These are the climate change innovations we still need

The world now has many of the tools needed to keep climate change in check, the United Nations’ climate research team reported last month. But humanity will still need to invent newer and better ones too.

The question is what kinds of research governments and companies should invest in.

In the final installment of its latest comprehensive assessment of climate science, the UN’s Intergovernmental Panel on Climate Change examined tactics to mitigate climate change. But for the first time in the three-decade history of IPCC reports, the panel has devoted chapters to innovation and technology development.

The report highlights how wind energy, solar power, and battery technologies that emit little to no greenhouse gases have made massive strides in performance and cost, making it more feasible than ever to shift the world away from burning fossil fuels at a faster pace than previously thought. These developments “have increased the economic attractiveness of low-emission energy sector transitions through 2030,” according to the report.

However, fossil fuels still fulfill about 80 percent of the world’s energy needs. Global greenhouse gas emissions appear to have been holding fairly steady for a decade now, but to keep the world from warming up more than 1.5 degrees Celsius or 2.7 degrees Fahrenheit this century, those emissions have to fall by half from their current levels by 2030.

So despite the advances, the pace of deployment of clean energy is still far too slow to keep more dangerous levels of warming in check. Getting on course will likely require even cheaper, more efficient, and higher-performing versions of the tools we have now. But it will also demand advances in fledgling clean technologies, like capturing carbon dioxide straight from the air.

At the same time, money and political will to deal with climate change are in short supply around the world, given competing demands from the Covid-19 pandemic, inflation, and international conflicts. With limited time and money, it’s critical to figure out what research will yield the most impactful innovations to counter climate change.

It’s difficult to predict which investments will lead to breakthroughs, but some researchers say there are ways to improve the odds. It requires thinking carefully about how potential innovations would scale and draw investment, but also demands policies to create the conditions for an even bigger clean energy revolution.

How solar, wind, and batteries got so cheap

To understand where to go next in clean energy innovation, it’s helpful to first unpack some of the extraordinary progress already made.

The price of solar electricity has dropped 89 percent since 2010, and silicon solar panels have increased in efficiency from 15 percent to more than 26 percent over the last 40 years. Onshore wind energy costs have fallen 70 percent in the last decade. Lithium-ion batteries have declined in price by 97 percent over the last three decades, while their energy density has nearly tripled in 10 years.

Chart showing costs of energy sources over time.

Renewable energy has experienced precipitous price declines and massive growth.
Our World in Data

Renewables have now become the cheapest source of new electricity production around the world. In half of the world, installing new wind or solar power is cheaper than running existing fossil fuel power plants.

These developments were spurred by large government investments and energy policies, with some private sector backing. Photovoltaic panels, for example, benefited from early research in the United States, Japanese companies developing applications for solar, an aggressive feed-in tariff incentive in Germany, and massive production scale-up in China. The development process spanned decades, with the first solar panels invented in the 1950s and foundational research beginning in the 1970s. Governments also helped create demand for clean energy, by setting targets for deployment and subsidizing their purchase prices.

But the technologies themselves have some common traits that helped them improve so quickly. For one, they readily scale up or down. A solar panel can be small enough to fit in a backpack. Larger panels can light up homes and thousands strung together can power a city. Wind farms can scale from several turbines to hundreds. Lithium-ion cells can power everything from phones to aircraft. That means tiny performance gains and price drops quickly add up. The smaller scales also create a lower cost barrier, so people are more willing to experiment with these technologies and find uses for them, hastening widespread adoption. And as these modular systems build up, they achieve economies of scale and costs begin to decline.

Contrast this with large-scale energy technologies like nuclear power plants, which require billions of dollars upfront and take years to build. In the United States, nuclear is one of the few energy technologies for which the cost has gone up over time.

The success of wind, solar, and batteries is “really counterintuitive to what I was taught in graduate school,” said Gregory Nemet, an IPCC author and professor of public affairs at the University of Wisconsin Madison. The conventional wisdom long held that a big problem like climate change demanded large-scale solutions. “What we’ve learned is that small-scale technologies are likely to turn out to be more scalable than large-scale technologies,” Nemet said.

So for clean energy, it pays to start small and go big rather than to start big and go bigger.

How to think about investing in the next generation of clean energy

IPCC authors often say that they don’t prescribe any particular policies or recommend a specific course of action on climate change; they just pool and evaluate the strength of the body of research.

Still, the latest report finds that some energy strategies are faster and more cost-effective than others. Among the various clean energy technologies available now, wind and solar will remain the cheapest and fastest ways to reduce carbon dioxide emissions from the power sector by 2030, according to the IPCC.

