The Economic Opportunity Hidden in the Climate Transition | Marielle Remillard | TED — Transcript

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1. 0:03Do we have what it takes to reach net zero?
2. 0:07I don't mean this in a philosophical way.
3. 0:09Does humanity have sufficient grit and creativity?
4. 0:13Do we have the political will?
5. 0:15I mean, quite literally, do we have enough stuff?
6. 0:18Cement, steel, glass, nuts, bolts needed to achieve net zero.
7. 0:24Because this is no small undertaking.
8. 0:27Over the next 30 years,
9. 0:28we're going to need to build 42 billion solar panels,
10. 0:311.3 million wind turbines,
11. 0:34476 nuclear reactors,
12. 0:37establish a hydrogen economy,
13. 0:39overhaul our electrical grid
14. 0:41and transform our transportation networks.
15. 0:43This is a lot of money and a lot of labor, yes,
16. 0:46but it's also just a lot of stuff.
17. 0:49So as governments set increasingly ambitious policy targets
18. 0:53and businesses overhaul their operations,
19. 0:56whether by carrots or sticks,
20. 0:58we can't forget a fundamental question,
21. 1:01is it even feasible?
22. 1:03I've been working on climate
23. 1:04and sustainability topics my entire career.
24. 1:06I started as a policy advocate and activist
25. 1:10lobbying for stronger policy interventions
26. 1:13and later as a scientist and an engineer,
27. 1:15only to come to the conclusion that those industries,
28. 1:18while very important, move so slowly.
29. 1:22I'm not a very patient person
30. 1:24and climate change demands urgent action.
31. 1:27So I made my switch to the business sector,
32. 1:30where we have both the resources and the agility to effect climate change
33. 1:34on the necessary time scales.
34. 1:36Among the highlights of my career
35. 1:38has been working at the BCG Henderson Institute,
36. 1:41BCG's think tank.
37. 1:42There, our research team studies how to increase the speed and scale
38. 1:46of the energy transition
39. 1:48by looking at the transition economy as a system.
40. 1:51Underpinning our research is this idea
41. 1:52that it's not just one sector that's going to need to transform,
42. 1:56but all of them.
43. 1:58You know, it's not just wind or automotive industries.
44. 2:01These sectors are transforming in parallel
45. 2:04and we need to look at this holistically.
46. 2:07So let me give you an example.
47. 2:09If we wanted to answer this question, can we achieve net zero,
48. 2:12do we have enough stuff for just the wind sector?
49. 2:15Classically, you might approach this question
50. 2:17by looking at all the materials you need to make a wind turbine
51. 2:20and then comparing supply and demand.
52. 2:22And what you would see is that maybe through 2030
53. 2:27you'd see some scarcity in carbon fiber,
54. 2:29possibly terbium,
55. 2:31but it's really unclear once you get to the bottom of the list.
56. 2:35Once we start factoring in the rest of the economy,
57. 2:38the picture looks like this.
58. 2:41There are 14 materials that would face scarcity
59. 2:44in the wind energy supply chain through 2030
60. 2:47once we account for the full economy.
61. 2:50I don't know about you, but I found these results staggering.
62. 2:53It's exactly this type of perspective that we need to bring to policymakers
63. 2:57to make informed decisions
64. 3:00and to bring to investors
65. 3:01so that they're investing in clean technologies
66. 3:03that will actually have meaningful impact.
67. 3:07Now, you may be wondering, you know,
68. 3:09isn't this just one scenario, right?
69. 3:11There are many pathways that you could take to reach net zero,
70. 3:15and in fact, there are hundreds of design choices
71. 3:18that go into each of these individual technologies.
72. 3:21So to show you what I mean,
73. 3:23we have a few different solar panels here mounted in different ways.
74. 3:27You can see this picture on the bottom left uses cement.
75. 3:30Some of the others do not.
76. 3:32Whether they're mounted on the rooftop or on the ground
77. 3:35will influence things like the number of inverters you need per gigawatt.
78. 3:40So what happens if we start factoring in actual design choices?
79. 3:45Our team wanted to do this,
80. 3:46so we ran a modest 6,000 experiments
81. 3:52where we varied not only the amount of solar and wind
82. 3:55in our net zero scenario,
83. 3:56but individual design choices.
