What the President's focus on climate change means for cleantech


What the President's focus on climate change means for cleantech

In his second inaugural address Monday -- and in sharp contrast to his first -- President Obama focused more on climate change and energy technology than any other single policy area. This signals a new opportunity for sustainability and cleantech innovation.

But to ensure real progress, it’s critical that politicians and business leaders alike frame the issue effectively and emphasize priorities that are relevant to all Americans -- like competitiveness, innovation, and quality of life.

In Monday’s speech, the president already began framing the issue along these lines. First, while asserting that climate change is happening, he focused on the human consequences by mentioning “the devastating impact of raging fires, and crippling drought, and more powerful storms” like Sandy.

Second, rather than push new climate legislation per se, he said our efforts will “power new jobs and new industries,” positioning America for success in the 21st century. In broadening the climate change frame, the president is attempting to disarm some critics who seemingly believe that any significant action on environmental topics represents job-killing environmental extremism.

The Obama administration is focusing on initiatives with broad economic and health benefits, not just environmental ones. According to the New York Times, strategies ranging from increasing appliance efficiency to further reducing emissions from power plants are all on the table. This strategy led to the adoption of a 54.5 miles-per-gallon CAFE standard by 2025 and EPA regulation of coal power plants.

Such executive action is not only a way to bypass a potentially deadlocked Congress occupied with other pressing matters like the federal budget. It’s also a way -- if the framing is done right -- to convince Congress that progress on the environment and progress on competitiveness, innovation and quality of life go hand-in-hand.

The private sector is also more closely connecting sustainability to business drivers. In our work with hundreds of leading corporations, we are increasingly seeing sustainability moving out of dedicated functions, for example, and becoming more integrated across corporate functions and into the business units.

Large corporations are also increasingly interested in cleantech startups. According to data from our i3 platform, around 20 percent of cleantech venture deals in 2012 had some corporate participation. While overall investment in cleantechis down from its peak, the number of deals with corporate participation roughly doubled from 2006 to 2012. Corporations see more and more strategic and economic value from cleantech.

Our findings dovetail with those of GE’s Innovation Barometer, which found that two of three global executives believe coming up with new business models is important for a company to innovate successfully. Cleantech sub-sectors like cleanweb -- the intersection of digital and cleantech, yielding more effective and efficient home energy controls, for example -- are ripe for producing new business modelsand powering innovation.

Nevertheless, the shadow case by Solyndra may loom large in the coming years. To some, the solar panel manufacturer’s failure marred the Department of Energy loan grant program and cleantech more broadly. While Solyndra is indeed a cautionary tale, any business leader who supports new business models recognizes failures are necessary on the road to success. As a panel manufacturer, Solyndra represented just a small portion of the solar value chain. Downstream solar services are booming. And despite losses in the manufacturing, overall solar jobs in the U.S.grew by 13.7 percent in 2012.

This is to say nothing of the soaring investment in other cleantech sectors like transportation, where the all-electric Tesla S was named 2013 Motortrend Car of the Year. Regardless of one’s opinion of cleantech generally, successes in job growth and vehicle technology are areas everyone can relate to and celebrate.

Now is the time to refocus on the environmental strategies and technologies that will spur innovation, improve U.S. competitiveness, and improve our quality of life. The challenge lies in continuing to appropriately frame the issue and effectively connect environmental improvement with these drivers of growth.

Illustration of green field overlapping natural field provided by Olinchuk via Shutterstock.