Promoting Green Technology Innovation

Promoting Green Technology Innovation The human impact onto the global equilibrium has been proved scientifically in the last years and current catastrophes like in Japan even strengthen the worldwide awareness for the protection of the environment. In our following literature review, we stated the reasons for the present development of green technologies, defined the term GT and pointed out the importance of innovations and their promotion in this sector. To solve the global problem of climate change and resource scarcity, common and individual measures have to be conducted in order to prevent long-term consequences for the world and its people. A major part of this work is dealing with the promotion of electronic mobility (e-Mobility) and how the world community is trying to force the development of this promising technology. Moreover, strengths, weaknesses and opportunities, threats are presented according to this groundbreaking industry which is supposed to change global market conditions sustainably. Key word: Green technology, Innovation, e-Mobility, Sustainability, Electric Vehicles (EVs) The Green Movement The reason for the green movement was a developed industrial society, the crisis in relations between human society and surrounding natural environment. The rapid growth of production, especially in the 1950-1960s was dictated primarily by the interests of economy for profit or political considerations (increasing the power of the states). In basis of the universal race was production for production and consumption for the sake of consumption. The company, regardless of its form of ownership, will always seek profit increasing, paying no attention to external costs (infrastructure, services, damage, destruction and repair) .The gap between the decisions on production, consumption and public expenditure generated at all levels tend to maximize, e.g. the maximum number of individual needs which are satisfied by the maximum number of items. As a result we have endanger human life and health from water, air and soil pollution by industrial and domestic waste, the destruction of many natural resources. The emerging number of effects that threat the ecological balance (greenhouse gases, global climate change, reduction of ozone layer, catastrophic erosion of soils, etc.) The ecological crisis that we face today wrote Murray Bookchin, an American environmentalist ultimately calls into question the ability of the Earth to support the development of life forms. Modern society is literally destroying all the work done by organic evolution.(Bookchin, 1991). Modern society is literally destroying all the work done by organic evolution. The issue of the nuclear weapon and energy gave the immediate impetus to the design and dissemination of the Green movement. The economy growth in 1960s was accompanied by a rapid buildup of nuclear power plants; nuclear programs in leading countries were further strengthened after the oil crisi s in the West region in 1973-1974. These subjects were considered as the sphere of competence of state military and energy policy, and because public opposition to nuclear development is directly facing the population and altruistically minded enthusiasts with the authorities and led to a radicalization of the movement. Those days popular slogan was: Better to be active than radioactive. The impact of nuclear energy and consequences can easily be seen these days: Chernobil in 1986, Fukusima in 2011 and many other incidents. In 1971, in North America the most known environmental organization Green Peace was formed. Originally, it took up the problems of nuclear tests of the USA, but has gradually extended the activity for the whole world and to a wide range, up to protection of biological kinds, waste, etc. The basic tactics of Green Peace is to draw attention of the public and the mighty ones of this world to different questions related to ecological problems. Nowadays, the green market is growing quickly and steadily, even compared to the economic environment market. Since 2008, the world economy shows the signs of the downturn, but green market remarkably grows. Dubai Chamber of commerce and industry organizations indicates that global market for environmental products will double by 2020. That shows vast opportunities for business. Change in mind of the global population In general, every single person in this planet needs to green if they want a better future for the next generations. Eventually, we will run out of carbon based fuels and we need to change to renewable sources. But in reality its just developed countries need and care about green technology and the ones without oil resourses. For example, Afghanistan, Gaiti, Tadzhikistan and about seventeen countries in Africa are experiencing food scarcity. There are revolutions in North Africa and the Arabian Peninsula. So probably going green its last thing they have in mind right now. But its a huge visible progress in Europe. Big taxes on oil encouraged carmakers to manufacture fuel-efficient vehicles, most of the countries signed KYOTO protocol, agreeing to reduce greenhouse emissions to a certain point, recycling, usage of wind and solar power sources. So any country which wants to reach economical sustainability, is switching to green technologies. European Union or any other state can come up with laws and restrictions, but we have just one atmosphere. So we have to make it economic , so that all people and all nations will have a profitable outcome . Energy is the mother of all markets. These days, many customers looking for a green product and retailers can lose them if they dont care about the environment. Most of them prefer green products from electric or hybrid car to reusable bags in supermarkets.The benefits of green technologies are obvious, especially when it comes to energy: population health, saving and making money, independence of some countries , sustainable economy, less political tensions and suspension of global warming. The term Green Technology has been developed in last 5 years, which describes industries promoting a value of innovations that benefit the environment. There is a time, when panic is an appropriate response.