Entrepreneurs from around the world are creating innovations to mitigate climate-change impact from five key sectors.
Energy
Areas to watch:
- Large-scale wind and solar power in the U.S., India, China and Saudi Arabia;
- Small-scale off-grid solar where energy infrastructure is underdeveloped;
- Efficiency technologies worldwide.
Energy consumption accounts for 35% of the world’s greenhouse gas emissions,1 and
industrial expansion in emerging markets will only increase that share
if opportunities for climate change mitigation technology aren’t
embraced.
The good news is that the use of renewable energy has reached a global tipping point, where the price competitiveness of solar and new technologies are raising demand for clean energy sources in emerging and developed markets alike. In fact, renewables are expected to become the cheapest form of new power generation by 2020, according to recent research by Morgan Stanley.
In the U.S, the solar industry already employs more workers than coal, oil and natural gas combined,2 and the solar market alone is expected to grow almost 25% per year on average through 2022, to reach $422 billion.3
Across the globe, smart-grid and Internet-of-Things technologies are making energy grids more efficient, reliable and low cost. Energy storage technology is also reaching a point where renewables can finally become a dependable source of power on electricity grids.
China far outstrips all other countries in the Index in terms of total energy consumption and emissions. Yet its government is highly focused on reducing pollution and energy emissions. The International Energy Agency forecasts that nearly 40% of total renewable power capacity growth will come from China by 2020.4
India’s government is also actively expanding renewables use. In 2016, the country unveiled the world’s largest solar power plant. India is now on track to become the world’s third biggest solar market in 2017,5 behind the U.S. and China.
Agriculture
Areas to watch:
While AgTech used to focus mostly on biofuels, seed genetics and water desalination, it now includes development of new technologies to reduce methane emissions from livestock—notably cattle. In Argentina, for instance, scientists are developing methane-capturing backpacks for cows. Initial results show that the backpacks can capture enough methane from one cow in a day to power a refrigerator for 24 hours.9
AgTech also includes new technology to sustain crop growth in regions suffering extreme weather conditions, such as Nigeria and Bangladesh.
Governments in agriculture-heavy countries are also improving the investment landscape for AgTech startups. In Australia, the government has partnered with the National Farmer Federation to create SproutX,10 an AgTech startup accelerator. In Turkey, mitigation technology development is growing, as the government sets ambitious goals to be among the top five agricultural producers in the world by 2023.11 In China, India and Brazil—the three largest global agricultural emitters—the focus is on technology investments that modernize the agriculture sector and increase crop production.
Built Environment
Areas to watch:
Deforestation for agriculture can be a major contributor to greenhouse gas emissions in some emerging countries—70% in Indonesia’s case14 and 51% for Brazil.15 The latter has focused on technology to monitor and reduce the destruction of the Amazon rain forest by using remote-sensing systems that detect deforestation, and other systems to alert authorities to illegal logging. Advances in more efficient agricultural techniques, like vertical farming, can also offset deforestation emissions.
The energy-efficiency movement in buildings, meanwhile, is becoming a global business in its own right. Growth in green-building certifications—such as Leadership in Energy and Environmental Design (LEED)—is burgeoning in developed countries, as commercial real-estate owners realize they can unlock greater returns with green buildings than with portfolios of less efficient real estate. The number of LEED-certifications in the U.S. has jumped, from 296 in 2006 to 36,300 in 2016.16 And it's not just the U.S.; Poland, for example, saw a 60% increase in green buildings from 2014 to 2015.17
New technologies move well beyond solar panels and green roofs. Energy efficiency now happens behind the scenes, with automated building management systems detecting usage patterns of lighting, heating and air conditioning. Lighting technology is also an area of opportunity, as are innovations in window insulation, which trap heat in winter and keep out the sun in summer.
The nonprofit Business and Sustainable Development Commission estimates that energy-efficient buildings, clean vehicles, urban public transport and green building in cities could represent an opportunity of more than $1.1 trillion globally by 2030, with more than half coming from energy-efficient buildings.18
Transport
Areas to watch:
Tighter regulations for clean air are leading policymakers to think about transportation in new ways. Increasingly public transport is being upgraded to be more energy efficient. Initiatives to expand green public transportation will underpin strong demand for clean transport technologies in the UK as well as the U.S., according to the report.
Clean transport technology is needed most particularly in fast-growing emerging markets. In India, vehicle demand is expected to almost double by 2020.20 Underpinning the demand for clean transportation in Brazil is the country’s culture of individual car ownership and a large and well-established biofuel market. Authorities are also exploring the construction of cleaner public transport in cities like Sao Paulo.21
Industry
Areas to watch:
Public outcry against industrial pollution is also driving governments in advanced and emerging economies to take action. In South Korea, the government has launched a carbon emissions trading scheme, and called for a legal framework for CCS, in spite of resistance from some industrial groups who believe the crackdown could hurt the country’s international competitiveness.23
The biggest opportunities for tech investment in this sector lie in emerging economies, namely China and India, where the industrial sectors are expected to grow by 25% and 40%, respectively, through 2020.24 This raises the urgency for innovations that reduce what are already dangerous pollution levels in both countries.
