A case for hope: 3 sustainability disruptions to happen in the upcoming decade

“We’re in the early stages of a sustainability revolution in the globe that has the scale of the industrial revolution but the speed of the digital revolution.” – that’s how former Vice-President Al Gore has put it some time ago. I thought about this quote and tried to take a closer look at what is currently going on in three major business sectors to tackle the issue of climate change.

Regarding the issue of an increasingly warming planet and the challenge of tackling this threat to humanity successfully by putting the Paris Agreement into practice, it sometimes feels pretty difficult to keep up confidence and optimism. We have made steps forward in the past, but the pace and impact of progress has to get ramped massively for cutting our greenhouse gas emissions by half within the next decade.

Nevertheless, one thing should always be kept in mind (which is also called Amara’s law): “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” The most famous example in this regard might be the iPhone – and to showcase what exactly a technology disruption can look like in the long run, one picture might tell more than thousand words. 

Papstwahl: 2005 vs. 2013 (Quelle: Spiegel.de)

So, there is no reason to be completely hopeless. Change is and will be coming, that is for sure. And as a steadily growing number of people is getting more conscious about climate und environmental issues, chances are (at least from my point of view) not too bad for expecting a decade of technology disruptions, which might help us to improve the overall sustainability of our lifestyle and protect the climate. Or to frame it with the words of former Vice-President Al Gore: “We’re in the early stages of a sustainability revolution in the globe that has the scale of the industrial revolution but the speed of the digital revolution.”

Encouraged by this outlook, I’ve tried to take a closer look at three major business sectors which have to potential to get disrupted by climate-friendly technologies combined with suitable business models – here are my findings.

MOBILITY – electric vehicles are taking over

Thanks to Tesla, e-mobility is no longer just a thing for tech-nerds and environmentalists, but rather making its way into the automotive mass market: in the US, the Model 3 was the 6th best selling car in the 3rd quarter of 2019 and just recently, the company announced the next step of its expansion plans with a new Gigafactory (output: roughly 500k cars/year) being built up in Germany – the fourth one, after two in the US and one in China. And in addition to these current market forces, also regulatory requirements are getting more ambitious: an increasingly number of countries is prohibiting the admission of new cars with an internal combustion engine – among huge ones like China and India, both setting the deadline for 2030. Hence, it is only a consistent decision, that even the biggest car manufacturer in the world (Volkswagen) is aligning its strategy – or to phrase it with the words of VW’s CEO Herbert Diess: “Without a rapid switch to electric mobility, we cannot win the battle against climate change. It is the only effective alternative to the combustion engine that can be produced immediately in large quantities at reasonable cost. Electrification is not a bet.”The current plans of VW seem to underline that it’s getting serious as the last production platform for internal combustion engines will be set up in 2026 and the investments for electrification and digitalization were raised up to 60 billion over the next five years. 

Putting it all together: due to a massive scale-up in the upcoming years (just recently, Amazon announced an order of 100k delivery vans to be on the road by 2024), the technology itself will continue to improve in terms of production costs, range extension and reduction of rare earths – which is why, the age of the internal combustion engine might be gone sooner than we can imagine right now.

FOOD (& AGRICULTURE) – vegan is not a not a trend

2019 was called “The Year of the Vegan” – but not by PETA, it was a headline from the Economist. And this conclusion is not based on feelings, but rather facts: “Fully a quarter of 25- to 34-year-old Americans say they are vegans or vegetarians.“ Furthermore: also quite popular and well respected personalities are going public with their commitments to step back from consuming animal products – such as six-times world champion Lewis Hamilton, Oscar winner Nathalie Portman or democratic US presidential candidate Cory Brooker. So obviously, plant-based diets are entering the social mainstream. However, and this is at least in my opinion important to mention: is not about black or white (vegan or not), but more about recognizing that the amount of animal proteins we are currently eating is neither good for the planet nor for us – and consequently, it totally makes sense in many ways to change our consumption patterns. As a result of this ongoing development it should not be surprising, that businesses and the overall economy are following. The German meat- and sausage producer Rügenwalder Mühle is already producing almost 40% of its revenues with vegetarian / vegan products, US companies such as “Beyond Meat” or “Impossible Foods” are gaining huge amounts of popularity and just recently, Dean Foods, America’s largest milk producer filed for bankruptcy. That’s pretty good news and probably just the beginning as all participants of our market economy are always looking for the most efficient way to allocate their resources – so if we can cut out the animal in the production process creating by plant-based food that tastes like natural animal products, it is by no doubts a huge step forward in terms of overall efficiency regarding our food system. Relating to study from RethinkX, even a drop of 70% in demand for cow products until 2030 might be conceivable – with other sources of animal protein expected to follow (Spoiler: Just.Egg is coming to Germany next January).

Putting it all together: in this case, the trend might be our friend. As Social Media will continue to unveil the disgraceful lies of factory farming and businesses will come up with better and cheaper alternatives, more and more people might get increasingly conscious about their food choices and thus shift their demand significantly within the next decade. The result could be tremendous: not only reducing our greenhouse gas emission, but also causing positive side-effects for our waters, our air and our biodiversity – and our personal health.

ENERGY – renewables are unstoppable

In 2012, former CEO of RWE said subsidies for solar power are as reasonable as growing pineapples in Alaska. At the end of this decade now it is crystal clear, that this statement was almost as far away from the truth as the evaluation of former Microsoft-CEO Steve Ballmer on the iPhone. It’s just seven years later, that EnBW announced its plans for building a huge solar park to power 50.000 homes without subsidies. The same applies for wind, which will this year be the single biggest source of energy in Germany by providing nearly a quarter of the overall electricity supply. And of course, this encouraging development also takes place in countries all over the world – just take a look at the massive solar parks in Morocco or wind farms in UK. Even more, the pace of this transformation might accelerate in the next decade, as the LCOE of renewables energies are entering the range at which fossil-fuel power plants are operating right now and storage opportunities are also getting increasingly competitive. Consequently, the upcoming scale-up of these decentralized and renewable energy systems might be able to drive out significant amounts fossil-fuel energy generation not too far from now. Or to frame it with the prediction of Jim Robo, CEO of NextEra Energy (industry leader of renewable energies in the US): “by the early 2020s, it will be cheaper to build new renewables than to continue running existing coal and nuclear plants.“

Putting it all together: the clues condense that we are right before the tipping point towards a carbon-free energy system by replacing fossil-fuels with wind and solar. We have the technological capabilities to build up such an infrastructure, we have the knowledge to design such energy systems and we are in a situation in which it also makes sense from an economic point of view to drive this way forward. 

As described above, we are basically able to achieve huge progress in terms of climate action within three very important business sectors until 2030. That’s why when entering now the next and probably most important decade human mankind has ever faced, we should never forget that this transformation towards a climate-neutral era is not only crucial for avoiding humanitarian disasters, but also the biggest opportunity for our economy in terms of jobs and growth since decades. So, the market itself can also be our friend in this regard – assuming that politicians and policy makers are finally committing to this transition by removing all kinds of support for climate-damaging products/services and strengthening their efforts significantly to let climate-friendly solutions unfold their full potential.

>> Cover Picture is taken from pexels.com <<

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