Turning Climate-Vulnerable Countries Into Global Innovation Hotspots

Technology Policy Net Zero

Turning Climate-Vulnerable Countries Into Global Innovation Hotspots

Paper
Posted on: 12th November 2021
By Multiple Authors
Olamide Oguntoye
Policy Lead, Science & Innovation Unit
Henry Fingerhut
Senior Policy Analyst, Science & Innovation unit

    Our Time to Zero In series makes the case for an inclusive transition to net zero that focuses on people, fairness, technology, markets and communities.

    Opportunity in Vulnerability

    Opportunity in Vulnerability

    From the Maldives to Costa Rica, many of the countries most at risk of climate disasters also possess natural resources essential for climate innovation. But while calls for improved climate finance grow increasingly more insistent, there is only minimal focus on building the innovation capacity of these countries and maximising the potential of their natural assets.

    Disasters triggered by natural hazards now occur five times more often than 40 years ago, affecting 1.7 billion people around the world over the past decade and causing $137 billion in economic loss each year. By 2030, climate change threatens to push over 130 million people into poverty and could mean that 200 million people a year – twice as many as today – need humanitarian assistance. By 2050, climate-related crises could displace 1.2 billion people​. Climate-vulnerable countries clearly need new investment to drive prosperity for their populations in the face of a harsh climate reality.

    Geographical barriers to innovation are becoming less of an issue in a world where global intellectual capital is increasingly dispersed and “Anywhere Jobs” are seeing an unprecedented uptick. Members of the Climate Vulnerable Forum (CVF) – an intergovernmental organisation of 48 at-risk countries – are a case in point. CVF countries are home to some of the leading research institutions of their regions (Figure 1).

    Figure 1 – CVF countries (shaded blue) host some of the leading research institutions of their regions

    Source: TBI

    The Global Innovation Index (GII), which ranks more than 130 economies worldwide on a spectrum of innovation indicators, shows little difference between the performance of CVF countries and others relative to annual expectations. In 2020, countries like Kenya, Costa Rica and Rwanda exceeded expectations, alongside the US and the UK. Other CVF members including Lebanon and Honduras performed at the “expected” level, along with Norway and Australia.

    Getting smarter with climate finance and developing policy to tap the innovation potential of all countries, regardless of location, is therefore now a matter of urgency. The question is how the global climate-finance community should help turn the vulnerable countries into climate-investment destinations.

    Progress Hubs: A Way Forward

    Progress Hubs: A Way Forward

    We propose Progress Hubs – an international network of world-leading climate-research universities hosted by CVF countries – as a means of turning climate-vulnerable countries into innovation hotbeds. Like other world-leading research and educational institutions, Progress Hubs would be universities operating at the forefront of climate science and technology, training the next generation of climate researchers and innovators, and developing climate solutions with potential for global application. Their presence in climate-vulnerable countries would mean they could tap into the unique strengths of their host nations.

    The Progress Hubs we describe in this paper are not yet operational. Rather, they are a concept that has emerged from our broader thinking on the future of climate science and innovation. Further details about which specific vulnerable countries should host the hubs, which institutions should be co-opted and what specific research topics to pursue will emerge from subsequent phases of research and stakeholder engagement.

    Progress Hubs would cover a variety of climate-innovation themes, from adapting to sea-level rise and developing drought-resistant crops to desalinating water for coastal megacities and creating low-emission transport solutions. They would provide technical leadership, managing research, testing and deployment of climate technologies. They would also provide educational leadership, forging strong academic and industrial partnerships, while facilitating international skills transfer.

    To summarise, Progress Hubs would aim:

    • to present a pipeline of solutions to the global challenge of climate resilience, for which there are currently no commercially viable solutions
    • to draw global attention to challenges that are prevalent in CVF countries, for which solutions are generally under-resourced or even ignored
    • to build real, self-sustaining, world-class research capacity in CVF countries, spurring new opportunities to maximise the benefits of the trillion-dollar climate-tech revolution
    • to move CVF countries from being receivers of aid to being creators of new wealth, as the hubs feed into global efforts on deep decarbonisation

    The hubs are a potential mechanism to constructively use the financial assistance available through international climate negotiations to put CVF nations at the forefront of climate innovation. They are an opportunity to create coalitions of the willing, with partnerships between centres of excellence in CVF nations and others worldwide. The hubs could involve as many CVF nations as possible, working jointly to develop climate technologies fit for the 21st century.

