Climate technology in our homes
Climate technology is the umbrella term for a group of current and emerging technologies that include clean energy, solar power, offshore wind, nuclear power and batteries. All of these can play a role in combating climate change and meeting the Net Zero targets.
EVs are all around us, but we need more to reach decarbonisation targets. We know that charging issues remain and that the shortage of lithium for batteries are holding back sales of EVs. Although they are a relatively mature technology, producing and transporting EVs is costly so they remain something of a luxury.
We’re also familiar with energy efficiency technologies for homes and buildings, for example heat pumps and smart solutions to manage lighting and heating more effectively. Soon these could extend from our homes and offices into streets and transport infrastructures and areas like smart street lighting.
Climate technology at work
Businesses are keen to become more sustainable, for example by switching to renewables and embracing the circular economy and recycling policies. Importantly, businesses want to communicate their achievements in sustainability as part of the corporate responsibility and branding. Corporate sustainability is an interesting area where providers such as IBM are offering tools to help companies measure and manage their carbon footprints. Companies want to be as “green” as they can be, without overstating their green credentials and risking accusations of “greenwashing”.
Much is happening in agriculture where Internet-of-things solutions and sensors are enabling new precision farming methods. And in other areas of food production, researchers are working on developments in new areas such the development of alternative protein foodstuffs.
More climate technologies on the horizon
We are beginning to hear more about some of the newer climate technologies.
The UK government has decided to support development of Carbon Capture, Utilization and Storage, CCUS. This is where carbon is removed from the atmosphere and either re-used or stored, probably deep underground. This technology promises a way to help carbon reduction without killing the traditional fossil fuel industries in the short term. Meanwhile in Europe, the EU is investing in research to explore the potential for a future hydrogen-based aerospace industry.
What analysts are saying about climate technology
Against a backdrop of rising global temperatures and disastrous weather events, analysts recognise the potential of climate technology to help us reach the elusive 1.5% target. At the same time, they acknowledge the challenges and uncertainties associated with the sector which is heavily dependent upon government policies.
Not surprisingly, they predict that investment in climate technology will continue to grow. In 2023 it was thought to be worth $70 billion globally. This could rise to $100 billion in 2024 as both private and public sector investments drive interest in decarbonisation and sustainability. This trend should continue as governments set stricter climate policies and investors seek to back companies that align with their ESG (environmental, social, governance) goals.
Yet, Analysts at Cap Gemini say that high costs are still preventing the widespread roll-out of the technologies required to meet climate targets.
McKinsey agrees that new climate technologies need to be deployed on a larger scale, and points out that, crucially, individual technologies should be scaled together because of interdependencies between them. For example, if there is growth in the use of solar energy which only provides power during daylight hours, we will also need to see growth in battery storage and demand management systems.
What about investment in climate technologies?
McKinsey says that only 10% of climate technology companies are currently commercially competitive and estimates that investment in climate technologies needs to rise to a massive $2 trillion by 2030, something that could become more challenging as we move away from very low interest rates.
However, investment in climate technologies is coming. Silicon Valley Bank reports climate technology accounting for 11% of all investment deals, up from only 2% in year 2020. The US Inflation Reduction Act (IRA) to cut carbon emissions is clearly having an effect. Finally, the International Energy Agency, IEA, estimates that between now and 2030, most CO2 reduction will come from existing technologies. By 2050, they say that nearly half of all carbon reductions will come from technologies that are at the demonstration stage now.
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