(Eugene Kleiner, 2007). And we reached that time. We are facing catastrophic and irreversible consequences. . Global warming is a problem that is connected to difficult issues such as poverty, economic development and population growth. Hundreds of millions of people around the world are already affected by water shortages, crop failures, and tropical diseases, flooding and extreme weather events-conditions that are probably going to be worse due to the global warming. We need green technology to change the impact on environment. And demand for it grows worldwide. So there are real chances to take a place in a given niche in the case of being engaged in this business right now. It requires a big investment for the companies, but return appears to be high. By switching to GT we will build better future for our children and also its a way to save and make money. Green technology What is green technology? Green technology is aiming at the usage of reusable natural resources for energy production. Target is to develop different ways to produce energy so that natural resources does not deplete. Green technology combines different methods and technologies for continuing evolving new solutions. Main areas for interest in green technology are sustainability, re-use ability, source reduction, innovation and viability. (Green technology 2010). Nowadays almost every company has products those have influences from green technology. Product life cycle, energy consumption, materials and product extermination are in important role when product ecological quantities are evaluated. The economical crisis has decreased temporary energy consumption and travelling. Bad thing is that at the same time investments for developing energy efficiency has decreased. This has negative long term influence of carbon dioxide emissions. (Vesa Laisi Vacon 2010). Fig.1: Capital Costs of Generating Technologies in 2009 Figure 1 shows capital costs of different energy production methods. One of the most important parts of green technology is energy production but there is also another important area of interest. For example construction industry tries to decrease energy consumption of buildings. New building regulations ensures green way to build houses. Also tax policy aims to lower energy consumption. Easy way for normal people to support ecological way to live is to buy products that are manufactured with the methods that have smallest impact on the environment. (Energy information administration 2010). Why is green technology important? All the time more and more consumers, investors and companies are interested in green technology. According to many studies ozone layer has decreased and now people woke up to worry about the future. World population increase force also to search new renewable energy sources because fossil energy sources cant fill future energy need. Fig.2: Clean Technology Figure 2 shows different areas where clean technology has been used. Consumers can reduce global warming by choosing materials and energy sources those have manufactured by green ways. (Clean Edge 2011). Capital investments for green technology have increased in first quarter of this year over 65%. (Dudley 2010). U.S.A is the biggest investor to clean technology. European countries have very positive attitude about green technology but investments are not so big. China is also a big factor when we are talking in clean technology. China has lot of old industry and pollutions are huge. Reasons why interest of green technology has increased so dramatically is the knowledge that fossil energy sources are running out and climate change. Fossil energy sources are very important for industrialized countries. In Finland nuclear power, waterpower and bio fuel are common energy production methods. Future energy questions are big and it is possible that those problems cant be resolved only with renewable energy sources. One main thing is to increase energy efficiency and this is segment where the smallest clean technology companies want offer solution. Improving energy efficiency helps to decre ase expenses because natural resources will be used less. (Linnainmaa 2007). Research has developed from innovative visions to serious business. Now green technology is many directors agenda in multinational companies and small innovative companies those main target is growth. Nowadays, it is lot of easier to get risk investment support and that help small innovative companies implement their strategy efficiently. Who uses green technology? Interest groups and target groups Green technology end users are consumers and industry companies. Consumers can use green technology for example house heating systems. Solar panels have been developed to potential option for summer cottage energy source. Solar panels manufacturing costs has decreased and that is big factor that help consumers to choose that option. Also use of ground heat systems has increased. One big negative issue about this option is expensive investments costs. Some countries support consumers to choose this heating system. Consumers can pay fewer taxes if they invest in this technology. Fig.3: Green is the next wave in flat panel displays Figure 3 shows how green technology has increased in flat displays. After year 2014 all displays contains energy saving functions and components are manufactured by green technologies. In 2008 most of developing work has been done and after that use of those methods has increased dramatically. Nowadays it is easy for consumer to choose products that were manufactured with green technology. Many products give information about to manufacturing method in their label. e.g. every food has mark in the label if it has been manufactured in a natural way. Industry uses green technology for example energy sources. Also choosing raw materials those have manufactured with green technology help to decrease pollutions. The development of better filters has decreased pollution in industry. One negative issue is that filters are very expensive and make competition situation unfair between e.g European and Chinese companies those dont often use that king of filters because there is not so strict legislation. Green Technology as Part of Sustainable Development Green Technology describes any application of science, knowledge or technology towards improving the