Financially motivated sustainability

Can chemists save the world? In his new book, targeted at the 2011 Year of Chemistry and published by the RSC, John Emsley argues in his characteristically inspirational manner that chemical innovations in areas such as biofuels, food production and clean water treatment can deliver the promise of the book’s title: A healthy, wealthy, sustainable world. Emsley makes no apologies about his crusading, even propagandising agenda, for he rightly points out that many of the biggest global challenges, from climate change to the end of oil, demand chemistry, making it potentially the key science of the 21st century. 

But Emsley concedes that his survey of the wonderful things that chemists have achieved in sustainable technology - converting rapeseed oil to biodiesel or to plastics feedstocks, say - does not look in depth at the economic picture. It’s a frequent and valid objection to technical innovation that it is all very well but how much does it cost compared with what we can do already? What’s the financial motivation, say, for China to abandon its abundant coal reserves for biofuels? 

There is no blanket answer to such economic conundrums, but common to them all is the question of whether one can rely on market mechanisms to generate incentives for a desirable technology, or whether it should be nurtured by governmental intervention. Here, the issue is how ’big’ government should be. 

In the wake of the financial crisis, market fundamentalists sound less credible asserting that the market knows best, especially when it comes to societal benefits: the recent boom years were not so much generated by market mechanisms as bought on credit. But it seems equally clear that highly managed economies which subsidise unprofitable enterprises are unsustainable and risk stifling innovation. A middle course has been successfully steered by the German government’s investment in photovoltaic (PV) energy generation, where money for research and breaks for commercial companies are coupled to a concerted effort to build a market for solar power through a feed-in tariff: a guaranteed, highly competitive price for energy generated from solar panels and fed into the grid. This stimulus recognises that new, desirable technologies may need a hand to get off the ground but need eventually to become independent. With government assistance, the German PV industry has created around 50,000 jobs, brought revenues of €5.6 billion (£4.7 billion) in 2009, and made Germany the largest national source of PV power in the world (Chemistry World, June 2010, p54). By 2020, up to 10 per cent of Germany’s energy may be solar. 

This is one reason why it is unrealistic to dismiss the prospects for an innovative technology on the basis that its (perhaps less desirable) rivals can currently do things more cheaply. There is a financial component to changing attitudes. Encouraging investment in a fledgling innovation can ultimately lower its price both by enabling efficiencies of scale and by supporting research into cost-cutting improvements. That was amply demonstrated by the Human Genome Project (HGP): the international decision that it was a ’good’ thing created the opportunity for new technologies that have reduced the cost and increased the speed of decoding an individual’s genome by orders of magnitude. Simply put, it became financially worthwhile for companies such as Illumina (spearheaded by chemists David Walt and Anthony Czarnik) to devise new sequencing methods. As a result, the economic hurdle to realising the potential medical benefits of genome sequencing was lowered. 

At the same time, the race between the publicly funded HGP and a private enterprise by Celera Genomics, the company founded by entrepreneur Craig Venter, shows that competition can accelerate innovation. What’s more, through canny marketing HGP engineered a favourable climate for investment and public endorsement, creating what economist Monika Gisler at ETH in Zurich and her colleagues have called a ’social bubble’.¹ They say that ’governments can take advantage of the social bubble mechanism to catalyse long-term investments by the private sector, which would not otherwise be supported.’ Of course, there is a fine line between supportive publicity and hype. But this is another reminder that promising new technologies, like children, flourish best when they are neither left to fend for themselves nor mollycoddled indefinitely. 

Philip Ball is a science writer based in London, UK