The Overview Papers

Overview Paper #1: Wizards, Prophets and Judges

The problem with climate change is not other people, it is ourselves (and physics)

Artic Islands

Photo credit: Stein Egil Liland, via Pexels

Previously I wrote about how Charles Mann has characterized environmentalists as either Wizards or Prophets. He described the inherent conflict between the Prophets’ approach of rejecting a consumerist society based on growth into perpetuity and the Wizarding belief in the power of technology to transcend natural limits. However, Wizards versus Prophets is far from the only fault line in our attempt to address climate change or other sustainability challenges.

For starters, debate often fractures along left and right lines. On a recent trip to meet with the UK government to discuss decarbonization I stopped briefly at the colourful Extinction Rebellion protest in London and heard a leftwing politician explain that anyone who was a supporter of a market-based system was condemning the world to oblivion. Conservatives, conversely, accuse the liberals of creating an environmental Trojan horse within which to smuggle their socialist agenda.

 Meanwhile the young rail against older generations for the mess they will be leaving the world in, while baby boomers note the hypocrisy of preaching millennials who also enjoy the freedom of fossil-fuel powered global travel which prior generations were precluded from.

The nature of climate change is inherently linked to notions of fairness (who gets to spend the carbon budget?) so arguments often have a moral dimension. Take, for example, the criticism the actress Emma Thompson received for flying from the US to attend the Extinction Rebellion march mentioned above.

Don’t Mess with my Worldview

We need to understand why these conflicts may be so intense, personal and even vindictive. The first and obvious reason is that the media deliberately stirs the pot; it’s clearly in its interest to exacerbate conflict and escalate adversarial language because that’s never going to hurt the ratings. Consequently, the extreme and controversial perspectives get airtime.

Our obsession with social media plays a role too because it reinforces our prejudices through un-edited but personalized newsfeeds, as well as stunting our ability to be open to other perspectives. Our addiction to smartphones inhibits our ability to focus or think rationally at a fundamental level.

Guilt, conscious or sub-conscious, that we are not doing enough, probably intensifies  our feelings. We might feel that deep down we are not addressing the issue, that we can’t translate our knowledge into action. A subject which generates guilt will amplify emotions. The power of our subconscious and primeval instincts makes a mockery of our ability to impose order. I previously used the elephant and the rider metaphor; Russel Brand recently and entertainingly described the rational self as a stowaway rattling around on the cruise liner of our emotional selves, under the delusion it is the ship’s captain.

But the most important point is that our views on how to address climate change go the heart of our self-identities. Neuroscience shows that when we perceive a threat to our core identity our views become retrenched. Criticism stings because it attacks our worldview. An important implication of this is that using fear as a motivator to engender change is of limited use.

Sub Tropical Forest

Photo credit: Trần Anh Tuấn, via Unsplash

Judging is Futile

Ultimately, no positive outcome can arise from judging each other. Our current system is unsustainable and every action we take as individuals, from taking a flight to buying a pint of milk creates a minute tug on the spider web of an economy still largely based on carbon-emitting energy sources.

Perceiving the use of fossil fuels as a moral aberration is also problematic. We should recognise that the world we have inherited, while far from perfect, is far better than what came before. Modern society gives us a better quality of life than anything experienced previously and in this respect we are all standing on the shoulders of the giants of generations who came before us. None of this world would have been possible without fossil fuels and we shouldn’t forget the cost paid by people who worked in coal mines, on oil rigs or any other part of this vast economy in making their use ubiquitous, even if the consequences are now clear.

Climate change does not allow us the luxury of naval gazing, guilt or turning things into a Punch and Judy show. Both left and right have meaningful contributions to make. Green New Deals offer some of the vast scope and boldness of vision we need, but market-based mechanisms, properly applied and regulated, also have an irrefutable power. A cap-and-trade system effectively addressed the acid rain problem in the US, to take just one example.

In fact, once you get into the vast complexity of decarbonizing the power, heat and transport systems, technical issues tend to push partisan perspectives into irrelevance. Here we see the benefits of objective deep geekiness; exhibited for instance in Jay Inslee’s climate plan. The plan, which, as Greentech Media put it is  “every wonk’s dream”, attempts to present tangible pathways to an “Evergreen Economy” and is the result of over a decade and a half of his development of climate policy.

The truth is fundamentally simple: different approaches work differently. Markets are doing very well now in driving the clean energy revolution in wind and solar. But in some cases governments are required to make things happen. From my own experience energy efficiency is an example of this – trying to push sector energy efficiency through the private sector is, frustratingly, extremely difficult.