    Progress Hubs constitute a different approach to innovation. Traditional institutions tend to focus on discrete strands of climate research. Progress Hubs take an integrated and more holistic approach, enabling much more cross-fertilisation of ideas, and sharing of skills and resources internationally. Progress Hubs focus on solutions of global import, but from the perspective of the CVF countries – which should give them a crucially different perspective to research organisations rooted in high-income countries. The creation of strong academic and industrial links with counterparts in high-income countries will allow world-class research and skills to be harnessed and transferred.

    Trillion-Dollar Potential

    Trillion-Dollar Potential

    Each Progress Hub has the potential to enable multiple gigatonnes of emissions reductions. Even with a modest carbon price, solutions powered by Progress Hubs could unlock billions of dollars in annual investments, from ammonia processing to nature-based carbon removal. Within each opportunity space (Figure 2), Progress Hubs would have the potential to contribute both to greenhouse-gas reduction and to the economic health of host nations. Most importantly, the Hub network would facilitate collaboration among researchers and technologists working across thematic areas.

    Figure 2 – Opportunity space for Progress Hubs

    Source: TBI

    Hydrogen and Ammonia: Many CVF members are exceptionally well placed to exploit the falling cost of clean energy, and for these nations a hydrogen/ammonia economy, supported by Progress Hubs, would be game-changing. Green hydrogen, made by electrolysing water with renewable energy, is gaining traction in the global-energy transition. Ammonia, hydrogen’s sister fuel, provides a neat way to store and transport hydrogen. Electric planes and ships can be powered by ammonia, and power grids can rely on globally traded ammonia to back up renewable energy. Both green hydrogen and ammonia could soon provide cheaper energy than fossil fuels, eliminating the need for many countries to import oil and gas.

    Protein and Agriculture: Progress Hubs are a viable platform for developing cheap alternative solutions to make agriculture more sustainable and more productive. Farming fish and prawns grown in tanks instead of areas of deforested mangrove, fed with sustainable proteins rather than fishmeal, and oxygenated with renewable energy could create opportunities across the CVF regions, including places remote from the sea as well as traditional maritime areas. Using harmless insects like black soldier flies to turn food and animal waste into larvae rich in fats and proteins; making proteins using bacteria and other micro-organisms; and using locally made green ammonia in producing fertiliser all provide environmentally friendly and economically sustainable alternatives.

    Nature-Based Solutions: Nature-based solutions, like the development of significant novel protein sources, would free large areas for reforestation, protecting soils and watersheds, and reducing flooding in downstream catchments. Soils are crucial to the health of both nations and the climate. A research study estimates that globally soils have lost 133 billion tonnes of carbon. Using soils for carbon sequestration will not only combat global warming but also help improve soil fertility. Mangrove restoration and coral farming serve as yet more examples of nature-based solutions that the CVF-based Progress Hubs can contribute to the global carbon market, tapping further economic benefits.

    Domestic Life: Progress Hubs can champion the development of domestic or community-scale fuel cells using alternatives to intermittent solar power. Ammonia, made locally, provides a simple, safe and cheap potential energy store that can produce electricity for whole communities in seasons with low sunshine. The hubs can develop solar solutions using simple tracking frames, low-cost storage and intelligent controllers linked to weather forecasts. This would enable homes across vast areas of the world to become energy self-sufficient. As another example, E-bikes and motorbikes need remarkably little energy and could potentially be made accessible to more people using the low-cost energy solutions developed by hubs.

    Urban Systems: With research contributions from Progress Hubs, urban spaces can be transformed. New approaches to domestic-water recycling and sewage treatment can be developed to reduce the need for massive infrastructure investments. Plastics can largely be eliminated by using plant-based products like compressed dried leaves for containers, creating employment and reducing both pollution and the need for raw-material imports. The growth of electrification and electric-mobility options, coupled with widespread internet, offers an opportunity to radically reconfigure urban transport systems. Building design and the use of shade trees could go a long way in mitigating the urban heat-island effect.

    Making Hubs Work

    Making Hubs Work

    Global leaders must commit to supporting CVF countries with dedicated funding to activate Progress Hubs and unlock the full power of climate innovation. Initial funding for a network of five Progress Hubs over a five-year period is estimated at $300 million (Figure 3), which amounts to less than a third of the annual budgets of institutions such as Oxford University. Bilateral funds from G7 donors and multilateral climate-financing streams like the Green Climate Fund as well as private endowments are all viable sources to kickstart Progress Hubs.

    Figure 3 – Estimated annual running cost per hub ($ million)

    Source: TBI

    Across Africa, where our Institute has supported leaders in delivering transformative programmes, Progress Hubs would constitute a valuable complement. In Kigali, where the Institute recently launched a partnership with Norway-based accelerator Katapult to boost the tech-startup ecosystem, developing a Progress Hub would bring additional value. Across other African CVF countries, the emergence of a vibrant innovation ecosystem would prove invaluable for Progress Hubs, particularly in the fields of food, agriculture and nature-based solutions (Figure 4).

