How is green technology changing the economy?

Green technologies are revolutionizing the economy by boosting efficiency, creating jobs, cutting costs, fostering innovation, and mitigating the impacts of climate change. Therefore, the long-term benefits in terms of economic sustainability, environmental preservation, and social well-being make the adoption of green technologies both a necessity and an attractive undertaking.

What is green technology?

Green technology is technology designed to minimize human impact on the planet. This includes technologies that use less energy, water, and other natural resources, and reduce waste and pollution.

Green technology can be applied in many different fields, including:

Renewable energy:Renewable energy is energy generated from natural sources, such as solar energy, wind energy, hydroelectric power, and geothermal energy. These energy sources do not produce greenhouse gases, which are the main cause of climate change.

Energy saving:Energy saving is the use of less energy to achieve the same result. Energy-saving technologies include LED lighting, smart thermostats, and efficient household appliances.

Sustainable production:Sustainable production is the process of producing goods and services without harming the environment. Sustainable production practices include recycling, using recycled materials, and reducing waste.

Sustainable transportation:Sustainable transportation is getting around without harming the environment. Sustainable modes of transportation include electric vehicles, bicycles, and public transport.

Green technology offers many potential benefits, such as:

Reducing climate change:Green technologies can help reduce the amount of greenhouse gases released into the atmosphere, thereby helping to mitigate climate change.

Cost savings:Green technology can help businesses and consumers save money on energy, water, and other bills.

Create jobs:The green economy is a growing field, creating new jobs in areas such as renewable energy, energy efficiency, and sustainable manufacturing.

Improve your health:Green technologies can help improve air and water quality, thereby improving human health and the environment.

More and more businesses are investing in green technologies, enabling them to operate more efficiently. This has a positive impact on the economy as it allows these companies to increase productivity and reduce costs. And that benefits both businesses and consumers by encouraging innovation and creating jobs, further boosting the economy.

Ellen Caviglia, CEO of the US-based digital consulting firm Tonic, stated that innovation in green technology is occurring across both business and consumer sectors, and the combined impact of each will reduce carbon emissions and support positive economic growth over the next decade.

"Renewable energy sources are expected to supply between 45% and 50% of global energy production by 2030 and between 65% and 85% by 2050," according to forecasts by the global management consulting firm McKinsey & Co. (USA).

This technology will help increase energy efficiency and availability almost everywhere. Additionally, green trends, such as remote work and digitized business operations, will help reduce the environmental impact of businesses while still enabling the creation of a more global workforce.

Ms. Caviglia added: “Overall, the increasing concern about carbon emissions from consumers and businesses will not hinder economic growth but instead create opportunities to develop more efficient and sustainable products and business practices.”

How is green technology changing the economy?

Let's explore some of the ways green technology is transforming the economy, from the perspective of experts:

Transition to green data centers

A green data center is a term referring to the transition of data centers to using renewable energy, energy-saving technologies, and other environmentally friendly technologies. This is becoming increasingly important as businesses and governments worldwide seek ways to minimize the environmental impact of their operations.

Between 2017 and 2020, carbon emissions from data centers in the U.S. doubled, becoming a hot topic in the IT sector, according to Cassandra Garber, Vice President of Environmental Sustainability and ESG at Dell Technologies. And with the advent of AI and the anticipated increase in energy and financial demand, data center sustainability has become an economic issue.

Cassandra Garber further shared: “This is reflected in efforts such as developing more efficient computing devices or responsible cooling methods. In fact, Gartner predicts that by 2027, up to 75% of companies will be developing sustainability programs for their data center infrastructure, up from less than 5% in 2022.”

For large IT infrastructure providers, this means innovating product and solution designs to support the goals and needs of customers and partners worldwide. It challenges organizations to create sustainable, cost-effective solutions.

Cassandra Garber is optimistic: “Data centers are an area where you don’t have to struggle to balance costs with sustainability goals. Greening data centers leads to higher efficiency and productivity, lowers your energy bills, and can result in less spending on carbon disposal. It’s also better for the environment and the economy, minimizing the data center’s costly contribution to climate change.”

