these elements into their resiliency efforts are the ones that are most likely to benefit from the value that resiliency provides to the marketplace. Contacts Clinton Moloney Managing Director, Sustainable Business Solutions (415) 498-8442 [email protected] Tripp Borstel Manager, Sustainable Business Solutions [email protected] (415) 498-7343 Jeremy Lardeau Manager, Sustainable Business Solutions [email protected] (408) 817-5098 Ryan Mullen Associate, Sustainable Business Solutions [email protected] (408) 817-4286 © 2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.