Who will lead the bio-digital energy revolution?

Innovation leadership amidst climate change and trade wars

Peter Drahos

Development, Environment & energy, Government and governance | Australia, Asia, East Asia, South Asia, Southeast Asia, The Pacific, The World

23 September 2019

With its over-reliance on fossil fuels, the world is in need of a strong leader in energy technology to steer it away from a climate crisis, Peter Drahos writes.

Excluding hydropower, renewable energy accounts for less than 2 per cent of the world’s primary energy supply. We are in the late stages of a climate crisis grounded in the decisions of early twentieth-century capitalist states to embrace fossil fuels.

To fuel their wars, states formed long-lasting relationships with the petrochemical industry that delivered products like napalm. Now, six of the world’s ten largest companies are oil companies – they need to disappear from the Fortune Global 500.

In order for this to happen, the world needs a strong state to lead an exogenous shock that will change the direction, speed, and scale of innovation in world capitalism. Global markets will not spontaneously move in this direction.

Big climate treaty meetings, filled with calculated bargaining and conditionality, deliver too little, too late. We will not be able to litigate our way into a decarbonised world, much like litigation has failed to stop the tobacco industry.

More on this: Preparing China for Paris

Social movements like the Extinction Rebellion, as the example of antislavery shows, take time to globalise. An effective global carbon abolitionist movement is unlikely to arrive in time.

Essentially, a state has to lead a regulatory agenda based on the development of a bio-digital energy paradigm. Biology and software languages must regulate the generation, storage, and distribution of energy.

Software languages are flexible, cheap, and extraordinarily powerful tools for writing and implementing a renewable energy future. Energy-efficient appliances, smart grids, and smart meters are only a few examples of how energy is being digitised. Much like the costs of decoding and re-coding DNA, the costs of clean energy are falling too.

So which state is capable of this kind of innovation leadership? There are four obvious possibilities: China, the European Union (EU), India, and the US.

The EU has an impressive track record on energy-climate policy, including the release of its Energy Union Package in 2015. The region, however, is constrained by the perpetual negotiation amongst its members, which tends to delay processes. Brexit is the latest and an extreme example of this.

More on this: China starts national emissions trading: a big step, but the journey will be long

While the EU has accomplished much with its internal market, its member states still have firm hands on the tillers of innovation policy and energy security, and they do not necessarily pull in the same direction. Central European states like Poland see their innovation future as different from that of Germany or France.

India can point to sectoral successes when it comes to innovation and development, the two clearest cases being pharmaceuticals and software. Much less clear is whether India can move at the speed and scale that is required. China, for example, achieved an electrification rate of 99 per cent for its economy by 2005; India has taken much longer.

Unfortunately, the world’s most innovative economy – the US – has turned itself into a fossil-fuel superpower.

President Obama was something of a missionary for fracking, overcoming the resistance of US environmental groups domestically. Today, the US is the world’s biggest producer of gas, with more than two-thirds of its output being shale gas.

As Trump’s trade war against China demonstrates, the US is more interested in choking off China’s technological development and preserving US hegemony than it is in innovating for the global public good of climate management.

More on this: Trump and climate

China could perhaps innovate and diffuse more of the technologies that we need in order to avoid falling into the worst climate scenarios.

By 2030, China is predicted to add another 310 million people to its cities. But China is not just urbanising. It is urbanising innovation. Through this urbanisation, China has the chance to add more than 50 innovative Singapore-sized city-states to its economy.

China is building experimental cities of many kinds – forest cities, sponge cities, hydrogen cities, and eco-cities – to test the viability of climate-related technologies.

Particularly, it’s testing whether they can be rolled out across China’s cities, as well as the cities outside of China that form part of the Belt and Road Initiative. City networks of innovation like the Belt and Road Initiative probably form our best chance to achieve the bio-digital energy revolution.

Of course, many things could derail China’s technological development. Worried about the intellectual property monopolies that underpin its hegemony, the US may engineer a truly serious confrontation with China. Climate change, however, will turn all coming hegemonic contests into Pyrrhic victories.

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