Iniitatives
RMI and Carbon War Room

Going Further Faster Together ... Rocky Mountain Institute and Carbon War Room merge to speed the energy revolution and create a clean, prosperous, and secure low-carbon future.

Burgess COMMENTARY

Peter Burgess

Going Further Faster Together ... Rocky Mountain Institute and Carbon War Room merge to speed the energy revolution and create a clean, prosperous, and secure low-carbon future.

When Amory Lovins cofounded Rocky Mountain Institute in 1982, the world was coming out of the oil crises of the 1970s and gasoline cost 91 cents per gallon. “Global warming” and “climate change” weren’t yet everyday household terms, but RMI’s staff was already hard at work on market-based solutions that could cost-effectively drive the shift from fossil fuels to energy efficiency and renewable energy. The diverse benefits of that work were manifold: for the health of our economy, our environment, ourselves, and our national security. The opportunities and benefits are arguably even greater today. So is the urgency of action.

The stark impacts of climate change are visible seemingly everywhere — from the devastating Pakistan floods in 2010, to the destruction of Hurricane Sandy in 2012, to the devastating wildfires in Australia in 2014, to the worsening drought in California today. The world’s experts say these events are becoming more severe, causing annual losses of $200 billion — a quadrupled toll in thirty years. Humankind is almost certainly on a path to cross the 2-degree-Celsius threshold most climate scientists agree we must stay below to forestall the worst effects of global warming.

“We need an energy revolution now,” says Jules Kortenhorst, CEO of Rocky Mountain Institute and Carbon War Room. “That’s why the merger of RMI and Carbon War Room — two leading NGOs working on market-based solutions for a clean economy — is so crucial.” The merger was publicly announced in December 2014, and in the months since, the joint organization has been working harder and faster than ever. “There is a unique window of opportunity to accelerate the energy transformation to create a clean, prosperous, and secure low-carbon future for us all,” Kortenhorst continues. “RMI and CWR can build upon our historical results, and focus on amplifying our impact beyond the sum of what we can do independently.”

RMI helped the Empire State Building save $7.5 million over 3 years through a deep energy retrofit. Image copyright Thinkstock / peder77.

Years and Decades of Respective Strengths and Successes

RMI has made great progress over the past 33 years, putting energy efficiency and “negawatts” on the map as the most cost-effective and untapped energy resource, advancing radically fuel-efficient autos whose fitness facilitates electrified powertrains, introducing the world to ideas like ‘tunneling through the cost barrier’ to make big energy savings cheaper than small ones, and other victories.

Over those decades, RMI proved the case for breakthrough deep energy retrofits, including the more recent retrofit of the Empire State Building, which has now scaled to hundreds of big buildings across the country, and it doubled the energy efficiency gains of retrofits for the U.S. government’s General Services Administration, the largest landlord in the country.

In electricity, RMI for three decades has pioneered the modern combination of efficiency, renewables, distributed generation, and new business models. In recent years, RMI pointed the U.S. Department of Energy and solar industry toward balance-of-system costs as a crucial driver of total cost, convened the Electricity Innovation Lab (e-Lab) so diverse stakeholders can tackle complex challenges together, done groundbreaking analysis on solar and battery trajectories now cited widely throughout the financial sector, and is serving as a strategic advisor to New York State on the most closely watched U.S. regulatory reform initiative.

RMI and CWR can build upon our historical results, and focus on amplifying our impact beyond the sum of what we can do independently.

RMI is also helping communities such as Fort Collins, Colorado, and Arizona State University achieve their ambitions for zero and low-carbon energy systems. And in China, RMI’s unprecedented pan-Pacific partnership of government agencies and nonprofit organizations aims to inform the 13th Five-Year Plan by illuminating the maximum share of efficiency and renewables that could fuel China’s rapidly growing economy while shrinking carbon emissions.

Meanwhile, Carbon War Room — though RMI’s junior by more than two decades — has built a growing catalog of strong successes as well. In 2009, the world was facing one of the worst financial crises since the Great Depression of the 1930s, and many were calling the UN climate summit in Copenhagen a failure. That same year, Sir Richard Branson founded Carbon War Room to harness the power of entrepreneurs to implement market-driven solutions to climate change and create a post-carbon economy. Over the past six years, CWR has honed a bold, entrepreneurial approach to remove market barriers by closing information gaps and reducing transaction costs to get money flowing to efficient and renewable solutions. Core successes include launching the world’s first shipping efficiency rating system and America’s first commercial PACE financing program.

CWR’s Trucking Efficiency operation is improving freight fuel economy with RMI spinoff the North American Council for Freight Efficiency (NACFE). Image copyright Thinkstock / BIG_TAU.

Becoming One to Scale Bigger Solutions Faster

Now the two organizations have come together to drive greater impact and scale solutions faster. Though founded decades apart, they share a common vision: that investing in a clean-energy, climate-safe future reaps great rewards for economy, public health, environment, and security.

The organizations’ synergies are many. CWR’s entrepreneurial emphasis and financial expertise complement RMI’s strong technical depth. RMI is best at developing new concepts and developing them through early adoption, CWR at scaling them to become really big. CWR is more tactical and achieves quicker wins; RMI embeds in the long game of transforming enormously complex systems over decades. To combine these diverse strengths, RMI and CWR now operate as distinct business units of the combined organization (still called Rocky Mountain Institute) with one Board and one CEO. Both units closely collaborate across their respective operations under a Board-approved joint strategy. It’s already clear that the result is, as hoped, much more than the sum of the parts.