    Figure 4 – Spotlight on some of Africa’s CVF countries


    Kenya

    53 million

    US $4,430

    Innovation ecosystem highlights

    • Considered one of Africa’s “big four” tech-investment destinations, along with Nigeria, Egypt and South Africa, which collectively secure over 80% of the continent’s venture-capital inflow
    • Offers a “Kenyan” way where startups are incorporated in-country
    • Leads in agritech, with big shots including Gro Intelligence, Twiga Foods and Apollo Agriculture
    • Has leading research institutions and consortia dedicated to agriculture, food and related topics, incl. ILRI (livestock research) and ICIPE (insects and ecology)
    • ICT, mobile-payment solutions and government initiatives have won Kenya the name “Silicon Savannah”
    • Had the highest African VC investment to GDP ratio (0.32%) in 2020 – a figure that makes it an outlier – along with the US
    • Considered an impact-investor “sweet spot” and East Africa’s entry-point, enjoying growing interest in areas like off-grid solar

    Ghana

    30 million

    US $1,700

    Innovation ecosystem highlights

    • Often considered a “safe” entry-point to the wider African market, offers a mix of entrepreneurial talent and growing investor interest
    • Economy growing faster than some of its neighbours
    • Has one of sub-Saharan Africa’s highest mobile-penetration rates outside of South Africa, and is a leader in mobile-money (MOMO) services
    • Is a leader in healthtech VC investment, with big shots like mPharma; also a leader in other areas like fintech and agritech
    • Had one of sub-Saharan Africa’s highest VC investment to GDP ratios in 2020 – which makes it an outlier – along with Kenya
    • Hosts a suite of university-led startup incubators and accelerators like KNUST, Ashesi University and other ecosystem members
    • Schools like the Meltwater Entrepreneurial School of Technology (MEST) are often cited as the home of high-quality talent in Ghana

    Rwanda

    13 million

    US $750

    Innovation ecosystem highlights

    • Ranks as one of the top countries in sub-Saharan Africa for ease of doing business, with its liberal and reformist policies
    • Has over 90% 4G network coverage, and offers a direct gateway to the multiple East African markets with which it shares borders
    • In the process of creating a startup act to enhance progress inflow of foreign capital and remove barriers to entrepreneurial innovation
    • Has high political stability compared to some of its neighbours. GDP growth rate averaged 7% over the past decade
    • Has one of the world’s highest startup support organisations per capita globally
    • TBI recently launched partnership with Norway-based accelerator Katapult to boost tech-startup ecosystem in Kigali
    • Gender balance between startup co-founders ranks high globally, consistent with findings of the global gender-gap index
    • Government is embracing technology fast and taking steps to close the ICT skills gap, e.g. with the launch of the Rwanda Coding Academy and the Smart Rwanda plan
    • Uni. of Rwanda has top courses in crypto, statistics and computational sciences

    Source: TBI

    Beginning the Next Chapter

    Beginning the Next Chapter

    Instead of treating climate-vulnerable countries as merely passive recipients of climate support, global policy leaders must flip perspectives around and embrace CVF countries’ untapped potential for active climate innovation. World leaders and climate-finance influencers must understand that climate-vulnerable countries have both a need and a right to be prosperous in the face of a climate emergency. Developing the scope of finance available for the Progress Hubs will be critical for achieving the countries’ plans for prosperity. Leaders of richer economies, who collectively are responsible for a significant chunk of climate finance, must:

    1. dedicate adequate resources to funding ambitious and promising programmes like Progress Hubs in addition to business-as-usual climate programmes
    2. tailor support to fit the specifics of the local context; what will make Progress Hubs stand out is not only their multinational presence but also their strong local relevance
    3. replicate Progress Hubs across more vulnerable countries with speed and agility, with each additional hub complementing existing ones

    Progress Hubs represent a fundamental, radical rethinking of climate action. The hubs eschew incremental approaches slowed by the barriers and impediments of international climate negotiations. Instead, they favour opportunities to attract investment, develop new technologies and improve outcomes that pave the way for shared prosperity. Rather than building climate strategies limited by development constraints, leaders must now support these vulnerable countries in driving bold, pragmatic visions for a climate-smart future.

    Editor’s note: Special thanks to Dr Mike Mason for sharing the vision of Progress Hubs and for providing helpful feedback on this paper.

    Lead Image: Getty Images

    Charts created with Highcharts unless otherwise credited.

    Map showing Kenya
    Map showing Ghana
    Map showing Rwanda

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