China, where air pollution is a highly political issue, has sought to position itself as a climate leader, pushing a progressive agenda, including plans to implement a cap-and-trade program in 2017.25 In its most recent five-year plan, China announced that it would seek to reduce factory emissions by 25%.26
Meanwhile, India’s government has targeted a 20% reduction in the country’s emissions by 2020,27after its air pollution levels surpassed even China’s in 2016.28 Indian corporations have also embraced clean-air tech innovations. In early 2017, for example, a plant in Tuticorin, southern India, installed technology that captures and converts carbon dioxide from its coal-powered boiler into baking soda. This is the first industrial-scale carbon capture venture that has turned carbon emissions into a commercial opportunity.29
Links
The good news is that the use of renewable energy has reached a global tipping point, where the price competitiveness of solar and new technologies are raising demand for clean energy sources in emerging and developed markets alike. In fact, renewables are expected to become the cheapest form of new power generation by 2020, according to recent research by Morgan Stanley.
In the U.S, the solar industry already employs more workers than coal, oil and natural gas combined,2 and the solar market alone is expected to grow almost 25% per year on average through 2022, to reach $422 billion.3
Across the globe, smart-grid and Internet-of-Things technologies are making energy grids more efficient, reliable and low cost. Energy storage technology is also reaching a point where renewables can finally become a dependable source of power on electricity grids.
China far outstrips all other countries in the Index in terms of total energy consumption and emissions. Yet its government is highly focused on reducing pollution and energy emissions. The International Energy Agency forecasts that nearly 40% of total renewable power capacity growth will come from China by 2020.4
India’s government is also actively expanding renewables use. In 2016, the country unveiled the world’s largest solar power plant. India is now on track to become the world’s third biggest solar market in 2017,5 behind the U.S. and China.
Agriculture
Areas to watch:
- Livestock methane reduction innovations;
- Efficient seeds and crop varieties in Sub-Saharan Africa and South Asia;
- Mechanization of agriculture processes to reduce livestock emissions for small-holder farms.
While AgTech used to focus mostly on biofuels, seed genetics and water desalination, it now includes development of new technologies to reduce methane emissions from livestock—notably cattle. In Argentina, for instance, scientists are developing methane-capturing backpacks for cows. Initial results show that the backpacks can capture enough methane from one cow in a day to power a refrigerator for 24 hours.9
AgTech also includes new technology to sustain crop growth in regions suffering extreme weather conditions, such as Nigeria and Bangladesh.
Governments in agriculture-heavy countries are also improving the investment landscape for AgTech startups. In Australia, the government has partnered with the National Farmer Federation to create SproutX,10 an AgTech startup accelerator. In Turkey, mitigation technology development is growing, as the government sets ambitious goals to be among the top five agricultural producers in the world by 2023.11 In China, India and Brazil—the three largest global agricultural emitters—the focus is on technology investments that modernize the agriculture sector and increase crop production.
Built Environment
Areas to watch:
- Green building retrofits in major cities;
- Vertical farming;
- Remote sensing systems to monitor deforestation.
Deforestation for agriculture can be a major contributor to greenhouse gas emissions in some emerging countries—70% in Indonesia’s case14 and 51% for Brazil.15 The latter has focused on technology to monitor and reduce the destruction of the Amazon rain forest by using remote-sensing systems that detect deforestation, and other systems to alert authorities to illegal logging. Advances in more efficient agricultural techniques, like vertical farming, can also offset deforestation emissions.
The energy-efficiency movement in buildings, meanwhile, is becoming a global business in its own right. Growth in green-building certifications—such as Leadership in Energy and Environmental Design (LEED)—is burgeoning in developed countries, as commercial real-estate owners realize they can unlock greater returns with green buildings than with portfolios of less efficient real estate. The number of LEED-certifications in the U.S. has jumped, from 296 in 2006 to 36,300 in 2016.16 And it's not just the U.S.; Poland, for example, saw a 60% increase in green buildings from 2014 to 2015.17
New technologies move well beyond solar panels and green roofs. Energy efficiency now happens behind the scenes, with automated building management systems detecting usage patterns of lighting, heating and air conditioning. Lighting technology is also an area of opportunity, as are innovations in window insulation, which trap heat in winter and keep out the sun in summer.
The nonprofit Business and Sustainable Development Commission estimates that energy-efficient buildings, clean vehicles, urban public transport and green building in cities could represent an opportunity of more than $1.1 trillion globally by 2030, with more than half coming from energy-efficient buildings.18
Transport
Areas to watch:
- Growing electric vehicle demand in developed markets;
- Public transit and biodiesel innovation in Brazil and Argentina;
- Low-emission transport in low-income economies.
Tighter regulations for clean air are leading policymakers to think about transportation in new ways. Increasingly public transport is being upgraded to be more energy efficient. Initiatives to expand green public transportation will underpin strong demand for clean transport technologies in the UK as well as the U.S., according to the report.
