In 2021, GreenTech has made the shift to: The Decarbonization Economy.
What makes it different than, let’s call it, GreenTech 1.0 is that it is about transitioning to an economy free of carbon emissions. This new economy is different. We’re not shoehorning sustainability into old systems. We’re redesigning the economy.
This transformation is on the scale of the digitization economy.
You should be, people were just as convinced the first time around.
My hope is that we can learn from the past and as the story goes with most transformations, when we first looked at making the shift, the ideas were there but the technology was not. Renewable energy was too expensive, batteries were too limited and asked for too many compromises of their users. But what has changed is the awareness of climate change hadn’t been felt as deeply as is as today.
I don’t think anyone saw the price drop coming.
Andrew Beebe notes five differences for why this GreenTech boom is here to stay.
1. The perfect storm of corporate and consumer demand
Corporations which control industry, start ups and consumers are all pulling in the same direction of going carbon neutral or carbon negative. These are ambitious goals that take time, money and focus. They will need to remain committed to these goals which is why customer behaviour being different this time is a huge factor.
Younger generations leading today’s buying power use the internet to clearly understand their ingredient labels — not just for what they put in their bodies, but what they put on their bodies, feed their pets, and use to build (and clean) their homes. They are coming to expect that those ingredient labels also help them understand their carbon and environmental impact.
2. Cost and Performance
It wasn’t cost effective to go green, but over the last decade we can see solar costs have dropped by 90%. Wind energy is now cost competitive in most parts of the world. Batteries are powering some of the most popular passenger cars ever made. It took us two decades to get to this point, but the better way is now also the more economical way.
The International Energy Agency had to correct its projects on energy cost. What wasn’t feasible a decade ago is realistic today.
Slide to compare the original projections with the corrections.
We are at the beginning of a fundamental shift in the way we’re going to be able consume renewable energies.
3. Money Talks
I sat down with Don Dahlmann about the investing into green energies, their economic viability and investment opportunities of Hydrogen. This is just one examples of a clean technology that seeing investment happen from industries like steel factories to passenger cars.
4. The Next Generation
In addition to demanding clarity on the impact of their purchases, Millennials and Gen Z also want to find impact in their work. According to one survey, 70% of Millennials are more likely to join companies strong in sustainability. This conviction in livelihood and purchasing intent seems only to increase with younger survey respondents — and there is no evidence whatsoever that it will slow down.
5. Policy and Regulation
Consumer behavior and corporate response reinforce the cycle of improvement, but that’s not enough. Governments around the world are beginning to offer support to speed along and sometimes pressure the transition.
Our Green Future
This time around, the plumbing has been built out, government solutions have been established, and companies are jumping on board. Consumer pressure and is important to keep companies focused on staying the course.
But let’s hope that the economics of renewables keep making sense. This would make it inevitable that concepts like “renewable energy company”, “electric vehicle company” and “sustainable supply chain” all become redundant. Which is what we need for The Decarbonization Economy to become a reality.