“If we’re going to focus on anything and not say ‘all of the above,’ those are the technologies that matter,” Nemet said. “We’re missing an opportunity if we don’t take advantage of what we’ve got now.”

Chart comparing how different clean energy sources will contribute to mitigating climate change.

Wind and solar energy are projected to contribute the largest share of global CO2 emissions reductions by 2030.

The technology itself still has room for improvement, but what’s needed is not so much a better wind turbine or solar panel as much as broader policy changes that encourage more widespread adoption. For residential solar power, upward of 70 percent of the price tag is due to “soft costs” — things like permitting, inspections, installation, and financing rather than the cost of the hardware itself. Solar could still get much cheaper, with costs falling another 50 percent by 2050 according to some estimates, but it will require cutting through this red tape.

While often not thought of as technology, energy efficiency is another cheap, scalable, ready-to-deploy method to curb greenhouse gas emissions. The IPCC report noted that the 18 countries that have sustained emissions cuts for more than a decade did so by doing more with less. “Reductions were linked to energy supply decarbonisation, energy efficiency gains, and energy demand reduction, which resulted from both policies and changes in economic structure,” according to the report.

For example, simply improving insulation on buildings could take a massive bite out of greenhouse gas emissions by reducing energy demand. According to the Natural Resources Defense Council, enhancing residential energy efficiency is the single largest carbon dioxide-reducing intervention in the US.

As for clean energy technologies that are still in their infancy, there are several criteria to consider, said Erin Baker, faculty director of the Energy Transition Initiative at the University of Massachusetts Amherst. The key formula for evaluating an investment is the chance of success multiplied by the potential benefit. Clean energy systems that are scalable and have low entry costs are, again, those best poised to take off. But it’s also important to cast as wide a net as possible rather than spraying a firehose of money at a particular technology until it works.

“To the degree that you can do things agnostically, it’s always good, because we don’t know where the next breakthrough is going to come from,” Baker said.

There are some specific clean energy needs, though, that need further backing right away, namely tools for storing, dispatching, and maintaining the quality of electricity on the power grid. “The biggest category is these things that make the grid reliable,” Baker said. “Some of that investment is technologies but some of that investment is more processes, business models, and regulations.”

One key area where the world needs to invest more is in carbon dioxide removal (CDR), where carbon dioxide is drawn directly out of the atmosphere. Though there are fears it may create a moral hazard, in sectors like aviation, shipping, and heavy industry, emissions may never drop to zero. So meeting international climate targets would require a way to withdraw those emissions.

“The deployment of CDR to counterbalance hard-to-abate residual emissions is unavoidable if net zero CO2 or [greenhouse gas] emissions are to be achieved,” according to the IPCC report.

There are several companies working on CDR technologies now, but it remains expensive and energy-intensive. A group of tech companies including the parent companies of Google and Facebook recently decided to tackle CDR in another way, by creating demand for it. The companies launched Frontier, which they describe as an “advance market commitment,” pooling almost $1 billion to guarantee purchases of permanent carbon dioxide removal.

A Climeworks factory in Hellisheidi, Iceland, in October 2021. The startup is working to remove CO2 from the atmosphere.
Halldor Kolbeins/AFP via Getty Images

These kinds of commitments could become another way to accelerate the development of clean technologies, but conventional incentives like subsidies and tax breaks remain critical too. And when it comes to climate change, one of the most important policies is to put a price on carbon dioxide emissions. “Based on a detailed sectoral assessment of mitigation options, it is estimated that mitigation options costing [$100 per ton of CO2] or less could reduce global GHG emissions by at least half of the 2019 level by 2030,” according to the IPCC report.

Climate change, however, imposes time constraints. Keeping global average temperatures from rising beyond 1.5 degrees Celsius would require not just halving current emissions in the next eight years, but achieving net zero emissions by 2050 and producing negative emissions thereafter — that is, taking more carbon dioxide out of the atmosphere than the world puts in. So a research, development, and deployment strategy has to have multiple horizons: ramping up wind and solar today while investing in technologies like nuclear, hydrogen, and CDR over the long term, and even making some longshot bets on nuclear fusion energy and investigating geoengineering.

And while better technology is necessary for mitigating climate change, it’s not sufficient. The biggest breakthrough won’t mean much if no one will buy it or use it. Clean energy innovations also won’t solve the fundamental injustice of climate change: that the people who contributed least to the problem stand to suffer the most. Meanwhile, those who produced the most greenhouse gases have the wealth to adapt to the unavoidable warming that’s in store.

So keeping the most dangerous climate change scenarios off the table demands more than better batteries, solar panels, and business models. It requires tackling the inequities and bad habits that created the situation in the first place. That, too, will require innovation in how the world distributes the costs of climate change and the benefits of a transition toward cleaner energy.