New Business Models for a Low Carbon Economy

Posted by: Bruno Berthon on December 15, 2009

This is a guest post about the UN Climate Summit in Copenhagen from Bruno Berthon, Accenture

What is clear to me after several days here at COP15 is that the focus has moved, from a business standpoint, deliberately towards solutions.

The climate change diagnosis is widely shared, the scientific evidence is not contested anymore, at least here, and business leaders, including the ones from North America, are expecting new regulations and restrictions and keep criticizing the lack of a long term perspective from the politicians.

However, they also recognize some specific barriers to action, in particular from an investment standpoint, around speed, scale of change, confidence in technology and particularly around the need to convince the consumer/user/citizen that a low carbon economy requires drastic changes in lifestyle and behaviors. As the world is expecting 3.5 billion new consumers from emerging markets to join the demand wagon in the next decades, with potentially the same Maslow pyramid of needs in terms of consumption, today’s challenging situation could turn into an unsolvable climate change challenge if the set of products and services on offer are not fundamentally adapted around key aspects of daily life—from alimentation to leisure, from transportation to housing—in order to invent a low carbon economic growth model or a more frugal growth path: from Copenhagen, capital of the country leading the pack in terms of ‘individual happiness’ index, this is a powerful message.

And this is a real challenge, as we have seen since Kyoto that the actual economic trends are inducing more, not less emissions, even in the countries that have committed to the protocol.

There are 4 interesting business models being explored, and a low carbon future probably requires a combination of them all:

1.) The 'clean energy' model, which is the one, attracting the highest level of attention at the moment: how to replace fossil fuels with clean energy at a scale which allows to support economic growth? This is a very significant challenge for emerging markets but also China and the US and their coal dependence requiring a real breakthrough in developing and scaling clean coal technologies. It also implies until 2050 to leverage significantly the nuclear industry and to transform intensively the individual transportation model. Combined with more energy efficiency, this model will certainly contribute to the journey towards low carbon heaven, but will hardly be sufficient.

2.) The ecological industry model, which is aiming at reinventing industry in a low carbon set of constraints, through a combination of circular economic concepts, energy efficiency and product/ process innovation. This model is certainly providing interesting solutions in a more sectorial approach to help specific industries become carbon neutral in their own right. It is also capable of leveraging effectively the distributed energy manufacturing solutions, to integrate renewable energy sources in the design of new industrial capacities instead of replacing the existing energy infrastructure with a new one.

3.) The 3rd orientation is around a services economy, where the ownership rule and physical product ideal are replaced by a combination of new uses and services offerings: this is what we are aiming at with models like car sharing (the VeLib and AutoLib models in Paris) or industrial models supporting/ selling a specific service without the product, like a decontamination process instead of chemical solvents.

4.) Finally the most futurist one, which is probably not that distant for the Web 2.0 and Twitter generation, is the functional model, i.e. where the function is what matters and can be fulfilled virtually as long as it provides the intended needs: from functional foods to virtual travel, from digital communities to functional clothing, it is aiming at providing the same sensations and fulfilling the same consumer needs without the recourse to a physical structure or media. What is particularly interesting about the last three models is that they propose a joint transformation of the supply and demand side instead of a cleaner 'business as usual' state in the first instance.

Moreover, the emergence of these new models is to be combined with the respective growth challenges of the emerging vs. developed markets. The positive element is that emerging markets can switch directly to the next generation of solutions, as they are doing with mobile phones, and in particular can leverage both ecological industrial models or even functional models more rapidly than developed countries hampered by their very heavy and costly legacy infrastructure.

Bruno Berthon, based in Paris, is Managing Director of Accenture's Sustainability Services Group and will be blogging his thoughts from Copenhagen during the Summit.

Reader Comments

Ed Sunderland

December 16, 2009 11:02 AM

"Quote:The climate change diagnosis is widely shared, the scientific evidence is not contested anymore, at least here, and business leaders, including the ones from North America, are expecting new regulations and restrictions and keep criticizing the lack of a long term perspective from the politicians: end quote".

"Wrong", this evidence has been manipulated by the same rabid left wing idealogs who will stop at nothing including forgery, deception, and fraud to force the American public into a costly green energy model. This is part and parcel in the plans of the overall takeover of this economy by this socialist adolescent administration.

The temperature and carbon in the atmosphere has fluctuated for millions of years but all the sudden we are to blame for this same fluctuation over the millennium?

"It is also very interesting that Al Gore and all these weather change hawks are loath to be challenged by the facts that destroy their argument". They just say that the argument is over, "well, it isn't by a long shot".

Justin Lewis

December 18, 2009 6:33 PM

I totally believe that the climate is changing dramatically. My friend (roommate) is from Russia and he said his grandfathers, father, and himself have never seen the weather so warm in his country. It has always been where snow topples the top of cars and buildings. Now he says it is getting warmer every year since he has left Russia. I hope we find something soon for a low carbon economy, it's getting out of hand!

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Pat

December 24, 2009 1:43 AM

The summit don't get our dream but I beleive more people have awareness and share to move the better world.

John

January 2, 2010 2:20 PM

Energy should be produced using low carbon energy sources & methods - renewable & alternative energy sources, fuels.

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Mike

January 27, 2010 4:58 AM

I hope that we can have total support from the government to realize these Low carbon business models one day at a time.

Mike
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Jane T.

March 15, 2010 12:10 AM

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March 28, 2010 8:33 AM

bally

March 29, 2010 4:15 AM

I will forward this article to him. Pretty sure he will have a good read. Thanks for sharing!
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John

March 29, 2010 2:30 PM

You can agree or disagree that there is man-made global warming, but that should not stop any of us for wanting to be friendlier to our plantet. Indie Rock | Computer Freezes

John

March 29, 2010 2:34 PM

Some really great info on what companies are going to have to do to stay ahead in the times we live in.
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