Climate change is now palpably experienced in different parts of the world. This year alone, many countries faced unexpected spells of drought and floods causing extreme economic distress, at a time when positive newsflow on economic growth itself is scarce. Businesses around the globe have taken cognizance of the fact that large sections of world population are moving up the pollution pyramid, and that innovative steps are required to arrest the factors debilitating the environment.
Corporate fears of the consequences of climate change are writ large in the just released Carbon Disclosure Project (CDP) Global 500 Climate Change Report wherein the number of companies that view global warming as an immediate threat to their operations has gone up to 37% from 10% two years ago. This perception is greatly influenced by huge losses that global majors suffered in the aftermath of devastating events like the tsunami in Japan, raging floods in Thailand and droughts elsewhere.
Climate change cannot be confined within national boundaries. So innovations and environmental protection measures will have to have conducted across borders. Large enterprises with geographically dispersed activities can press ahead with low-carbon innovations. For instance, enterprises working with a vast network of suppliers can prevail upon their partners to reduce emissions as a condition of doing business.
Opportunities for low-carbon innovations exist across business sectors, especially in energy-intensive activities. These opportunities will increase given that world energy consumption is expected to grow 40% in the next two decades. As per reports, the replacement value of the existing global energy supply infrastructure alone is estimated at $12 trillion. Moreover, global revenues from new low-carbon energy solutions, energy efficiency technologies and services, and other climate-related businesses are projected to reach $2 trillion by 2020.
Against this backdrop, enterprises that bring low-carbon innovations to market quickly will gain immensely in the future. Strong policy support such as initiatives taken by the Department of Energy and Climate Change (DECC), UK, will provide the necessary impetus for low-carbon innovations. To illustrate this, DECC has launched a £16million fund for entrepreneurs to pursue low-carbon innovations in areas like building control systems, advanced lighting systems, space heating and cooling technologies, energy storage technologies including fuel cells, biomass boilers and heat pumps. The department is also focused on accelerating the commercialization of emerging low-carbon technologies.
It may be added that cloud computing can also be harnessed to drive these innovations and curb emissions. For instance, cleantech market intelligence firm Pike Research has reported that cloud adoption will lead to a 38% reduction in worldwide data centre energy expenditure by 2020. Likewise, CDP has stated that large US enterprises that use cloud computing will be able to save $12.3 billion in energy costs and 85.7 million metric tons of CO2 emissions annually by 2020.
All these developments point to a likely surge in low-carbon innovations across geographies, which in turn will have a key bearing on climate talks and global governance systems.