Prophets are right to say we need to redefine our values and in so doing achieve some level of personal progress concurrently with environmental redemption. The cult of consumerism which has become our international creed has driven contemplation of spiritual considerations out of our lives. It is correct to point to the hubris in the view that technology will necessarily save the day. But to write off technical solutions on the basis that capitalism is flawed is hubristic in itself. Technology may produce game-changers, and we certainly need the most advanced technology we can muster. Wizards are right to continue to extoll and pursue the ability of our ingenuity to create solutions but must temper this outlook with a suitable level of respect for the planet’s finite natural limits.

The Truth: the Real Problem (x2)

The problem, ultimately, is not other people. The problem is two things: it is (i) ourselves, and (ii) physics.

As humans we are frail, we put our heads in the ground, we have an evolved tendency for short-termism, for ego and the need to compete with each other. We see debates as battlegrounds to be won, not crucibles to hammer out the best possible plans through collective reasoning.

The problem with physics is worse. Physics does not compromise and does not prevaricate. While we point fingers, shout and smirk at the perceived stupidity of those other people through our greenhouse gas emissions we are collectively trapping extra heat around the earth equivalent to 400,000 Hiroshima bombs, every day.

The stakes are high because everything we have is in jeopardy; all of the beauty and complexity, all the order we have brought into the universe. The risks of failing to tackle climate change are that profound. Consequently, we need everyone pulling in the same direction. We need every Wizard, Prophet, hard-headed libertarian, impassioned leftie, angry Millennial or Generation Z’er, and every wise baby boomer to stand together. If all this doesn’t work out, if we fail, then at least we will have lived our lives in the best way we could, with gratitude, humility and love. And at least we will have gone out in style; nobly, standing together, at the best of our game.

Or we allow the planet to burn in a bonfire of various vanities.


Sustainable Investing and Capital

Five Ways in which New Electricity will Change Long-Term Investing

New Electricity – astonishingly cheap but variable power produced from solar and wind energy – will change the world in fundamental ways. Long-term investors need to understand the consequences of this.

Singapore Trees

Photo by Mike Enerio via Unsplash

For over a hundred years oil has been the “master commodity”. It was required to produce all other commodities, from agricultural goods to mined metals and minerals. The emergence of “New Electricity”- cheap power produced from renewable resources – upends this.

The root cause of the New Electricity revolution is precipitous cost declines in three key technologies: photovoltaic solar, wind power and lithium-ion batteries. Together this triumvirate is quietly transforming the way power is produced, and in future renewable energy will dominate power generation globally.

BNEF Graphic

Source: BloombergNEF

Not only will energy be increasingly generated from renewable resources, but in the coming decades more stuff will be powered by electricity. The electrification of transport is visible already through the emergence of electric vehicles; the electrification of heat may well be next.

New Electricity is not electricity as we currently know it. It is variable due to the nature of wind and solar production, but also malleable due to the emergence of new technologies for energy storage and digital management of supply and demand for power.

Here are five ways that New Electricity will change the world of long-term investments, as well as the economy and society at a broader level:

  1. Electrification of Everything

The sudden availability of cheap and clean power opens the possibility of whole sectors converting to electricity. Most obvious is transport and heat; internal combustion engines appear to be on a pathway to redundancy and in the coming decades it seems likely that houses and communities will be increasingly kept warm through electric heaters.

Less well understood is that food may be produced from electricity in future. Price decreases of Light Emitting Diodes (LEDs), which have mirrored those seen in core renewable technologies, raise the prospect of production of crops occurring indoors using targeted artificial light produced from clean energy. Such “controlled environmental agriculture” (a term representing a spectrum of technologies from the more basic such as polytunnels and greenhouses, to sophisticated of LED-powered “vertical farms”) has a number of benefits, in theory at least. Product quality can be guaranteed, waste and disease risk is minimised and, if production facilities are stacked vertically over multiple shelves, yields per hectare can be increased by orders of magnitude.

Abundant clean power is poised to change the way we feed the world in generations to come.

  1. A Systems View: Everything is Now Connected

From an investment standpoint it used to be possible to evaluate a renewable energy asset in isolation. A wind farm with a government subsidy contract attached to it guaranteeing a fixed price for power effectively stands alone as an asset. As long as the wind blows and the government does not renege on its promises the investment produces reliable returns. A negative consequence of this is market distortions – assets may be sited in sub-optimal locations given the underlying wind or solar resource. Moving beyond subsidies means the elimination of such anomalies; projects are built where there is either abundant sun or wind and freely available land.