It’s already clear that the result is much more than the sum of the parts.

“Current efforts to address the climate change challenge are clearly not at sufficient speed and scale across society — from local to international politics, to business practice, to consumer behavior,” says José María Figueres, chair of the newly combined Board. “We need to move much further, much faster. Under one umbrella, the combined organization will generate breakthrough insights, partner with early adopters, create replicable solutions, engage with markets to remove transaction barriers, and close information gaps, all in order to scale impact and transform global energy use.”

RMI and CWR’s Ten Island Challenge recently announced a partnership with the Clinton Foundation to transition Caribbean island-nations from fossil fuels to efficiency and renewables. Image copyright Thinkstock / IngaL.

Speeding the Energy Revolution

An energy revolution is rising all around us. In each of the past four years, the world has invested more than a quarter-trillion dollars to add over 80 billion watts of renewables (excluding big hydro dams). Generating capacity added last year was 37 percent renewable in the United States, 53 percent in the world, 68 percent in China, and 72 percent in Europe. And this growth is accelerating: solar power is scaling faster than cellphones. Electric vehicle sales are scaling twice as fast as hybrid cars did at the same point in their market introduction. Shrewd companies are realizing the enormous business opportunities that climate solutions present.

Global companies like IKEA, Google, Apple, Facebook, Salesforce, and Walmart have committed to 100 percent renewable power. Tesla’s stock is up an astounding 770 percent over the past two years and now has half the market value of General Motors. The NEX index — which tracks clean energy companies worldwide — grew by 50 percent over the past two years (far outperforming the general market) while equity raisings by quoted clean energy companies more than doubled. Many of the world’s top financial firms concur that the era of coal and of big power plants is drawing to a close; leading coal companies have already lost 90+ percent of their value.

“The transformation to a low-carbon future is arguably the greatest business opportunity of our time,” wrote Amory Lovins and Sir Richard Branson in a joint op-ed. “Combating climate change through energy efficiency, renewable energy technologies, clean transportation, and smarter land use can reap rewards as great economically as environmentally.”

Reinventing Fire defined a path to an 80% renewable U.S. electric grid. Image copyright Thinkstock / hxdyl.

Going Further, Faster, Together

Yet we need to go further faster. Which is why the merger of two of the world’s preeminent nonprofit organizations tackling climate change through market-based solutions will turn our toughest long-term energy challenges into vast opportunities for entrepreneurs to create wealth. In the U.S. alone, Rocky Mountain Institute’s Reinventing Fire analysis found a 158-percent-bigger economy could entirely eliminate coal and oil consumption and use one-third less natural gas, yet cost $5 trillion less than business as usual. So far, the U.S. is on that track, and ahead of target for renewables. We are closer than ever before to transforming the world to a low-carbon energy system. Rocky Mountain Institute and Carbon War Room are excited to have come together and forged a coordinated approach to making transformational impact worldwide.

Under a revised strategy approved earlier this year by the board, RMI and CWR will drive the greatest impact by:

• • Developing breakthrough insights, business models, designs, and solutions.

• • Partnering with early adopters to pilot and fine tune such breakthrough ideas.

• • Creating replicable solutions that are profitable and able to rapidly scale.

• • Identifying and removing market barriers such as information gaps and transaction costs.

• • Scaling impact through broad outreach, resulting in large-scale adoption of new solutions.

United we stand to make a greater impact quicker, and this is already happening. Our first combined program, the Ten Island Challenge, is making progress in seven Caribbean countries. Caribbean economies suffer from some of the highest electricity prices in the world — perpetuating poverty, expanding national debts, and blocking sustainable development. They are also on the front lines of climate change, facing nearer-term impacts from sea-level rise, increasing temperatures, and extreme weather events. Our combined organization is laying the groundwork to transform these islands’ energy systems from being dependent on expensive imported diesel to cleaner, cost-effective systems of efficiency and local renewables, while cutting electricity costs, boosting private investment, and enhancing and diversifying the local job market. We are demonstrating that entire economies can adopt low-carbon solutions while strengthening their economies.

And islands are just the beginning. We are closer than ever before to transforming the world to a low-carbon energy system — with the U.S. electric grid, scaling rooftop solar and other customer-sited and renewable energy technologies, in China, with building efficiency, and more. Rocky Mountain Institute and Carbon War Room are excited to be working together to achieve far more than we could separately. Together, we can go further and faster towards a clean, prosperous, and secure low-carbon energy future.

Written by Laurie Guevara-Stone, a writer/editor for Rocky Mountain Institute and Carbon War Room.

Meet Carbon War Room — A Timeline

October 2012 Cargill, Huntsman, and UNIPEC — representing 350 million tonnes of commodities — declare they will use CWR and RightShip’s A to G Rating

October 2013 Launches the Trucking Efficiency operation with RMI spin-off the North American Council for Freight Efficiency

January 2014 Prince Rupert Port Authority and Port Metro Vancouver become the first ports in the world to offer incentives to the most-efficient vessels calling to their ports based on the A to G Rating, rewarding those shipowners who invest in more-efficient fleets

June 2014 Delta Air Lines partners with Carbon War Room to accelerate low-carbon jet fuel production worldwide

July 2014 Receives NGO of the Year award from businessGreen

December 2014 Merges with Rocky Mountain Institute

Web Extra For more information on this topic visit: carbonwarroom.com