The 2022 US climate bill – more commonly known as the Inflation Reduction Act – prompted European diplomats to groan and frown this past week at the World Economic Forum in Davos. That is because geopolitics may never be the same again after the passage of the IRA, because the actions to reduce climate pollution have become law and the money to finance them is guaranteed through subsidies. The IRA opens an unprecedented global competition in clean technology. Climate markets responded similarly.
At the end of the Forum, European policymakers remain concerned that their own investments in cleantech growth may suffer as the US begins to release grant funding. Take for example the recent approximately $100 million for projects that advance environmental justice in underserved and overburdened communities across the country. Community groups can use it for a variety of things, whether it’s monitoring air pollution or training people to get bigger grants.
In response, French and German leaders and EU officials have called for Europe-wide, industry-specific laws aimed at matching the incentives imposed by the US, in what Bloomberg Law term “cleantech arms race.”
The defining challenge of the 21st century is climate change. How will climate geopolitics – that politics, especially international relations, influenced by geographical factors – rise to solve the problem?
Wasn’t it just a few months ago that Europe was well ahead of the US in environmental action and regulation? Not anymore. “To keep European industry attractive, it is necessary to compete with offers and incentives,” said Ursula von der Leyen, the president of the EU Commission, in a speech in Davos. “We also need to increase EU funding.”
Then again, even the brothers squirm. “Having a competition to drive things faster, and on a larger scale is not a bad thing,” Jennifer Morgan, Germany’s climate envoy, said in an interview in Davos this week. “It’s like: Game On.” The stars are aligned for a US and European collaboration, a gestalt that will generate better results for both climate markets. Climate solutions are now an opportunity, rather than a risk, so further investment in a green future seems very attractive.
Cleantech and the Climate Markets Are Coming Together
The COP27 climate summit in Sharm el-Sheikh foreshadows the strategies that are now being unveiled in the 2023 climate markets.
- Put fossil fuels in the ground and, instead, look at investing heavily in renewable energy. Think wind, solar, and hydro power. Smart cities and electrical grids. Sustainable infrastructure. Regenerative agriculture. Mapping wetlands. Consumer applications such as smart appliances and thermostats.
- Curbing methane emissions. About 60% of methane emissions come from anthropogenic sources including landfills, livestock farming, the oil and gas industry — so make these industries and practices transparent. Call Big Oil greenwashing. Request methane monitoring services. Aerial sensors combined with cloud-based analytics can detect methane leaks on a continental scale.
- Everything will be electrified. EVs, sure. But also all the kitchen utensils. Heat pumps appreciate the properties of the climate. Electric lawn equipment and ebikes. These are the places where we have the most control: our cars and our homes. But the feds are also being asked to continue the government’s electrification campaigns to meet tough emissions goals.
- Plant more trees, reduce deforestation. In fact we are further away from stopping deforestation today than we were six years ago. Every year, the world loses about 10 million hectares (24.7 million acres) of forest. Large companies with supply chains at risk of causing deforestation do not report their activities to stop deforestation. Develop a global approach that consistently tracks where trees are growing and that supports existing data on tree cover loss.
- Support the Global South and its transition to renewables. The United Nations launched the Climate Partnerships for the Global South – also known as the Southern Climate Partnership Incubator – to initiate, facilitate, and support partnerships that help developing countries address climate change. climate
Opportunities within Climate Markets
Governments on both sides of the pond are enacting climate legislation specifically tied to cleantech.
Natural Capital Survey: The administration of US President Joe Biden will launch an effort to more accurately count the country’s natural resources in official economic statistics, arguing that the data is necessary to provide a true picture of US output. The administration says these statistics help track the value of land, air, water, and other natural assets in relation to the economic activity they support, in the face of climate change risks.
According to Bloomberg, China has obtained those statistics of what they call “gross ecosystem product.” Officials use surveys, remote sensors, and other cleantech methods to collect data on a range of environmental factors, including the health of grasslands and fisheries, carbon sequestering forests, and air pollution among others. other substances that affect public health.
Environmental justice priorities: For many activists, the success of Biden’s bold promises to make environmental justice and racial equity top priorities fell largely on the implementation of the Justice40 initiative, which mandates federal agencies to provide 40% of the “general benefits” of their environmental and energy investments in poor communities.
Green jobs as part of workforce development are designed more than ever to get clean energy-related jobs to those who need them most. So, too, is the transformation of the industrial sector responsible for the damage to address climate adaptation, mitigation, and resilience.
Carbon offsets are a scam: A Guardian The collaborative investigation concluded that forest carbon offsets approved by the world’s leading provider and used by Disney, Shell, Gucci and other large corporations are largely worthless and exacerbate global warming.
Instead, cleantech can be encompassed by an infinite array of tech-enabled equipment and innovations, from renewable energy systems like wind and solar, to electric vehicle technology, to tech advances that reduce the need for non-renewable resources. Cleantech can help reduce environmental impact — by saving energy, reducing waste, and performing necessary functions such as monitoring and maintaining remote equipment with limited carbon emissions. Examples of environmental technology include a wide range of industrial applications, as well as sustainable products, services, and infrastructure.
UN Secretary General Outlines Cleantech Path to Climate Solidarity
United Nations Secretary-General António Guterres delivered a message at the 13th session of the International Renewable Energy Agency (IRENA) Assembly “World Energy Transition – The Global Stocktake” earlier this month. Guterres argued that renewables are “the only credible path to avoid climate catastrophe, protect our future, close the energy access gap, stabilize prices and ensure energy security.” Here is the path outlined by Guterres to achieve equitable global renewable energy.
- “First – we need to remove intellectual property barriers and treat key renewable technologies, including energy storage, as global public goods.
- Second — we need to diversify and increase access to supply chains for raw materials and components for renewable technologies, which do not harm our environment. This will help create millions of green jobs, especially for women and youth in the developing world.
- Third — decision makers must cut red tape, speed up approvals for sustainable projects around the world, and modernize grids.
- Fourth — energy subsidies must shift from fossil fuels to clean and affordable energy. And we must support vulnerable groups affected by this transition.
- And fifth – public and private investment in renewables must triple to at least $4 trillion a year.
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