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To avert runaway climate change, we must eliminate global carbon emissions by 2050. While much of the focus has been on the main culprits — power plants, buildings, and cars — more than one-third of emissions come from heavy transport such as trucks and planes and the heat-intensive manufacture of materials such as steel and cement. We can’t reach our goal without addressing these sectors, too. But how? They’re widely considered hard to abate — stubbornly resistant to decarbonization, which many believe would be slow, costly, and unprofitable.
But abatement is not only feasible — it will be amply rewarded, if done strategically. In this decade, a rich stew of new technologies, materials, design methods, financial techniques, and business models, along with smart policies and aggressive investments, could revitalize, relocate, or displace some of the world’s most powerful industries. By the 2030s, trucking, aviation, and shipping could be decoupling from climate. Steel, aluminum, cement, and plastics could take new forms, be used more sparingly, and be made in new ways, in unexpected places, under novel business models.
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In this article and a companion technical paper,1 I examine business strategies that can help make all this possible and generate trillions of dollars in the process. While the strategies are distinct, they share a common thread: Increasingly competitive and abundant renewable electricity is undercutting and displacing fossil fuels. Outpaced and outcompeted, coal and gas plants are being starved of revenue while their fixed costs per kilowatt-hour rise. Electrified heavy transport and industrial manufacturing heat powered by renewables will likewise undercut, devalue, and strand their fossil-fueled rivals, siphoning off the old technologies’ revenues to fund their own expansion. The growing arguments for making and using renewable electricity will reinforce one another, accelerating the demise of fossil fuels and propelling one of the greatest disruptions in business history.
1. A. Lovins, “Profitably Decarbonizing Heavy Transport and Industrial Heat,” PDF file (Basalt, Colorado: RMI, July 2021), https://rmi.org/profitable-decarb.
2. Hearst Autos Research, “What Is MPGe?” Car and Driver, accessed July 19, 2021, www.caranddriver.com.
3. A.A. Phadke, A. Khandekar, N. Abhyankar, et al., “Why Regional and Long-Haul Trucks Are Primed for Electrification Now,” PDF file (Berkeley, California: Lawrence Berkeley National Laboratory, March 2021), https://eta-publications.lbl.gov.
4. Revenue- and size-neutrally, if desired. N. Mims and H. Hauenstein, “Feebates: A Legislative Option to Encourage Continuous Improvements to Automobile Efficiency,” PDF file (Basalt, Colorado: RMI, February 2008), https://rmi.org.
5. A. Lovins, “How Big Is the Energy Efficiency Resource?” Environmental Research Letters 13, no. 9 (September 2018): 1-18.
6. A. Lovins, “Reframing Automotive Fuel Efficiency,” Society of Automotive Engineers J. STEEP 1, no. 1 (April 16, 2020): 59-84.
7. T. Koch-Blank, “Green Steel: A Multi-Billion Dollar Opportunity,” RMI, Sept. 29, 2020, https://rmi.org; and “1H 2021 Hydrogen Levelized Cost Update,” BloombergNEF, April 8, 2021, www.bnef.com.
8. P. Bodnar, M. Gray, T. Grbusic, et al., “How to Retire Early,” PDF file (Basalt, Colorado: RMI, June 2020), https://rmi.org.
9. “Mission Possible: Reaching Net-Zero Carbon Emissions From Harder-to-Abate Sectors,” PDF file (London: Energy Transitions Commission, November 2018), www.energy-transitions.org.
11. J.P. Womack and D.T. Jones, “Lean Solutions: How Companies and Customers Can Create Value and Wealth Together” (New York: Free Press, 2005); P. Hawken, A. Lovins, and L.H. Lovins, “Natural Capitalism: Creating the Next Industrial Revolution” (Boston: Little Brown, 1999), ch. 7; D. Karamitsos, T. Motmans, V. Corno, et al., “What Is Servitisation, and How Can It Help Save the Planet?” World Economic Forum, Nov. 20, 2020, www.weforum.org.
12. J. Orr, M. Drewniok, I. Walker, et al., “Minimising Energy in Construction: Practitioners’ Views on Material Efficiency,” Resources, Conservation, and Recycling 140 (January 2019): 125-136.
13. “New Energy Outlook 2020,” BloombergNEF, accessed June 22, 2021, https://about.bnef.com.
14. A. Lovins and K. Bond, “Can a Virus and Viral Ideas Speed the World’s Journey Beyond Fossil Fuels?” Environmental Research Letters 16, no. 2 (February 2021): 1-9.
15. A. Lovins, “Applied Hope,” PDF file (Needham, Massachusetts: Olin College of Engineering, May 19, 2019), www.olin.edu.