Although climate change presents a very strong threat to business survival, it equally has a lot of business opportunities that can be tapped into by entrepreneurs. According to a study conducted for Shell by an independent consultancy, Vivid Economics, it was found that efforts to reduce climate change could create a market of up to £30 billion for British businesses alone over the next ten years. The study also shows that there are big opportunities for both small and medium enterprises in numerous areas, including responding to demands by consumers for environmental friendly products and on government demands on business practices.
According to the study, a breakdown of the biggest areas for potential growth in response to climate change for small and medium sized enterprises reveals that the building regulation market is worth £950 million, renewable road transport fuels £500 million and renewable energy £800 million. From this breakdown it becomes clear that intelligent entrepreneurs could benefit from the numerous business opportunities presented by the climate change. Today there are a wide range of services and products which some years ago wouldn’t have made any economic sense and for which there wouldn’t have been any demand for. Therefore for businesses, the idea of tackling climate change becomes both a necessity and a huge business opportunity. This creates a great business opportunity for small and medium sized enterprises and entrepreneurs worldwide.
Another report on climate change business opportunities conducted by PricewaterhouseCoopers for New Zealand Business Council for Sustainable Development (NZBCSD) talks about 32 potential business opportunities identified by six participating companies in the report identified within their operations. These opportunities cut across provision of knowledge and services, climate friendly branding, and investment in emissions reduction projects both locally and abroad. The report also provides a high level quantitative and qualitative analysis on potential climate change business opportunities in five different areas that the public might be interested in. the areas include commercial building energy efficiency, clean development mechanism, wood waste to energy, methane reduction through runiminant efficiency and climate friendly branding.
A scenario analysis by the report using high level assumptions showed that opportunities in those five areas could be worth in excess of NZ$350 million per annum and could deliver greenhouse gas savings of around 9 million tones of CO2 per annum, which is estimated to be the emissions reduction equivalent of taking over 2 million average family cars off the road.
Business that has taking advantage of climate change business opportunities
For most businesses, climate change has now become a risk management issue which has significant business opportunities. Therefore, it makes good business sense for entrepreneurs and businesses to understand and work towards minimizing their greenhouse gas emissions and to identify the business opportunities that are likely to arise out of a carbon reduced economy as quickly as possible.
Many businesses have taking advantage of the numerous opportunities that climate change presents in the area of renewable energy. One of these companies is a123systems. A123 systems is a company founded by Dr. Yet-Ming Chiang and was incorporated in Delaware. It designs, develops, manufactures and sells advanced rechargeable lithium battery for use in electric vehicles and electric grid storage. It also provides research and development services to government agencies and commercial customers. This company has been successful in business.
The world economy is undergoing a transformation driven by rising demands for high output energy solutions that are less harmful to the environment. Also because global economic growth, geo-political conflicts in the oil producing regions and escalating exploration and production costs, there is an increase in market demand for innovative energy alternative that can help reduce dependence on oil. Also heightened concerns about global warming and climate change are giving rise to enactment of stricter environmental standards and regulatory for energy sources that are not harmful to the environment. Because of these reasons, clean energy technologies are experiencing increasing popularity and greater adoption which is fueling continued innovation and improving the economic viability of such technologies. And so these green energy trends are contributing to a growing demand for advanced battery technologies which is what a123 systems manufactures.
In the area of transportation, a123 systems has built and developed more lithium ion hybrid systems than any other lithium ion battery manufacturer worldwide, with units on the road since 2007. There systems have been put to the test I the real world conditions, meeting and exceeding performance requirements with the most rigorous duty cycles.
In the area of electric grid, the company provides energy storage solutions that enable a more efficient and reliable electric grid and help integrate renewable generation sources. The company leverages its patented Nanophosphate technology to deliver dynamic storage solutions for power generation, transmission and distribution. Having shipped more than 36MW to date, a123 has produced and deployed more lithium ion batteries for ancillary services for the grid than any other company in the whole world.
In commercial applications, a123’s Nanophosphate technology overcomes traditional battery constrains. It enables expanded flexibility in design for a broad range of commercial applications. It’s batteries gives high power, long cycle life, excellent safety performance and light weight with regard to applications ranging from medical systems to IT infrastructure applications. The Nanophosphate lithium ion technology delivers consistent performance even when it is at low state of charge, giving an improved user experience. It also reduces overall cost of ownership because it gives a customer , lighter weight, longer life, faster charge capability and higher reliability.
A123 has more than 1 million square feet manufacturing facilities in Asia, Europe and North America. These manufacturing facilities enable the company to mass produce to meet increasing global demand in their product. The company operates a vertically integrated structure, and this structure enables them to deliver great high quality across their product line and it enables them to incorporate customer requirements at all levels of their manufacturing process.
In September 2009 a123 systems went public by offering its initial public offer. The company offered and sold 32,407576 shares of common stock at a price of $13.50 per share. It raised about $391.8 million in net proceeds. Although since its incorporation to date the company has been making net loss but because of the anticipated growth of the market, a forecast has shown that from the year 2012 the company will start making tremendous net profit.
Conclusion
Climate change apparently has its problems for businesses but those who are intelligent and who have great eterpreneuring spirit would definitely find a good business opportunity presents by climate change. And if business and entrepreneurs can take advantage of these numerous business opportunities that climate change and global warming provides it will be a win-win situation for them because at the end of the day they would have succeed in reducing greenhouse emission thereby making our environment better as well as making huge returns for themselves and their investors.
References
Articles
Business opportunities and global climate change, New Zealand Council for Sustainable Business, PricewaterhouseCoopers 1999.
Shell, Climate change is a business opportunity.
Climate Change – The Great Business Opportunity , Christopher Gleadle 2010
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