This new world of unsubsidised renewable energy works with a diverse array of components playing specific roles based on their individual attributes. It must therefore be viewed as an interconnected system.

Looking at Europe, for instance, the bulk of energy in future will come from solar in the sunny countries of the south and wind in the North and Scandinavia, with more niche technologies suited to local resources, such as tidal power in Scotland, playing supporting roles. These components will be linked together by an upgraded network of interconnector cables and backed up by energy storage technologies from batteries to pumped hydropower.

Investors need to understand this need for a systems-wide view. Take for example an investment into a solar power asset: the value of the output of the solar farm will be affected by the amount of solar built into the system: as more solar is added the value of each incremental unit will decrease because the whole solar fleet in the region produces power at the same time and depresses prices. This price cannibalization factor for each technology will be a key consideration in the energy sector.

Indeed, as the power sector becomes increasingly intertwined with other sectors such as transport, investors need to take an even wider systems view. The development of the Electric Vehicles (EV) and the mechanisms by which EVs both charge from the grid and act as a form of power back-up will have material consequences for the value of long-term energy infrastructure investments.

  1. Climate Needs to be Factored in

Climate plays an increasingly important role in long-term investments. This is apparent in physical risks, such as the exposure of real estate portfolios to sea level rises. It is also necessary to consider transition risks arising from the shifting of global society in response to climate change, manifest in everything from increasing public pressure to divest from carbon intensive investments to rapidly changing regulatory and legal environments.

New Electricity is strongly influenced by weather; directly in the case of wind and solar, and indirectly in the case of hydropower, which is exposed to rainfall patterns, and bioenergy, which may be affected by the growing conditions for crops used for feedstock.

For the first time since the industrial revolution society must look to the sky and consider what the climate may bring with respect to energy production.

Storm in Desert

Photo by Lucy Chian on Unsplash

Thankfully core renewable technologies are inherently complementary. Sun and wind tend to have levels of negative correlation at different timescales, from within a given day to annual patterns. Advances in energy storage technology, transmission and distribution infrastructure, and the digital architecture underpinning the grid mean that that system will be able work even at deep levels of renewable energy penetration.

Investors should adopt conscious and long-term planning based on an understanding of the consequences of both short-term weather and long-term climate trends for asset portfolios.

  1. Abundance

As New Electricity develops there will be an expansion in technologies such as batteries to help keep the system in balance. But however much of this “flexibility” infrastructure is deployed, wind and solar power will become so cheap that there is likely to be a massive overbuild of these technologies, even if this means there will be times when surplus power is just dumped.

Consequently, at times electricity prices will be extremely low due or even negative due to excess renewable energy generation. This may occur in irregular circumstances, for example in the case of a windy night in the Northern European winter, when the offshore wind fleet is producing at maximum output, but intrinsic demand is very low. Such periods may occur on a regular basis with a high degree of certainty.

This presents an enormous value-creation opportunity for investors able to identify industry segments which may benefit from this variable abundance. Vertical farms may be an example of this; plants grown indoors can be bathed in light at any time of the day or night, or left for several hours in darkness, so power demand can be shaped to match the output of variable renewables. There will be other sectors that benefit from this cheap abundance, perhaps heavy manufacturing industries where output can be flexed, or specific applications like the production of ammonia, a crucial resource for agriculture. Indeed, there may be whole new sections of the economy which we have not even imagined yet which may emerge to benefit from this new abundance.

  1. Changing Land Value

The rise of New Electricity changes the way we should think about the value of land itself.

First, the transition away from the fossil fuel era upends the geopolitical energy order that was established in the second half of the twentieth century. This order skewed wealth towards countries which had won the great hydrocarbon geological lottery. And because the production of oil as a useful product can only take place at a large scale – even if you were lucky enough to have an oil well in your backyard you would be unlikely to build an onsite extraction and refining facility – it reinforced the positions of mega-corporations.  Renewable energy is inherently more distributed and more democratic. If a country has sun, wind or water resources, it can now power itself, and with some rooftop solar and a battery in their basement a family can achieve a degree of energy independence.

At a nation-level this enhances energy security; for countries with moderate land areas either wind or solar, depending on the location, can supply an increasing share of local generation. But, until renewables are superseded with future energy sources such as nuclear fusion, availability of land continues to be what economists call a “fixed production factor”. The importance of this is that the fixed production factor will capture any surplus value in a value chain.

