Green Technologies Promising Environmental Clean Up
After contributing to sullying the earth for centuries, technology now shows promise in environmental clean-up. Technological innovations specifically aimed at reducing pollution-from cleaner manufacturing processes to flue gas scrubbers are now catalytic converters figuring prominently in mitigating some of the growing pains of an increasingly technological world. Green technology mainly helps fashion policies, allowing producers and consumers to recognize and internalize the environmental costs of technology and thus spur innovation to clean up the environment.
EU (European Union) has put forward the idea of launching nuclear power and natural gas plants under applied conditions as transitional green investments to drastically cut the continent’s green gas emissions. The proposal to expand what can qualify as a sustainable source of energy has exposed deep rifts between countries relying on different technologies and comes amid surging electricity prices. Nuclear and natural gas are two high-profile components of the plan that will affect a range of industries—from forestry to manufacturing and transportation, shifting how companies and investment funds approach sustainable investment.
Economic Incentives and Technological Innovation
Realizing the environmental promise, new technologies, that is, exploiting the beneficial side of technology’s dual nature, depends partly on getting the prices right. New technology will reduce environmental costs, given these costs are recognized. For example, if automobile prices reflected all the environmental costs of tailpipe emissions, automakers would have stronger incentives to use new pollution control technologies in new car models.
The environmental regulation has come to normal on its own in the US. For instance, tradable pollution permits - such as for sulfur dioxide emissions from coal-fired power plants - have created financial incentives for electricity generators to adopt cleaner production processes. These market-based approaches can be more cost-effective than traditional emissions limits or technology standards since firms that can reduce emissions most cost-efficiently cut them more than they otherwise would and then sell their excess permits to firms that cannot. At the same time, the market-based approaches induce innovations by putting a price on emissions and reductions.
The uses of incentive-based approaches are growing not only here but also abroad. International policy discussions on global climate change include taxes on carbon emissions and the use of marketable permits. Similar approaches to getting prices right in managing water quality and waste, like the examples above, are likely to discourage environmentally harmful uses of these resources and further encourage the use of new technologies in managing them.
Information technologies, in particular, will help expand the scope and effectiveness of incentive-based approaches for at least four reasons. First, improved remote sensing technologies make incentive-based regulations rely on emissions monitoring, either to enforce compliance or to levy taxes on pollution more practically. Second, technological advances will help extend these approaches even to smaller polluters, possibly including small businesses and individual automobiles. Third, new information technologies are making it possible to fine-tune prices and regulatory programs, for example, by allowing pricing to reflect the time of day, congestion, or atmospheric conditions. Lastly, in the case of international resource management, remote sensing from space-based satellites may make it easier to monitor environmental compliance across countries.
I can hang my hat on something,’ and I think that’s where the taxonomy comes in. Depending on how this whole debate on gas and nuclear plays out, this might actually become, by default, the global benchmark
Nuclear power plants are commonly used since they require less maintenance and are designed to operate for longer stretches before refueling, typically every 1.5 or 2 years. Natural gas and coal capacity factors are generally lower due to routine maintenance and/or refueling at these facilities. Renewable plants are considered intermittent or variable sources and are mostly limited by a lack of fuel (i.e., wind, sun, or water). As a result, these plants need a backup power source such as large-scale storage (not currently available at grid-scale), or they have to be paired with a reliable baseload power like nuclear energy.
“Today is a means to an end, the proposal that lays out conditions for including nuclear and natural gas as sustainable investments may be imperfect but it is a real solution. It moves us further towards our ultimate goal of carbon neutrality,” says EU Financial Services Commissioner Mairead McGuinness.
The proposal, first released on New Year’s Eve, is part of the EU’s ‘green taxonomy,’ a detailed breakdown of what regulators believe should count as a sustainable investment. The goal is to funnel more capital into projects and activities that have been vetted for their sustainability and avoid greenwashing, where companies exaggerate their sustainability credentials.
Shashank Krishna, a partner at Baker Botts, specializes in sustainable energy investments, says, “People need a benchmark, to say ‘I can hang my hat on something,’ and I think that’s where the taxonomy comes in. Depending on how this whole debate on gas and nuclear plays out, this might actually become, by default, the global benchmark.”
Bas Eickhout, a Dutch Green MEP and vice-chair of the European parliament’s environment committee says, “The European Commission is significantly undermining the EU’s credibility as a climate actor; at the UN climate summit in Glasgow, small steps were taken towards phasing out fossil fuels. Yet, unfortunately, the commission is already turning back the clock and leaving the door open to the gas industry.”
The Institutional Investors Group on Climate Change, representing 375 funds holding 51 tons of assets under management, also urged the commission to drop gas, citing International Energy Agency studies showing that Europe’s existing gas plants will have to close by 2035. Put simply; there is no remaining carbon budget for new investments in natural gas, the group proclaims.
The Institutional Investors Group on Climate Change asserts that only gas plants emitting less than 100 grams of CO2 equivalent per kilowatt-hour over their lifecycle should be allowed, criteria that exclude conventional gas. In contrast, the commission would allow gas plants emitting 270g CO2e/kWh to be classed as sustainable until 2030. A second alternative would allow gas plants that emit an average of 550g CO2 e/kWh over a twenty-year lifespan. Critics describe this as a loophole that allows new gas plants to be built on a promise of carbon capture technology yet to take off.