Innovation is widely recognised as a critical driver of economic growth. However, in the context of the climate crisis, its importance goes well beyond that. Innovation is essential to achieving net-zero greenhouse gas emissions by mid-century and avoiding the worst impacts of climate change. Put simply; there is no way to meet our climate goals without it.
Furthermore, entrepreneurs are not only innovating to meet environmental challenges – but they are also finding creative ways to adapt to them. For example, entrepreneurs are developing new products and services that help people reduce their carbon footprints, such as sharing economy platforms for transportation and accommodation. They are also creating new businesses to help communities prepare for extreme weather events, such as installing solar panels and creating microgrids in areas that have been hit hard by storms. In short, the creativity of entrepreneurs is helping reshape the world to adapt to climate change. Here is a closer look at why innovation matters so much in the fight against climate change.
Factual Data on Low-Emission Technology
Currently, there is much excitement around low-emission technology. According to the International Energy Agency, investment in renewable energy reached a record high in 2018, with solar and wind installations outpacing all other forms of energy. In addition, there has been a surge in electric vehicle ownership, with over two million vehicles now on the road. It is estimated that if by 2050, 16% of all passenger vehicles are electric, 10.8 gigatons of carbon dioxide from the combustion of fuel could be avoided. Technology deployment will complement other strategies for lowering long-term emissions, including the National Hydrogen Strategy and Future Fuels Strategy implemented in Australia.
Despite the progress with EVs and other green solutions, there is still much more to accomplish to achieve net-zero emissions. The World Resources Institute estimates we need to invest an additional $1 trillion annually in clean energy through 2030 to meet our climate goals. Attempting to meet these goals is daunting, but it is essential to remember that the cost of inaction is even higher. We cannot afford to delay action any longer if we want to mitigate the worst consequences of climate change.
The Cost of Inaction
A recent report from the World Bank found that the economic losses from climate-related disasters have reached a staggering $520 billion over the past two decades. This number will only continue to rise as the planet warms and extreme weather events become more common. Communities worldwide are already struggling to cope with these events, and the increased financial strain makes it even harder for them to rebound.
In order to address this issue, we need to invest in climate-resilient infrastructure and promote sustainable development, which will not only help protect communities from the impacts of climate change but also create jobs and spur economic growth.
The Innovation Potential
Innovations such as renewable energy, energy storage, and electric vehicles are essential for reducing greenhouse gas emissions, as expressed earlier. These technologies are necessary to meet the ambitious targets set by the Paris Agreement or achieve net zero emissions. The aviation industry is attempting to achieve greater efficiency out of their engines by burning cleaner fuels and are even testing electric engines where possible. Without innovative solutions, the world will stagnate, and human lives will be at greater risk.
In addition to enabling us to reduce emissions and transition away from fossil fuels, innovative solutions can also help us build the future we want and need. A lack of innovation will have a devastating impact on our world and economic activity. We will see a decline in economic growth as countries struggle to meet their emissions targets. Inevitably this will have dire consequences. For instance, there will be a decrease in the quality of life for millions, even billions of people. There will be considerable job losses in industries and an increase in poverty. Issues often plague developing countries in sanitation and energy and medicine shortages that can hinder their economic security. Technology can change how the world works and assist people living in poverty.
How Would Declining Innovation Impact Climate Objectives?
The lack of innovation would hinder our climate goals, which would have devastating consequences for the environment and human populations. Reduced innovation would lead to slower economic output, causing immense hardship for people worldwide. Supply chains are already being tested due to geopolitics, war, currency wars, and the rising cost of living. These global events are hastening the decoupling of globalisation, leaving fewer options on the table while increasing poverty and inequality.
It is difficult to foresee what will happen if low-emission technology declines, but it is safe to say that the world would be set back significantly. The road to zero carbon for global manufacturers will require much more than a strategic shift and considerable investment budgets. The ramifications of innovation decline in the innovation space could have devastating consequences for the environment and human populations. Meeting our climate goals and reducing emissions will be much more difficult without new technologies and innovations.
We Must Induce an Innovation Boom to Counter Climate Change
The current pace of climate innovation is impressive but needs to be faster. We are seeing a proliferation of new technologies and businesses that can help us reduce our greenhouse gas emissions and adapt to climate change. However, we need to dramatically increase the innovation rate to meet the challenge of climate change.
- Several things can be done to increase the pace of climate innovation. First, we must ensure adequate funding for research and development into new low-emission technologies.
- In addition, we need to create an environment conducive to innovation, with policies encouraging entrepreneurship and risk-taking.
- We also need to educate people about the importance of climate change and innovation’s role in solving it.
- Finally, we must ensure that climate innovation’s benefits are shared equitably worldwide.
Innovation can help us reduce our greenhouse gas emissions and adapt to climate change, but it must be used in a coordinated way if we are going to achieve our goals. While innovation has many benefits, it is essential to remember that it must be used for global synchronised change rather than for segmented localised adaptations. We must ensure everyone can access the latest technologies and work together towards common goals. Only then will we see significant change.
The Impacts of Low-Emission Technology
One of the most critical ways that low-emission tech will change the world is by creating new jobs. By developing new technologies that help us reduce our greenhouse gas emissions, we will create new industries and businesses that can help us address climate concerns. In addition, we will be able to improve the flow of technological improvements to the global market, which will benefit everyone.
When it comes to low-emission technology, businesses have several priorities that must be considered. One of the most important is driving greater efficiencies. It is necessary to ensure that the new technology can be adopted on a large scale and make a real impact. Additionally, it is essential to remember that low-emission technology can help businesses save money in the long run by reducing energy costs. Moreover, technological innovations rapidly converge into new clusters and applications that fuse digital technologies, which opens up new business opportunities to improve efficiency and reduce carbon footprints. By embracing these changes, businesses can reduce their environmental impact and improve their bottom line.
In order to make sure that low-emission technology is used in a way that is beneficial for both the planet and the bottom line, businesses need to be aware of the potential risks associated with it. By implementing a balanced governance system, businesses can feel more comfortable embracing new low-emission technology, which can bring significant benefits.
Considerations
Regarding climate change, there are two types of costs that businesses must consider: mitigation and adaptation costs. Mitigation costs are those that are incurred to reduce emissions. On the contrary, adaptation costs are incurred to adapt to the effects of climate change.
Mitigation costs can be divided into two categories: direct costs and opportunity costs. Direct costs are incurred to reduce emissions, while opportunity costs are the lost benefits from not investing in emissions reductions.
Adaptation costs can also be divided into two categories: private costs and public costs. Private costs are paid by individuals or businesses, while public costs are those taxpayers pay.
Conclusion
Regarding climate change, businesses have several incentives to reduce their emissions. The most obvious incentive is the reduction of mitigation costs. Reducing emissions can help businesses save money on energy bills and avoid fines from government agencies. Additionally, reducing emissions can help businesses improve their image and attract new customers. Businesses also have the incentive to adapt to the effects of climate change. Adapting to climate change can help businesses protect their assets, save money, add reputational value, and improve business outcomes.
If your business has a sound ESG strategy in place but may be seeking a different perspective on innovation, OceanBlocks will be able to steer you in the right direction. Our global network of innovation partners and vibrant start-up entrepreneurs may be working on something relevant to your needs. Reach out for an initial free discussion on innovation and intellectual property (IP).