To be viable without subsidies wind and solar power often need to be built at substantial scale, which necessitates the availability of large amounts of land scarcely populated areas. The Atacama Desert in Chile, Southern California and the interior of Spain, blessed with bountiful sunshine, are examples of land areas where the solar revolution may increase land values; wind may do the same in the snowy regions of northern Scandinavia, as well as Texas and western China.

Sub Arctic

Photo by invisiblepower via Pexels

More subtle changes are underway too. With the advent of controlled environment agriculture, New Electricity in particular, becomes a particularly important consideration. The $200m Sundrop Farm, which supplies 10-15% of Australia’s truss tomatoes, uses an integrated renewable energy system to provide heat, electricity, water and nutrients. As challengers to traditional open field agriculture arise, access to cheap energy will increasingly be a crucial competitive advantage. Proximity to a renewable energy source, therefore, may be a valuable asset. The extremely high yields per land footprint of vertical farms, meanwhile, means that production facilities can be established in urban areas. London’s Growing Underground development, sited in Second World War air raid shelter’s under  Clapham Common, is an example of a business model predicated on the premise that closeness to the end customer is a competitive edge.

Because of the substantially enhanced yields per hectare of controlled environment agriculture, it may be that large areas of land currently given over to food production could be restored to natural habitats such as forests, used for recreational purposes or renewable energy production. All of these changes of use have important implications for how that land is valued.

While the exact consequences in terms of land values that New Electricity will have are hard to project, what is clear is that land itself will continue to be a key driver of value, just as it has been throughout human history. But the drivers of that value in future will be very different to those in the past.


The coming domination of renewable energy will change the world in what initially may seem subtle ways, but in the medium and long-term the effects will be profound. New Electricity is permeating the global economy, but it only works because of an interconnected system where generating power plants work in conjunction with “flexible” assets such as battery storage, and everything is held together by the glue of a complex emergent digital network. Agile investors will be able to capture the valuation creation opportunities presented by an abundance of cheap variable power; but the continued linkage to weather means that even in the twenty first century climate patterns will need to be considered in a manner familiar to our agrarian predecessor societies. The confluence of controlled environment agriculture and New Electricity allows a democratization of production (resource production is less tied to areas which happen to have the right ecological or geological resources), and this in turn will shift the way land itself is valued.


Sustainable Investing and Capital

Why sustainable investing is the best job ever

A career in finance is rarely what we dream of when we are children. But forget being a rock star, a football pro or a contestant on Love Island. Here’s why working in sustainable investing is the best job. Ever.


Image: Dan Wells

In the year 2000 I was travelling in New Zealand, sharing a hostel room with two easy-going Americans who lived a permanent backpacker life. “I have friends who took a suit and tie job, but I’ve never regretted my choice,” said one, in between anecdotes of a life of freedom and spur-of-the-moment adventures around the world.

A month later I was back in London, starting my career in finance; because I clearly wanted to squeeze every last drop out of life in, um, accounting.

In the years to come, as I rooted through invoices in dingy back rooms at companies I had been sent to audit, the obvious conclusion would be that my former buddies – paddling around Hawaii or seeking out yet more remote backcountry to ski – had chosen the more fulfilling path in life.

But early in my career, having always had an interest in the environment, I complemented my finance training with learning about sustainability through a part-time Masters degree. In 2009, I moved to Asia where I worked for sustainable investment firm Sindicatum on clean energy, forestry and sustainable agricultural projects in China, India and Southeast Asia, based in Singapore.

In Asia, I witnessed first-hand the environmental challenges created by rapid economic development, but also the ingenuity evident in the application of technology to address such problems. I carried these lessons with me back to Europe in 2012.

As I have subsequently found out, a career in sustainable investing is the best job. Ever.

Here are five reasons why.

1. Purpose

In August 2018 the news was full of record temperatures across Europe. On holiday in the Austrian Alps I had been both enjoying and been thoroughly depressed by Nathaniel Rich’s novel-like climate article in the New York Times Magazine, Losing Earth. One night our three-year-old son was too hot to sleep; even up in the mountains the heat of the still air was oppressive. Lying there at 3am, listening to his cries of discomfort caused by something entirely not of his making, I contemplated the future his generation have to face.

Even though my career has been focused on climate-related themes, the feeling of needing to do more that night was intense. But the breathless feeling of panic was tempered with a sense of gratitude that my suit-and-tie skills have some role to play in tackling the world’s biggest problems.

