The Great Transition: What Will Deliver a Sustainable Energy Future?
- Jamesine Rogers, Project Manager, Risky Business Project
- Diane Munns, Senior Director, Clean Energy Collaboration, Environmental Defense Fund
- Dawn Fenton, Director, Government Relations and Public Affairs, Volvo Group North America
- Ryan Schuchard, Associate Director, Climate Change, BSR (Moderator)
There is no one right solution for transforming the energy grid to support a low-carbon future. Greater efficiency, use of low-carbon fuels, and behavioral changes are all examples of important components of the transitions that need to occur.
As we build our future energy system, we need to consider the economic risks that climate change poses to our energy infrastructure. Decisions made now will directly affect energy’s affordability and reliability.
We need to better incorporate climate risk into core private- and public-sector decision-making, especially for long-term capital decisions being made today in the energy sector. The costs of not doing so could be significant.
Energy transformation will require a double-barreled approach, one that advances incremental and immediate changes, as well as more transformative long-term changes.
“If you have a point of view on this, at least for my sector, make it known. [S]how that these technologies [and] that this issue is important to you and that you would like action taken.” —Diane Munns, Environmental Defense Fund Clean Energy Program
“The [BSR] Conference has been all about transformation, and I think it’s a really important theme because without transformation we’re not going to be able to sustain our planet—at least not the way we know it.” —Dawn Fenton, Volvo Group North America
“If there is a first among equals, it is efficiency.” —Dawn Fenton, Volvo Group North America
“Something that some of our risk committee members really push for pretty hard is to also just think more about being more transparent about climate change.” —Jamesine Rogers, Risky Business Project
“We found that risk framing is very helpful in creating a … ‘safe space’ for folks who are not currently engaged in the discussion.” —Jamesine Rogers, Risky Business Project
Most experts agree that stabilizing greenhouse gas emissions to within 2 degrees of warming will require drastic changes to our energy system. What is less clear, however, is what this new low-carbon energy system will look like and what is needed to make the transition. Moderated by Ryan Schuchard of BSR, panelists Diane Munns, Dawn Fenton, and Jamesine Rogers presented cutting-edge perspectives on the theory and practice of creating a sustainable energy future.
The discussion began by examining the barriers to a low-carbon energy future. Munns kicked it off by highlighting the need to change the utility business model, which is currently structured to encourage utilities to sell more kilowatt-hours and build more energy infrastructure. According to Munns, the big question is how do we transform utilities so that they get compensated for better optimizing use of energy as opposed to just selling more and more energy? Solving this problem will require transparent, innovative discussions among a broad set of energy stakeholders. Because of their relationships with customers and experience managing the complexities of our electricity system, utilities are in a unique position to advance the investments and operational changes needed to undertake the great transformation to a sustainable energy future. Utilities need to be incentivized to operationalize efforts to reduce energy use.
For the transportation sector, Fenton pointed out that barriers include a combination of both commitment and cost. Whether it is improving engine efficiency or electrifying auxiliary components in large trucks, it will take an enormous amount of time and capital to develop the clean technologies needed for a low-carbon future. Companies are major investors in these technologies; however, they cannot do it alone. They need public support in order to commercialize low-carbon transportation technologies. Government agencies, such as the U.S. Department of Energy and the California Energy Commission, have programs to support transportation innovation; however, more support is needed from both a regulatory and investment standpoint.
Fenton further pointed out that, without proper communication and collaboration with regulatory entities, government can be a barrier. Regulations that do not fully reflect the needs, interests, and constraints of corporations may end up being too prescriptive and may not effectively address barriers to advancing clean energy technologies and business models. A lack of effective, transparent collaboration between companies and regulators can have unintended consequences that may prevent us from moving forward to a low-carbon energy future.
Given these barriers, Schuchard looked to Rogers for insight on what businesses need to do differently in order to effectively plan for the energy system we want. Rogers highlighted the costs of inaction. For the Risky Business Project, it is important for corporations to understand that unmitigated climate change will have monumental effects on the global economy and business operations. Companies should become more informed about the changing climate’s potential impacts on their business models. The key is having unassailable, downscaled data. Using data specific to their business operations, companies can more effectively engage with other stakeholders and become a powerful voice that describes the solutions needed to move forward globally. They can also use that data to operationalize climate change considerations throughout their business operations. Rogers emphasized the importance that both the public and private sector understand that investments made now, particularly in the energy sector, will have effects far into the future.
During the Q&A, Ashley Nixon from Royal Dutch Shell asked about the value of addressing climate change by supporting efforts to tackle other problems, such as water availability and air quality. Panelists agreed that, depending on the audience and context, such support can be a very effective way of advancing solutions to climate change. Panelists also highlighted the importance of identifying and investing in solutions that provide co-benefits across more than one environmental, social, or economic problem.
Finally, the panelists concluded the session with recommendations on what companies can do to support a sustainable energy future. Munns stressed the importance of communication. If a company has a clear view of how to address climate change, they should make it known and engage policymakers and the investment community to identify the best solutions moving forward. Fenton agreed and encouraged business to educate the public sector and become an active stakeholder in these discussions. Rogers concluded by pointing out that there is no single solution for businesses interested in minimizing climate risk. But she encouraged companies to take a close look at climate risks, understand them, and then take action.
November 5, 2014