Perhaps this is the year that environmental and climate policy makers put innovation at the center of the global climate agenda.
Despite Rio, Kyoto, Paris, and the rest of the 27 UN COP Summits, the predominant climate narrative is depressingly and consistently negative. To keep below warming temperature targets, the world would need to cut carbon emissions by 43% by 2030 to stay on course. Now the IPCC reports that it is likely that the world will exceed the 1.5-degree Celsius threshold within 10 years.
Meanwhile, a quarter of all natural disaster-related costs over the last 40 years have happened in the last five years. Last year alone, disasters cost the world $313 billion. Breaking the link between carbon and economic growth may be vital for the future, but fires, floods, hurricanes, droughts, erosion, and subsidence are happening now. “Business as usual” has led to soaring costs in property damage, small business losses, and community harm.
Based on these real-world costs and fears of future disasters, like the Greenland ice shelf falling into the sea and other apocalyptic nightmares, one would think that the world would have already invested huge amounts of money in research and development to look into these issues. This is not the case.
In a just-released report on blue (water-based) innovation, Institute for Sustainable Development (ISD) researchers were surprised to find how little verifiable green R&D there actually is. While there may be definitional quibbles, the most ISD could document for the U.S. was $3.9 billion – 21% funded by government, 8% by universities and foundations, and 71% by the private sector. Considering that Hurricane Ian alone cost over $55 billion in insured costs last year, and how large industries like shipping, offshore wind energy, fishing, and coastal travel and tourism are, that seems very low.
In fact, overall worldwide R&D spending for green risks and opportunities may not be more than $119 billion, and only $28.9 billion of that is focused on researching environmental challenges directly. By way of contrast, global spending on all R&D was $2.5 trillion last year – the bulk of it on defense, healthcare, and energy. Somewhere, there’s a disconnect between rhetoric and budget reality.
Why does this matter? Because the more input into an innovation pipeline, the more output that can result. For every thousand basic research projects that are undertaken, perhaps one hundred lead to applied research opportunities. Of these applied research opportunities, maybe 10 lead to product improvements, and of these 10, maybe one is a true breakthrough.
This is why there is a growing chorus of domestic and international voices calling for innovation – anything to change the status quo and reduce the impact of extreme weather events and climate changes that threaten human ecosystems.
The good news is that investing more in green R&D makes sound economic sense. The world could quadruple green R&D, and it would still pay for itself, even if it only reduced future environmental impacts by 10% and enhanced global green markets by 10%. Governments have a critical role to play because they currently account for 50% of funding support for basic research. The bulk of the private sector’s investment is in applied research and experimental prototyping.
A Green Innovation agenda would empower researchers, entrepreneurs, architects, and engineers, and spur bottom-up creativity. It would unleash more science to explore large scale, complex challenges. It would encourage more businesses to investigate huge opportunities like extreme weather abatement, efficient desalination, cloud seeding improvements, eutrophication, and resource regeneration.
This is an agenda that both liberals and conservatives can get behind. On one hand, the Biden Administration has already increased R&D budgets by 9% and Bill Gates has called for a Green Industrial Revolution. On the other, hundreds of companies from small mom and pops to commercial giants like Tesla have already created revolutionary products and brought them to market.
Best of all, a Green Innovation agenda does not rely on Russia, China, India, or other actors with different interests to be successful. Breakthroughs can happen anywhere at any time. If policymakers can widen the science end of the green innovation pipeline, who knows what can be produced as market forces are given more basic science to work with to solve current and future environmental problems.
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