Transcriber: Zeddi Lee Reviewer: Amanda Zhu
So let me share with you my journey into renewable energy.
When I was about to turn 16,
I was sitting on a meadow in Western Germany.
I was there for an orienteering event with friends.
It was a sunny day, like this one on the picture here.
But it had been raining overnight,
so the grass was still wet.
And the next day,
I was learning that the rain that had come down over this meadow
was radioactively contaminated
by an event that had happened 1,500 kilometers away,
the Chernobyl nuclear accident in Ukraine.
This incident really sparked my interest in energy.
I started asking myself,
isn’t there a better way to satisfy our energy needs
than relying on nuclear power and other non-renewable energies?
In hindsight, this was really the day
that marked my three-decade-long journey, now, into renewable energy.
I looked into different sources of renewable energy,
like solar, wind and hydropower.
I was fascinated quite early on by what’s technologically possible.
But this time, back in the 1980s,
it seemed there were some serious economic challenges.
Renewable energy was just more expensive than conventional energy,
partly because those were relatively immature technologies at the time,
partly because of what economists call external cost,
the fact that non-renewable energies do not pay for their full cost to society.
Nevertheless, I felt like there had to be a better way,
so I was eager to learn more.
I went to university;
I studied management, science and engineering.
I specialized in energy and transport issues.
I did internships with think tanks and government agencies.
I wrote a Ph.D. about marketing green electricity.
That’s it.
After my Ph.D., I had the opportunity to work in the financial sector
and came to realize that it has a key role to play in the energy transition.
I worked with one of the leading European energy venture capital funds
invested in promising technology ventures and in areas like solar energy,
even wave energy and others.
And I was impressed by the passion and energy
that entrepreneurs put into creating new energy realities.
But working in the financial industry,
I also came to appreciate the wider systemic challenges
in making a successful global energy transition.
When I returned to academia,
I started building a team, and a truly amazing team,
I have to tell you,
that is closely following the development
of renewable energy technologies and markets.
Since we’ve started the Chair of Management of Renewable Energies
in 2009,
one of the things that really changed things
was the cost of solar energy has come down by some 80 to 90 percent.
You can see from this graph here.
This was faster than even the most optimistic forecasts had anticipated.
And what’s remarkable about that
is not just kind of this steep learning curve
that solar has gone through
but also the fact that solar and wind
are, by now, even the cheapest sources of electricity,
cheaper than coal, nuclear or gas.
You can see from this graph here,
published in The Economist and prepared by Lazard,
the US investment bank.
Wind and solar actually are about half the cost of coal
in the United States
and about a third of the cost of new nuclear power plants.
So once these economic challenges seem to have been overcome,
what else could be challenges that are there?
Well, that was really one of the questions that kept kind of being on my mind.
If we have cheaper means of electricity,
if we have more environmentally friendly, cheaper means of electricity,
and if similar developments can now be also observed in the transport sector,
with electric vehicles becoming cheaper, having higher energy efficiency,
having lower lifecycle greenhouse gas emissions,
what on earth is holding us back?
So that’s really been the part of the puzzle
that my research team and I have been trying to address in recent years.
We've used experimental methods.
We’ve gained deep insights into consumer and investor decision making,
and we learned how these decisions
are led by a nuanced interplay of rational and emotional factors,
or as Nobel Prize laureate Daniel Kahneman calls it,
“Thinking fast and slow.”
And this kind of interplay
of rational and emotional factors on a collective level
lead to phenomena like path dependence and inertia
that can persist among people but also organizations,
even if new information arises,
like the information that solar power is now cheaper
than conventional sources of electricity.
The good news is there are ways to overcome those barriers,
to design policies and marketing strategies
in a way that actually overcome these psychological challenges
that are sort of wired into human beings and organizations.
What can be done is to offer a convenient and easy-to-understand information
to consumers and investors at key touch points
during their decision process.
What’s also relevant is peer-to-peer communication.
So think about your neighbor putting solar panels on their roof,
and what a powerful message it is
if he or she shares that positive experience with you
and that excitement.
And that is one of the ways
that path dependence and inertia can be overcome.
Another piece of good news
is that several organizations basically refuse to be held back by these challenges
and are making significant progress to a cleaner energy future.
Think about Ørsted,
the Danish company that used to be called the Danish Oil and Natural Gas Company,
or DONG,
which decided to move away completely from oil and gas
to 100 percent wind power in less than a decade.
