The green transition: tech to the rescue?

A mix of established and new technologies can help deliver net zero by 2050. The question for governments is how to scale them effectively.

Despite the ambitions and climate commitments of the world’s governments, the current levels of policies and global investments are not enough to ensure the world economies reach net zero by 2050. If we continue on this trajectory, it will constitute a serious missed opportunity, as we already know that our immediate 2030 climate goals can be met with technologies that exist today. 

Given the size of the task in achieving a green transition that reaches net zero, governments will need to lead by subsidising technological innovation and incentivising private financing and fostering public-private cooperation to deliver a decarbonised, sustainable economy that creates measurable long-term value for everybody. No single government can afford all the funding needed to tackle climate change. Governments must work to encourage the flow of private capital into green energy and technology projects.

The technologies that can drive change

Neither can one single technology help us reach net zero. Governments need to support a combination of existing and emerging solutions that can scale and power a just transition. There are many different technologies that governments can support. 

The power sector offers one example. Here established Internet of Things (IoT) technologies can help make liquified natural gas (LNG) a realistic low-carbon short-term transition path to fully renewable energy by reducing the risk of methane leakage. Developing the battery and storage capacity to successfully depend on wind, solar and geothermal power will prove a real game changer. 

Transportation, meanwhile, already is rapidly changing due to electric vehicles (EVs), charging infrastructure, shared mobility and autonomous driving. And in manufacturing, digital technologies such as artificial intelligence (AI), robotic process automation (RPA) and big data offer the quickest potential path to optimising production processes, reducing material waste and improving product sustainability. 

How we use that data will play a big role in helping shape new green economies through better products and services.

Getting the right mix of policy and investment

Despite the current progress, our research shows that, by 2050, half of the required emission reduction will need to come from technologies such as carbon absorption, hydrogen-fueled engines and clean batteries that still are in the demonstration or prototype phase. If governments are genuinely committed to realising a just transition, they will need a proactive approach to developing and deploying existing and new technologies — and that’s where private sector partnerships will be important. 

The private sector plays a crucial role in driving the energy transition. It will ultimately create markets and sustainable economic growth that we can all benefit from. Governments will need to strike a balance between regulating and incentivizing investment through policy and giving investors confidence for the long term. This will enable solutions to scale and ensure an equitable impact for all.

The appropriate levels and types of support differ depending on the growth path, market penetration and energy impact of each technology. Governments can help by regulating established or soon-to-be-deployed technologies, such as renewable energy and fuel-efficient vehicles. These regulations already have driven the success of wind and solar power and improved internal combustion engine vehicle performance in the energy and automobile sectors.

They can also help make established technologies commercially viable through tax incentives and user subsidies, such as government efforts to encourage EV adoption, home energy efficiency and recycling. Funding R&D and creating connections between business and academia can support promising yet underdeveloped technologies like carbon capture utilisation and storage (CCUS), tidal and oceanic energy, and green hydrogen.

Direct public ownership, oversight and management of some technologies will be necessary in some cases — particularly sensitive or hazardous operations that are yet to be commercially feasible and need to remain under government oversight, like next-generation nuclear and large-scale hydroelectric power.

Plan now for future success

Green technologies will be highly influential in helping the world dramatically reduce greenhouse gas emissions. Still, their effectiveness will depend on how they are supported, funded and deployed. To help bridge the current gap between government’s net-zero ambitions and their current levels of support, we believe there are five clear calls to action:

1. Increase funding for green technology innovation and create policies that incentivize private investment while lowering risk. 
2. Develop integrated policies that promote public-private cooperation across industry sectors to achieve comprehensive decarbonization. 
3. Adopt a technology-neutral perspective that relies on the specific capacity and cost of each technology to contribute to the transition. 
4. Embrace science-informed policymaking that will foster technological innovation and make the best use of data.
5. Advance behavioural change at individual group and societal levels to embrace low-carbon forms of consumption and energy demand.

The challenges and opportunities of achieving net zero are both clear and immediate. We know a combination of proven and new technology can help us deliver on climate goals. But we also know that neither governments nor the private sector can do this alone. That’s why we need a new era of public and private finance collaboration and cooperation. Together, we can succeed.