relationship between human technology involvement and the impact this has on the environment and natural resources. Green technology is a category, in that it can cover many different parts of technology and human development (energy, computer and agriculture). Environmental technology is the conservation of the environmental sciences, and to decrease the negative impacts of human acts. (Green Technology 2010) Its main goals are: Sustainability Creating products that can be re-used. Change the patterns of production and consumption for reducing the waste. Developing alternatives in order to improve health and environment. Environmental degradation is worsened by extensive use of environmentally hazardous mass production technologies and use of fossil sources of energy which emit carbon dioxide into the atmosphere contributing to the greenhouse effect and pollution. Only a thorough reassessment and reorganization of global development, when a central role would be given to mass transition to green technologies and intensive rather than extensive consumption, could guarantee optimistic prospects for future generations. Enterprise needs reciprocal commitment of all countries to contribute to the solving of global environmental problems according to their capacities, which could be increased through exchange of knowledge and green technologies among the countries. Green technology is a method or practical application of knowledge from environmental science to conserve the natural environment and resources, and to alleviate the negative impacts of human activity. It is called to contribute to sustainable development. It is for sure that usage of oil, gas, and coal as main sources of energy undermines the ability of future generations to use these finite sources of energy. (IPU 2009). Among traditional types of environmentally friendly renewable sources of energy, there are other technologies which contribute to global green energy balance: Biofuel: Obtained from lifeless or living biological material. It is similar to fossil fuels, which are produced from biological material. Ethanol: Esay to manufacture and process and can be made from common agricultural feedstock such as corn, potato, sugar cane etc. Anaerobic digestion: Various processes in which microorganisms break down biodegradable material without oxygen and is widely used to treat wastewater. It is commonly used as a renewable energy source because the process produces a methane and carbon dioxide rich biogas suitable for energy production helping replace fossil fuels. The ability to pursue an environmentally friendly shift to green technology and intensive consumption is being procrastinated by the latest 2009 world financial crisis. It greatly undermined the perspectives of long-term sustainable development. It has put the economic issues on top of the world agenda at the expense of other unresolved urgent problems of the modern globalized era. The fact is that the worst problems are highly conspicuous in poor and developing countries whose dramatic population growth makes it harder for the government to preserve states manageability, not even mentioning their weak incentives to address such abstract long-term issues like global warming. (UN 1992). In order to give a better understanding of ecological sustainable development, examples of two Asian countries are being stated below: South Korea South Korea announced a green action plan and laid out a budget of $84 billion to support it, which will help cut car emissions and improve the energy efficiency of buildings and houses. This is expected to make the country a green nation in the recent years. The aim is to become one of the worlds 7th most competitive country in 10 years in terms of energy efficiency and ability to adapt to climate change, according to a presidential statement. The country also plans to create 1.81 million new jobs. Kwon Tae Shin, said that reducing greenhouse gas emissions initiative will serve as a growth engine to drive the country to greater times. South Korean government will develop international markets for LEDs, solar cells and hybrid cars. CO2 emissions will also from part of the new strategy and will be implemented next year, said official sources. India Major industrial private sector firms formed an Alliance for Energy Efficient Economy (AEEE ), This alliance pretend to save 2,000 MW of energy by next year by promoting energy efficiency measures in homes and businesses. Also, India will form a National Environmental Protection Authority (NEPA) as a part of the country initiatives. Aims to intensify the authority of Indian environmental agencies, improve public information and transparency, demonstrate progress in environmental compliance and enforcement. Also, India has in place an eco-labeling scheme called Ecomark for identification of environmentally-friendly products. The mark is awarded to consumer goods that meet different environmental criterias (encompasses raw material extraction, manufacturing and disposal). (Shukla 2010). IV. Promotion of green technology innovation Climate change has been on an increase and proving to be a monster since the beginning of the 20th century. In the process, it has lead to global warming a; phenomena where high levels of carbon dioxide ratio exceed normal. This has resulted in increasing temperature of the earth ´s surface air and big water masses. During this time, the Assessment Report by the Intergovernmental Panel on Climate Change (IPCC 2007), reported that the earth surface temperature increased out of proportion and may go further between 1.1 to 6.4 °C in the 21st century, and the finger was pointed at increasing concentrations of greenhouse gases, mainly from man-made activities such as deforestation, miss-handling of the eco-system and burning of fossil fuel. For that matter, there is need for an emergency management perspective. In this management, there should be utilities for guidance and management in response to global climate change. There are many risks and vulnerabilities related to global climate change. These utilities should address these risks and vulnerabilities and combine the greens peace and the policy makers while providing a base to accommodate this need. Although this is the idea, the techniques for drawing the