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Global Warming and Energy

It could be reasonably argued that the greatest threat facing the human race in the twenty-first century is global warming. A reduction in the rate of global warming demands a reduction in the level of greenhouse gas emissions. Key opportunities in this area include the expanded use of renewable energy and an improvement in the processes for the storage and distribution of electricity generated by renewables. Progress in relation to the later issue is somewhat slower than in technological advances in relation to renewable energy. This is due to the fact that in many countries electrical grids are often fragmented and poorly suited to achieving distribution of renewable-generated electricity (Cohen 2015). Problems include traditional electrical systems being centralised with electricity being generated at a large-scale power plant and transmitted to customers. The alternative technological opportunity is to move to distributed generation from renewable sources at or near the point of consumption combined with advances in load management and energy storage systems. Such actions would reduce the amount of energy lost in transmitting electricity and reduce the size and number of power lines needed (NREL 2010).

Cohen posited that for such outcomes to be achieved governments have the following key responsibilities:

  • 1. Fund ongoing basic scientific research because private companies cannot justify this type of expenditure.
  • 2. Fund the creation and expansion of sustainable energy storage and distribution infrastructure
  • 3. Use the tax structure to provide incentives to direct private capital towards investment in the renewable energy economy.
  • 4. Use regulatory rules and enforcement to prevent unsustainable economic activities by directing companies away from short-term profit at the expense of subsequent public sector funded clean-up projects.
  • 5. Act as a catalyst to promote the creation and expansion of partnerships between government, industry and non-profit organisations to foster the necessary advancements needed to create an effective sustainable energy economy.

PricewaterhouseCoopers (2008) described cleantech as not one tidy group, but rather an array of distinct sub-sectors: solar, wind, and geothermal energy generation, biofuels, energy storage (power supplies such as batteries and uninterruptible power supplies), nuclear, new pollution-abatement, recycling, clean coal, and water technologies’. The common thread across many cleantech applications is that these sub-sectors represent technologies, services or products aimed at reducing greenhouse gas emissions and other pollutants and promoting energy efficiency and the conservation of natural resources. Firms in the cleantech industry are dedicated to finding technological solutions to energy, ecological and industrial processes whilst growing economies and improving environmental productivity. Energy-related companies make up the largest cleantech segment, with energy being broken down into supply-side and demand-side technologies. Energy generation is probably the most well-known sector as a result of the emergence of new technologies in relation to products such as wind turbines, batteries, electric cars and solar panels. Other areas within the cleantech taxonomy include commercial lighting, programmable thermostats, intelligent network devices, materials, recycling, and water and air purification (Tierney 2011).

Opportunities do exist as a way of reducing greenhouse gas emissions. The primary focus of many efforts is on revising or modernising production processes. In energy-intensive industries such as chemicals, mining, metals, utilities, and oil and gas, new energy-efficient technologies are being developed and implemented to achieve emission reductions (Kolk and Pinkse 2005).

Companies have the option of drawing upon organisational capabilities as well by exploring new product/market combinations. One possible way to enter new markets is by becoming involved in a strategic alliance with other companies such as that now occurring in oil and automobile companies in relation to the development of fuel cells. Climate policy may also induce companies to position their products and services outside traditional markets. Another solution is to ensure that activities and sources of high emissions are carried out elsewhere in the supply chain. For example, British Telecom has begun to purchase electricity that is generated by renewable sources and combined heat and power plants (Cunningham 2008).

One consequence of realising energy-efficient production technologies at a relatively early stage is that it becomes difficult to improve efficiency levels further, thus creating a negative balance of emission credits in subsequent years. Unilever, the British-Dutch food and home products company, is an example in this regard. It is indirectly susceptible to natural disasters such as floods and long-term drought, because most of its supplies are of an agricultural kind. Moreover, the climate impact of its home products strongly depends on household behaviour, such as the temperature of laundry washing. Therefore, Unilever pursues a strategy of manufacturing a range of products that diversifies the risks of extreme weather conditions and keeps track of emissions related to energy use by taking the type of energy source into account (Unilever 2004).

Another approach is related to downstream activities based around product design involving life-cycle analysis. Stora Enso, a Finnish paper, packaging and forest products company, is using the by-products of its core business to enter a new market: green electricity. During the production process of paper and forest products, the company produces large amounts of sawmill and logging residues, which are now being used as a biofuel for the generation of electricity. While these biofuels were initially only used for internal energy consumption, the company has recently set itself the goal of becoming a major player in the green electricity market, which means that biofuels will be offered to external users. In this way what used to be a waste product is now actively harvested to serve the purpose of entering new markets. To improve the harvest of these by-products for biofuel use, Stora Enso has established a private-public partnership with the Forest University of Freiburg in Germany (Stora Enso 2003).

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