Fighting Climate Change with Innovation
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- Authors: KELLY LEVIN, ANDREW STEER
- Published: September 2, 2021
Inflection point and role of innovation
- Progress since Paris 2015:
- More than 60 countries—representing over half of global emissions—have committed to net zero emissions by mid-century.
- 4,500 non-state actors have embraced a net zero target.
- Asset owners and managers with over$40 trillion of assets under management have committed to net zero portfolios by 2050.
- Innovation types credited with recent momentum:
- Institutional innovation (Paris Agreement’s voluntary, non-binding approach).
- Innovation in economic understanding: shift from perceived trade-off between climate action and growth toward recognition that smart action stimulates investment, jobs, and healthier economies.
- Leadership innovation: intensified political and corporate commitment following the IPCC’s 2019 recommendation for a maximum warming of 1.5°C.
- Technological innovation: rapid cost declines and adoption in renewables, batteries, and EVs.
Scale of transformation required
- Power and energy:
- Share of renewables in power generation must move from about 25 percent today to almost 100 percent by 2050.
- Unabated coal will need to be phased out six times faster than it is today.
- Buildings and efficiency:
- Buildings must be renovated with zero-carbon heating and cooling and improved energy efficiency at a rate of 2.5–3.5 percent by 2030—compared with today’s rate of 1–2 percent.
- Agriculture and land use:
- Crop yields must rise faster than expected; they must increase even more quickly on existing lands to meet growing food needs without encroaching on forests—doubling recent rates over the next 10 years—while maintaining soil health and water quantity and quality.
- Industry:
- For a 1.5°C compatible pathway, the energy intensity of cement production must drop 40 percent in the next decade.
Technology gaps, priorities, and potential contributions
- IEA and technological readiness:
- The IEA’s net zero roadmap: decarbonization needed by 2030 is largely achievable with readily available technologies, but by mid-century almost half of required emissions reductions will call for technologies that are not yet on the market.
- Reliance on technologies still under development is even higher for harder-to-abate sectors such as long-distance transportation and heavy industry.
- High-impact innovation opportunities:
- Direct air capture and storage, advanced batteries, and hydrogen electrolyzers together can deliver roughly 15 percent of cumulative emissions reductions between 2030 and 2050.
- Technological carbon removal scale needs:
- The IPCC and National Academies of Sciences suggest that, by mid-century, 8–10 gigatons of carbon dioxide (GtCO2) may need to be removed annually.
- Natural approaches, such as landscape restoration, may remove 5–6 GtCO2 with significantly renewed efforts; engineered approaches such as direct air capture and storage will be needed to reach the total suggested by the latest science.
- Recent technology trends:
- Battery pack prices have fallen almost 90 percent over the past decade.
- Exponential growth in renewables; accelerating EV sales supported by governmental phaseouts, subsidies, and corporate fleet targets.
- Innovation dependencies:
- Scaling technologies like direct air capture requires drastic cost reductions, policy support (tax credits), greater market demand, public and private investment, and enabling infrastructure (integrated grids, battery storage).
Financing needs and policy levers
- Public financing gap:
- The IEA estimates that $90 billion in public financing is needed as soon as possible to support demonstration projects for the energy transition before 2030, though only $25 billion is budgeted over the next decade.
- Policy and investment priorities:
- Leverage private investment while boosting and better aligning government spending.
- Develop policy and regulatory frameworks tailored to an innovation agenda and reduction of risk to attract private capital.
- Support for demonstration projects, large-scale deployment, and enabling infrastructure (for both technology and markets).
- Support for developing economies in the form of financing, technology transfer, and capacity building.
Equity, governance, and co-benefits
- Just and equitable transitions:
- Government measures must ensure transitions are just and equitable, especially for workers and industries tied to a carbon-intensive future.
- Co-benefits of transformation:
- New job opportunities and creation of whole new industries.
- Significant health benefits, for example through air quality improvements.
- Near-term opportunity:
- Recovery from COVID-19 presents a near-term opportunity to reshape systems to advance low-carbon solutions instead of further locking in fossil-fuel-intensive infrastructure.
Fighting Climate Change with Innovation — KELLY LEVIN and ANDREW STEER, F&D Magazine, September 2021. https://www.imf.org/en/publications/fandd/issues/2021/09/bezos-earth-fund-climate-change-innovation-levin
Content in this bundle
- مكافحة تغير المناخ بالابتكار
- Bezos Earth Fund: Fighting Climate Change with Innovation – IMF F&D
- Combatir el cambio climático con innovación ● Finanzas y Desarrollo ● Septiembre de 2021
- L’innovation au service de l’action climatique
- Инновации в борьбе с изменением климата
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