Thursday, November 27, 2014

The Power of the Prize

VIENNA – The world faces two looming, interconnected energy challenges: how to provide reliable access to modern energy services to the one in five people worldwide who do not have it, while minimizing the damaging impact of climate change by reducing carbon emissions. Surmounting these challenges requires finding more diverse, cleaner energy sources, which implies the need for expanded funding and incentives for research and development of clean technology.

Free-market incentives are often viewed as the main catalyst for such solutions. But, while market forces reward innovation and creativity, their impact is substantially weakened in a global economy plagued by slow, uneven growth. Given this, it is up to governments to stimulate and support the development of critical energy capabilities by rewarding innovation.

For centuries, governments have used prizes to spur innovative research that yields creative solutions to pressing global challenges. Such prizes reflect genuine global leadership: transforming a major challenge into an opportunity to facilitate progress toward a better future.

Eighteenth-century British leadership provides a case in point. In 1714, seven years after one of the worst naval accidents in the history of Britain’s Royal Navy, the United Kingdom launched the Longitude Prize, a £20,000 reward (equal to $5 million today) for developing a simple and practical method to determine a ship’s longitude reliably.

At the time, maritime navigation was based on a combination of science, experience, and luck, making it difficult, expensive, and dangerous, especially for those – such as the British government – bearing the financial burden of devastating shipwrecks and lost fleets.

Mariners had long known that, to determine their precise location, they needed to compare the time aboard ship and the time at the home port. But, while they could figure out the former by watching the sun, clocks were not accurate on ships at sea, so they were unable to track the time elsewhere.

Even after the prize spurred scientists, inventors, and engineers from all walks of life into action, it took nearly a half-century for John Harrison, an English carpenter-turned-clockmaker, to win. Motivated by the prospect of a handsome reward, Harrison worked for decades to create the marine chronometer, a timepiece capable of keeping accurate time at sea over the course of a long voyage, enabling sea captains to plot their course accurately. The innovation revolutionized nautical and, later, aerial navigation, and served as a boon to British naval and commercial dominance.

Similarly, in 1795, the French government, with an army debilitated more by hunger than by enemies, offered prizes to anyone who could develop an effective food-preservation method. After experimenting for 15 years, the Parisian Nicolas Appert won the prize with his ground breaking technique for preserving food in glass jars. England’s Peter Durand subsequently built upon Appert’s method by using metal cans.

A half-century later, France’s Royal Academy of Sciences offered a cash prize to the scientist who could produce the best proof for or against spontaneous generation. The award both catalyzed and subsidized the work of the chemist and bacteriologist Louis Pasteur, whose breakthrough discoveries led him to develop revolutionary methods – including the process that came to be known as pasteurization – for the sanitary production and preservation of food.

In order to tackle the twenty-first century’s most pressing challenge – providing access to sustainable energy for all – the world needs the same inspired leadership and long-term vision that spurred innovations in maritime navigation and food preservation. The United Arab Emirates – where projected electricity demand will more than double by 2030 – is among the countries that are rising to the occasion.

The UAE enjoys substantial hydrocarbon resources, with oil and gas output accounting for 45% of GDP and 80% of national income, and fueling the country’s economic growth. Indeed, energy has enabled the UAE to become one of the Middle East’s most developed economies – and thus has played a crucial role in securing the country’s global standing. Nonetheless, its leaders have recognized the need to secure their country’s future by diversifying its energy sources; as a result, the UAE has emerged as a pioneer in the renewable-energy revolution.

The UAE’s toolkit for creative solutions includes the Zayed Future Energy Prize, an annual award for achievement in developing and deploying renewable energy and sustainable technologies. Since its launch in 2008, nearly $10 million has been awarded for innovations that have changed the lives of people worldwide.

In January, during Abu Dhabi Sustainability Week, the UAE honored eight winners in five recipient categories with prizes totaling $4 million, rewarding proven innovators and giving them the financial support that they need.

