Redefining an industrial revolution: OECD 2015 Green Growth and Sustainable Development Forum (14-15 December 2015, Paris)
Ryan Parmenter, OECD Environment Directorate
Besides the sound of whistling steam, what comes into your head when you hear the term “industrial revolution”? Some might think of new innovative technologies and processes, or even economic growth. Others might think of environmental degradation. Just type “industrial revolution” into Google Images and you’ll quickly see both of these perspectives.
The images of the industrial revolution highlight the new steam-powered trains as well as the innovative factories that drove large-scale societal change. Yet, those same images also show blackened skies due to the increased use of coal. These images are similar to those landscapes described by F. Scott Fitzgerald’s The Great Gatsby (the “valley of ashes”) or even in Dr. Seuss’ The Lorax.
But, what if things were done differently? What if an industrial revolution occurred without negatively affecting the environment, and in fact helped to reach green goals cost effectively, faster and at scale needed to bring about meaningful change?
Environmental performance can be a founding principle rather than an afterthought. Innovative technologies to improve productivity and performance could be developed using a systems approach, rather than being pursued in sectoral or technological isolation. Exciting possibilities are emerging. One example is the pursuit of a biobased economy. This is about seeking to transition from a fossil-based to a bio-based economy by using biomass for non-food applications. This requires innovative applications in chemicals, materials, transport fuels, electricity and heat. Another example is smart grids. But even this approach is evolving to consider larger systematic opportunities available through smart cities. These are examples of where the innovation complementarities are considered in order to maximise the benefits across technologies and sectors.
Innovative businesses can also be encouraged by policy. As demonstrated in the past, incremental improvements in existing technologies as well as radical or disruptive technological change are necessary for an industrial revolution. Therefore, it is important to identify the right policy mix to support both types of innovation. Policies need to encourage new green businesses to enter the market and existing businesses to improve their productivity and environmental performance or else exit the market. This is a critical balance as environmental policies can at times benefit new entrants to the market, or favour existing firms (i.e., incumbents) through practices such as ‘grandfathering’ legislation. The nature and level of government policies will have a direct impact on the dynamics of firms entering and exiting the market – ultimately shaping the nature of innovation activities.
Big data sources
The increasing number of unconventional and “big” data sources could be used to drive greener growth. Evolving technologies for satellites and now even cellphones are rapidly expanding the number of opportunities available to collect information needed for air pollution monitoring or real-time resource use (e.g. energy and water). For example, drones can now be used to gather increasingly detailed information in order to green the agriculture sector. Other examples of exploiting new sources of data exist in the energy, transportation, water sectors as well as others. To be successful, the technical, regulatory and policy implications of these data sources must be considered, while addressing how the information is collected and ensuring its confidentiality.
Public engagement, International co-operation & Measurement
Public engagement should be considered fundamental to ensure that risks are managed and that trust is established in the process of pursuing innovative and green technologies. New forms of governance and adjustments to the regulatory system may be required to ensure that human health and safety is protected while allowing for emerging technologies to be used. International co-operation can also be used to develop innovative processes and technologies. Environmental impacts such as climate change do not respect international borders and neither do the benefits of green innovations. This requires the use of the appropriate mechanisms and incentives to encourage co-operation. The effective measurement of innovation is also an important consideration. Meaningful government support needs to be established based on credible information. Decisions need to be made on how and when government support is provided, both to encourage successful innovations and also to end support when initiatives are unsuccessful.
So, for those interested in exploring any of these issues, or more broadly considering how to foster a green industrial revolution, it will be worthwhile to plan a trip to the OECD Green Growth and Sustainable Development Forum* in Paris this December.
This year’s theme for the OECD Green Growth and Sustainable Development Forum is “Enabling the next industrial revolution: systems innovation for green growth”. Rather than a large trade fair style event, the Forum allows for in-depth discussions between those advising and lobbying governments. The objective is to share policy analysis and experience among countries and the community of green growth and sustainable development practitioners. Through these shared experiences and analysis, key knowledge gaps can be identified to inform future work in this important area. Given that the Forum will be taking place directly on the heels of the COP21 negotiations in Paris, the timing is perfect for considering the best ways of encouraging a green industrial revolution. Those interested can register for the Forum here.