The first reason that sustainable investing is the best job ever is that it matters.

Consider the meaning of these two words:

  • Sustainability”: the challenge of making our global society sustainable is existential; the risk that we won’t make it through the next few generations is not zero.
  • Investing”: the allocation of our combined capital, which represents all of our pooled resources – our material things, the product of our skills, and the application of our time and attention. It is everything we have. It’s more than just financial. It’s about the way we, and the generations which follow us,choose to live our lives.

Sustainable investing therefore refers to how we allocate everything we have to the challenge of survival. So when you work in sustainable investing you possess that quality that can be elusive for so many people in consumer societya purpose.

This purpose is not limited to addressing global problems; sustainable investing creates value at the local level. While working in Thailand, investing in projects which converted gas emitted from landfills near Bangkok into renewable energy contributed to improvements in the local environment and living standards.

2. Nature

At the risk of causing offence to my co-workers and acknowledging that I am lucky to work in an iconic skyscraper which affords me views as shown above, offices are my least favourite place to be. Working in finance usually means a lifetime of feeling separated from the planet, in a cycle of offices, business trips, and conferences in hotels and, more offices.

But working in sustainable investing, giving consideration to the interaction between finance, business and the natural world, allows us to spend time in fields, oceans and mountains; in wilderness and the great ecosystems of the planet; if not literally then in our minds as we plan and execute investment strategies.


Image: Dan Wells

Sometimes it also allows us to experience nature directly. When visiting potential sustainable forestry investments in Indonesia I saw first-hand the interaction between the logging industry and the rainforests of Kalimantan.

3. Understanding how everything on our planet is connected

Sustainability requires a deep consideration of the nature of risk. Often it is not possible to be exact when predicting long-term trends such as the precise degree of warming that may occur over many decades. It can only be framed in terms of degrees of risk. We can only broadly articulate the chances of a 1.5°C rise or a 4°C rise by 2050, and then build a picture of the pathways which could lead to either of these.

With sustainability, the stakes are as high as they get—the risk is that our society could cease to exist. As investment professionals, we are paid to understand and price risk. So we have a unique role to play in how the sustainability challenge is tackled. We also understand that risk is not just about avoiding disaster; it’s also about the opportunities created as we transition to a sustainable future.

4. Our view of the world

Sustainability forces us to consider how we view the world. American scientific writer Charles Mann has described people who believe in the power of technology and innovation to solve the environmental crisis as “wizards”, distinct from the “prophets”, who stress the need to reduce consumption and human interventions. While wizards will point to agri-tech such as vertical farming and genetic modification, prophets emphasise organic or low intensity approaches.

Both approaches have important contributions to make, but the friction between the two can cause the debate to fracture in a similar manner to how left versus right politics has become tribalised. The issue is highly emotive, because whether someone is a wizard or prophet goes to the heart of their being.

In sustainable investing, we need to consider our own emotional and mental frameworks, our biases, and our world views. Progress in the field of neuroscience, for example the work of American economist Daniel Kahneman, underlines the power of our subconscious over our rational, conscious selves. A useful metaphor is the elephant and the rider: the elephant being the powerful, charging subconscious, and the rider the rational self, hanging on and exerting control where possible. In sustainable investing we need to empower the rider so that we can exert a “scout mindset”, setting aside our biases as we seek out the best investments.

5. Personal sustainability

Sustainability influences how we manage ourselves as human beings. As so many of us work in offices, achieving physical, mental and spiritual sustainability is one of the biggest challenges we face as a society.

We can learn from athletics coaching, which recognises that the 1980s “no pain no gain” approach of flogging oneself through intense exercise won’t make athletes the best they can be; they need a balanced programme of recovery, sleep and nutrition.

Exercise and meditation help us set our mental foundations. They act as an antidote to the constant exposure to social media. A strong, healthy mind lets us focus on what is important in life; and this takes us back to purpose.

Finding purpose in our work helps us anchor our lives and align our daily application of energy to something we have consciously chosen to do, which enriches us. Working in sustainable investing has led me to see these dimensions of sustainability, and understand that sustainable performance, a sustainable body, and a sustainable mind are inextricably linked.

Long-days, late nights and the quotidian low-grade stress of the office, punctuated by moments of high stress and drinking binges to try to make it all “worth it” are trademarks of the modern professional. But they’re not sustainable physically or mentally, and do not nourish the soul. What does enrich the soul is to have a purpose. And for me there is no greater purpose than tackling the challenge of sustainability by helping to allocate the world’s capital.

