SHF2016丨Frans Berkhout

Thank you very much indeed for inviting mehere today. And in a way is a nice Segway from Mr. Batista’s Talk on the NewDevelopment Bank because we are going to talk about is this question of how dowe transform an Energy System from being very carbon intensive to a low carboneconomy. It is a slightly more academic talk so it is based on research that Iand many other people have been doing in the last 10 years or so to try tounderstand such transition processes. And I think the main argument I want tomake is that while in thinking about this major transition to low carbon drivenby concerns about resources but also of course by climate change and localenvironmental problems like ecology in cities, people are often concerned aboutthe introduction only of new technologies and relative crisis of thosetechnologies. In fact in thinking about on how those transitions unfoldovertime, we need to take a much broader view, a more systemic view, and try tounderstand how such system innovations happen over quite long periods of time.That is really the great challenge.

The analytic challenge but it is also achallenge for policy makers. And so what I am going to layout for you today isreally just a, the framework the thinking about this sociotechnical regimechanges happened internationally and also suggest at the end and although manypeople are still very worried on the context of the Paris talks and so about,whether this transformation away from energy systems which are very carbonintensive towards this systems that are low carbon is happening too slowly.There is still all sorts of difficulties with the technologies that would befundamental to it. There is also economic and financial obstacles that in factI take a much more optimistic view that there are already very clear signs ofan emerging, global low carbon regime. And actually these changes may happenmuch more rapidly that we sometimes suspect.

So, this is what my talk is seeking to do,and I hope it will say something useful. So, when we talk about systeminnovation that is not only the introduction of new technologies, but thechanges in institutional frameworks within which this technology operate andregulatory systems, but also changes in the way people behave. We areconsidering purchases of deep economic cultural institutional transformation.And sometimes we use terms such as transition, as well as the debate aboutwhich of this terms are the right one to use. We often have in mind ideas ofthresholds being cross, of tipping points of sudden accelerations in the waywhich the system reconfigurations are happening. And there’s a lot of debate inacademic literature but one of the right terms to be using I am not going to beso concerned about that just to say that we ought to be aware of that.

Typically when we think about change, weare thinking of two different types of change. In the economics of innovation,which is an area I work in. We often concern with incremental changes smalladjustments which are secular year on year changes, improvements in energyefficiency for instance which may be operating in the level of 1 or 2 percentper year, but then we also have this notion of much more radicaldiscontinuities. Step changes in the way things are organized or the fusion of newtechnologies whether is solar or wind, all sorts of much more importantqualities of changes in the way systems are organized and so on. Thedevelopment of the New Development Bank for instance, is that a radical change?Or is it an incremental development of things?

Again, these important theoretical debates,I think we should not get too tied up in them. There are usually incremental aradical changes happening at the same time and if you look over a long periodof time. Incremental changes adapt to radical changes, and so this importantinteraction of different types of change. Now when we talk about technologicalchange, and particularly transformations from one sociotechnical regime toanother, we are often concern how rapidly such a change would happen; andcertainly in relation to the development of the introduction of low carbon technologiesand the transformation of our energy systems and transport systems andagricultural systems. We are concern on how rapidly these things will happen.

The history of technology demonstrates thatactually changes are often very slow. One of the most important features ofsociotechnical regimes is that orderness and stability in fact. So I will makea very simple example in paper making. This is the original FourdrinierMachine, was a machine developed in the 1840s by two French brothers in the UK.It was a radical new technology for producing paper. This is standard papermachine that we would be seeing in a Chinese paper mill today. It is actuallythe same technology. What happens is that an emulsion of fibers and othermaterials are sprayed onto a net which is driven thru a machine and then dried.And that is why this things are very long, is quite a simple process butoperating at high speed. This is still a Fourdrinier Machine. It isrecognizably the same thing. It is operating at a much higher capacity and amachine like this can be four hundred five hundred meters long. It is anenormous machine that produces half a million tons of paper a year, but it isrecognizably the same machine after 150 years.

