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Practical Transformation

By Amory Lovins


Rocky Mountain Institute does solutions, not problems; practice, not theory; transformation, not incrementalism. In short, practical transformation.

Most of the world’s biggest economic entities are no longer countries but companies, and many central governments are stagnating while private enterprise innovates. Therefore turning scarcity by inattention into abundance by design requires fundamental change that some of the world’s biggest, most complex, and most entrenched industries can lead. Rather than waiting for policy and politics to thaw, we must catalyze business-led change from within. Sympathetic collaboration can reveal practical paths to manage risk, increase profit, and create competitive advantage.

This gentle trimtab steers incumbents’ strength and force from blocking change to driving change. Jûjutsu-like, its suppleness can overcome superior force by subtly redirecting it—turning opposing weight and strength into an advantage through fluidity, centeredness, leverage, and up-close, hands-on engagement. Fighting with an opponent turns into dancing with a partner.

That is how Rocky Mountain Institute helps drive the United States’s challenging shift from oil and coal to efficiency and renewable energy. But how can a $12-million-a-year independent nonprofit group move a $5-trillion-a-year swath of the economy? Jûjitsu contestants’ weights don’t vary by half a millionfold. This effort is ambitious but not quixotic, as encouraging signs lately confirm.

Twenty-one years after we developed the ultralight Hypercar concept, we’re heartened to see others taking strides down this ever more crowded path. The federal rule change RMI helped achieve, decoupling size from weight, has spurred lightweighting—now the core of Ford’s and BMW’s announced strategies. Three German automakers plan 2013 production of electrified carbon-fiber cars; 17 firms worldwide offer equipment to make composite autobodies; three top carbon-fiber makers run automotive innovation centers. Diverse firms around the world that we’ve patiently coaxed for two decades are requesting strategic briefs on lightweighting. As a senior reviewer for the National Petroleum Council’s transportation fuels study, and now a member of the council itself, I’ve been pleased by the oil industry’s receptiveness to the prospect of saving, by 2050, the equivalent of 1.5 Saudi Arabias, or half an OPEC, of inexhaustible, all-American, $18-a-barrel oil by drilling under Detroit.

The military efficiency revolution encouraged for three decades by our hundreds of conversations, lectures, and studies has now become bedrock policy in the Pentagon. As a professor of practice at the Naval Postgraduate School, I’ll help teach it to the next generation of naval leaders. And as its new rules, valuing saved fuel about ten to a hundred times more than before, drive prime contractors’ rivalry over radical efficiency, their innovations will supercharge efficiency in the civilian sector, which uses 50+ times more oil. That’s huge leverage for national security.

Just as three-fourths of U.S. oil fuels mobility, three-fourths of electricity powers buildings. In 1991, Bill Browning founded RMI’s pioneering Green Development Services, and in 1998 coauthored this new field’s classic text. RMI’s hundreds of projects have helped design professionals, developers, and financiers begin to capture $1.4 trillion of net savings from energy-efficient buildings—plus the far larger non-energy benefits that RMI first discovered.

These patient decades have paid off. Inefficient and environmentally inferior buildings are no longer financeable or leasable in most U.S. and many foreign markets. RMI’s tools for deep commercial retrofits and smarter analysis are being rapidly adopted. Top real-estate firms have reshaped their strategies around our findings. More will be influenced by RMI partner and leading real-estate finance expert Scott Muldavin’s 2010 Value Beyond Cost Savings, which decisively links energy and environmental gains with financial performance.

Industry is even more heterogeneous than America’s 120 million buildings, and so is our progress there. Yet our more than $40 billion worth of redesigns in diverse facilities, new and old, have solidly proven how RMI’s integrative design methods can save energy and capital. Collaborations with powerful partners help test, break, fix, refine, apply, spread, and scale our work. Now leading business groups want to spread our findings as a key new driver for competitiveness. And our new program director Dr. Jon Creyts, who as a McKinsey partner led that firm’s U.S. climate practice and co-led its U.S. electricity practice, strengthens RMI in all these areas.

The electricity sector faces uniquely disruptive change as 21st-century technology and speed collide with 20th- and 19th-century institutions and rules. Yet initial engagements built on our decades of utility experience and new insights from Reinventing Fire are achieving rapid mutual learning. Our exciting “e-Lab” innovation process with key stakeholders will help explore and shape new business and regulatory models that can make America’s next electricity system efficient, diverse, distributed, renewable, and resilient.

These major shifts are again being accelerated by both military innovation and private-sector insurgents. Since 2008, half the world’s new generating capacity has been renewable. In 2011, clean energy invested its trillionth dollar since 2004 and won a record $260-billion global investment. Its rapid price drops (fourfold for solar-power modules in three years) are driving explosive growth. Grid integration is proving manageable. Industry giants like Siemens, ABB, and GE are rapidly pivoting to distributed renewables.

Durable market trends that RMI catalyzes and reinforces are setting the United States on its 40-year journey beyond oil and coal. Progress is already visible. In the U.S. during 2005–10, coal lost one-fourth of its share of electricity services (which are 95 percent of its market) to cheaper gas, efficiency, and renewables. In 2011, U.S. net oil imports hit a 15-year low. U.S. gasoline use peaked in 2007, industrial countries’ oil use peaked in 2005, Deutsche Bank forecasts world oil use may peak around 2016, and the causes are accelerating. U.S. energy productivity overall has doubled since 1975 and, RMI finds, could triple again by 2050. The Energy Information Administration forecasts flat U.S. carbon emissions for the next one to three decades. Slowly but with gathering speed, the supertanker is turning. RMI is making the maps and, increasingly, standing on the bridge advising the captain.

Much of RMI’s jûjutsu is necessarily invisible. We play the long game, often out of view. And so the Reinventing Fire vision is taking hold—one engineer at a time, one CEO at a time, one investor at a time, one firm at a time, one state at a time, and before we know it, one country and world at a time. The $5-trillion savings on the table—and profound national-security concerns—provide ample motive; public-health and climate concerns add urgency for many; political consensus isn’t needed. Practical transformation works. It’s fun. It’s why we’re here. And it’s why we’re so pleased that you are among our companions on this astonishing journey.

Best,

Amory Lovins,
Chairman and Chief Scientist