84. 3:58So for our solar panels,
85. 3:59we looked at whether they were made from crystalline silicon or thin films,
86. 4:04whether they were framed in aluminum,
87. 4:06whether they had a glass backing
88. 4:07and whether they were mounted on the roof or on the ground.
89. 4:10And we varied similar parameters for the wind sector.
90. 4:14What we found was that 45 percent of the materials
91. 4:18needed to build solar and wind panels could face scarcity through 2030
92. 4:23under every scenario we tested.
93. 4:26Some of the materials we expected, right?
94. 4:28Things like cobalt or rare earth metals have been in the news for a long time,
95. 4:32but others were a lot more surprising.
96. 4:35No one's talking about aluminum or carbon fiber.
97. 4:38For every decarbonization pathway,
98. 4:40the mix of technologies down to small design choices
99. 4:43can sway our ability to achieve net zero.
100. 4:46And for businesses,
101. 4:48what this necessarily means
102. 4:49is that they're going to look for substitutes
103. 4:51as they try and overcome these scarcities.
104. 4:54But those substitutes and those transformations can lead to more scarcity.
105. 4:59So ...
106. 5:02We can do a thought experiment.
107. 5:04Say we had a scarcity in carbon fiber.
108. 5:06It's used to strengthen the wind turbine blades.
109. 5:10A logical substitute here is fiberglass.
110. 5:12The fiberglass market is quite large,
111. 5:14it could easily absorb additional demand coming from the wind sector.
112. 5:19But to make fiberglass, you need boron,
113. 5:21and boron is becoming increasingly used throughout the energy transition.
114. 5:25It goes into rare earth magnets that are used in EVs and wind turbines.
115. 5:29It goes into boron steel in the automotive industry,
116. 5:32it goes into borosilicate glass in certain types of solar applications.
117. 5:38So as we increase demand for fiberglass,
118. 5:41we may put strain on boron supplies.
119. 5:44So maybe we just increase the supplies.
120. 5:46Well, as it would turn out,
121. 5:48there's only a few countries that mine boron.
122. 5:51Seventy-three percent of known reserves exist in Turkey.
123. 5:55And to open a new mine, that's a 20-year process.
124. 6:00So yeah, we could replace carbon fiber with fiberglass,
125. 6:04but it could have implications for the entire economy.
126. 6:09And this is just one material.
127. 6:11For all of these technologies,
128. 6:13there's hundreds, maybe even thousands of components to consider.
129. 6:20So ...
130. 6:22I could give you another example, right.
131. 6:24So if the wind example didn't resonate,
132. 6:26we could talk about lithium ion batteries.
133. 6:28They are skyrocketing in demand driven by electric vehicles
134. 6:31and grid scale storage.
135. 6:34The anode material that goes into a lithium ion battery
136. 6:37is typically graphite.
137. 6:39We would pretty much need to double graphite supplies by 2030
138. 6:43to achieve net zero.
139. 6:45The graphite anode supply chain is dominated by China.
140. 6:50They control 100 percent of battery-grade graphite.
141. 6:54So there are a lot of people looking to expand supplies of graphite,
142. 6:58but there's also substitutions that are under research.
143. 7:02Scientists are exploring the alternative of using silicon as an anode material.
144. 7:07But this not only creates a new opportunity for silicon producers,
145. 7:10but could put pressure in semiconductor and solar panel industries.
146. 7:15OK, thrown a lot at you,
147. 7:17so just to check that you're following.
148. 7:20Achieving net zero is going to take a lot of stuff.
149. 7:24That stuff is going to increase our demand,
150. 7:26could lead to scarcity
151. 7:28and businesses will respond through substitution.
152. 7:32But there's one more thing I'm not sure you caught.
153. 7:36Somebody's going to get rich.
154. 7:39That somebody could be you.
155. 7:41(Laughter)
156. 7:42For businesses big and small,
157. 7:44the energy transition creates
158. 7:45the single largest industrial growth opportunity
159. 7:49since the Industrial Revolution.
160. 7:53The energy sector that was once dominated by two fuels
161. 7:57is now experiencing fierce competition
162. 7:59among a broader range of climate technologies.
163. 8:03The materials and components that go into these
164. 8:05could gain a share in trillion-dollar energy economy.
