Solving climate change demands more than moonshots

To a growing number of economists and scientists, the battle against climate change hinges on the adoption of ambitious, mission-oriented thinking by the world’s governments.

In the book Mission Economy, an account that draws inspiration from the 1969 Apollo moon landings, economics professor Mariana Mazzucato argues that the state, rather than big business, should bear the risks in the development of vital green technology.

Governments, she says, need to embrace a “whatever it takes” approach to tackling problems like global warming, taking the risks that corporations can’t.

It is difficult to argue against such logic. Policymakers have a major role to play in steering the world towards a more sustainable energy mix. Public investment, regulation and taxation can each help speed up the development and adoption of clean technology worldwide.

That said, it would be wrong to suggest that grand, top-down projects are the only answer.

When governments try to impose green technology on industries, their efforts aren’t always successful. Tech that is shoe-horned into sectors where it doesn’t quite fit brings its own problems, particularly when the subsidies disappear.

In our experience, a better approach is to harness relatively simple solutions that use existing technologies. Many of these can go a long way in reducing pollution, waste and energy use.

Take energy efficiency technology. Often quick and simple to deploy, devices such as smart electric motors for heavy industry or energy efficient domestic household appliances can provide major environmental benefits.

That is particularly true for manufacturing, which has a huge carbon footprint. Heavy industry accounts for some 50 per cent of global energy consumption and about 20 per cent of greenhouse gas emissions. Yet many of these emissions could drop by a quarter from their current levels simply by making better use of energy efficient technologies that are already commercially available. Advanced commercial heat exchangers are one such solution. It is estimated that the poor maintenance and low replacement rate of devices used for industrial cooling, refrigeration and heating are responsible for 2.5 per cent of all carbon emissions. By replacing existing exchangers with the latest technology, businesses can reduce energy use by as much as 25 per cent.¹

Currently, over half of the Fortune 100 companies are saving approximately USD1.1 billion annually through initiatives focused on energy efficiency, renewable energy and reducing emissions.² By investing in energy efficiency, there is a potential to increase global cumulative economic output by USD18 trillion by 2035.

Pollution control technology offers another cost-effective way of containing environmental damage. Studies have shown that pollution mitigation and prevention can yield large net gains for the economy.

Investing to improve air quality could prove especially cost-effective. The fine particulate matter that pollutes the air we breathe caused 6.4 million premature deaths worldwide in 2019 and resulted in 93 billion lost working days due to illness according to data from the Global Burden of Disease (GBD) study. The World Bank estimates that the health problems caused by air pollution amount to a staggering USD8.1 trillion globally, which is equivalent to 6.1 per cent of global GDP. The US has seen an estimated USD30 in economic benefits for every dollar invested in air pollution control since 1970.

Smart city infrastructure can also bring major environmental and economic benefits. Installing smart meters to lower the consumption of water and electricity – tech that is already readily available– can cut household and commercial utility bills and improve resource management across urban centres worldwide.

Barcelona, for example, achieved a 25 per cent reduction in water usage by incorporating smart technologies into its extensive (and often outdated) water systems.

More efficient farming techniques, many of which are easily deployable, offer another affordable way to reduce carbon emissions. Efficient irrigation systems and satellite crop monitoring systems have reduced the use of fossil fuels across the farming industry by approximately 6 per cent, the equivalent of 18,000 long-haul flights. And if such technologies are used more widely, fossil fuel use could fall by a further 16 per cent.³

Used to power satellites in the 1950s, solar energy is an old technology that is rapidly becoming the most cost-effective source of electricity generation. Utility-scale solar photovoltaic (PV) power generation is now the least expensive option in many countries. According to the IEA, solar energy is on course to become the dominant source of global electricity generation and could account for 13 per cent of supply by 2028.⁴

None of this is to downplay the importance of national governments in the transition to a more sustainable economy. Given the risks involved and the funding required, the state will have a pivotal role to play. Yet, the world doesn’t have to rely exclusively on grand plans to engineer a transformation. Sometimes, change can come through the scaling up of existing technologies.