Many of our fundamental industries are basedon extremely stable technology, technologies and technologies regime associatedwith them. Not only the technology but also the markets associated with them,the fundamental economics, the practices, the producers of these technologiesare very few manufacturers in the world that can produce a machine like thisand so on. Highly structure, and therefore change is a very difficult thing toachieve. Here is another example. This is a ford motor car, this is theoriginal model T ford, and this is model Ford Focus, recognizably the samemachine after a hundred and three years. It has four wheels, a steering wheel,and an internal combustion engine. Fundamentally the same technology of coursethis is a much more efficient machine. It is much safer, much more comfortableto sit in. It has a roof, you do not get wet. But basically it is the samething. And therefore we often concern in to what the manufactures like toinsist every year we have new innovations, it is a new brand machine and so on.But actually is the same thing.

The point I am making is that change ishappening in incremental change, but is also the fundamental characteristic ofthis regimes is actually the stability and orderness and therefore thinking ofa radical change is a complicated thing to do. Here is another example ofradical change. This is messaging, this is the change in telephony from thestandard model which was developed in the early part of the 20th century and ofcourse we all know a smart phone of today. This is a disruptive and suddenradical change that happened at the end of the 20th century and happened reallyrather quickly, so here’s an example of disorder, of radical transformation ina sociotechnical regime. And therefore although in many cases we have enormousstability energy systems enormously stable, there are many examples of radicaldiscontinuity and change, and it is from this kind of changes that we need tolearn into thinking forward about changes towards a low carbon economy.

So in these kinds of incremental or radicaldiscontinuities, what actually changes and of course we know a whole suit ofdifferent things are changing. The underlying technologies are changing. Theway they are arranged in systems of production, systems of exchange, economicsystems, systems of social practices, of regulations, of norms. One of theimportant things about the car, perhaps the most important thing is notnecessarily that it moves you from point A to point B but also the symbolicvalue of owning a car. The value in terms of your own sense of being successfuland the status that is associated with a vehicle and that is often what the carmanufacturers are playing with when they are trying to sell you a Mercedes Benzor a BMW. And these things are very deep seated and also very difficult tochange.

So when we are talking about a transition,also a transition towards the low carbon economy, we are talking about a wholeseries of interconnected changes that need to happen. Here is an example from arather foundational paper by Frank Hales not so long ago, which is using a kindof social network theory analysis of what a sociotechnical regime looks like.And this is for cars. And the central thing is the artifact itself, is thevehicle the Ford Focus or whatever, we all know that this machine is of courseembedded in a whole series of different kinds of structures and practices andregulations and so on. And without all of those things, it would be impossibleto have a car. You need to train drivers, you need to have traffic light systems,you need roads, and you need fueling systems and so on. And this car is theonly possible because it is embedded in this network of social economicalinstitutional relationships and all of these things need to change andreconfigure and readjust as we go through one of this regime changes.

What also changes of course about thesystem is performance. Here is a well-known example. Moore’s Law is typicallinear change. But change can also be slow or fast. When come to Maize yields,there is a turning point at the end of the Second World War. The application ofscience in a very structured way and this are main fields in the United Stateswhich see a rapid and quite radical change, a continuing change, since then.And here is another example which you all know of a much more abrupt and suddenchange, this was the first search engine on the internet “Lycos” introduced in1996, not so long ago, twenty years ago. And of course now these engines areabsolutely fundamental to almost everything we do, from shopping to studying toworking and how to travel from A to B. And we have this exponential anddramatic development in the use of the internet. The kinds of changes that wesee may be narrow or may be wide, and here I am going to use an energy example:we may be concerned simply of the introduction of specific technology likeoffshore wind in this case, or in fact a much more large scale systems changelike the development of the microwave, which involves the articulation andembedding of a whole suit of different technologies perhaps the restructuringof a network enabling not just the transition of power in on direction, butsomehow the transition of power in both directions of the consumer becoming aproducer.

A big question in relation to these kinds ofsociotechnical regime changes is that intentionality, that is whether theyemerge as the result of historical changes in technologies in economies incultures or were there they purposely, intended in some kind of way. Twoexamples you might say that the development of steam power at the beginning ofthe industrial revolution is, in Europe it was an emerging change, it somethingthat was not necessarily planned by governments it was not advocated for civilsociety or organizations. It was something that emerged from the spheres ofinventions and the accumulation of advantages than that gave to manufacturersand therefore became very widely diffused very rapidly. But there are alsoexamples of course many examples, and this is the poniard example of technologieswhich are intended to create revolutions.

