6 / 32
6
CLIMATE ROUNDTABLE - TOWARDS A GREENER FUTURE
As we reach for a prosperous future, free of poverty, we must
find ways to achieve global economic growth without
unsustainable pressure on resources. Such a future depends
on our ability to direct innovation to transform human activity.
Climate change is already having serious economic consequences,
especially in more exposed areas of the world. Without stronger
action in the next 10-15 years, it is near certain that global
average warming will exceed 2°C, the level the international
community has agreed not to cross. Based on current trends,
warming could exceed 4°C by the end of the century, with
extreme and potentially irreversible impacts.
Yet there is still hope. Human ingenuity and innovation in
technologies, processes and institutions have in the past
allowed us to get more out of the resources we have, escaping
the impending Malthusian trap by building knowledge capital.
Knowledge capital is dependent on a number of factors such
as cumulative R&D expenditures and physical and human
capital investment. For example, new equipment enables new
ideas and innovation in technologies. Investing in computers
sparks bright ideas on how to use them. Investment in physical
and knowledge capital also drives increasing returns.
In this virtuous spiral, knowledge leads to increased output
and frees resources for more investment. The problem is that
with knowledge building on knowledge, changing technological
paths can be difficult.
The fossil fuel network, for example, includes not just mines,
refineries, ports, pipelines, generation plants and filling stations,
but also a vast knowledge and wealth pool, which allows fossil
fuel companies to hire top innovators to extract fuels from ever
more inaccessible sites. They also have extensive lobbying
power in various governments.
Ideas and practices are also hard to change. The QWERTY
keyboard was built to prevent English language typewriters from
jamming. We no longer use typewriters, but much of the world is
stuck with the keyboard, whether or not it enhances productivity.
The shape and location of London’s office blocks and tube stations
are in part determined by Roman planning two millennia ago.
And it’s more than just bricks and mortar. Any visitor to
Copenhagen or Amsterdam will be struck by the popularity
of cycling. People explain this as a result of first-class
infrastructure. But the infrastructure could be a result of the
Innovating for
a sustainable economy
By Dimitri Zenghelis
Co-Head Climate Policy,
London School of Economics