In Davos, Switzerland, at the 2016 World Economic Forum annual meeting, industry leaders focused on what they call the Fourth Industrial Revolution. Whereas the First Industrial Revolution used steam and waterpower in manufacturing, the second used electricity to power factories, allowing production on a much larger scale. The Third Industrial Revolution introduced sophisticated technology and automation, which has touched every aspect of people's lives. The Fourth Industrial Revolution promises to do even more.
Eying these advances, Klaus Schwab, executive chairman of the forum, said he perceives the "brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another." In their scope, scale and complexity, these changes will be "unlike anything humankind has experienced before," which will transform "entire systems of production, management and governance," he said.
This Fourth Industrial Revolution, Schwab said, "is blurring the lines between the physical, digital and biological spheres." Ironically, this fast-paced technological and space-age world is bringing humanity back to earth, to the power of nature. Some of this power of nature comes from the very linkages Schwab talks about, linkages of information technology, nanotechnology, industrial technology and biology.
These linkages enable precision farming to reduce use of chemicals and improve yields; they improve solar cells by patterning them after the physical design of leaves. And some of the power of nature is seen in the use of digital information: sophisticated mapping and engineering insights paired with knowledge of natural systems to inspire new solutions in health care, urban services and even community resilience from storms, floods, fires and more.
Consider oyster reefs. They protect shorelines by absorbing wave energy and reducing the power of waves by as much as 76 to 93 percent, thus reducing coastal erosion, flooding and damage to coastal infrastructure. The Nature Conservancy is working with communities, engineering companies and others to restore oyster reefs. This work brings together digital information, coastal modeling, engineering and ecosystem insights to reduce risks to communities from coastal storms.
Such fast-paced change that links multiple fonts of knowledge is also opening up new ways of conceiving how society can fulfill its energy needs, which is good news for communities across the globe striving to address climate change. The World Economic Forum's 2016 meeting comes on the heels of the historic Paris Agreement on climate change, in which more than 190 nations committed to reducing greenhouse gas emissions.
The Fourth Industrial Revolution, coupled with the global commitment to address climate change, puts entrepreneurs, communities and individuals in a position to reinvent how America fuels, generates, transports and uses energy.
Bill Gates, Jack Ma, Jeff Bezos, Mark Zuckerberg and other leaders in the fields of technology, research and investing have formed Breakthrough Energy Coalition to supercharge clean-energy innovation. These industry leaders vow to spur a new level of public-private partnerships that invest early in projects, with the potential for affordable, reliable energy that produces near-zero carbon emissions. Imagine an energy revolution taking place at the speed of social media or with an adoption rate as fast as that of the smart phone.
The energy sector will continue to transform and diversify energy sources to increase choices, reliability and security while reducing greenhouse gas emissions and providing additional transparency to consumers about energy costs.
But not all of the innovative action of this new revolution centers on energy. The fourth revolution—and its nexus in addressing climate change—is driving changes in finance, insurance, city services, building design, risk management and more.
- The insurance industry is incorporating natural infrastructure in its risk modeling and spurring new investments in nature-based solutions to help reduce risks to storms, erosion, flooding and other threats.
- Cities are using nature to help clean the air, handle storm water, cool temperatures and supply drinking water.
- Planners, developers and infrastructure providers are expanding the use of nature-based solutions to enhance urban and coastal resilience.
And some of the largest innovations are not technological, but instead institutional. New arrangements like "green performance contracts" can improve economic, environmental and energy performance. Consider the example of raw potatoes supplied to potato chip manufacturers. A study of the carbon footprint of potato chips, summarized by PwC, revealed that prices were set by weight. Responding to the price signal, farmers controlled humidification to produce moister (and thus heavier) potatoes. Despite strict moisture-content specifications set by chip manufacturers, farmers still added a few extra grams of water weight per potato, which increased the price paid for the raw potatoes, but added no value to the final product. The total additional weight was significant, and it took extra cooking to burn off the extra moisture.
In a life-cycle analysis of the potato chip carbon footprint, this extra cooking turned out to account for an unexpectedly high percentage of the chips' energy consumption. The greenhouse gas (GHG) emissions and energy from this extra cooking actually dwarfed those from transportation of the potatoes to the factory.
The solution to this challenge was straightforward: change the procurement contract to provide farmers with an incentive to produce potatoes with less moisture without compromising product quality.
Other energy-performance contracts are emerging among builders and governments, providing customers with comprehensive measures that improve energy efficiency, expand use of renewable energy and use distributed electricity generation. Often these services are accompanied by guarantees that savings produced by a project will cover the full project cost.
As I see the unfolding of this Fourth Industrial Revolution, I am reminded of the words of Alfred, Lord Tennyson: "The Earth is so huge, and yet so bounded." The world sees growing demands for energy, food, water and other resources as populations grow and incomes rise, putting pressure on finite resources. But the good news is that humanity's imagination is unbounded and therein lies hope for a healthy and prosperous future.
Combining knowledge in information technologies, chemistry, nanotechnology and more with solutions drawn from nature is helping to reduce waste, use resources with greater precision, and link economic opportunity and environmental benefits.
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