165. 8:09And it's not just rare earth metals and clean tech.
166. 8:14We're talking about commodities.
167. 8:16I mentioned aluminum a little bit earlier.
168. 8:18This is an industry that has been stagnant since the 1980s.
169. 8:23But if we take our approach to net zero seriously,
170. 8:26they will see a boon in their industry.
171. 8:29It's used in solar panel mounting hardware and frames.
172. 8:32It's used in conductors for the electric grid.
173. 8:35It's used to lightweight electric vehicles.
174. 8:38It can also replace other scarce materials like copper,
175. 8:41thereby seeing increased demand through substitution.
176. 8:45And it's not just aluminum,
177. 8:47we're seeing this trend for certain grades of steel,
178. 8:50for silver, for epoxy resin.
179. 8:55There's also opportunities that exist by entering new markets.
180. 8:59So we could say for an example,
181. 9:01perhaps you are a manufacturer of automotive parts.
182. 9:06You may think that the electric vehicle industry
183. 9:08is going to be the death of your industry.
184. 9:12But the same skills and labor
185. 9:14that go into manufacturing parts for a gas car
186. 9:17translate incredibly well to the wind energy sector,
187. 9:21where wind turbines require thousands of mechanical parts.
188. 9:25Getting a foothold in that supply chain could diversify your product portfolio
189. 9:29and lead to new revenue opportunities.
190. 9:33Or say you make lubricant.
191. 9:35There's an opportunity for you, too.
192. 9:37There's two drivetrains that are common in wind turbines.
193. 9:40One uses magnets that are becoming increasingly rare,
194. 9:42and one is mechanical design.
195. 9:44As rare earth magnets become more scarce,
196. 9:47the industry will likely shift to mechanical alternatives,
197. 9:50which will need more lubricant.
198. 9:53We'll also see an expansion in infrastructure.
199. 9:56The offshore wind industry is going to need ports
200. 10:00that can store enormous components.
201. 10:03It's going to need ships that can erect skyscraper-sized wind turbines
202. 10:08in the ocean.
203. 10:09Those ships are going to need new engines
204. 10:11that can burn alternative fuels like methanol and ammonia.
205. 10:14In fact, ammonia demand is expected to double through 2030
206. 10:18and triple by 2050.
207. 10:20That extra ammonia is going to need storage.
208. 10:23So if you're a chemical storage tank producer,
209. 10:25this is an opportunity for you too.
210. 10:29And I haven't even touched the surface on the finance sector,
211. 10:32the education sector, construction, logistic services
212. 10:35that are all going to experience increased opportunities
213. 10:39as we achieve net zero.
214. 10:42Now, I think it's important to take a pause here to note,
215. 10:45I'm not advocating for more consumption on our pathway to net zero.
216. 10:50And I think it's really important to acknowledge
217. 10:52that clean technologies can come
218. 10:54with their own environmental and social costs.
219. 10:57We're going to need to be really thoughtful about how we do this.
220. 11:01But these opportunities can also lead to innovations
221. 11:05in new and different ways, right?
222. 11:07Better processes, better use and recycling of materials.
223. 11:11The LED light bulb is a really good example here.
224. 11:13This is a technology that reduces our energy use,
225. 11:17but also saves consumers money
226. 11:19and uses a fraction of the materials
227. 11:22that go into a CFL or an incandescent bulb.
228. 11:27Achieving net zero is not going to be easy.
229. 11:30The timelines are incredibly tight,
230. 11:32and given the complexity involved,
231. 11:34it's going to require collaboration
232. 11:36from both the public and the private sectors.
233. 11:39But this also provides an opportunity
234. 11:44for innovation and for growth.
235. 11:47I mentioned at the beginning of my talk
236. 11:49that I am interested in the business sector.
237. 11:52I really do believe
238. 11:53that this is where we are going to see solutions to climate change happen.
239. 11:59I want you to get rich and to innovate and to grow,
240. 12:03because this is how we reach the speed and scale we need
241. 12:06to achieve the energy transition.
242. 12:08After all, someone has to make the stuff needed for net zero.
243. 12:13So I'll leave you with one final question.
244. 12:17What opportunities lie ahead?
245. 12:20Thank you.
246. 12:21(Applause)