Climate Technology: What is it & Why is it Important?
If poor technology choices have been one cause of the climate crisis, can climate technology be a solution? That is, at least, the hope for climate technologies.
Since the Industrial Revolution, technological advancements powered by fossil fuels have increased the levels of heat-trapping Greenhouse gases (GHG) in the atmosphere. These increased levels of GHG in the atmosphere are driving changes in our climate, bringing extreme heat, droughts, sea-level rise, and unpredictable weather events with potentially disastrous effects for humanity.
Climate technologies aim to better our ability to mitigate and adapt to the effects of climate change. For example, renewable energy and carbon capture/storage technologies reduce CO2 in our atmosphere. At the same time, technologies such as sea wall defenses and improved weather warning systems make living with the effects of climate change more manageable.
Some climate technologies like wind power and stilted buildings in flood zones have been around for decades. But, other forms such as artificial intelligence, satellite imagery, or data science are more modern advancements.
Innovate to Net Zero
Research suggests that 60% of the emissions reduction needed by 2050 will come from existing mature technology. But, for the rest of those emissions, we will have to rely on technologies still in their infancy or yet to be discovered.
Thankfully, innovations in how we use new technologies such as AI, machine learning, and blockchain are turning climate change into not just an environmental problem but a data problem. These innovations give us tools like climate management and accounting platforms for companies to accurately measure their carbon footprint and advance existing technologies’ capabilities in renewables and weather forecasting.
These new climate technologies, coupled with more traditional ones such as wind and solar power, provide solutions to stave off the worst effects of climate change on the way to net zero.
A New Taxonomic Language
The increase in climate technologies has prompted multiple taxonomic reference guides to be released, all of which help organize this nascent field and define what is and what is not a climate technology. HolonIQ’s taxonomic map puts climate technologies in three broad categories, with ten subcategories:
On the other hand, Pitchbook’s report on climate tech taxonomy breaks the technologies into nine segments, each with up to six categories.
These taxonomies are essential as it is critical for investors and stakeholders to differentiate climate tech from cleantech and other technology categories as climate tech grows.
Investing in Humanity's Future
Business and investment leaders are beginning to understand the financial implications of climate change and are seeing a shift in consumer demand for impact-driven sustainable technologies and companies.
An increase in impact investing from investors has challenged the long-held views that social and environmental issues should be addressed only through philanthropic deeds and that investment should solely be judged on financial returns.
Larry Fink, CEO of BlackRock, the world's largest asset manager, recently said that climate change is a "business opportunity” and has heavily invested in new climate technologies. This sentiment is shared with the world’s two most wealthy men, Jeff Bezos and Bill Gates, who invest heavily in clean energy and climate tech. Gates claims "8 to 10 Tesla-sized" companies will be created in the space. Plus, with $87.5 billion of investment for the year preceding June “2021,” it was the year climate tech startups raised the most cash.
It now seems Adam Smith's "invisible hand of the marketplace," the very thing most climate activists say got us here, is the same hand guiding us towards a decarbonized future.
Nurture and Nature
Nurturing the development of climate technologies through investment, research, and regulations will undoubtedly help us mitigate and adapt to the climate crisis. However, it should be noted that the belief that future technological developments will save us could be counterproductive, enabling the delay of action and undermining other necessary changes.
Climate technology may get us over the line in the long run, but time is short, and we need solutions now. We must harness the climate solutions inherent to nature by restoring natural carbon sinks and reducing deforestation. We must also use regulatory measures such as carbon pricing, which might keep fossil fuels in the ground.
The importance of climate technologies in measuring, managing, and reducing carbon dioxide levels in our atmosphere can not be understated. With continued innovation and investment, climate technologies will play an integral role in fighting climate change.