Before the last major COP meeting, in Paris in 2015, innovation was barely on the climate agenda. This year in Glasgow it will take centre stage. Shifting the world’s focus to inventing clean technologies was among the greatest successes of the Paris COP. Continuing that trajectory is, perhaps, its biggest opportunity this year, because innovation is the only way the world can cut net greenhouse gas emissions from roughly 51bn tonnes per year to zero by 2050.
There is now significantly more money for basic research and development and more venture capital for clean start-ups in hard-to-decarbonise sectors than ever before. As a result, some important clean technologies — like sustainable aeroplane fuel, green steel and extra-powerful batteries — now exist and are ready to scale up.
If the world is really committed to climate innovation, however, then these breakthroughs must be only the beginning of the story, not the end. At COP26 we need to think about how to turn lab-proven concepts into ubiquitous products that people want and can afford to buy. This will require a massive effort to fund hundreds of commercial demonstration projects of early-stage climate technologies.
It is incredibly challenging for any start-up to commercialise its product, but it is uniquely so for energy companies. When I was starting Microsoft, we didn’t need much infrastructure to write code and, once we’d written it, we could make nearly infinite copies with perfect fidelity for very little money.
Climate-smart technologies are much more difficult to navigate. Once you can make green hydrogen in a lab, you have to prove that it works — safely and reliably — at scale. That means building an enormous physical plant, ironing out engineering, supply chain and distribution issues, repeating them over and over again and steadily cutting costs. Demonstration projects like this are hugely complicated, extremely risky, and extraordinarily expensive — and it’s very hard to finance them.
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In clean technology, there is yet another complication. When all that complicated, risky, expensive work is finished, you end up with a product that does more or less the same thing as the one it’s intended to replace — green steel has pretty much the same functionality as today’s steel — but costs more, at least for a while.
Naturally, it’s hard to find buyers, which means banks charge more for loans. The high cost of capital, in turn, increases the price of the products. Because financing is so hard to come by, commercial demonstration can be an excruciatingly slow process. Right now, the key to the climate innovation agenda is making it go faster.
I believe we can do this. Hundreds of governments and companies have made net zero commitments, and