Think about Mobility Carsharing,
a company in Switzerland that offers car sharing that I’m a customer of,
that has now promised to go to 100 percent electric vehicles,
again, by 2030.
Or yesterday, we had a webinar here with Bertram Fleck,
who used to be heading Rhein-Hunsrück-Kreis,
the German district right next to that meadow that I started out with
when I described my my journey into renewable energy,
and that district has now gone to 310 percent renewable energy,
so even beyond the 100 percent level that other companies are heading for.
And RE100 is a group of, by now, more than 200 companies
aiming for similar targets,
going for fully renewable energy supply.
So things are happening.
And I think one of the really interesting things on my journey
was also to observe this change going on when I was teaching.
I started my teaching career 16 years ago,
and back then, quite frankly,
topics like clean energy and climate change
were fringe topics at a business school.
But you know what?
We've come a very long way since.
And different aspects have played a role.
Of course, societal movements, like the Fridays for Future movement,
have put climate change much higher on the agenda
in the last two years.
And again,
we see this peer-to-peer communication going on
with students sharing the dinner table with their younger siblings,
who protest on Fridays and confront their parents
with some of their high-carbon consumption choices.
That’s a very powerful way of being exposed to the issue.
But it’s also coming from within.
We see business students
increasingly really kind of seeing the economic consequences
of climate change.
I see, for example,
banking and finance students increasingly looking at this and realizing
that if they want to have a career in the banking and finance sector
in the future,
they need to understand how climate risk impacts financial markets.
I see business innovation students
who are inspired by entrepreneurial solutions,
brought about by the likes of Elon Musk at Tesla, for example,
and both of these groups have seen dramatic shifts in the market.
We’ve seen Tesla becoming more valuable,
having a higher market capitalization than some of the established car companies
like Volkswagen, Ford or GM now.
We see Ørsted, again,
the example I just mentioned,
being more valuable than BP,
the kind of traditional oil and gas company.
And then we also see international affair students coming in
who really want to help bring the policy efforts to the next level.
So there’s different groups of students looking at this.
And I recently launched Managing Climate Solutions Program
here at the University of St. Gallen,
which was more than 3 times oversubscribed when we launched it,
really brings those students together.
And it’s fascinating to see how they come from different backgrounds
and collectively look for ways of turning their career climate positive.
So all of this is really encouraging.
I think we’ve come already a long way,
but we need to be mindful that there are, of course, remaining challenges.
Let me highlight three of the challenges I think still need to be overcome.
First, it really takes leadership to get it done,
defending the status quo is easier than arguing for change.
There are lots of silent people,
maybe silent majorities.
They need to be convinced.
There are also vocal minorities
that need to be confronted with determination.
There are people at risk in the transition,
and they need to be taken along and be offered new opportunities.
And we should also not underestimate
that even for the most enlightened executive,
changing some of the world’s largest companies
is really no small challenge.
Second, I think one of the things that still kind of is ahead of us
is that while many studies have shown
that a low carbon transition will have more winners than losers,
some of the most affected industries are fighting hard for their influence.
In Switzerland,
the Association of Oil and Car Importers have just launched a referendum
against the revised CO2 law that’s been passed by Parliament.
And again, it’s a matter of convincing the majority of voters,
successfully addressing their concerns in the transition
if we want to win that challenge.
Last but not least, my third observation here
is climate leaders need to keep an emotional balance.
They must remind themselves that they’re not alone in this.
In several countries, from Switzerland to New Zealand,
we’ve seen elected leaders
taking on the challenge of advocating for change.
We’ve seen leadership from young people in the climate movement
who successfully raised awareness.
However, in other parts of the world,
we see governments undermining trust in science
and trying to roll back time.
I don't think they will succeed in the long term,
but I can very well relate
to the fact that this can feel like a setback
to many of those of us who try to make a positive difference.
Maintaining a network of positive change makers, I think,
is key to staying healthy here in the long run,
in this long-distance race that we’ve embarked on.
So I’ve started this talk
by looking back at my journey into energy and climate issues
that actually started when I was a teenager.
Today, my daughter is 16 years old,
and I wonder what will her life look like 30 years from now?
Will she live in a polluted city
in a world facing violent conflict for scarce resources,
or will she enjoy a better life,
enjoying clean air and prosperity
because 2020 was the year when humanity finally grasped its greatest challenge,
climate change?
A clean energy future is in our hands.
Let's get started today.