From: Issue 38
The War on Carbon
Solar pioneer Jigar Shah is out to prove that saving the world is good for business
To read the full interview with Jigar Shaw, click here.
The climate fight hasn’t been easy.
International climate negotiations have proven ineffective. Environmentalists have been out-gunned by big oil and old king coal. Politicians, by and large, have lacked the will and the public support to make the difficult decisions that are needed.
Much of it is a distraction if you ask Jigar Shah, chief executive officer of Washington, D.C.-based Carbon War Room, a not-for-profit organization co-founded and backed financially by U.K. multibillionaire Richard Branson.
In Shah’s mind, one of the most effective ways to make meaningful steps toward a low-carbon economy is to harness the power of greed and use it as a force for social and environmental good. As Branson is fond of saying: saving the world is good business.
“There are only two drivers that I see behind solving climate change,” says Shah, sipping coffee at a hotel cafe in Toronto. “One is a moral driver. The other one is greed.”
The morality play hasn’t worked so well, at least among the world’s largest greenhouse-gas emitters. Both the U.S. Department of Energy and International Energy Agency say global emissions jumped six per cent in 2010 to their highest level on record. There’s no clear sign yet after two decades of international negotiations – including recent talks in Durban, South Africa – when annual emissions will peak, let alone start to fall.
Carbon War Room was founded in 2009 on the belief that the power of markets should be enlisted to effect the kinds of change – and emissions reductions – that have eluded us so far.
Shah, founder and former CEO of solar services pioneer SunEdison, was hired by Branson to lead that charge. Ask him to describe his mission and he’ll tell you there’s no shortage of the entrepreneurial spirit, innovative business models and technologies required to get us to a low-carbon world. What’s lacking are the market-based tools required to level the field, which is currently occupied by powerful high-carbon enemies.
Carbon War Room’s mandate is to fill information gaps, reduce transaction costs and support creative financial products as part of a coordinated effort to achieve gigaton-scale emissions reductions in key market segments – or what it calls “theatres of war” – with the biggest potential to effect change.
“Ultimately, moving capital is the metric by which we will determine whether we’ve been successful or not,” Shah says.
The approach has been effective. One of Shah’s first battles was with the shipping industry, which accounts for more than three per cent of global emissions and has huge potential for fuel-efficiency gains.
Vessel purchasers, charterers and cargo owners haven’t historically taken fuel economy or CO2 output of ships into account, partly because there was a significant dearth of reliable information on which to base decision making.
But with such information, a cargo owner is empowered to seek out higher-efficiency vessels as part of efforts to reduce the carbon footprint of supply chains. This, in turn, will convince more ship owners over time to take vessel efficiency more seriously.
“We filled that gap by publishing the fuel-economy readings of 95 per cent of all the ships in the world on a website,” says Shah, referring to Carbon War Room’s site shippingefficiency.org. Launched a year ago, it rates roughly 60,000 of the world’s existing container ships, tankers, bulk carriers, cargo ships, cruise ships and ferries.