Tuesday 22 January 2019

Warning we must step up fight against climate change... meet Kirsten Dunlop, head of Climate-KIC

'Vested interests' in firing line as boss of green body Climate-KIC urges greater efforts, writes Environment Editor Paul Melia

Kirsten Dunlop, CEO Climate KIC.
Picture: Arthur Carron
Kirsten Dunlop, CEO Climate KIC. Picture: Arthur Carron
Paul Melia

Paul Melia

Tackling 'vested interests' and undertaking a complete societal transformation is needed to combat the ravages of climate change and put the world on track for a low-carbon future.

The head of Climate-KIC (Knowledge and Innovation Community), Kirsten Dunlop, says the scale of the challenge requires a global effort never seen before in human history, which will require deep transformation, regulation and convincing capital markets to invest in new technologies.

"In terms of self-transformation, we've rarely done that as a species and we've never had to do it at a planetary level. To get on track, we're going to have to do the really difficult stuff which is going to run foul of every vested interest we have out there," she says.

Climate-KIC is the EU's largest public-private partnership, tasked with addressing climate change through innovation by achieving deep decarbonisation across cities, while tackling land use, agriculture and industrial manufacturing, and securing finance.

It works with 280 partners across academia, business, the public sector and NGOs, and has supported more than 2,000 startups to date, leveraging more than €2.5bn in funding.

Some €1.8m has been invested in Ireland in firms including Longford-based Mimergy, which is working to convert waste tyres to various valuable products including renewable chemicals and steel, and Hexafly in Meath which is farming insects to produce fish food additives and plant fertiliser, among other uses.

Appointed in February last year, Dunlop took the job because the opportunity to address a "big and structural" issue like climate change on a global scale was "too interesting to turn down", she says.

But in an interview with the Irish Independent, she notes that progress is slow as she and colleagues attempt to convince capital markets and industry of the need to invest in a low-carbon future.

"The principle of Climate-KIC was to direct public money to a group of real economy actors and get innovation to happen, to do for Europe what the US seems to be able to do - leverage blue chip research and turn it into money, to commercialise that high-value research.

"Seven years of doing that had produced pretty noble efforts; a lot of startups with a dominant bias to single-point solutions, and a lot of education programmes, but very little in the category of what I would call profound, transformative systems change.

"It's good stuff, but it's not reconstructing energy, waste, agriculture, water, forestry and food, the stuff we really need to change fast. It's still piecemeal and slow. We've done almost all the easy stuff and we are not on track for any of the targets we have signed up for.

"This requires us to stop operating within national boundaries, but within global supply chains. It requires us to bring regulation into play in a concerted and serious way. It's reductions in carbon and changes in consumer practices. The scale of that challenge requires deep transformation."

She cites the example of a digital app which allows users to regulate their home heating. While useful, it doesn't fundamentally change assumptions around what type of energy is used, why it is used, who owns the energy and who makes money from it.

"For me, profound systems change means you genuinely rewire our underpinning set of assumptions of what is good and acceptable, almost a moral switch, but you also drill hard into what would incentivise a completely different notion of where energy comes from, who owns it and who gets to benefit from it," she says,

In one project in the Netherlands, homes are equipped with boxes which process data and the heat generated is used in the property. But rolling that out across a broader market requires fundamental changes.

"You need planning changes, risk changes, you'll need some redesign around distribution of systems and what that means in terms of data-processing, some stuff who will be willing to run the gauntlet of energy providers, something around community buy-in. That's systems change," she notes.

Part of the problem is apathy at the corporate level. Dunlop, an Australian who previously worked in academia, with KPMG and Suncorp Australia, says innovation is generally more about "spray and pray" than seeking to fundamentally alter how business is done.

"Boards and executives are on the hook for long-term thinking but incentivised for short-term priorities. Innovation is not a random trial of spray or pray, but a very deliberate exercise in learning about a very different set of conditions - technological, social and economic - and working out what an alternative core business model or models look like. It's very easy to be in a large organisation for your entire career and never be forced to think systemically."

A key driver of change will be our cities. If, for example, the biggest 20 or 30 in the world committed to only using zero-carbon cement, all cement companies would begin producing the type of product being demanded.

Likewise, if energy costs were at least halved by utilising more renewables and other power sources including hydrogen, heavily-polluting and climate-emitting industries would have no excuse not to transform their business practices because they would have the money to do so.

"You need a couple of big signals," she says.

But capital markets also need to change their attitudes towards investment in the climate space.

"A person from the real-world economy lives with the idea that the financial system should be designed to serve real-world economy needs. The vast majority of the financial system is designed to do business with itself. It's money making money which is why the financial system at scale has been so slow to do anything. It can't see the money-making money opportunities here.

"They cannot compute investment below a certain order. If it's below €1m, it's too difficult to deal with. But if I can put forward a portfolio of things, it gets to a critical mass the capital markets can row in on."

Next November, Climate-KIC will hold its Climate Innovation Summit in Dublin, where the focus will be on climate financing.

Part of the reason why Ireland was chosen was because of its partner here, Sustainable Nation Ireland, which has worked with the Government to attract green finance. There is €28bn in sustainable finance activities under way here across bonds, funds and equities.

"Ireland has been one of the most advanced, energetic, enthusiastic markets we've dealt with," Dunlop said. "Sustainable Nation Ireland have been brilliant not only in terms of a vision and a capacity to act, but also in terms of beginning to pull together the system within an Irish context in terms of the Government, start-ups, the entrepreneurs and corporates.

"Last year we focused the Climate Innovation Summit on cities. It's very obvious, the deeper we delve into cities, that the missing piece is finance. They don't know how to access financial institutions. Financial institutions don't really want to deal with cities."

While progress is slow, she is hopeful of a sea change over the coming years, adding that jobs will be created.

"If you shine a spotlight on this space and create a platform for people to connect with excellent thinking, and put some energy and lift under it, then sometimes you unleash a force," she says.

"In five years we could be part of a system doing good business while changing every single paradigm we've constructed in the last 150 years.

"We've a world with an ageing population, and we're worried that nobody's going to have a job apart from looking after the elderly because of robots.

"But we have this other huge force of opportunity where we have to reinvent every major industry and every assumption about how we live on the planet. That's a huge space for creativity and opportunity. We've got jobs for the next 200 years to pull off living sustainably on this planet."

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