For much of my career I was an environmental strategist, emphasizing new technologies that could cut waste and boost the economy. As a result, I was delighted to read a new report that projects up to 16.5% cuts in greenhouse gas emissions by 2020 with major initiatives in Machine-to-Machine (M2M) technologies — as much as could be brought about by switching to renewable energy sources.
It proves my long-held belief that the environmental movement has wrongly been associated in corporate minds for too long with sacrifice, and instead should be seen as eliminating waste and increasing efficiency. In other words, the IoT can be a win-win solution for the environment and the economy.
The report, “Machine to Machine technologies: unlocking the potential of a $1 trillion industry,” was written by the Carbon War Room with assistance by AT&T. The Carbon War Room is ” a global entrepreneurial initiative set up by Sir Richard Branson that accelerates entrepreneurial solutions to deploy profitable, scalable clean technologies across industry sectors.” It is a registered US non-profit.
The report concentrated on potential greenhouse gas reductions (and opportunities for economic growth) in four “carbon intensive” sectors of the global economy:
The report is predicated on a 23% annual growth rate in M2M products and services between now and 2020: from 1.3 billion devices worldwide to 12.5 billion. This should also result in almost a trillion dollars of annual revenue by the end of the decade.
The report is optimistic about the benefits of aggressive M2M growth: “if we utilize technologies such as M2M to their full potential, ‘low carbon’ will be synonymous with economic growth and sustainable prosperity, now and into the future.”
Breaking the reductions in greenhouse emissions down by sector, the report projects:
- Energy production, distribution and use emissions could be cut by 2.0 Gt of Co2e (CO2e is the concentration of CO2 that would cause the same level of radiant forcing as a given type and concentration of greenhouse gas) by 2020, primarily by promoting “smart grid” technologies such as smart meters and demand-response systems. M2M can also improve energy production and transmission, while fostering the transition to renewables.
- Transportation emissions could be cut by nearly 1.9 Gt of Co2e in the same time period by optimizing routes of all transportation modes so people and goods are moved as efficiently as possible.
- Built-environment emissions would fall by 1.6 Gt of Co2e by 2020 by increasing the efficiency of building systems such as HVAC, lighting, electronics and appliances, and security systems.
- Agricultural emissions would drop by 1.6 Gt of Co2e “by reducing deforestation, managing livestock, and increasing the efficiency of planting, seeding, harvesting, fertilizer application and water use—allowing more food to be grown with fewer resources and saving money for farmers.”
The report also is realistic about the many obstacles facing full deployment of M2M technologies worldwide, including:
- Fragmented value chains that keep mobile network operators from being able to provide complete turn-key solutions
- Lack of universal standards that retard broad integration of M2M solutions
- Lack of performance data that make it hard for potential clients to quantify the cost-benefit ratio of new investments in M2M solutions.
- Communication and marketing challenges: “Companies offering M2M solutions need to be able to communicate the benefits of implementing an M2M system to various entities within a potential client company, from the procurement manager to the CFo. Not only a lack of data but also a lack of strong marketing angles is hurting the M2M industry’s ability to communicate
the value proposition of M2M systems to potential clients.”
- Incompatible sales models and long sales cycles since M2M pricing remains high.
It recommends a variety of strategies to overcome the obstacles, including:
- Value chain integration and unified M2M partnerships: “Creative partnerships and mergers & acquisitions (M&A) are required if the market is to be able to unilaterally offer M2M solutions.”
- Alternative business models and new marketing strategies.
- Increasing emphasis on global standards.
- Quantifying data to clarify ROI and make the benefits of investing in M2M clearer, as well as building data collection and analytics into their offerings.Companies offering M2M solutions must work (“there is also a large untapped opportunity to collect and monetize the vast amounts of data generated by M2M devices. this could take the form of an entrepreneurial venture, or a data clearing house created by the telecoms industry.”)
- Telecom and other companies should make M2M part of their core businesses.
- Adding innovative new business models and sales.
- “Creating a new level of industry cohesion on communication will also be key. The (telecom) industry needs to create forums to discuss and co-ordinate efforts to increase the deployment of M2M technologies, improve its value proposition, and develop a common language to describe its benefits that resonates with customers.”
It seems to me that quantifying the greenhouse gas emissions reductions is particularly important, since so many companies have now adopted “triple-bottom line” accounting. The vast amounts of data generated by M2M applications should make that a relatively simple function to add.
Add in other environmentally-related IoT initiatives such as HP’s “CENse central nervous system for the planet” (BTW, still frustrated by HP’s unwillingness to give an up-date on its progress!) and it seems pretty clear to me: the IoT is our last, best hope to provide for needed economic growth (especially in developing nations) while simultaneously reducing the greenhouse gas emissions that threaten the planet.