I’ve lost touch with my backpacking friends, but I hope they would feel that the “suit and tie” path that I chose isn’t so bad. Hopefully, the sustainable investing being done around the world will help ensure there is a world worth travelling around for generations to come.




Sustainable Investing and Capital

Power the rise of Emerging Market Consumers to tackle Climate Change

The UN climate conference in Marrakesh can create history, say Stewart Langdon and Dan Wells

It would be easy to become depressed about the outlook for climate policy. After all, the topic barely warranted a mention during the recent US election, except for occasional disparaging remarks from the now President-elect. But at the ongoing UN climate conference in Marrakesh, delegates are attempting to build upon the success of last year’s event in Paris, which delivered a watershed moment in the form of a long overdue agreement on emissions. The coming days could be remembered for an equally enduring landmark if the parties choose to accelerate a quiet revolution that is radically reshaping energy systems around the world.

Globally 2.2bn people have no access to electricity or endure highly unreliable service and rely instead on a toxic mix of kerosene, paraffin, candles and wood. For a third of the world’s population energy is dangerous, erratic and ruinously expensive. Lighting can cost a poor household more than a hundred times what it does in rich countries. 4.3m people die each year from the effects of pollution from cooking alone.

Reliable power is a pre-requisite for a quality of life beyond basic subsistence. The industrial revolution catapulted the West to a vast improvement in life expectancy, public health and educational standards. Those advances were enabled by an energy revolution: the newfound ability to extract and utilise fossil fuels on a large scale.

The developing world is now experiencing something similar, driving long-term growth in energy markets across Asia and Africa. By 2040 those two continents will be responsible for 56% of global energy demand between them, accounting for virtually all of the 30% growth between now and then. That upward surge is a reasonable expectation for two continents that will by then be producing 62% of the world’s GDP, compared with only 37% today.

Underpinning all of this is a dramatic convergence in global living standards driven by the rise of 4 billion low income people out of poverty and into the consumer classes, finally matching long-standing aspirations with newfound spending power. In 2010 2.4bn people earned more than $10 per day (the rough proxy for having discretionary income). By 2025, McKinsey forecasts this to increase to 4.2bn. Poverty is falling rapidly as a result and it is vital that this economic development is powered by low-emissions energy.

Thus, the devastating consequences of inadequate access to energy and climate challenge come hand-in-hand with one of the great business opportunities of the 21st century: providing energy and other essential services to the world’s emerging consumers.

In 2009 developed nations pledged to provide $100bn a year by 2020 to help poor countries mitigate the impact of climate change. Mobilising capital for business models that provide renewable energy access to the world’s poor could simultaneously combat energy poverty and climate change whilst investing in the big energy markets of the future. How should this be done?

An argument persists that only centralised fossil fuel generation can provide the energy resources required to lift people out of poverty on a meaningful scale. This ignores the transformative impact of years of innovation in renewable energy.

Since 2010 the price of solar technology has plummeted by around 80%, radically improving its economic viability in low-income countries and removing the supposed trade-off between development and clean energy. Similar reductions in the cost of energy storage are solving the issue of intermittency. Crucially, solar technology is fundamentally modular: it works at any scale, rendering debates about centralization redundant. Solar plants can also be developed and built more quickly than fossil-fuel plants.

As a result, clean and reliable energy is changing the underlying topography of electricity infrastructure, moving towards distributed, low-carbon systems. Consumers in Africa and Asia can now produce their own power, enabling them to actively manage their own relationship with energy for the first time. Welcome to the age of the emerging producer-consumers (or prosumers). Innovative new businesses are seizing the opportunity this presents.

At the individual level, companies such as D.light and Greenlight Planet are taking their customers on a journey up the energy ladder from solar-powered lanterns to home systems, which include radios, mobile charging and televisions. Both have reached real scale (20m customers between them) and continue to grow quickly and profitably. But connectivity remains critical: electricity grids still have a fundamental role to play in future systems, although increasingly as “stock exchanges” for electrons, rather than simply as wires to send power in one direction.

The Marrakech conference could supercharge this revolution by mobilising capital for investment in solar energy infrastructure at all scales. The world would reap substantial benefits: the moral imperative of improved energy access; the climate impact of ensuring the rise of billions of emerging prosumers is powered by renewable energy; the economic benefits of smart, long-term investing. That would be a legacy to rival Paris.


Daniel Wells is a Partner at Foresight Group.

 Stewart Langdon is a Partner at LeapFrog Investments.