This essay is the fourth of a series of four appearing this week on GigaOm. It draws from material in Jonathan Koomey’s latest book, Cold Cash, Cool Climate: Science-based Advice for Ecological Entrepreneurs, which is being released by Analytics Press on February 15, 2012.
Written for entrepreneurs and investors, this book describes how to profit from tackling climate change, one of this century’s greatest challenges. The author acts as your company’s scientific advisor, summarizing the business implications of the climate problem for both new and existing ventures. Koomey helps you effectively allocate scarce time and resources to the most promising opportunities, drawing upon his more than 25 years of experience in analyzing and implementing climate solutions.
5 ways to harness info tech to fight climate change
Information and Communication Technology (ICT) speeds up our ability to collect data, manage complexity, and more rapidly learn and adapt. ICT is driving rapid innovation that continues to accelerate throughout the economy (for examples, see the recently released ebook titled The Race Against the Machine). ICT is an example of what economists call a general-purpose technology, which is one that has transformational effects on the ways companies generate value and reduce costs.
My incomplete list of new capabilities enabled by these technologies (taken mostly from my book Turning Numbers into Knowledge, which expands on most of these points) is as follows:
Near-zero marginal cost of reproduction and distribution, quicker publishing, easier sharing of data, quicker review of technical material, easier ordering and distribution, direct feedback from suppliers to consumers (and vice versa), indirect feedback from consumers to suppliers (through data collection), collaboration among users, access to information 24 hours per day, universal searching, easier and more widespread public access to technical information, dematerializing products and services, improving measurement and verification of processes, improving the speed and accuracy of analysis, and enabling more rapid institutional change.
The last five ideas bear further examination because of their direct relevance to climate-related entrepreneurial innovation.
1). Easier and more widespread public access to technical information
Interactive links between the Internet and relational database management systems help those who possess detailed technical knowledge to make it useful to a wider audience (this information is often buried in impenetrable and obscure reports). Lawrence Berkeley National Laboratory (LBNL), for example, has for decades been the preeminent center on energy use in homes, but much of the information LBNL generated never reached the general public until the advent of the World Wide Web. LBNL’s Home Energy Saver (HES) web site was the first Internet-based home energy analysis tool; it embodies the technical expertise of dozens of LBNL scientists and has had more than 4 million users since it was created.
A user of this site has confidence that the tool accurately characterizes energy use in her home because of the expertise and credibility of those who created it. Even better, the HES has an API, so you can incorporate the technical knowledge of those who created it into your own software and avoid having to recreate all that detailed technical work yourself. Think of it as your tax dollars at work.
2). Dematerializing products and services
My flip name for this category is “replacing parts with smarts” but it’s even broader than that. It is usually possible to make products simpler in design using software and controls in the device itself, but we can also save energy and materials by avoiding the need to move physical objects and people from place to place. The three archetypal examples of this effect are telecommuting, replacement of physical compact discs with downloadable music, and video conferencing. It is not always true that moving bits instead of atoms reduces emissions, but it is often true.
3). Improving measurement and verification of processes
Because of the rapid decline in the costs of monitoring technology (driven by improvements in the costs and energy efficiency of computing and communications), our ability to understand the effects of our actions in real time is increasing at a furious pace. This means better control of processes, less waste, and better matching of energy services demanded with those supplied. The most sophisticated data center operators, for example, have sensors that measure temperature, humidity, power flows, and other key data tens or hundreds of times per second, so their control systems won’t miss anything.
4). Improving the speed and accuracy of analysis
Fortunately, the inrush of data from monitoring technologies has been accompanied by improvements in our ability to analyze and understand those data. Without new tools we’d have a hard time keeping up, which is why new data centers and industrial operations are increasingly demanding more powerful tracking software.
These developments are important because the data starting to become available on energy use will be at increasingly fine levels of geographic and temporal disaggregation. With the proliferation of “Smart Meters” that allow real-time metering of electricity use, our ability to understand electricity use in buildings will rapidly improve. In the early days of energy efficiency analysis (in the 1970s), we conducted market assessments using simple averages of costs and savings for a single refrigerator model for the US as a whole (for example). Soon we’ll be able to monitor the response of millions of households to electricity price in real time, and to disaggregate household electricity into its component parts with unparalleled accuracy. That will allow much more precise assessments of efficiency potentials and will give businesses the opportunity to target the biggest electricity users with energy-saving innovations.
5). Enabling more rapid institutional change
When companies first started buying computers on a large scale, economists were puzzled by the apparent lack of effect on productivity (this puzzle eventually became known as “the productivity paradox”).
This delay had historical precedent. With electric motors, for example, the real benefits of that technology didn’t arrive until production processes were modified to take full advantage of the new technology’s benefits, and the same was true for computers. Once companies reorganized themselves to capture those benefits, productivity improvements started on an upward march that continues today.
But it’s not just that ICT requires that companies reorganize themselves to take full advantage of its benefits, it also makes such reorganization easier because it improves communication, coordination, and process controls, and creates the conditions under which complementary cost-reducing innovations can more rapidly be brought to market. It is in this deep sense that ICT is a transformational technology. Institutional innovation is one of the beneficiaries of that transformational power, and it’s one of the areas where entrepreneurs can generate the most rapid and pervasive changes in the emissions intensity of the economy.
Information and communication technology is our ace in the hole. It speeds up data collection, helps us manage complexity, allows us to restructure our institutions more easily, and lets us rapidly learn and adapt to changing circumstances. It’s also a great place to look for emission reduction opportunities because it generally offers rapid speed to market and low startup costs.