Nuclear power was clearly a state drivenchange in the USA, in Europe following the 1960s; of course it is not withoutthese difficulties as we know with nuclear power. Although it can play a veryimportant role I think in achieving low carbon energy systems it is not withoutthese difficulties this association with environmental pollution, nuclearweapons proliferation and so on. And so on, change in sociotechnical regimesmay sometimes be emergent, may be purposive that the purpose of the type is notthe better type. Clearly a change to low carbon systems is in some senses anintended change. It is something that governments and societies are seeking toachieve but I think we should remember that maybe all sorts of risks associatedwith that as well. And clearly we see that sometimes in relation to renewablepowers, well, we have many different theories of transformation. We may beconsidering an evolutionary change, a more emerging kind of change. We may beconsidering trying to understand, how revolutions happen, revolutions ofteninvolve struggle, and certainly low carbon transitions involve all sorts ofpolitical and probably economic and industrial struggle between incumbents andthe new challenging technologies and companies. Or it may have some kind ofcyclical element as well.

And there are all sorts of narratives,different stories we tell as we go thru this change processes deep seatedchange processes related to growth and development. The simple theory andnotion of Creative Destruction, the idea that in such a change will in partconcern with the emergence of novelty but at the same time and often underemphasized, is actually the destruction of old orders. And those two things aregoing on at the same time. One is very painful, and the other very hopeful. Andthis interaction between this two combine processes. We have metaphors fromecology that had to do with growth and release and reorganization and so on andcertainly this notions of order and disorder that crush in how you maintainorder in a process of transition where everything seems to be disconnected andin some chaotic state which would be normal in a process of transition.

The final I want to say is really thatafter such a long meditation I do believe we see all sorts of signs of a newregime a new properly global regime around low carbon. And I just want to giveyou a few bits of evidence, all collected on the last few weeks. So this areevents and things that happened in the last few weeks that show to me at leastthe kinds of interconnected changes that herald the development of a radicalnew way of producing energy around the world. It is happening all around us, weare in the middle of this transition, we are not waiting for, we are in themiddle of it, is accelerating, and this change may be much more rapid than wethink. So here are just some examples, earlier this month the whole country ofPortugal operated for four consecutive days on renewable energy alone. Theyswitched off all the other powers stations there was no coal, no gas, there wasno nuclear, the whole country operated for four days on solar and wind. Onlythree years ago, Portugal only had about 30% of its grid of producing renewableenergy and if you would said to anyone ten years ago, that a country in the EUwould operate for four consecutive days on renewable power alone people wouldhave said that you are crazy. But it happened this month. And so this is a veryclear image for me.

Now you may say Portugal is a smallcountry, is not a very industrialized country. But never the less, this is avery important signal I think of what the future will be like. Another examplehere from the financial times this month is that “Green Jobs employ 8.1 millionpeople around the world” involved in production of this kind of technologiesand at the same time you would have the competitor the old incumbent regimewhere you have employment falling off. So just in terms of jobs generation itis absolutely obvious now that the evidence is all around us, that this newtechnologies are where companies are going to be investing and where the rapidgrowth is feasible.

This data from IRENA which is theinternational body which looks at renewal energy this capacity increases lastyear just published, a record year, again, after many record years and showingagain that huge increases in power generation capacity renewals, over a hundredgigawatts of power have been in stored in 2015 and the mayor growth is in Asiawith China playing an absolutely fundamental role, that’s where the most rapidgrowth was seen. And I think this is actually the killer fact. Here this onehere, Global investment in renewable power capacity, of all investment in powergeneration in the world for the last two years over 50% of that is being in therenewables. And that to me is an absolutely clear sign in a tipping point inthe way investment flow are working and the way the regime now… and of courseas a market there’s huge inertia in this kind of systems, they are very slow tochange. But once you have the situation than more than 50% of total investmentin an industry is happening in renewables, it is absolutely clear to me thatthe transition is underway and the unstoppable, the market has already takingover a new selection environment is being imposed and that’s the way things aregoing.

And so you can see here, that in 2015 andthis is the most recent report from the Frankfurt School UNEP CollaborationCenter we have a double the amount of investment in renewable compared to coaland gas energy generation. So I think I want hope, I want to end in a hopefulnote, having taken you thru some ideas about how you need to see sociotechnicalregime change, there’s all sorts of firm evidence that I think that, we are wellon our way thru this transition and we can be hopeful and the new developmenttank will play an important role in that as well. Thank you very much indeed. 

(This article is edited based on the recording and has not been reviewed by the speaker.)