Global leaders should follow such examples and provide the needed investment and incentives to support innovation in both the public and private sectors. In this way, a brighter, cleaner future can be secured for all.

Read more from our "The Innovation Revolution" Focal Point.

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    1. Portrait of Christopher T. Mahoney

      CommentedChristopher T. Mahoney

      Here's a factoid for you: a number of manufacturers (Japan, Korea, France) now offer small, self-contained, self-controlling, turnkey atomic power plants. They have already invested in energy innovation, and these systems produce zero carbon emissions. We don't need the UN to sell us on more wind farms.

    2. Commenteddonna jorgo


    3. CommentedNathan Coppedge

      I should bring investors attention to the very impressive condensation tower concept (they call it a downdraft energy tower). One is being built in Arizona. It is a highly efficient concept in dry climates, and runs using watersprinklers and a water pump. It could be especially useful in coastal areas. But I fantasize about the reproduction of this system all over the world. It probably works in less arid climates as well, depending on how tall it is. There is also a possibility that it could be combined with skyscraper architecture, to create a new form of green habitable living, e.g. it is permissible for the towers to be built in the lower floors of buildings, or feed into circulation systems, because all that is necessary is a draft of dry air, and a means of processing the sprinkled water. It seems like the best energy system available today, judging by expense. I'm surprising more of these towers are not yet under development (just one in Arizona so far). Exciting, to me anyway, that more of these towers could be developed around the globe. It could be part of this same type of sustainability you mention in your article, with the right investments it could pay off for clean power companies, in a big way.

    4. Portrait of Ingmar Schumacher

      CommentedIngmar Schumacher

      It is certainly correct to emphasize that prizes have the potential to attract R&D directed towards clean technology. However, the one big problem with relying on prizes is that they provide money only ex post, if an innovation has been made and proven useful. But it is also true that R&D for clean technology often requires substantial finances up front. It is, therefore, more likely that prizes attract R&D activities on smaller problems that may be solvable without large up-front sunk costs than on bigger ones like car engine efficiency.
      Also, it may be questionable inhowfar prizes really provide incentives to undertake R&D activities. It may simply be that someone wants to make a certain process more efficient or attempts to find a solution to a problem without having been initially drawn to it by the possibility of obtaining a prize. This was, for example, the case for the development of the zeer pot.
      Clearly, it is unlikely that prizes harm incentives. However, one way to really increase the usefulness of prizes is to link prizes to specific research questions. Like this researchers will know what financial remuneration they may obtain in case they find a solution to that specific question.

    5. CommentedZsolt Hermann

      I agree that the appreciation of the society and awards can spur people on to great things.
      Of course the question is what values does society hold important, for what goals are people motivated?
      Looking at how the world is speeding towards a very unpredictable, probably volatile future due to the stubbornly promoted excessive, constant quantitative growth socio-economic model, probably before we try to motivate people we should examine whether we should change the values our society holds at present.
      Even the "energy crisis" is a misunderstanding.
      Today humans approach the closed, finite natural system they exist in from the demand side.
      We are like children simply demanding everything we think we need, we deserve, way above our necessities, producing and consuming goods we do not even need and are mostly harmful for us, simply in order to make profit.
      In a fragile, highly balanced natural system, where homeostasis is the primary principle everything is based on available resources.
      We simply cannot demand what is not in the system, or what us threatening to imbalance the system.
      At the moment human society totally ignores the natural principles of general balance and homeostasis and by the 21st century we have turned completely opposite to nature. What we are witnessing in the form of the "global crisis" is simply the end stage of our artificial, unnatural development as we have run out of "steam and open space". And what we already exhausted are the human resources and we are also close to exhausting the natural capabilities.
      Since this natural system is vast and infinitely more powerful than our species as we can witness every time a natural catastrophe strikes, in order to achieve equilibrium and have a hope for a predictable, sustainable future only we can change, the system and its principles will not change.
      Human society needs to promote new values, motivate innovation, exploration that leads to the understanding of the global, integral system we evolved into and how humanity needs to, can adapt to it.