Innovation is Imperative – Especially in Thinking

For the past three years, I’ve been fortunate enough to attend the Clinton Global Initiative annual meeting in New York. At this year’s event in September, CGI altered its traditional format of organizing the conference along the lines of “What” areas most need to be addressed in the world – energy/climate change, global health, poverty alleviation and education – to focus on the “How” of innovation, infrastructure, human capital and financing. All are critical to success in meeting the world’s challenges, but in the energy/climate change sector, none is more imperative than innovation.

By innovation I don’t mean just technology breakthroughs like large-scale battery storage or solar cell efficiency, though there’s no denying the need for those. More important is innovation in thinking — throughout business, finance, and particularly government. We will never achieve the necessary goals of energy transformation and global carbon reduction without it.

We will move to a clean energy future; the only question is when. But the enemies of this transformation are not just the usual suspects of climate change deniers, coal and oil lobbyists and backward-thinking politicians. They are also complacency, a political system often ruled by inertia and the curse of incremental change. “If all we do is simply improve what we’ve done in the past,” said Cisco chairman and CEO John Chambers on a CGI panel, “we’re not going to get very far.” It’s one reason why Cisco has embraced a whole new industry, smart grid technology, with such fervor.

Or as Nobel laureate Paul Krugman put it in a recent New York Times column on opposition to action on climate change, “It’s not just a matter of vested interests. It’s also a matter of vested ideas.” Eleven months after what seemed to be a transformational U.S. presidential election, our internal political debates, and the news media that thrives on covering and instigating them, still seem mired in old ways of thinking.

Innovation used to be heroic in America, with breakthrough icons like Henry Ford, Steve Jobs and Andy Grove lauded and revered. But when it comes to true innovation in energy — the type of orders-of-magnitude increase in clean power and transportation that we’re going to need — the culture of “no we can’t” still seems to rule the day. The U.S. Chamber of Commerce’s opposition to meaningful action on climate change, for example, has recently caused PG&E, Exelon, PNM Resources and Nike to resign their memberships or board positions, and I expect even more forward-thinking member companies will follow. Innovation resisters like the Chamber have helped perpetuate the myth of massive cost increases and widescale disruptions from even a modest carbon cap-and-trade system, and I fear that the average American believes them.

Which brings us to the global economy’s (if not world history’s) most dramatic example of transformation, for better or worse: China. As most of the clean-tech industry now knows, China has turned its economic development turbochargers to solar PV manufacturing, wind farm construction, efficient and electric vehicles and other critical clean energy sectors. “What I admire about China is the mindset of can-do,” said Duke Energy CEO Jim Rogers, who at CGI announced a joint technology development deal with Chinese energy giant ENN Group encompassing solar, biofuels, smart grid, efficiency, carbon-capturing algae and other areas. “They’re not looking for excuses as to why we can’t do something.”

China’s admirers among American CEOs don’t stop there. General Electric’s Jeffrey Immelt likes the long-range view of China’s series of five-year plans that have overhauled the nation’s infrastructure. “What we have (in the U.S.) is a systems problem,” he said. “If we want a clean energy future, we’re talking about 20 to 40-year investments. You need standards set by government, and there must be public-private partnerships. The world’s fastest-growing economy is a good model.”

Dow Chemical CEO Andrew Liveris believes that China has aligned education and workforce training with its national goals far better than the U.S. “It’s a success model that combines industrial and energy policy with education policy, where science, technology, engineering and math all play a role,” he said. “In that sense, I think that the United States is still a developing nation. We talk about it a lot, but I don’t think we’ve solved that here.”

Ponder that for a moment, especially if you’re old enough (like me) to remember China’s days of communism under Mao Tse-Tung. I sure never thought I’d live to see the day when the CEOs of two of America’s largest companies hold up China as an economic role model.

But that’s the kind of dramatic, I-can-hardly-believe-it change that comes from new ways of thinking. A few years ago, who would have believed that Wal-Mart Stores would become a world leader in clean energy use and particularly efficiency? “We came to realize that sustainability is now part of our business model and our message to customers — save money and live better,” said Wal-Mart CEO Mike Duke. “The more we looked at it through that set of filters, we wanted to move even faster. That’s when you really start becoming more innovative.” Duke went on to agree with former President Bill Clinton that an 80 percent CO2 reduction by 2050 will be a positive, not negative, economic transformation for the U.S.

From Beijing to Bentonville, the lessons and inspirations are out there. Whether it’s a price on carbon or a dramatically overhauled national electric transmission system, we need game-changing ideas implemented, and soon. But we can’t underestimate the intransigence that we’re up against. Kleiner Perkins partner Ajit Nazre put it simply at the recent Renewable Energy Finance Forum-West conference in San Francisco: “Energy is a global $6 trillion market with historically little innovation.”  That, and government policies and processes that help protect the status quo, create a powerful force against change. To move that mountain, we’re going to need unprecedented creative thinking from clean-tech innovators in technology, finance and policy across the globe.

Clint Wilder is Clean Edge’s contributing editor, co-author of The Clean Tech Revolution, and a blogger about clean-tech issues for the Green section of The Huffington Post. 

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