COP 15 was a disappointment to many and there is now certainly a risk that policymakers leave the building, metaphorically speaking, leaving markets to take over and solve the environmental problems the best they can. Can they and should they?
Cleantech Scandinavia recently attempted to analyze Nordic cleantech patent application levels.The European Patent Office and OECD’s environmental directorate did a similar attempt analyzing cleantech patent application levels worldwide.
OECD carried out statistical analysis for basically all energy generation technologies showing a marked increase in wind, solar and hydro after the Kyoto agreement was signed. Their analysis also found that cleantech patent activity was dominated by Japan, US, Germany, Korea, Great Britain and France. (87% of solar photovoltaic patents were for instance handed in by Japan, US, Germany, Korea and France).
At Cleantech Scandinavia we looked at Nordic cleantech related patents, using basically the same methodology. This revealed a number of things that we found interesting:
Solar shows remarkable patent growth over the last ten years. Over the same period, numerous new solar companies have been formed in the Nordics.
LED lighting patents are also on the rise. The first wave already a few years ago but now experiencing a second growth stage, likely fueled by energy efficency demand and upcoming legislation banning light bulbs in the EU.
The heat pump industry showed for us, an unexpected development. Seen from a Nordic perspective, this industry comes off as a fairly mature. From an international perspective however, the potential for heat pump technologies is clearly both existing and growing. As an example, heat pump company Thermia sales were up with 100% last period, stating new legislation in Spain as a main reason. The potential to make heat pump technologies more energy efficient has clearly stimulated innovation in the heat pump industry as patent applications where clearly up the last years.
Recycling solutions tend to operate on policy driven markets. This was also reflected in patent levels, with applications rising strongly in the period when a lot of new recycling regulations where put in place (extended producers responsibility for packaging, car scrapping schemes and so on). Application levels remain high, probably driven probably also by increased resource efficiency and increasing raw material prices over the monitored period.
To highlight later stage growth companies in the Nordics we asked a couple of questions to 81 Swedish and 23 Finnish cleantech growth companies. One of them was on policy dependency. 74 % of the Swedish and 70% of the Finnish companies answered that policy benefited their market/solution.
Does any of this mean anything? I think it does. I think it means that in many cases and on many markets, policy has been crucial for cleantech innovation to happen. The oil crisis in the 70’s set off a surge in insulation related patents but that just clarifies the point further. Clear price signals are needed for innovations to happen.
Of course, it can be argued that what I am talking about is in the past. It doesn’t mean it has to be like this in the future. Perhaps we have now reached a level of oil and raw material prices that, coupled with increased environmental awareness, means we don’t need the policy makers to guide markets any longer. I wish, but I don’t think so. Chinas oil demand has increased ten-fold the last decade, water is increasingly becoming a scarce resource and waste is literally piling up in many parts of the world. We are just not creating, and more importantly deploying, solutions quickly enough.
I hope that we will see increased activity from policy makers to guide markets and consequently innovations into the low carbon and low pollution levels where we need to go. So stay awake policymakers, cleantech still needs you!
