(Climate) Solutions for a better world: overhauling our future with Paul Needham
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At the end of 2019, UBC declared a climate emergency, and everyday it seems the world is placing a growing value on technology and systems that solve environmental problems. In our 5th episode of evolution, entrepreneurship@UBC’s Creative Specialist, MJ Araujo, speaks with Entrepreneurs in Residence Paul Needham about his experience as a serial entrepreneur and how COVID has urged government and society to overhaul our current systems, making room for climate solutions to come first.
About Paul Needham
Paul Needham is an economist, FinTech and CleanTech serial entrepreneur with over 19 years of experience as CEO and board member, leading companies from founding to successful exits. Paul currently serves as board member and senior advisor to energy access enterprises, financing facilities and social impact investment funds that are accelerating the energy transition. Paul co-founded Simpa Energy India which provides rooftop solar solutions to low-income households in rural India.
Listen to our fifth episode of evolution.
To read a full transcript, see below:
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MJ: Today we have Paul Needham joining us. Paul, tell us more about Simpa and what brought you to that project?
Paul: Access to energy creates access to opportunity, and people who are living without access to reliable electricity, reliable sources of energy...the opportunities in their lives are greatly constrained. When we started the company in about 2010-2011, solar technologies were already widely available as with many renewable energy technologies. The problem is the very high upfront cost: you could purchase a solar panel and then get free electricity. But if you can't afford to purchase it in the first place, then you just can't realize the benefits of it.
So our business idea was to sell solar much like a prepaid mobile phone. With a prepaid phone, you buy the phone, which is not that expensive, and then you pay for the service. So it's a pay as you go model for the telephone service or the mobile phone service. We wanted to create that same user experience for solar panels, so we invented technology that integrates into the back of the solar panel and we could remotely turn it on and off over the air. So it's IoT tech integrated into the panel that allows us to create this pay as you go user experience for the customer. The customer makes a small initial payment, and they get the solar equipment installed, they get a solar panel, battery lights fan, we have bigger systems with TVs. But just like a prepaid mobile phone, it does not work until you prepay for service. So the customer might pay for 10 days in advance, 30 days, whatever they can afford, then the system magically turns on and delivers energy and lighting and cooling until they start to run out of prepaid credits and they start to get alerts on their phone via SMS. Then, at their convenience, they can go back and top up the system again. Those payments for energy service add up towards the total purchase price. So after using the system for about two or three years, they end up paying it off and owning it. Then of course, they get free electricity.
MJ: Thanks for sharing, very interesting to see different models and approaches to support the transition to renewable energy. Moving on to the current work you're doing, tell us more about what you're up to at UBC?
Paul: As you know, UBC declared a climate emergency in December 2019. A very bold move for one of the leading universities in the world, and this certainly captured the headlines. So I came to speak to people at UBC and I learned about not just the declaration, but the very structured process that's being run now to engage stakeholders across the university to understand and decide what exactly that means. What does it mean to declare a climate emergency? What are we going to do differently? So this stakeholder engagement process is ongoing. It's a fantastic process and I'm looking forward to the outcomes. Also feeding into that I think us at entrepreneurship@UBC have a really important role to play in helping build ventures that are offering solutions to the climate emergency.
"I think us at entrepreneurship@UBC have a really important role to play in helping build ventures that are offering solutions to the climate emergency."
MJ: You bring up a good point here, at the institutional level, UBC has declared a climate emergency. What does that mean and what doors does it open when a declaration like this is given?
Paul: Well, I think in doing so the university is joining, at last count, about 1400-1500 jurisdictions around the world, other cities, major institutions, provinces, states. Yeah- over 1500 jurisdictions have declared a climate emergency. Most like the city of Vancouver are now translating that into very specific action plans. I believe this will create a massive opportunity for companies that are offering solutions. So when the city of Vancouver declares a climate emergency and then develops a number of specific areas that they want to work on and things they want to change, this can take the form of new bylaws, new policies, but ultimately, it will also take the form of new procurement. So companies and cities around the world that are looking to act on the climate emergency are actively looking for solutions, and this creates market demand for companies that are offering those solutions.
MJ: Hmm. So let's dive deeper. I think most of us have a general understanding of what a climate solution might look like. But what does the term climate solutions really encompass?
Paul: Climate solutions is a big term! I guess at a high level, climate solutions are technologies and systems that can help stop or reverse global heating, or help societies address and mitigate the risks of climate change. So usually, if you break that down a little further, you can think of climate solutions that do one of three things: They either help reduce the sources of greenhouse gases, or they help improve the effectiveness of the sinks. That the systems, the natural systems we have that sink and capture carbon, or third, that somehow improve the ability of societies to manage through those risks. Within climate solutions, there are some surprising subcategories that people don't often think about. Often when we think about climate solutions, we think cleantech or we think renewable energy, but helping people shift to plant based diets is probably one of the biggest areas of impact on the climate. It impacts land use, it impacts, you know, direct emissions of GHGs. At the individual level, it's probably the single most important thing a person could do. Probably more impactful than then, you know, changing how you move around the city or changing how you move around from country to country. Shifting to a plant based diet has enormous impact. Companies that help people do that, make that easier, provide healthier, tastier, plant based options.
