Here are the top trends that will shape climate tech in 2023
"Extreme weather and climate events have gripped the planet this year," said the National Oceanic and Atmospheric Administration (NOAA). With growing constituent demands, the world's governments are taking bold steps to address the climate crisis and drive climate tech growth. Here are the top four trends that will shape climate tech in 2023.
1. Legislation drives climate behaviors and climate tech innovation
Governments have set the climate agenda with legislation such as the US’s historic Inflation Reduction Act funding of $369 billion for clean and renewable energy, and the UK’s Environment Act 2021. These laws will expand the use of current climate technologies, such as hyperspectral remote imaging and artificial intelligence, and drive innovation for 2023 and beyond.
2. Carbon credits are popular until better alternatives emerge
As boards and investors pursue sustainability, many organizations buy carbon credits to offset carbon emissions. However, the carbon credit strategy itself will come under more scrutiny because it has three significant challenges, which climate tech can help to mitigate: with growing demand, the cost of carbon credits will rise significantly this decade, up to 3,000%; the validity of carbon credits is hard to guarantee and there are significant issues of additionality; the Earth doesn’t have enough land to offset all of society’s carbon emissions.
Many organizations use carbon credits today and invest in innovation for tomorrow. Airlines, for example, are already investing in sustainable aviation fuel for future carbon reductions.
3. Biodiversity goes mainstream and demands better reporting standards
Biodiversity requirements are prominent in recent legislation, such as the UK’s Environment Act 2021 and the Recovering America’s Wildlife Act of 2022. But implementation is hampered by a lack of standards for evaluation and reporting. Laure Denos, Science Policy Expert, International Union for Conservation of Nature (IUCN), calls for “consistency and compatibility” in reporting across countries, between sectors, and over time. Recently, more than 300 businesses in 56 countries asked for mandatory reporting on their impact on nature by 2030. These critical assessments need advanced data acquisition and analysis, prompting opportunities for the climate tech industry’s innovations
4. Engineers flock to climate tech
Motivated engineers will shift to climate technology companies and bring technical talents and fresh perspectives that drive innovation. They seek more relevance, purpose, and the ability to make real change, and with this industry rapidly growing, modernization won’t stop anytime soon. The world needs climate tech now more than ever. In 2023, governmental response to the rising tide of popular demand will drive new requirements and funding – public and private – for effective climate change programs. Their inherent complexity requires the scale and power of innovative climate technologies and the industry is ready for change.