CAN TECHNOLOGY INNOVATION SAVE US FROM CLIMATE CHANGE?

• Author: Freeman, Madison

INTRODUCTION

The same technological breakthroughs that have immensely improved our lives have also brought us to the brink of a climate crisis. While fossil fuels have served as an efficient source of energy to power our societies, drive international trade, fuel other scientific breakthroughs, and feed our swelling population, they have also warmed the atmosphere, raised the seas, and intensified weather patterns.

Some have looked to technology as salvation from the worst-case climate scenarios we currently face, reasoning that if we innovated our way here, we must be able to innovate our way out. This is a possible future, and for many of the worst sources of emissions, we have alternatives in labs, in startups, or in the field. But across the board, solutions are not being deployed on the scale or at the speed needed to meet reasonable pathways to decarbonization.

Development and deployment of new technologies will require a combination of public and private action. There are positive shifts within the private sector, where patient capital from investors with longer time horizons and greater concern for decarbonization potential is funding the advancement of promising emerging technologies. At later stages of technological development, big institutional investors and banks are comfortable with backing certain types of clean energy projects, and the proliferation of environmental social and governance (ESG) funds that aim to have a positive impact alongside investor returns may encourage more private capital to pursue other clean technologies.

However, none of the sectors with the largest greenhouse gas emissions are moving fast enough to reduce emissions to the levels required even by optimistic climate plans, and policy must galvanize the flow of capital and drive forward innovations. For policies to encourage, not impede, the rapid development of decarbonization technologies, policymakers must understand the status of emissions-mitigation technology across the sectors most responsible for greenhouse gas (GHG) emissions.

Technologies move along on a spectrum of viability. In their infancy, they exist in a lab or on a sheet of paper, dreamed up but not ready to stand on their own and compete in the marketplace. Here, policy incentives must provide support for early-stage research, with nuance and understanding of the long-time horizons until deployment.

Once a technology has begun the early stages of deployment, it faces a complicated journey to full commercialization. Some technologies move rapidly along this spectrum, others more slowly or stagnate; while some succeed, the vast majority peter out, fail to find the right market fit or capital, or face strong incumbents which prove insurmountable. Sustaining technologies along this path is incredibly difficult, especially in cleantech where so many of the benefits of new technologies are commonly shared, not reflected in monetary terms, and diffuse.

The difficulty of surviving this divide between research and development and widespread deployment has given the gap the name the "valley of death." Policymakers can bolster promising technologies across the valley by pricing carbon, developing strong public-private partnerships, and cooperating with other countries to provide international support. Even when technologies reach the level of broad commercialization and commodification, policy has a role to play. Effective implementation of policy can speed up deployment of mature technologies by providing financial incentives to encourage growth.

Each of the most impactful sectors faces different challenges in limiting their contribution to climate change, but they can be roughly ranked by the amount of traction emissions-reduction technologies have been able to achieve: the power sector is the furthest along, followed by transportation, industry, and agriculture. Understanding where each sector is in the technological life cycle is vital in shaping policy incentive structures.

POWER

The power sector is the first area many think of for battling climate change, as its advancements--solar panels on homes and wind turbines along ridges--are often the most visible symbols of decarbonization. Though the sector generates nearly a third of global emissions, this is also the area in which emissions mitigation technology has progressed the most, and the path to full decarbonization is within reach.

Decarbonizing power will mean addressing two major challenges: increasing the rate of penetration of proven technologies while scaling earlier-stage technologies.

Wind and solar power have moved the furthest along the spectrum of technological traction and have become fully commercialized. The capital requirements for these technologies have shifted--rather than startups developing early-stage technologies depending on venture capital funding, standardization and proven deployment means that banks and other major investors are now comfortable financing large-scale projects. Rapidly decreasing costs and demand from consumers and corporations for renewable energy is driving a boom in deployment, and in 2018, renewable energy sources made up 45 percent of the world's increase in electricity generation. (1)

However, this expansion of renewables will not equal success in lowering emissions if fossil fuel generation is not phased out rapidly. Historically, new sources of energy have only added to, not displaced, existing sources. If all existing fossil-fueled power plants remained operational through their full lifetimes, their emissions alone would exceed the goals of the Paris Climate Agreement. (2)

In addition to existing renewable technologies, other carbon-free sources of power generation will be necessary. New types of solar may offer higher efficiencies, new forms of hydropower could cause less ecosystem disruption, and greater deployments of offshore wind can take advantage of the stronger and more consistent winds off the coast. Small modular nuclear reactors could be safer and cheaper and produce less waste than existing nuclear power plants. Natural gas plants that capture all of their carbon emissions, like the Net Power plant in Texas, promise far higher efficiencies at similar costs...