We are already seeing the outlines of a plan that will enable us to solve the climate crisis — development of clean energy sources, acceleration in the adoption of electric vehicles, sustainable forestry, regenerative agriculture, circular manufacturing, retrofitting of more efficient buildings, as well as the push towards sustainable investing by businesses and investors around the world.
Falling cost of renewable energy sources
Alternative energy sources have become increasingly popular around the world. In 2019, renewables accounted for 80% of new electricity-generating capacity installed worldwide.
This is linked to falling costs — five years ago, electricity from renewable sources was cheaper than electricity from new fossil sources in only 1% of the world. Today, this is true in more than two-thirds of the world. Five years from now, electricity from solar and wind energy is expected to be cheaper than burning gas, coal or oil in almost all of the world.
Next set of technologies to enable a net-zero economy
AI for hyper-efficiency
A major trend that will enable us to achieve a net-zero economy is the application of artificial intelligence (AI) and machine learning to achieve hyper-efficiency in processes. With these new tools, we are experiencing the ability to enhance energy efficiency and conservation far beyond what many had thought possible.
For example, Google reduced energy consumption at its data centres by 40% by applying machine learning technology developed by DeepMind, a UK-based company it acquired in 2014. They were able to reduce energy use without any new hardware, instead learning how to utilise the same process in a far more efficient way with the use of new technologies.
Surge of interest in “green” hydrogen
It was previously impractical to extract hydrogen from water because of the amount of energy required. The dramatic expansion of the amount of wind and solar electricity, which is zero marginal cost renewable electricity, has made it now possible to create hydrogen sources, or “green” hydrogen, economically, and at scale. Hydrogen can then be burnt to produce extremely high temperatures, and applied to processes such as steelmaking and other high-temperature use cases. Germany has already begun subsidising the accelerated development of green hydrogen, and the European Union is following its lead.
Growth of carbon markets worldwide
While the idea of carbon taxes has been largely controversial, we have seen the emergence of indirect carbon pricing through emissions trading schemes in markets like China, the European Union, and US states like California, New York, Oregon and Washington. Markets in need of revenue can benefit from this as under the international treaties, prices on carbon are treated like value-added taxes collected at the border from countries that do not have them, and rebated to domestic exporters when they are being used in export.