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Waste less, earn more

While some advocate economic degrowth as an option to achieve climate targets and other environmental goals, adopting efficient clean technologies can promote both economic growth and environmental goals.

Our world is extraordinarily inefficient. We waste enormous quantities of energy, water, raw materials, and food. We even waste our waste and the precious resources it contains. We do so not necessarily because we lack ecological awareness, but rather because the society we live in is built on the myth of infinite resources.

Sustaining this situation of false abundance is morally unacceptable when a large part of the world’s population lacks what a small part routinely wastes. It also has a considerable financial cost now that technologies exist to end this waste.

While some are considering economic degrowth as an option to achieve global climate targets and other environmental goals, there is a much stronger case for adopting technologies that allow us to become more efficient. That means replacing old polluting infrastructure with cleaner modern systems.

The good news is that the resulting efficiency gains outweigh the financial cost of the transition. Better still, we won’t have to sacrifice economic growth in the process. Over the past four years, the Solar Impulse Foundation has selected and labeled more than 1,000 products, services, and processes that can greatly increase efficiency in the fields of mobility, construction, agriculture, industry, energy, and water.

Efficiency is the ability to achieve the most with the least. Energy efficiency, for example, means maximising service while minimising consumption.

The search for efficiency long had a bad reputation because of the so-called rebound effect, a perverse phenomenon whereby technological improvements result in increased resource consumption. The British economist William Stanley Jevons first described it in 1865. The emergence of more efficient steam engines, he observed, led to greater coal use.

But Jevons was observing conditions in a totally free market. Today, ecological regulations and incentives to reduce consumption, such as carbon taxes, help to preserve the environmental gains of efficiency.

Moreover, rebound effects work both ways: current heightened environmental awareness could produce a positive effect, whereby a household spends the economic gains from lower energy costs on a healthier diet or the purchase of an electric vehicle.

In any case, efficiency must be part of our overall response to the climate challenge. The International Energy Agency estimates that today’s technologies could reduce our electricity consumption by about 3,000 terawatt hours, or more than 10 per cent of the total in some regions and 5 per cent globally. By 2040, this potential for improvement will almost double, to roughly a quarter of total consumption.

This is because energy-management systems in recent years have become able to limit generation and distribution losses and support increasing shares of variable and distributed renewables while increasing grid flexibility.

They have also become much smarter, integrating external data sources such as weather conditions and traffic patterns. Using artificial intelligence, these advanced systems can forecast energy demand more accurately and improve grid-response capabilities.

Public policies to boost efficiency would also improve access to electricity for the 13 per cent of the world’s population still without it. As the global standard of living increases, we must ensure that new consumption demand – including for electricity, goods, and mobility – is met with efficient devices. That way, we can reconcile greater prosperity with adherence to our environmental commitments.

Technologies that boost efficiency are not limited to the energy sector. We are also wasting huge amounts of water at a time when scarcity is affecting hundreds of millions of people – often fueling conflict, displacement, and other disruptions of lives and livelihoods. But today’s technologies enable us, for example, to allocate the minimum quantity of water needed to increase agricultural yields.

The responsibility of policymakers today is to set higher efficiency standards in every sector. This will increase demand for clean and efficient technologies and thus encourage innovative firms to bring them to market. Such regulations would be hard to accept if they penalised citizens and undermined economic growth. But new green technologies do exactly the opposite: they increase corporate profits and create jobs.

As a result, we can now finally escape from the sterile debate pitting economic growth against ecological stewardship. The two must go hand in hand. Clean, efficient, and profitable technologies are available today, and the faster we implement them, the more will be available tomorrow.

Bertrand Piccard is Founder and Chairman of the Solar Impulse Foundation.

Copyright: Project Syndicate, 2021.

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