An intense dialogue, a very heavy weight of content and a few gems.
Today Dr Walter Boettcher our Head of Research & Economics attended the Climate Action: Sustainability Innovation Forum in Glasgow which is running alongside the UN Climate Change Conference. Here Walter covers the key themes that have emerged from today’s forum.
Green metrics: With my research hat on, I can see that no matter what area is being discussed (de-carbonisation of buildings, net zero energy production, construction and green design processes, transportation, research & development, investment), there is a perceived need to measure and report on performance, especially performance improvements. Furthermore, mandatory data reporting may be required across all green sectors, especially as processes become increasingly digital and amenable to analysis with artificial intelligence. This is understood as a key ingredient in encouraging investment in all areas of the emerging green economy. Likewise, it encourages banks to lend into these sectors.
Public/Private Partnerships and capital: There is absolutely no sense at this conference that: “Capitalism got us into this and therefore should have no role in getting us out” to quote a protestor at the Glasgow 100,000 strong demonstration on Saturday. Private capital is understood as crucial. In addition to finding robust metrics to support risk/return analysis in assessing investments, a key problem is finding investment opportunities of scale so as to put this capital to work efficiently. The solution is linked to government leadership in promoting inclusion and co-operation of all public and private stakeholders which is ultimately local.
Energy production: Two crucial themes arose requiring substantial investment in research and development: lowering the price of hydrogen through more efficient electrolysing processes and creation of large-scale and long-term energy storage. The key approach here is to identify the best potential technologies to be supported through government and private investment. However, an interesting point was made that renewables is already the cheapest form of new energy.
Supply chain efficiencies: In assessing how supply chains can be decarbonised, it was suggested that they need to be horizontally integrated. This means that all actors in the chain, whether large (multinationals) or small (SMEs), from upstream production to downstream distribution, need to work together. As it presently stands, profit margins are not evenly distributed which means that the capacity for companies to invest in new technologies and efficiencies is also not evenly distributed. Likewise, the costs of the supporting infrastructure upon which all members of a supply chain ultimately rely, are not evenly distributed.
My own take on this is that levies such as road taxes, for example, should not be targeted only at hauliers, but rather on all actors in a chain, including the largest actors with the largest margins, whose supply chains also rely on roads.
About the author:
Dr Walter Boettcher is our Head of Research & Economics with more than 20 years UK and European experience in the commercial real estate sector. He regularly participates in industry panel discussions, engaging with our wide range of clients, as well as providing commentary to the media.
To contact Walter, email Walter.Boettcher@colliers.com