policies should not be undermined, since they have a potential of big challenges and disaster. The goal is to enhance policy making at all levels to be equal in order to develop a more consistent approach to combat the challenges of climate change and global warming. ( Schneider 2011). Although tackling the problem of climate change, includes a lot of challenges, there is a way forward; the Kyoto global agreement on climate change (Kyoto protocol) where, these challenges are sought to be handled. This protocol also assesses international proposals forwarded by academics and the international community. Despite its effort, there has been little achieved, yet the main issues have to be addressed. These issues include emission reduction targets for developed countries; the nature and extent of actions to limit emissions quarters of countries and its funding with an aim to reduce it. (Howes 2009). Developed countries have quarters of emission aimed at reducing emissions by 20% by 2020. One of the most positive way is to go green, which requires agility, determination and responsive in innovation. This implies that, the average emissions growth should be 1.5% by 2020. Kyoto also knows that this is an ambitious reform by developed countries despite the support of international community funding to developing country, in order for them to mitigate. (Howes 2009). Global approach Michael Zammit, United Nations climate official agrees that there is a non-consensus agreement between Europe and the USA on archiving the goal of emission reduction as specified by the Kyoto treaty. Instead of individual contribution, USA evading with helping poor countries in emissions reduction were as Europe advocates for the countries responsible for the emissions should be forced to reduce it at home. He also points out that, in this gigantic economic and political change, they should have a limit and control of greenhouse gas emissions in order to fulfil the Kyoto commitments. There for there is need for innovation of green technology. (UNFCCC 1999). Sining C. Cuevas (2011) suggests that, there should be adaptive measures on how to carry out a system that is affected by climate change. He devised a three dimensions model consisting of climate change, eco-system vulnerabilities and risks involved. He identified that climate change occurs in four different nature; intensity, variability, frequency, and quantity. This was all driven by social-economic, bio-physical, technological, and organisation means, were as the risks oriented more on income, diversity, health, mortality rate, and infrastructure risks. Although his findings give an understanding of gears that drive climate change, they are still crude to implement. Support measurements for green technology innovation Some countries are seriously embarking and subsidising green technology. For instance, China announced plans to help the growth of green technology green technology at home. It launched its financial strategy towards the end of 2008 and parting a big portion to green technology and renewable energy. Its aggressiveness in green technology reached its climax in 2009 when it injected a lot of resources to help the 1.3 Billion people with energy. These government subsidies are targeting clean energy vehicles, steel mill, development of solar and wind power in order to help develop the green technology industry. These come in form of reduced price in production which is further transfer cheaply to the consumer. (Leonardo Academy). Marketing and value communication The European Community (EC) together with the European Union (EU) has responsibilities and have obliged with the Kyoto Protocol. They have participated and contributed to the Kyoto Protocol although they sometimes tend to be non-compliant with their obligations. This prompted for a massive investment in innovation in green technology in the European Community (EC); as a result, they reduced their emission by 8% share under their obligations of EU Member States. For this reason, they dismiss the idea of redistributed of burden-sharing agreement since innovative technology, if done right, will cater for the emission-reduction target. (Schiele 2010). An empirical investigation made by Dr. Omid Sabbaghi (2011) on behaviour of Green Exchange-Traded Funds on returns and volatility factor, showed that, market-wide green returns accumulation were more pronounced in the year 2005 up to 2008 and is still promising. The need to go to green technology was still advocated for in the green stock returns. Although this is the case, some of the green technologies still have to improve its cost and the public awareness of it availability and necessity is important. Despite these issues many organisations are embarking on undertaking the idea forward in order to rip the benefits of green technology. Moreover, companies associated in environmental projects are hitting sky high with their stocks. In United States, investment in companies undertaking environmental projects in wind farms, solar parks and bio-fuel plants was $91.9 billion on top of the original $145 billion. The message is getting louder. The presence of more green technology may guarantee more investment. (Invesco Power Shares 2010) Fig. 4: Investment in green technology Green technology comes with additional un-intentional benefits. For instance, while in the design and production process, the material and design is targeted to future recycling; products meet environmental objectives. This in turn reduces the resource cost and the future price for the same product. Not only resource benefits, but also but it stimulate innovation in order to merge the future technology and the current renewable resources consequently there is less damage to the environment. Furthermore green technology attracts economic activity in products and the technology that makes them, beneficial in the global environment. (World Green). Furthermore, Leonidas C. Leonidou (2011), studied the growth of green advertising around the world between the period of 1988-2007. He realised that, the trend was favouring the green advertisements although, his target was regarding consumer goods. This is because green advertisements are more domestic rather than international. Elham Rahbar, Nabsiah Abdul Wahid, (2011) supported