Aruna Ramkrishnan and Amrit Jalan (MBA ’22) reflect on the parallels between thermodynamic transformations and tough real-world Energy/Sustainability problems.
Years ago, as budding chemical engineers, we learned about the concept of “transition energy.” It explains how changes in complex systems do not occur spontaneously even though the benefits may be obvious. Rather, these systems often need to overcome high barriers before nature takes over and accelerates their transformation to the desired state.
You do not need to be a scientist to understand transition energy. Just think of the motion of the blue ball in the accompanying graphic to get the basic idea. The ball is in a comfortable, stable spot on the left, but it does not know that with a bit of a push, it can get to an even deeper, more stable (and therefore better) valley. In the absence of a push, it will stay in its original spot, much like the proverbial frog in the well. While the push will come with a cost (“transition energy”) in the short term, the cost will be well worth it in the long term, as the ball will be in a place where it is much more resilient to disturbances.
Most of us are familiar with the dire consequences the planet faces in the wake of increasing greenhouse gas emissions. There is broad agreement that fundamental changes are necessary to the way we think about essential aspects of our lives: energy, food, mobility, and land use. We all realize that these changes will lead the planet to a better state. However, as obvious as the benefits are, change has been painfully slow. Why is that? It turns out that the concept of transition energy applies just as well to the irrational world of the energy transition as it applies to the rational realm of chemical engineering.
There are several barriers that the world must overcome to achieve the energy transition:
- Inertia: When you see a fire, you rush to put it out (hopefully). Seeing a problem is half the solution. Climate change is invisible and occurs on timescales where it is easy to ignore. No one rushes to put out a fire they cannot see.
- Technology: Yes, the world needs new technology. While nobody can agree on what the future will look like, there is clear alignment that the future energy mix will be more complex with several interdependent and perhaps yet-to-be-discovered technologies.
- Policy: Regulations and laws have a huge role to play. Powerful lobbies with vested interests in the status quo will push back (as expected). Without policy nudges, it is difficult to create a sense of urgency and give new technologies or businesses a chance.
- Business: Like the humans who run them, businesses also suffer from short-termism. It is difficult to convince the CEO of a company to allocate part of next quarter’s earnings towards a problem that will hit her company ten years down the line.
So, what needs to happen to get us over the proverbial Transition Energy of the Energy Transition? Let’s look at each of the barriers outlined above, with a focus on how we can overcome them:
- Defeat inertia with planned urgency: Emissions are everybody’s problem and we need to invest in education and awareness. Equally important is increased accountability through systematic goal-setting (global and regional), monitoring and reporting.
- Accelerate innovation: We no longer have the luxury to wait for the apple to fall on our heads. Technology has to be a top priority with unprecedented collaboration across industries and governments. No single sector or technology will be the silver bullet.
- Dynamic science-based policy: Science and policy have to learn to talk and educate each other as we develop new solutions. Lawmakers and shareholders need to be armed with facts and consequences to incentivize clean business opportunities.
- Reimagine the role of business: Prevention is better than cure. For business, recovering from climate change may be much more expensive than getting ahead of the problem by moving to a more holistic view of the bottom line.
Perhaps the only silver lining of the current pandemic is that it has shown us what we can achieve when we act together as a society and the consequences of ignoring facts. Navigating the energy transition will require similar coordinated action but on a longer time scale. Moving the ball to the top of the hill will be necessary to give entrepreneurs and businesses a fighting chance to lead the transformation towards a sustainable and environmentally conscious society.
(Disclaimer: All views expressed here are those of the authors and do not reflect those of any company or organization that the authors are or have been affiliated with.)
Aruna Ramkrishnan (HBS Partner ’22) graduated from IIT Bombay and University of Minnesota and is a research scientist in the Energy industry. She currently works on long-term technologies for emissions mitigation. In her free time, she can usually be found goofing off with her feisty toddler and thinking of ways to make the world a better place for her toddler.
Amrit Jalan (MBA ’22) grew up in India and worked in the energy industry prior to HBS. An alumnus of IIT Bombay and MIT, he is deeply passionate about all things technology, especially in the energy and sustainability domains. As an RC, he has never heard of “free time” and would love to learn more about it from those who have it.