Home Articles The sky’s the limit

    The sky’s the limit


    aa22-jun-jul-2007-the-sky-s-the-limitEvery societal challenge produces a fascinating set of market opportunities. Climate change is no exception. 


    Last year, I read the Australian writer Tim Flannery’s excellent book, The Weather Makers, in which he takes the complex and potentially bewildering topic of climate change and paints it in such a way as to be accessible to a mass audience. 

    It is at times a disturbing read. Flannery details many of the causes of climate change and their potential impacts, which range from increased storm activity, destruction of the Great Barrier Reef and the deterioration of productivity from Australia‘s agricultural sector. Even the less apocalyptic scenarios paint a picture of a very different world 50 years from now. 

    Flannery’s book inspired me (in truth, ‘shocked’ might be a better description) to learn more about the topic, so I set about speaking to experts on climate change in Australia. That research is now appearing in a series of articles that I’ve been writing for various publications. 

    One theme that came up again and again is that, while climate change presents many challenges, it also presents many opportunities for innovation, both in minimising the problem and dealing with its consequences. 

    Not surprisingly, many of these opportunities are based upon technology driven innovation. While it was technology that got us into our current climate-change mess, it seems technology will also be at the forefront of getting us out (or at least as far out as it is possible to get given the damage that has been done). 

    Electricity is one of the biggest contributors to greenhouse gas emissions in Australia (especially as we generate it from a particularly climate-unfriendly source – brown coal). Various estimates state that for many white collar industries (such as banks, accountants, business consultants or software developers) up to half of all electricity consumption goes to operating IT. 

    Not surprisingly then, many global IT companies are actively working on technologies that reduce the energy consumption of the hardware they produce. Hewlett-Packard has pledged to cut the energy consumption of some printers by 30 percent, and some servers by 50 percent. 

    The ANZ Bank has already cut its overall power bill by four percent by simply ensuring that it puts its 31,000 PCs into sleep mode each evening. A further four percent will be saved by other simple measures, such as powering them down entirely. 

    According to the UK-based vice president of research at the analyst company Gartner, Simon Mingay, technology can also play a role in reducing the greenhouse impact of other activities. Software can be used to reorganise logistics and distribution networks to make freight movements more efficient, and hence use less fuel. New videoconferencing and workplace collaboration tools might also finally make it possible to reduce worker travel. 

    The strange thing about many of these measures is that there is also a financial benefit for the company that implements them. Reducing travel means eliminating associated costs and boosting productivity through regained time. Reducing power consumption from IT also means lower electricity bills. 

    Then there is also a marketing upside that comes from taking a greener approach to running a business. Since the ANZ Bank involved its staff in reducing electricity consumption, the company has witnessed an improvement in morale. For the West Australian-based company ilisys, which provides computer hosting services, moving to a ‘carbon neutral’ business model has resulted in a similarly positive response from customers. 

    The opportunities are many, and already ‘clean-tech’ has emerged as the new buzzword of tech investments circles, with US$883.6 million invested in 2006. That number is only going to grow. 

    Sceptics remain, but there is enough science now to suggest that climate change is real, and so too are the impacts it will have on all of us. But with it comes enormous opportunity for innovation. 

    While Australia has been a laggard in adopting climate change measures such as carbon emission reduction and clean energy production (anyone remember Kyoto?), there is still a significant opportunity for Australians to take a lead in providing the innovative solutions that will been needed to help minimise and cope with the problems to come.


    Brad Howarth is a journalist and the author of ‘Innovation and the Emerging Markets: Where the Next Bulls Will Run’, a study on the challenges facing small Australian technology companies. You can read his blog at lagrangepoint.typepad.com