MJ: Given your work at entrepreneurship@UBC, I think it would also be interesting to hear about examples of companies that could fall under the umbrella of climate solutions?
Paul: Supporting climate solutions at entrepreneurship@UBC is not new. We have a number of companies in our network of companies that we've touched that we've helped build that are developing climate solutions. Cambridge Energy Partners, Acuva, Green Metrics, CarboNet, Orbitless, Susgrainable. In our social venture stream right now we have a company that's developing a low carbon cement solution. We have a company that's developing a fisheries management solution, detecting illegal fishing using long range drone technologies. There's a company working on an organic fertilizer solution that could increase yields, while also improving the ability of soil to capture and store carbon. So we've been building climate solutions ventures all along. I think the opportunity now is to find ways to accelerate that work, to bring more focus to it, and to really think clearly about: What are the barriers? What would it take to double the number of climate solutions ventures coming out each year? Those are the questions we're asking ourselves right now and developing some new programming around.
“I think the opportunity now is to find ways to accelerate that work, to bring more focus to it, and to really think clearly about: What are the barriers? What would it take to double the number of climate solutions ventures coming out each year?”
MJ: So tell me more about what barriers exist that prevent taking climate solutions into the market and commercializing them?
Paul: One of the barriers is, it sounds easy, but it's really vexing and it's just about information sharing. People naturally tend to work in their silos and we're all guilty of this. Now, what has often happened with most incubator or venture building programs around the world is that we wait for an entrepreneur to step forward with an idea and ask for help. The entrepreneur knocks on the door and she says, I've got this fantastic idea. I've developed something and I'd like to build a business around this, I'd like to take it to market and I need your help. They come to entrepreneurship@UBC or they may go to another incubator or accelerator. What sometimes is that that entrepreneur has a fantastic solution, but doesn't quite yet know what the problem is. So the solutions sometimes get developed in a vacuum. Then a big part of the work that's done in an incubator is helping that entrepreneur to figure out where best to apply that technology or that innovation. Now, of course, that entrepreneur isn't coming in completely blind, they usually have quite a deep understanding of the market. But there's a better approach and it's really about creating a more active dialogue between the market and the researchers. That dialogue should be ongoing, not a one off thing, where an effort is made to deeply understand the problem space and articulate the highest impact problem areas and then engage with the university or centres of research to understand what possible solutions might be available. So it's more of a very intentional approach to communication between research and the market and when I say the market, I mean industry, but also government and civil society.
MJ: How has COVID affected the market for climate solutions in your opinion?
Paul: Well, I think that the COVID emergency has really done many things. It's demonstrated society's ability to pull together when it's needed, and to do what's necessary. You know, this has been the struggle for the climate action movement over the past many, many years. And I think what we've seen here is people pulling together, recognizing the dangers of a common enemy, and taking the action that's needed to manage through it. So I think that that level of social cohesion and action is really very inspiring. Another thing that I think this emergency has given us is an opportunity to rebuild an economy that we deserve. The economic shutdown that was necessary to stop this disease in its tracks and to manage it, has already had just enormous impact economically on so many people, millions of millions of people in North America losing their jobs. Many small businesses pushed to the brink or are failing. Many governments are stepping forward with various kinds of stimulus packages to restart the economy or to lessen the blow. I think now governments are shifting from focusing on lessening the blow to focusing on stimulating the economy and restarting it. I think what's really important is that we use this opportunity for a clean restart, that we don't go back to business as usual. Instead, we use this opportunity to build a lean economy that we need and that our children deserve. Back in 2013, Jigar Shah published a book called Creating Climate Wealth, where he analyzed the opportunity to shift to a low carbon economy. And at that time, his calculations were a $10 trillion opportunity. Now, the International Renewable Energy Agency has identified it to be a $110 trillion dollar opportunity. There are different approaches to coming up with those figures, of course, but the bottom line is (and we mustn't get distracted by whether it's a 10 trillion or 100 trillion dollar opportunity) there is a massive market opportunity to build the low carbon economy that we need.
“I think what's really important is that we use this opportunity for a clean restart, that we don't go back to business as usual. Instead, we use this opportunity to build a lean economy that we need and that our children deserve.”
MJ: Thank you, Paul, for your insights and for ending on that hopeful note. As you mentioned, we have an opportunity right now to restart and to drastically change social structures that have been in place and make room for more innovation.
Thank you for joining us and we hope to see you next time. In the meantime, stay safe and stay healthy.
Want to learn more? Check out these resources recommended by Paul:
1. Creating Climate Wealth: Unlock the Impact Economy, by Jigar Shah. As mentioned by Paul during this episode.
2. Transforming the energy system and holding the line on rising global temperatures, a report from the International Renewable Energy Agency (IRENA).
3. 8 Economic Recovery lessons for Canada from Europe's Green Deal, from Corporate Knights.