his findings when they made a study on determinants of effects on green marketing tools on consumers actual purchase behaviour in Penang (Malaysia). They realised that there was more trust in eco-label and eco-brand by the customers. Furthermore, there was a hug customers perception of this brand; a very big encouragement for green technology. Promoting e-Mobility The global attitude towards the environment and the impact of human being on the global equilibrium is changing. Not only since the subjective impression of an increased amount and strength of natural catastrophes and the current happenings in northern Japan, people all over the world feel that the world population cant go on with its handling of the planet. After the scientific proof of the harmful correlation between carbon dioxide and world climate, industries with huge pollutant emissions have to find ways coping with this problem. One of the biggest sources of pollution is the global car traffic which is responsible for 17% of global CO ² emissions without pollution resulting out of production processes. Additionally, it is expected that this expulsion will increase in developing countries from 30% in 2006 up to 45% in 2030. (UNEP 2009) But not only because of this reason its important to re-think the car industry. External factors which have significant influence on the branch endanger the former success of global car manufacturers today and in the future. The problem of rising oil prices, their finite nature and global governmental interference actions force the automotive industry to find new ways of mobility. Therefore, the various global players and even some small start-ups started an incomparable innovation process creating ideas for a new era of automobile. Out of numerous concepts including gas, biofuel, hydrogen and electricity, the power train with electrical energy delivered best results regarding practicability, efficiency and sustainability. Using this technology, there evolved several new innovators next to established corporations and introduced the first electrical cars on regional markets. The US based company Tesla Motors was one of them having the idea to interconnect hundreds of laptop batteries in their Tesla Roadster in order to assure a range of over one hundred kilometers. In order to get rid of the dependency of oil, countries all over the world started national investment plans in this field with extensive subsidy policies spreading from USA over Europe up to China because no one wants to lose the lead in this strategic field. The opportunities are tremendous reshuffling the whole market with an expected total market volume of $80 to $120 billion in North America, Europe and Asia by 2030 provided that electric vehicles (EV) get a share of 5 to 10 percent. (Gao, Wang, Wu 2008: 2). This development can contribute significantly to a reversal of global emission amounts caused by passenger vehicles. Under a no-action scenario and further growth of conventional power trains, the passenger vehicle pollution will increase by over 50 percent until 2030 mainly due to the booming Asian region. Quite contrary to this, there are three possible trends according to McKinsey demonstrated in figure 1: Firstly, a rapid transition towards an electric powered world would decrease emissions by 49 percent. Secondly, the optimization of present engine technology could reduce emissions up to 42 percent. Thirdly, a more balanced mix of technologies could lower emissions by 47 percent (GreenCarCongress 2009). The last scenario is currently the most likely one. Fig.5: Global passenger vehicle CO ² emissions and abatement potential On the way towards wholly emission free engines in vehicles, there are interim solutions using different types of systems as isolated applications: (IEA 2008: 1-4) Hybrid electric vehicles (HEVs) combine conventional gasoline engines with a battery component which allows electric drives for a limited speed and range. Therefore, an improved fuel economy especially in stop and go traffic situations is guaranteed. The first mass producer of hybrid cars has been Toyota with its Prius model which is proving technical practicability under daily routine conditions. Plug-in hybrid electric vehicles (PHEVs) are an evolutionary form of HEVs because one can plug them into the electricity grid when the vehicle is parking. The built-in battery has a higher capacity and allows a higher speed maximum using the combustion engine as a range extender. Battery electric vehicles (BEVs) using only electric power are the aim of every manufacturer in their research and development. Currently, the biggest problem is hereby the battery technology which is not allowing wide ranges. The Tesla Roadster solved these problems with existent technical components at first. All three types of new concepts are leading the way towards a greener future. Both hybrid cars improve the fuel efficiency and therefore the demand for oil but the biggest problem is still the purchase price which is still so high because the battery costs contribute much. Figure 6 shows the comparison between a combustion engine and an electric power train using different categories. Although the price per mile is lower by more than 20 percent, problems occur in range and the recharging. Moreover, the power is switching away from the OPEC cartel towards utility companies providing the energy for the age of eMobility. Fig.6: Electric vs. Gasoline Taking the environmental impact into account, electric drivetrains are not equivalent to zero emissions and environmental friendliness. To measure this, the well-to-wheel consideration has been developed including also the emissions generated by producing the fuel. For EV this means considering the pollution produced when generating the electric power in plants. (Hensley, Knupfer, Pinner 2009: 93). In countries like Germany, China and the United States this will often be coal whereas Denmark and Northern California could use wind power which is oftentimes not used during low demand times like at night when EVs are normally charged. Due to a test of BMW with its Mini EV, 98 percent of the test customers using this vehicle want to have renewable energy sources produced by solar, water and wind. (Seiwert [2] 2010: 2). Another important aspect