David Tyfield [Part 1 of 2]: Low Carbon Innovation in China

Dr. David Tyfield (pictured right) of Lancaster University in the UK is a critical realist of science and innovation policy.  Cross-trained in molecular cell biology, philosophy of social sciences and the law, Dr. Tyfield brings an interdisciplinary approach to analyzing current trends in international collaboration in low carbon innovation.  The Green Leap Forward had the opportunity to interview Dr. Tyfield before a live audience of about forty attendees at an event hosted by the Beijing Energy Network on October 29 in Beijing.  This the first of two posts summarizing the hour long interview, with this first post focused on questions posed by The Green Leap Forward, and the second summarizing the Q&A session that was opened to the audience.

The Green Leap Forward (GLF):  Here at The Green Leap Forward, we’ve previously talked about the need to look at innovation beyond just the technological, calling for disruptive systems over mere disruptive technologies.  You similarly have an expansive view of “technology” and “innovation” beyond the way the media narrowly construes it.   How would you define these terms?

David Tyfield (DT):  I don’t think its just the media, but its the main thinking behind a lot of policy.  We would want to distinguish between technology and innovation, where technology is just new kinds of machines.  Innovation on the other hand is a much bigger issue than that and its not just the technical issue of introducing new machines.  My background is in looking at science and innovation from a sociological political economic angle, which means we treat innovation as a social process. that means innovation is not just a question of great minds coming up with great ideas, not is it just about R&D spending.  Its a much bigger process.   In fact, a lot of important innovation does not involve technology at all.  They can be social innovation, the kinds of processes or new kinds of organizational forms.  For instance, the joint-stock company or limited liability company is a form  of innovation.

Another important issue that we are interested about innovation is that once we start looking at it as a social process then we can start to recognize that there are many different possible trajectories of technological change, therefore there is also a question of choice between them. So there is a question of direction, and not just a question of how much innovation is happening but in which direction.  And that opens up, in effect, all kinds of important political decisions that can be easily swept under the carpet.

In terms of the implications for low carbon innovation, this is very important.  Because if we just limit our our consideration of innovation for low carbon to high technology, not only are we setting ourselves for some pretty difficult tasks, we also exclude ourselves from all sorts of other possibilities which could have profound influence on a shift to a low carbon system.  In terms of what we mean by low carbon definition, therefore, the “low carbon” bit does not just refer to more efficient use of greenhouse gases. Its actually  about any kind of innovation in this broader definition which contributes to a shift in social system that actually has, altogether, a lower carbon consumption.

GLF:  So lets take what you are saying in the context of the international climate talks.  China has proposed the establishment of an international technology transfer fund, where by developed countries contribute technology and financing to developed countries.  What you are saying seems to suggest that there is room for China to make a contribution, and for something more than just a uni-directional model of technology transfer.

DT: There are several issues that can be said here about the tech transfer argument.  Being a European in China, I have to start by laying my cards on the table and say that China is in a very strong moral position in terms of demanding support from the west.  Right now, and if we talk in terms of climate change, we also have to take into account that CO2 stays in the atmosphere for about a hundred years.  Therefore it is not just the fact that China is, if not now then maybe next year, the biggest emitter of CO2.  There is the issue of historical aggregation as well.  However, that is a very temporary position for China to be in.  The front page of the Climate Group report about China’s Clean Revolution has an absolutely staggering statistic that says by 2020–that’s only like 10 years away–if the EU meets its target and China’s emissions continue to grow, China’s per capital emissions will be double Europe’s, in which case there is no longer this moral high ground in China.  This is a very particular issue now and I just wanted to premise with that comment.

In terms of the technology transfer argument, there is clearly room and need for some kind of international collaboration or cooperation mechanism.  There has to be that.  I think the high technology problem is something that is going to take some late nights and some pretty barnstorming negotiation.  I don’t think that can be avoided.  What can be said, though, is that the negotiations can be smoothed or eased by saying there are other issues for which there can is agreement and real mutual, non-zero, win-win situations, as the jargon has it.  And a lot of this comes out from the redefinition of “innovation.” Once we recognize there there is low tech innovation that can happen, so called “disruptive innovation,” which is either low or low tech or social, and that has a capacity to peculate through the system and have profound change, then if there is there is a mechanism to stimulate international collaboration in these forms, and there is certainly need for collaboration in these forms, then there is all kinds of possibilities for mutual, win-win.  High tech innovation is just moribund with the high cost of IP.

GLF:  So what you say about low cost and low tech innovation suggests that China has a role to play in the ecology of technology transfer.  Could you give some examples?

DT:  If we just focus just on high technology, then we are also putting it as the “haves” against the “have nots”, i.e. the West versus  China.  The situation doesn’t have to be like that, is not like that and should not be viewed like that. There is plenty of important low carbon innovation in China, which means that China in many ways can take the lead in certainly make a significant global contribution.

The most obvious example here is in the low cost innovation in renewables and the potential for the massive roll out of renewables across the world, whether it is in solar power–China now has five of the largest solar companies in the world–and similar for wind power.  I had the fortune of going to Baoding recently, which is a city southwest of Beijing in Hebei province.  Obviously there is local government support for the renewbale industry there, but nevertheless, it is making a big impact.  Renewables now are 10% of the local economy, which is staggering, and teh factories that we saw were very, very impressive.  Really high quality stuff coming out at a really good cost, and they expect grid-parity [for solar power] in the next couple of years.

GLF:  Are you referring to Yingli Green, the solar company?

DT:  Yes that’s right.

GLF:  Any examples of low tech innovations that you have come across?

