If there is one statistic that every government should keep in mind while designing post-COVID stimulus packages, it is this: “ The Oxford Review of Economic policy showed that investment in new sustainability measures create three to four times as many jobs per dollar investment as investments in the old economy” – Al Gore.
Conversations during the Davos Agenda this week were different in many ways. What changed? Last year, faced with a devastating global pandemic, biotech companies accelerated a typically five year process to under a year. With no concerns about short term return on investment or unnecessary red tape standing in their way, technology pioneers Moderna and BioNTech showed us what humanity is capable of when faced with a crisis.
With this stark example of the art of the possible, the question to fellow Davos Agenda attendees was this: How can we replicate this process to accelerate the energy transition?
As Fatih Birol of the IEA pointed out, about 50% of the emissions reductions required to reach net zero in 2050, rely on technologies that are still in the demonstration stage.
He also quite rightly highlighted that despite promises made in countless government speeches, R&D investment in clean energy over the past decade has not increased, yet it has in sectors like IT and car manufacturing. It’s time to invest heavily in clean energy.
From my perspective as a Technology Pioneer at the Davos Agenda, there are four things we can learn from the vaccine’s journey to save our planet:
1. A massive policy response is possible, and it works
Faced with a pandemic, the decision making around policy was massively simplified by a life or death scenario. Governments will increasingly take the same approach with climate change – and economic stimulus measures in response to Covid-19 provide an opportunity to take urgent action will could boost the economy while supporting climate goals.
2. We have to recalibrate our thinking on funding
Research shows that while worldwide spending on R&D has slowly increased, R&D returns have been declining, and there is emerging evidence that suggests a short-term mindset lies at the heart of this puzzle. The evidence shows that long term R&D projects deliver more value and a greater impact to societal progress.
3. Technology Pioneers and incumbents need to work together
Incumbents and startups have sometimes been portrayed as antagonistic, but if last year has shown us anything, it’s how powerful they are when they work together. When you combine innovation from technology pioneers (Moderna, BioNTech) with scale from incumbents (Lonza, Pfizer) – that’s where progress happens at the scale and speed necessary to solve a global crisis.
4. We need an agnostic alliance to bring a diverse group of people together.
Oliver Wyman has shared some interesting thinking on the mission-based ecosystem during the Agenda. They identify three imperatives to make it work; A strong mission, incentivized participants and collaboration from complementary people. Again, 2020 provides the evidence, just look at what COVAX achieved.
It was also great to hear Teresa Ribera, the Spanish Minister for Ecological Transition address the criticality of creating jobs where they are needed: “The just transition is very important. We need to take care of those who feel menaced by the transformation.” There is an enormous opportunity for jobs and wealth creation as we transition, and we must ensure this wealth is justly shared.
The wider theme is of course more broadly that society’s measure of prosperity is profoundly broken. President Macron articulated it nicely when he said: “There are two kings in this system—shareholders and consumers, with workers and the planet paying a price.” This past year has settled the debate on whether traditional capitalism is fit for modern society, and a move to stakeholder capitalism is the only way to build a future that is equitable.”