Disruptive Low Carbon Innovations -

DISRUPTIVE LOW CARBON INNOVATION 1
DISRUPTIVE LOW CARBON INNOVATION
by Student’s Name
Code + Name of Course
Professor’s Name
University
City (State)
Date

DISRUPTIVE LOW CARBON INNOVATION 2
Introduction
Climate change is a problem affecting the entire globe and hence needs a global solution. Just
like internal business operations are vital, it is also necessary to evaluate how the change in
climate will impact the business operations and its potential impact on sustainability. How does
climate change affect business? How will the business deliver in the presence of restrictive
policies set to curb climate change? In this document will look at the threats energy business face
from climate change as well as limitations in the operations brought by policies put in place to
curb climate change menace. In addition, the report will cover types of innovations and give a
case study of the innovation necessary to enhance business prosperity in the presence of climate
change.
Threats to the energy industry from climate change and policy frameworks
Climate change
Fluctuations in the atmospheric temperature, precipitation pattern, sea level and severity and
frequency of extreme climatic events will have an effect on the quantity of energy generated,
delivered and consumed across the United Kingdom. Energy production and utilisation do
significantly contribute to global warming. The increased temperature will increase the demand
for energy while also changing the ability of the nation to generate and deliver electricity.
During warm climates, Britons will use more electricity in functions such as air conditioning.
Warming will likely increase summer peak energy demand in several locations across Britain.
For energy businesses to meet this new demand there will be need to put in place additional
investment in alternative energy generation and distribution infrastructure. New mechanisms will
also be necessary in managing system reliability especially during peak hours when the demand
is high, these adjustments mean more expenses to the energy generation and distribution firms.
Warmer climate will also reduce the efficiency of power production in the existing fossil fuel
and nuclear power plants since the plants heavily rely on water for cooling purposes (Wilson, et
al., 2019). Cold water improves the efficiency of the production generators.
Another aspect of climate change that will interfere with energy businesses is water availability.
Fluctuations in precipitation pattern, increased occurrence of draught and reduction in the
snowpack will interfere with the water and energy use pattern. For instance, power plants rely on

DISRUPTIVE LOW CARBON INNOVATION 3
huge quantities of water for cooling while on the other hand energy such as hydroelectric power
is generated from running water (United States Environmental Protection Agency, 2017).
Policy frameworks
Policy frameworks meant to curb global warming are salient to the energy sector. The climate
change policies that states are putting in place are already interfering with the planning and
investment decisions as firms strive to adhere with the emerging policy requirements under the
Clean Air Act, state laws as well as anticipation of the eventual federal greenhouse gas and other
climate and air regulation constraints (King, et al., 2015). The quest to shift from use of fossil
fuels to renewable sources of energy production has a significant implication on the trade-off
among the goals of clean, reliable and affordable energy and the various institutions and agencies
that are responsible for achieving the goals. The association between global warming regulatory
policies and the energy industry is through the impact of the climate change policies on the
energy sector. The policies cause interference in the overall level of consumption of certain types
of fuels for instance by switching of fuels or reducing demand for energy from certain sources
(Beecher & Kalmbach, 2012). These actions do affect the fuels and technology mix of a
country and may therefore have a negative consequence on the energy security. Changes that
happen at the end of energy supply induced by policies meant to curb climate change have the
potentiality of negatively affecting the energy security of the EU during the early stages of the
chain back to the global imports.
Summary of three types of innovation
Theory of innovation is a concept that was fronted by Schumpeter. The theory compliments
other investments theories under the business cycle which asserts that changes in investments
accompanied by monetary expansions are the main reasons behind business fluctuations.
However, the theory by Schumpeter posits that innovation in business is the primary reason for
the increased investments and fluctuations in business (Greenacre, et al., 2012). Innovation
here is defined as the changes in the techniques applied in production and transportation as well
as introduction of new products to the market. In this section three types of innovations will be
evaluated: Disruptive, incremental and game changing innovation.
Disruptive innovation

DISRUPTIVE LOW CARBON INNOVATION 4
Disruptive innovation by definition is the technology whose application significantly influence
the way a market or an industry operates. One of the examples of descriptive innovation in the
modern world is the internet as it massively altered how firms do business with a severe negative
impact on the firms that are not willing to adopt it. The aspects of innovation that makes it
disruptive is a point of contention. As per the example above the internet was classified as
disruptive innovation since it was never an extension of the prevailing technology. Instead, it was
an entirely new idea that did lead to emergence of unique opportunities for making money as
well as create losses for certain businesses (Adner & Snow, 2010). One of the disruptive
applications of the internet was the restructuring of the book selling industry. Several big book
selling firms did incur tremendous losses when amazon applied the internet to gain competitive
advantage over other firms (Ansari & Kumaraswamy, 2016). Instead of owning a physical
store, Amazon could display its inventory over the internet hence attracting a larger market
share. Investing in a disruptive innovation can be a complicated business idea as it needs the
investor to gauge the ability of the firms to adapt the new innovation instead of focusing on the
development of the technology. Amazon and Facebook are example of firms that heavily relied
on the internet as a disruptive technology.
Incremental innovation
Incremental innovation are the series of small continues improvements that firms make on
products, services or production methods in order to improve the efficiency of the current
productivity with an aim of achieving competitive differentiation. This type of innovation is
applied by most firms to maintain or improve their products’ market position (Clausen, et al.,
2015). Incremental innovation is a common occurrence in the consumer-oriented industries as
firms strive to continuously improve their devices to achieve consumer friendly features.
Innovation is a major factor when it comes to determining the longevity of the modern firms and
their success (Mejjaouli & Babiceanu, 2014). The trend had pressured more companies to put
extra focus on both incremental and radical innovations strategy as ways in which they can assist
improve the services and products offered by firms. An example of incremental innovation in
practice is the Gillette product. The brand is one of the examples of firms that have utilised
incremental innovation to overcome market competition. Originally the Gillette razors use to