We can achieve net-zero emissions by 2050, but we need to step up financing for innovation so energy transition technologies can be deployed at the scale and speed needed, says Peter Sweatman, Chief Executive of Climate Strategy & Partners, Chairman of Energy Efficiency Capital Advisors and author of“Funding Innovation to Deliver EU Competitive Climate Leadership” launched today
I have been worried about humanity’s ability to respond to climate change for 15 years. Over that time, we’ve seen remarkable innovation: LEDs, competitive wind and solar, electric vehicles and heat pumps, to name a few. But is it enough? Will our global energy transition deliver on time?
We have one chance to transition the global economy to net-zero greenhouse gas emissions by 2050 and limit global warming to well below 2°C. This means decarbonising power, transport, buildings, industry and agriculture, and balancing remaining emissions with systems that remove carbon dioxide from the atmosphere, and keep them out.
To consider this in the European context, my team and I participated in a European Climate Foundation funded modelling exercise in the summer of 2018 to build and review pathways to net-zero emissions by 2050.
The good news is that it is possible. The net-zero 2050 energy system will be considerably cheaper for us than a higher carbon alternative, and the avoided damage costs and societal benefits far, far outweigh the additional investment required.
The “easier” net-zero 2050 pathways have us demanding less stuff (especially red meat, flights and space), but only to levels we have been happy with in the recent past. And with cultured beef, electric planes, zero energy buildings and a doubling of sustainably managed forests, an enhanced technology pathway can also get us there.
So where’s the catch?
Three quarters of the required emissions reductions can be delivered by deploying the technologies we have, just faster: multiples faster. And the remaining quarter relies upon our ingenuity and innovation.
In researching “Funding Innovation to Deliver EU Competitive Climate Leadership”, published today, we discovered that innovation is widely misunderstood. Innovation is not invention. We know what we need and it is already invented. Our innovators either just haven’t yet turned it into a product, made it affordable with innovative business models or got it funded and marketed to win the social acceptance required to deliver at the scale that net-zero 2050 demands. So how do we do this?
We need coherent policies, sustainable investment and a concerted effort.
First, let’s stop playing at the edges. To reduce emissions to net-zero, we all need to engage. We should set a long-term strategy of net-zero emissions by 2050. Our report shows that innovators and businesses that lead the move to develop and deliver net-zero emissions products and services can build competitive advantages and therefore have the greatest access to the world’s markets. They will also be a beacon for sustainable finance which will start to define mainstream finance. And, increasingly, what is not sustainable will not be financed.
Secondly, we need more public and private sector investment in innovation. In Europe this means an increase of around one-third compared to the status quo. Yet European research and innovation investment still remains at around 2% of GDP.
We should broaden our thinking on innovation to include the development of new technologies, products and services, business models and the societal innovation required to embrace them. Experts estimated that just 40% of the innovation required for net-zero 2050 is technological. Each net-zero decarbonisation strategy requires a different mix of innovation, different levels of investment delivered through various public and private sector funding instruments.
Finally, we need to align the actions of everyone with a role in this historic transition. Europe can lead this transition if consumers, voters, investors, businesses, banks, collectives, NGOs, policymakers and leaders work together to decarbonise our society by design. This will also lead to a healthier continent that is more competitive, productive, efficient, energy secure, fair and just.
It remains to be seen whether we will succeed, but significant change is already here. The deployment and uptake curves of new technologies are increasingly exponential, and never before, as a society, have we been able to change so fast.
Denmark has been on a mission to decarbonise its society since the oil crisis of the 1970s, and it still sits near top of the OECD’s [Organisation for Economic Co-operation and Development’s] Better Life Index. The energy transition is not a choice. We can either choose to lead and help decide our fate or dither and suffer the negative impacts of runaway climate change on our lives, our environment and our economy.