Technologies that improve the energy efficiency of buildings are likely to have the biggest impact in reducing greenhouse gas (GHG) emissions. But while some solutions, such as distributed energy storage, receive high levels of public and private investment, there are significant investment gaps and opportunities in emerging technologies such as building automation and vehicle to grid systems.
These are some of the findings in a preview of a forthcoming report from Economist Impact called Sustainable Disruption: 12 decarbonising technologies for cities which has been commissioned by international law firm Osborne Clarke.
Cities consume over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions (C40 CITIES). 12 key technologies are featured that hold the potential to help cities achieve their carbon-emissions targets, while also creating jobs, lowering energy costs for residents, and improving overall quality of life. Technologies are broken into three sectors - building & construction, transport, and city infrastructure (including energy).
Economist Impact has looked at ten cities around the world to assess the availability of policies or investment that support development and implementation of these most impactful technologies. Barcelona has emerged as the leader in providing financial and / or policy support for the majority of technologies identified in this study.
- Barcelona, Spain
- Seoul, Korea
- Paris, France
- New York, USA
- London, UK
- San Francisco, USA
- Delhi, India
- Berlin, Germany
- Singapore, Singapore
- Florence, Italy
Martin Koehring, senior manager for sustainability, climate change and natural resources, Economist Impact: “Cities offer some of the best opportunities for decarbonisation in sectors such as construction, transport and waste management. Our study highlights the huge potential of disruptive technologies in cities to support meeting global climate goals. But with their huge potential also comes the need to measure their impact, scalability and investment opportunities.”
James Watson, head of decarbonisation, Osborne Clarke: "Many of these decarbonising technologies will play a crucial role in helping businesses transform in response to increasing pressure around sustainability from consumers, regulators and competitors – and we believe some will be a focus for the investment and financial community. However there are also risks and opportunities to be navigated: with increased IoT deployment comes greater cyber risk; collaborative activities and industry standards can be challenged under competition law; and in some cases new contract frameworks and oversights will need to be developed. A strong understanding of the changing legal and regulatory environment will be crucial for every business's future net zero success."
Claire Bouchenard, Partner, Osborne Clarke: "Legislators are also playing a role in tackling the carbon challenge. France for instance is debating a new law to reduce the environmental footprint of digital technologies, including by requiring consumer disclosures on environmental impact, penalising planned obsolescence and setting mandatory rules on eco-design and product updates. We expect to see similar initiatives in other territories."
Building & construction sector
Low-carbon cement and concrete alternatives receive a high score for impact, and a very high score for scalability as there is widespread availability of the raw materials. However, there is little investment in this technology. Of the ten cities studied, only Paris and London had policies or programmes that incentivised the use of low-carbon cement.
Investment is also low in Building Automation Systems (BAS). These have a high potential for reducing carbon emissions. However, they require high up-front costs to implement because building systems are extremely complex and lack standardisation.
Digital twins receive a medium score in impact. They outperform BAS but require substantial amounts of energy to operate. In the design stages, it allows for more efficient building and planning of projects as the model can predict how the real-life project will behave in various scenarios. Digital twins require significant additional infrastructure investment to implement, which is why it receives a lower score for this category. Spain and Singapore now have policies in place which support the implementation of this technology.
High-efficiency heat pumps hold the potential to reduce GHG by 1.8 GT annually as they can reduce energy for heating by up to 50%. With very high scalability potential, it is currently available to implement in all ten of the cities investigated. There is very high public investment in this technology but this is not reflected in private sector investments.
City infrastructure (including energy)
District heating & cooling scores high for impact, particularly for potential to reduce C02 emissions. Implementing this technology can lower investment costs for heating and cooling and reduce operation costs. It can be implemented in all 10 cities studied but it has a cost of US$226.8–337.4bn net for initial implementation.
Unified communications hold a key role in reducing carbon emissions by enabling Work From Home (WFH) and mobile connectivity. It scores very high in carbon emissions reduction potential but only medium overall in the impact category because of the resources required for this to change global ways of work. It is being implemented in most places as a result of the pandemic and private investment is high.
Smart grids and smart meters receive a high score for impact. Their implementation is estimated to lead to a 12% reduction in energy and CO2 emissions, giving a very high score in the impact category. Public sector investment is high, partially driven by an EU policy which had a target of an 80% market penetration by 2020.
Waste robotics receive a high score on impact and scalability. They automate the recycling process and reduce the margin for error which allow for 75% of waste to be diverted out of landfills through recycling and improved waste sorting systems. Investment, however, is low with greater public and private sector spending needed for it to reach its full potential.
Transport
Mobility as a Service (MaaS) receives a medium score for impact. With MaaS, public authorities can better understand mobility patterns and travellers benefit from an enhanced travel experience without owning a private vehicle. There is evidence indicating that the technology is available to purchase across all countries in the study, with relatively low costs and opportunities to leverage existing transport infrastructure. Private investment is high but it is yet to receive substantial government funding.
Vehicle to grid technologies (V2G) score high on the impact category. Optimising V2G technologies for a reduction of carbon-intensive electricity could enable a 24% reduction in CO2 emissions , while also improving the efficiency, stability and reliability of the electricity grid in cities. V2G technologies are in the pilot stage for most of the cities in the study, with some implementation occurring in France, Spain, Korea, the UK and the US. Despite their promise, V2G technologies receive low scores across all investment indicators, indicating a significant investment gap.
Autonomous vehicles (AVs) receive a medium score for impact. There is conflicting evidence that autonomous vehicles would substantially reduce CO2 emissions, in part due to the significant energy required to run the data centres processing vast quantities of data they require. AVs receive some of the highest scores in the investment category of any technology in the study with cities following suit.
Hydrogen transport vehicles receive a medium score for impact. They are better suited to long-haul routes compared to standard battery-powered electric vehicles and are estimated to produce half the CO2 emissions of traditional fuel powered vehicles although the evidence is patchy. Hydrogen transport vehicles receive a medium score for investment with a small number (44) of big investors compared to over 3,000 for autonomous vehicles. High investment costs and some concerns about efficiency could prevent widespread adoption—particularly for more under-resourced urban areas.
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