RMI’s formula for clearing human hurdles to a green economy

It’s 2050. The roads are much less crowded, and engine growls have given way to bird song. The old zoning rules have been repealed and sprawl is no longer subsidized; developers now pay the full costs they impose on public infrastructure. Workers still go to the office a few days a week, but many work from home exclusively. Fueling stations dispense biofuels and hydrogen, complementing the ubiquitous smart-charging points for electric vehicles. Clean energy has replaced fossil fuels in quantities sufficient to power society as we know it.

Such is the future described in Reinventing Fire, the Rocky Mountain Institute’s meticulously-researched manifesto on the new energy era. Introduced in 2011, the book posits a business-driven transition to a sustainable future. Led by scientist Amory Lovins (interviewed here by Joel Makower), RMI’s team of researchers weaves a fabric of futuristic, yet commercially viable technologies in buildings, electricity, industry, and transportation to “reinvent fire.”

Laying out a formula for sustainable growth, the authors predict that in 2050, “Oil is rapidly becoming like whale oil after electric lights – a curiosity hardly worth selling.” Greater national security and fewer traffic deaths are side benefits of an American economy expected to be 2.6 times the size of today's – all with one-third less natural gas, no oil, coal or nuclear energy, and at a $5 trillion lower net-present-value cost than business as usual. The vision is so universally attractive that we wonder what could possibly stand in our way to getting there.

People, naturally. “Non-technical” hurdles may be our most significant roadblocks to a clean energy future. Reinventing Fire identifies nine dominant barriers, most of which can be described as “human-related” -- that is, due to lack of incentives, leadership, and vision:

  • Active or passive resistance by incumbents. Most organizations have an energy-using and -generating asset base dependent on fossil fuels. Moving away from it looks risky and costly.
  • Economics and technology. Economic and technology barriers are shrinking as high-value efficiency and renewable solutions are brought to market, but hurdles persist in some sectors.
  • Knowledge and culture. Energy is not a priority for most organizations, so many lack the knowledge, willingness or capabilities to move away from fossil fuels.
  • Financing. Energy investments, often with sizable initial and relatively long paybacks, vie with others nearer a company’s core priorities.
  • Value chain complexity. Energy investments often link multiple parties across long value chains, with sometimes misaligned incentives, routing costs and benefits to different parties.
  • Unclear value proposition. Energy is energy, clean or not, so selling efficiency and renewables to undiscriminating customers can be hard.
  • Lack of long-term leadership. Changing the energy strategy of a company, state or nation requires planning and stewardship over decades – a far longer time period than profit or election horizons.
  • Policy and regulatory structures. Some existing policies and regulatory structures impede energy transformation, so they must be changed or replaced to enable and accelerate it.
  • Entanglement with partisan politics. Politicians apparently can’t resist the temptation to hold short-term tax policies hostage to other issues, even if the result severely damages some of America’s most vibrant and fast-growing high-tech industries.

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