Energy Efficiency Technology

Originally posted 16/07/09

I attended a presentation yesterday (under the Chatham House rule) that addressed the mathematics of climate change.  The speaker showed that reducing annual global carbon emissions to around 33 gigatons/year in 2030 (from about 50 GT currently) -- which is not even sufficient to meet G-8’s recently agreed goal of limiting global temperature increase to 2 deg C -- will be a Herculean task, largely due to expected growth in India and China.

The speaker discussed the importance of various low-carbon power technologies, but paid much less attention to energy efficiency technology.  It seems, however, that the latter may be the bigger opportunity for small, innovative businesses.  There are a number of reasons why opportunities in low-carbon power may be less than expected: the basic technologies are largely known (solar, nuclear, wind, hydro, etc); much of the rents from low-carbon power will be captured by power companies; and much of the innovation will be through government-funded efforts.  Of course, opportunities in the area are still huge.  But opportunities in energy efficiency (and other aspects of climate change adjustment) may be larger — since the playing field is much less clear, possible technology solutions are more diverse, and opportunities to create entirely new product categories are manifold.