Clean transport technology is needed most particularly in fast-growing emerging markets. In India, vehicle demand is expected to almost double by 2020.20 Underpinning the demand for clean transportation in Brazil is the country’s culture of individual car ownership and a large and well-established biofuel market. Authorities are also exploring the construction of cleaner public transport in cities like Sao Paulo.21
Industry
Areas to watch:
- Carbon capture and storage technologies;
- High-efficiency industrial power generation in Bangladesh;
- Innovations that decouple industrial production from emissions growth in advanced economies.
Public outcry against industrial pollution is also driving governments in advanced and emerging economies to take action. In South Korea, the government has launched a carbon emissions trading scheme, and called for a legal framework for CCS, in spite of resistance from some industrial groups who believe the crackdown could hurt the country’s international competitiveness.23
The biggest opportunities for tech investment in this sector lie in emerging economies, namely China and India, where the industrial sectors are expected to grow by 25% and 40%, respectively, through 2020.24 This raises the urgency for innovations that reduce what are already dangerous pollution levels in both countries.
China, where air pollution is a highly political issue, has sought to position itself as a climate leader, pushing a progressive agenda, including plans to implement a cap-and-trade program in 2017.25 In its most recent five-year plan, China announced that it would seek to reduce factory emissions by 25%.26
Meanwhile, India’s government has targeted a 20% reduction in the country’s emissions by 2020,27after its air pollution levels surpassed even China’s in 2016.28 Indian corporations have also embraced clean-air tech innovations. In early 2017, for example, a plant in Tuticorin, southern India, installed technology that captures and converts carbon dioxide from its coal-powered boiler into baking soda. This is the first industrial-scale carbon capture venture that has turned carbon emissions into a commercial opportunity.29
Links
- United States Environmental Protection Agency, “Global Greenhouse Gas Emissions Data”
- Combined”, EcoWatch, 17 January 2017
Dana Varinksy, “Solar-energy jobs are growing 12 times as fast as the US economy”, Business Insider, 26 January 2017 - Allied Market Research, “Solar Energy Market by Technology (Photovoltaic Cells and Concentrated Solar Power Systems), Solar Module (Monocrystalline, Polycrystalline, Cadmium Telluride, Amorphous Silicon Cells, and Others), Generation (First, Second, and Third), and Application (Agriculture & Horticulture, Architecture, Transportation, and Others) - Global Opportunity Analysis & Industry Forecast, 2014-2022”, February 2017
- International Energy Agency, “Renewables to lead world power market growth to 2020”, 2 October 2015
- “India unveils the world's largest solar power plant”, Aljazeera, 30 November 2016
- Sara Menker, “Planting Dollars: The Growing Pace of Global Investment in Agriculture”, 30 August 2016
- Stephen Russell,“Everything You Need to Know About Agricultural Emissions”, World Resources Institute,29 May 2014
- The Economist Intelligence Unit calculation from CAIT Climate Data Explorer and FAO
- AgWeb, “Could Less Gassy Livestock Be a Cash Cow?”
- “Australia’s first national agtech innovation hub SproutX launches to transform agricultural industry”, Startup Daily, September 2016
- Republic of Turkey Prime Ministry Investment Support and Promotion Agency, “Food and Agriculture in Turkey,” March 2014
- The Economist Intelligence Unit, “Energy efficiency and energy savings: A view from the building sector,” 2012
- Economist Intelligence Unit calculation from CAIT Climate Data Explorer and FA
- “Forests and Landscapes in Indonesia”, World Resources Institute
- Claudia Azevedo-Ramos, “Sustainable development and challenging deforestation in the Brazilian Amazon: the good, the bad and the ugly”, FAO
- Statista, “Statistics and Facts about the U.S. Green Building Industry”
- Colliers International, “Green Buildings in Poland 2015: Certification in Numbers”, 2015
- “Valuing the SDG Prize in Cities: Unlocking Business Opportunities to Accelerate Sustainable and Inclusive Growth”, Business and Sustainable Development Commission, November 2016
- Anthony Eggert, “The Clean Transport Revolution”, Climate Works, 7 June 2016
- EIU Forecast.
- Prefeitura de Sao Paulo, “Law Number 14933”, 5 June 2009
Ari Phillips, “Electric Buses Being Tested Around The World, Pleasing Passengers And The Environment”, 19 March 2014 - Jess Shankleman and Rakteem Katakey, “Big Oil to Invest $1 Billion in Carbon-Capture Technology”, Bloomberg, 4 November 2016
- Ned Stafford, “Emissions trading scheme faces industry skepticism in South Korea”, Chemistry World, 6 January 2015
- The Economist Intelligence Unit forecast
- Tom Phillips, “China's Xi Jinping says Paris climate deal must not be allowed to fail”, The Guardian, 18 January 2017
- Barbara Finamore, “Tackling Pollution in China's 13th Five Year Plan: Emphasis on Enforcement”, NRDC, 11 March 2016
- Chelsea Harvey, “Air pollution in India is so bad that it kills half a million people every year”, The Washington Post, 11 may 2016
- Chelsea Harvey, “Air pollution in India is so bad that it kills half a million people every year”, The Washington Post, 11 may 2016
- Roger Harrabin, “Indian firm makes carbon capture breakthrough”, The Guardian, 4 January 2017
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