Technological Innovation: False Hope or Promising Solution to Combating Climate Change?

From the wheel in Ancient Mesopotamia to modern artificial intelligence, technology has aided society for thousands of years. The most transformative era came during the Industrial Revolution, when machines allowed humans to produce massive quantities of goods at a fraction of previous costs. The revolution significantly increased living standards and ushered in a new age of prosperity. The machines, however, relied on an increasing amount of energy that early industrial technology, such as wind and watermills, could not keep up with. This prompted many countries to switch to energy-intensive fossil fuels like coal, expanding over time to include natural gas and oil. As energy consumption increased, so did pollution, climate change, and habitat destruction, pushing society to a dangerous tipping point of ecological breakdown.

Some members of the public believe, however, that technological innovation will solve the climate crisis. They argue that breakthroughs in carbon capture technology, energy production, as well as energy efficiency can solve climate change by reducing, and ultimately eliminating, the presence of greenhouse emissions from the atmosphere.

A new study published by Drs. Sudharshan Reddy Paramati, Umer Shahzad, and Buhari Doğan attempts to address this argument. From 1990 to 2015, global energy efficiency significantly improved as the world’s aggregate energy intensity (the amount of energy needed to produce a dollar’s worth of economic output) decreased by a third. The authors explored how much of that reduction resulted from improvements in environment-related technology, such as investments in renewable energy and the development of energy efficient buildings, cars, and industrial processes. Looking at data collected from the International Monetary Fund (IMF), the World Bank (WB), and the Organisation for Economic Co-operation and Development (OECD), they found that OECD countries with higher shares of environment-related technology patents tended to have lower levels of energy consumption and energy intensity. The researchers attributed this effect to increased research and development in renewable energy and other energy-efficient technologies in OECD countries, adding that these nations produce over half of their electricity from hydro-renewable technology. In other words, for nearly all of the studied countries, environment-related technologies appeared to reduce energy demand despite upward trends in economic growth. The authors took into account various economic factors when assessing the impact of these technologies, including a country’s GDP per capita, the sum of its total imports and exports as a portion of GDP, and its score on the IMF’s financial development index.

While the authors established environment-related technology as a significant factor in reducing energy intensity and demand, they argued that free trade may also play an important role. Countries with larger portions of their GDP made up by trade were associated with lower energy intensity and energy demand. In this case, open trade agreements may create opportunities for countries to invest in energy efficient technology and services from abroad. The researchers also identified higher per capita incomes with lower levels of energy intensity and more energy consumption. As a nation becomes wealthier, its citizens will consume more energy, purchasing higher energy-demand goods such as refrigerators and washing machines. On the other hand, increased economic development can also generate more investment into energy efficiency technologies, which can in turn decrease energy demand through optimization and innovation.

The researchers chose to look at energy consumption from OECD countries since they have the highest energy consumption per capita. Increased energy efficiency in these countries, consequently, could have a much larger impact on reducing greenhouse emissions. They acknowledged, however, that the findings may not hold in industrial settings as many of the OECD countries rely on service-based economies. These industrial settings include manufacturing capitals, such as China, as well as heavy resource extraction countries, such as Russia. In addition, countries with more open trade policies may have lower energy intensity and demand levels because of carbon leakage and not global investment opportunities. Carbon leakage occurs when countries with stringent carbon reduction policies export carbon-intensive practices, such as manufacturing, to other countries with more relaxed regulation.

While technology is vital in combating climate change, it is not a catch-all solution. Technology can only combat climate change if we foster innovation and actively incorporate new technology into our infrastructure, from solar panel installation to electric vehicle chargers. The study’s findings should encourage continued investment into environment-related technologies, but overstated promises in technology’s capability to fix climate change can be deadly in moving climate policy forward. Such wishful thinking has already delayed policy initiatives at both the Kyoto Summit and in the Paris Agreement, preventing measurable action when we need it the most. Energy policy requires technological input as much as any other field, but to focus solely on the potential for technology to stop climate change eclipses the much greater need to take action, even when there is no perfect solution.