DT:  The example that springs to mind is an agricultural example.  Its a project that is an international collaboration but its being run and led in China and is about the reduction in the use of nitrogen fertilizer by farmers. There are various forms of innovation involved in this project.  There is the simple transformation of the use of fertilizer by farmers.  There is the innovation of giving   them a very low tech meter, just a stick basically, a very meter like a thermometer which you stick in the soil and tells you if there’s enough nitrogen in the soil in which case there’s no point in adding anymore or you’re just throwing your money away.  If this were to spread across over all of China, where there is widespread over-use of nitrogen, releasing NOx gases which are themselves greenhouse gases and more potent than CO2 and of course polluting water, this would have a profound impact on China’s carbon footprint, and it is a very low tech innovation indeed.

So what I would say therefore is where China has the opportunity to make lots of progress here, the very speed of development here opens up all kinds of possibilities for experiment as well, which perhaps is much more difficult in highly developed, more rigorous systems.  Again this is slightly more technological, but in terms of the evolution of fuel cell cars or electric vehicles.  Maybe not in Beijing, but in maybe second-tier vehicles across the country, the possibility of introducing an electric vehicle system is clearly much bigger than it is in in say, L.A.  And if that were to be a success, that will be a stepping stone for the global roll out for that kind of technology.  I’m not saying that technology is bad; technology is clearly going to be part of the solution.  But its not just high technology. We can’t stick around for multinationals to come up with big bag solutions to climate change.  There is huge scope for innovation to happen here and to have a huge impact across the world.

GLF: Just to add to your point on electric vehicles.  Warren Buffet recently made a big investment in a Shezhen-based company called BYD Auto, which is set to be the first carmaker in the word to introduce an electric vehicle to the market, next month.  I would say that the vision for electric vehicles in the greater context of the energy economy is a great example of looking at at innovation more holistically through the lens of “energy systems” rather than discrete “energy technologies.”  Electric vehicle have to be charged up by an upgraded and smarter grid, which can be powered by renewable energy sources such as wind and solar.  The eletric vehicles can also serve as distributed sources of energy storage and power. This is where transportation systems meets grid-based electricity systems. Electric vehicles are just a part of a larger system of an electron economy and can really spur the development of the entire renewable energy industry, so that’s really a great example.

So just to shift gears a bit before we open up questions to the audience, what are your thoughts on the current financial crisis and its implications to low carbon innovation?

DT:  My take on the financial crisis is that we can’t really understand where it comes from without taking a long view perspective on the political economy and in particular understanding the dominance of global finance of Wall Street over the global economy for quite a long time now, certainly since 1980.  The bubble has arisen and it got so bad because basically Wall Street was calling the shots without people calling in into account.  I’m not sure whether with the current financial crisis that that is the end of that.  I am perhaps laying my political position on the table but the U.S. at the moment is not being run by [George] Bush, but being run by [Secretary of Treasury, Hank] Paulson, and therefore being run by Goldman Sachs [which Paulson was formerly the CEO of].  There was a bailout of Wall Street by Wall Street and Goldman, basically.  And therefore there is no real obvious move at the moment to call Wall Street to call itself into account for its own self-create problems.  That being the case, there are all kinds of issues related to the carbon market that I will mention in a moment.

In terms of the future though, I think the financial crisis will play very differently in the West than in China.  In the West, there are many calls from “high carbon lobbies” that this is not the right time to go for low carbon.  There’s always next year, lets sort out the recession first, then we’ll move on to low carbon.  In the UK’s case, the government has made overtures to say that “No, we are pressing ahead with this.”  And so for instance the UK government has a binding act that says that we have to have 60% reductions by 2050.  They actually recently said, in the midst of the financial turmoil, that they want to increase that to 80%.  So they say they are going in the opposite direction, but then there is always “And we will begin that process next year.”

If there is a severe recession–the major obstacle to low carbon innovation in the West is political will–and if there is a recession then that will severely harm political will to make that move.  In China, on the other hand, if the recession actually involves a cooling rather than a slowing down of the economy, i.e. China actually grows at 8% rather than 12%, then that could be really good for low carbon innovation in China, because many energy companies and many car companies at the moment, they’re interested and doing what they can, but they don’t really have the pressure and incentive to invest heavily in R&D because times are good.  They are making enough profit without having to invest in R&D.  If they are still making good profit at 8% growth but it is getting tighter, competition is getting stiffer, then it might be that there is a greater incentive to move into low carbon innovation in China.  So maybe we’ll see China developing its own high tech R&D capacity over the next few years as a result of the financial crisis and recession.

Finally, the, in terms of the development of the carbon market, what I was saying earlier about the dominance of Wall Street…What that has led to is a series of bubbles;  the most recent ones of course has been the dot com bubble, and now we have the securitization bubble of mortgage debt.  There is no reason why we should not expect a “green bubble.”  Everybody is now beginning to take climate change seriously.  It seems an obvious investment; Warren Buffet, as you’ve said, is moving into it.  That’s going to have a signal of investment across the U.S.–here is Buffet, if he’s investing in green, it must be the way forward.  And in so far in there still is this political imbalance with Wall Street in charge, there is no reason why there shouldn’t be a green bubble.  I don’t know if that’s necessarily a bad thing because when the dust settles there may actually be some green companies that have been formed after all of this.  There will be plenty of train wrecks as well.  But, on the other hand, if this is the beginning of a more political shift in order to call finance into account, then it might actually be the beginning of the creation of a really viable, profitable, productive green sector.   But this is now.  This is a situation that is too present to call.

GLF:  The internet certainly didn’t go away after the dotcom bubble burst, in fact it emerged even stronger.

DT:  Exactly.

GLF:  Well great.  Thank you, David.  With that, lets open it up to the audience for questions.

[Tune in to Part 2 in the next post for the Q&A session between Dr. Tyfield and the audience]

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