Put People First: Linking human development and energy innovation

There’s a century old quote of physicist and Nobel Laureate Wilhelm Ostwald that succinctly captures the link between innovation and energy. “If it were possible to invent a transformer that would yield only a few per cent more, that would bring the working classes more relief than all the welfare institutions in the world.”[i] This focus on people is important to maintain as new technologies and policies are developed. The Global Innovation Index 2018[ii] focus on innovation in the energy sector provides a succinct, but lengthy, overview of how countries are lifting their citizens out of poverty or leading the world in technology transformation. The report provides a global overview of progress in transforming the energy sector, it also provides in-depth discussion of the opportunities realized if a clean energy future becomes a reality. The report delivers both a global and local perspective, essential for understanding the state of our energy system.

Wilhelm Ostwald, photo credit

Studying the energy sector often requires a focus on the large macro picture of statistics and charts or unique case stories. These methods emphasize different aspects of how technology impacts at a global or local level representing policy choices or people and businesses. This macro/micro lens means it is hard to straddle to account for diversity while comparing country-to-country progress.

Working through the GII 2018 is like leafing through an energy systems encyclopedia. Spanning over 400 pages, I found the chapter on India most representative and concise for representing the findings of the report.[iii] India still has 35 million people without energy services and 780 million without clean cooking facilities. That is, they rely on ‘traditional’ biomass methods in the form of animal dung and other organic material for cooking and heating. While advances in biomass make it an excellent choice for advanced economies, as the report states, the small scale cooking fire, can be replaced by still simple but much safer technologies, like cook stoves or liquified biomass. Thus Ostwald’s call for greater efficiency in energy technologies provides a means to focus our efforts on relieving suffering and making a tangible difference in those regions where advanced technologies are not fully diffused to populations that need them.

Important in the chapter on India is how the authors connect with the Human Development Index to demonstrate the improvement of conditions for Indians. Topping the list is Iceland, with India ranked with very low quality of life (see below). I like this chart, since it is both simple and draws from a complex scoring mechanism that compares countries health, education and income measurements. From this we can start to paint a picture of the social requirements of energy. People do need energy services to access other areas that improve and enable them to live a healthy life. The chapter authors give a thorough review of the inter-connected aspects of the energy system with how people utilize energy technologies.

Human Development Index (source: Global Innovation Index 2018, p 144

The people of India need solar PV and nuclear energy to power their electric cars and create a cleaner environment while also lifting the living standards of all income groups. As the report states, electrification is the key way the country can improve access to energy resources. While biomass technology is important to distribute for cooking needs and providing access to resources, on the larger scale of the national economy, development growth needs to progress with electrification and movement away from fossil resources. This leads to the other key paradox of the report. Advances in energy supply technologies (mainly generation sources, like solar PV and wind) need to play a foundational role in a new energy system, the innovation and deployment is actually occurring in the area of energy end-use technology. Thus, the tremendous impact LED lighting technology has made (such as in India) is massive and measurable, deploying more innovative technologies to power the LEDs is required.

Inverted policies and efforts

Just as there is a macro and micro perspective on the energy system, there are also two sides of the energy system, split between ‘supply-side’ and ‘demand-side’, or ‘energy end-use’, as described in the report. Here the findings of the report are very interesting for identifying the strong state led efforts that are focused on the production of energy supply, rather than finding ways for consumers to reduce and benefit from efficiency improvements on the demand side. The chart below identifies where innovation efforts reside, demonstrating a huge misalignment between innovation efforts (going into energy supply), yet a huge impact on innovation outcomes and objectives on the energy-use side comes from  the smaller input. Overall, the indication a strong misalignment between the resources going into energy innovation and where the benefits are seen.

Direction and objectives of Innovation efforts and outcomes (Source: Global Innovation Index 2018, p 123)

The bigger question then is who benefits from this misalignment? And that question will have to be taken up in another post. But it is clear centralized top-down efforts led by government and large companies still directs the money. Households, irrespective of the level of development, get the short-end of the funds while the supply-side giants consume huge amounts of R&D budgets and incentives.

In a sense, nothing really has changed much in the past 100 years of expanding our energy system. Referring to Ostwald’s quote again, the efficiency improvement in the transformer is reflective of an expansionist and supply driven focus. This reflects the time of building out of large scale centralized systems. In our current example of India, this is still needed. But as the authors note, efforts in energy efficiency – not just in LED, but in heavy industry, have reduced demand by 83 billion Kilowatt hours in 2015-2016, and making Indian industry more internationally competitive. Less energy consumed by consumers or devices, means more consumers or devices can be powered with less generation. Less generation means money can be spent elsewhere in the energy system.

Maybe Ostwald’s quote can be updated to read, “If it were possible to invent an innovative energy system that would bring the global working classes more relief than a centralized one, it would be focused on the needs of the working class rather than the politicians and large companies building dirty coal fired power plants, gas and oil pipelines, funneling money to offshore companies, neglecting energy efficiency for households and attempt to understand how people use energy for heating and cooling and double efforts to build a clean energy system that protects our environment and improves our health, instead of funding pet electric projects that do not substantially displace oil fueled vehicles from our cities, instead politicians allow citizens to die in higher numbers from air pollution and chemical additives in our water. Investing in people and their energy needs would bring the working classes more relief than all the welfare institutions in the world.”

Yes, I think Ostwald would say this. After 100 years, it is time to invert the chart.

References

[i] Janet Stewart, ‘Sociology, Culture and Energy: The Case of Wilhelm Ostwald’s “Sociological Energetics” – A Translation and Exposition of a Classic Text’, Cultural Sociology, 8.3 (2014), 333–50 <https://doi.org/10.1177/1749975514523937>.

[ii] ‘Global Innovation Index 2018: Energizing the World with Innovation’, ed. by Soumitra Dutta, Bruno Lanvin, and Sacha Wunsch-Vincent (Cornell SC Johnson College of Business; INSEAD; WIPO, 2018) <https://www.globalinnovationindex.org/home> [accessed 21 August 2018].

[iii] Anil Kakodkar, ‘India’s Energy Story: A Quest for Sustainable Development with Strained Earth Resources’, in Global Innovation Index 2018: Energizing the World with Innovation, ed. by Soumitra Dutta, Bruno Lanvin, and Sacha Wunsch-Vincent (Cornell SC Johnson College of Business; INSEAD; WIPO, 2018) <https://www.globalinnovationindex.org/home> [accessed 21 August 2018].

Author: Michael LaBelle

Dr. Michael LaBelle is an associate professor and the Jean Monnet Chair in Energy and Innovation Strategies at Central European University. He holds a joint appointment between the Department of Environmental Sciences and Policy and the Department of Economics and Business. His research is centered on energy governance, innovation strategies, and energy justice.