The next economic boom will be won by cities that lead on climate | Andrew Wear | TEDxMelbourne

Key Concepts

• Fossil Fuel Free Construction: Eliminating the use of fossil fuels in construction machinery and operations.
• Energy Transition: The global shift from fossil fuel-based energy systems to renewable and low-carbon sources.
• Climate Capital: Investment directed towards climate solutions and sustainable industries.
• Clean Tech Roadmap: A strategic plan to foster innovation and growth in clean technology sectors.
• Green Hydrogen: Hydrogen produced using renewable energy sources.
• Net Zero Commitments: Pledges by organizations and governments to reduce greenhouse gas emissions to a net-zero level.
• Sustainable Infrastructure: Development of infrastructure that minimizes environmental impact and promotes long-term sustainability.
• Venture Capital: Funding provided by investors to startups and small businesses with perceived long-term growth potential.

Oslo's Fossil Fuel Free Construction Initiative

The video highlights Oslo, Norway, as a prime example of a city making bold climate action. Heidi Sorenson, head of climate policy in Oslo, spearheaded a policy mandating no more fossil fuels on city construction sites. This initiative faced significant resistance from builders who cited concerns about technology readiness and cost. However, Oslo's team persisted, developing the policy, gaining council approval, and overseeing its implementation.

Key details and outcomes:

• Policy Implementation: Oslo started by requiring contractors to demonstrate emission reductions for city construction contracts, initially focusing on projects like schools and libraries.
• Learning by Doing: The city adopted a phased approach, learning and adapting as they went.
• Current Status: Today, 98% of Oslo's city construction sites are fossil fuel free, and two-thirds of machinery hours are powered by renewable electricity.
• Global Impact: Oslo's actions have significantly influenced the global market for electric construction machinery, which was valued at $18 billion in the previous year and is projected to reach $90 billion by 2032. This demonstrates how local policy can drive global industry change.

The Enormous Economic Transformation Driven by the Energy Transition

The speaker emphasizes that we are currently experiencing a massive economic transformation with unprecedented capital reallocation.

Data and figures:

• Energy Transition Spending: A decade ago, annual spending on the energy transition was approximately $580 billion. Last year, this figure surged to $3.2 trillion.
• Projected Growth: This spending is expected to more than triple again as the world moves towards net-zero emissions, involving tens of trillions of dollars annually for decades.
• Investment Areas: This capital is flowing into clean energy, electric transport, power grids, building electrification, and new clean industries.

Shift in Financial Systems:

• Fundamental Reorientation: This is not solely driven by government stimulus but represents a fundamental shift in the global financial system.
• Bank Lending: Banks are increasingly reorienting lending towards sustainable infrastructure and supply chains. For example, Australia's Commonwealth Bank now refuses to lend to fossil fuel companies unless they demonstrate serious emission reduction plans.
• Superannuation Funds: Australian superannuation funds, managing $4 trillion, are reallocating investments towards sustainable outcomes, with 82% committed to net-zero. This translates to hundreds of billions of dollars moving to clean energy and climate-friendly industries.
• Corporate Commitments: On the Australian stock exchange, two-thirds of the top 200 companies are committed to net-zero. This pressure extends to their suppliers, who must reduce emissions to retain contracts.
• Insurance Industry: Globally, 60% of insurance companies refuse to insure coal, and 40% avoid oil and gas. Projects lacking insurance are unlikely to be built, illustrating the power of market forces.

The speaker asserts that this transformation is not at its beginning but is well underway and accelerating.

London: A Model for Climate Tech Hubs

London is presented as an example of a city intentionally attracting climate capital and fostering innovation.

Key strategies and outcomes:

• Clean Tech Roadmap: The city mayor and the London Sustainable Development Commission developed an ambitious roadmap to position London as a hub for low-carbon innovation.
• Green Growth Plan: This plan aligned zero-carbon ambitions with job creation and economic growth objectives.
• Physical Infrastructure: Investment in physical infrastructure like London Green City provides a space for clean tech startups to develop, scale, and test their technologies.
• Networking Events: Events such as the London Climate Technology Show facilitate connections between innovators, investors, and buyers.
• Venture Capital Attraction: This comprehensive approach led to London-based climate tech startups attracting over $5 billion in venture capital in 2023.

London's success demonstrates the effectiveness of creating an environment where innovators, investors, infrastructure, and ambition converge to address climate challenges.

Melbourne Climate Network: Connecting Local Innovators

The video then shifts to a local example, the Melbourne Climate Network.

Formation and impact:

• Origin: The network emerged from bringing together individuals and groups already working on climate solutions, including startups, engineers, investors, researchers, and public servants.
• Low Budget, High Energy: Despite a modest budget, the initiative was fueled by significant energy and enthusiasm.
• Momentum Generation: Initial events were standing-room-only, fostering new connections, collaborations, and problem-solving.
• Connecting Ingredients: The network identified that Melbourne possessed the necessary components for a climate solutions hub but needed a platform to connect them and create an environment for collaboration. This connection is crucial for generating momentum and finding a niche.

Global Race for Climate Economy Dominance

The speaker highlights that cities worldwide are actively seeking to capture a share of the emerging climate economy.

Examples of cities positioning themselves:

• Port Kembla, New South Wales: Positioning itself as a hub for green hydrogen, attracting billions of dollars.
• Copenhagen, Denmark: A leader in zero-carbon shipping and ports.
• Gladstone, Queensland: Framing itself as an emerging center for green metals.
• Helsinki: Transitioning from coal-based heating to geothermal innovation.
• Gippsland, Victoria: Shifting from coal to offshore wind.
• Stockholm: Building a climate startup scene based on research and development.

The core message is that cities waiting to observe will miss out, as proactive cities are already securing deals, attracting capital, and securing talent.

Economic Development as Life Improvement

The speaker concludes by emphasizing that economic development, particularly driven by climate action, has profound implications for people's lives.

Key arguments:

• Jobs and Opportunities: It ensures good jobs and better opportunities for future generations.
• Thriving Industries and Communities: It fosters future-focused industries, healthy communities, excellent schools, and great local services.
• Untapped Financial Opportunity: There is a significant amount of money available for those who act decisively. Hesitation will lead to missed opportunities as capital flows to proactive cities.
• Winning the Next Boom: The next economic boom will be secured by regions that lead on climate action.

The speaker encourages the audience to consider their own cities and the potential for individuals to be the catalysts for change, drawing inspiration from figures like Heidi Sorenson. The race is on, and the opportunity exists for any city to win.