The role of artificial intelligence (AI) in supporting green technologies and the circular economy.

In the race to address the climate crisis and build a sustainable future, green technologies and the circular economy are emerging as key players. And in this race, AI is playing an increasingly important role in supporting both fields.

Green technology encompasses environmentally friendly technologies that minimize human impact on the planet. From renewable energy sources like solar and wind to electric vehicles and sustainable agriculture, green technology is revolutionizing how we live and work.

Meanwhile, the circular economy is an economic model that aims to eliminate waste and pollution by reusing and recycling resources. Instead of using resources once and then discarding them, the circular economy encourages the design of products and systems in which materials can be used multiple times.

AI can support green technology and the circular economy in many ways, including:

Energy optimization:AI can analyze data from renewable energy sources to predict energy demand and improve the operational efficiency of energy systems.

Developing sustainable materials:AI can be used to design new materials that are environmentally friendly and easily recyclable.

Waste management:AI can help optimize waste collection routes and improve the efficiency of recycling plants.

Precision agriculture:AI can help farmers use water and fertilizers more efficiently, minimizing their environmental impact.

Logistics and transportation:AI can optimize delivery routes and reduce carbon emissions from transportation.

Stanton Thomas, Senior Vice President of Sustainable Solutions at o9 Solutions, a provider of supply chain management solutions, said: “In the near future, AI will play a crucial role in waste management and reducing landfill waste through recycling, recovery, and reuse. By combining advanced mechanical equipment with AI technology and vision systems, everything delivered to a waste treatment facility can be sorted. This system will identify recyclable waste, such as plastics, metals, and organic materials, to prevent them from being sent to landfills.”

Mr. Thomas noted: “The ultimate goal is to reduce the amount of material actually going into landfill by up to 90%. If 90% of the things we normally throw away are returned to different supply chains for reuse and recycling, we’ve essentially created a sustainable circular economy.”

This is crucial because the circular economy has the potential to boost GDP growth by $4.5 trillion by 2030 through waste reduction, innovation, and job creation, according to a report from the Boston Consulting Group (USA).

Innovations in LED lighting are impacting the economy.

Fariyal Khanbabi, CEO of Dialight, an industrial LED lighting technology company (UK), said that LED lighting systems are undergoing a historic turning point with continuous innovation and development, such as the integration of power electronics and building automation, expanding applications beyond lighting to include data collection, diagnostics, and a number of advanced safety functions.

"These innovations are creating a wave of impact on the economy," Khanbabi shared.

By making green technologies more budget-friendly and reducing the payback period, organizations are encouraged to explore cost-cutting measures, reduced energy consumption, and more efficient ways to achieve net-zero emissions targets.

According to Ms. Khanbabi, with the rise of sustainable practices and the increasing demand for green technology advancements, new job opportunities focused on the continuous improvement of these solutions are being created, including roles in manufacturing, installation, research and development.

Investing in green technology has economic benefits.

According to Marga Hoek, author of the book "Tech for Good: Imagine Solving the World's Greatest Challenges," climate change is putting significant pressure on global markets and economic growth.

She shared: “We now have the opportunity to create positive changes in terms of financial stability and sustainability through targeted investments. Clearly, investing in green technology is not only the right thing to do but also yields good business benefits.”

According to Ms. Hoek, accelerating the pace and scale of the innovative technological breakthroughs of the Fourth Industrial Revolution will require strategic investment and bold action. Business initiatives are key to stimulating green technology sectors to find new ways to invest money, time, and expertise in the sustainability agenda.

For example, the Belgian green technology startup Act&Sorb is leveraging the fact that the recycling of treated and untreated wood has become mandatory in many countries by bringing its groundbreaking technology to market.

Act&Sorb's innovative material recycling process is creating value from bio-based wood waste, thereby generating significant industrial potential with positive energy efficiency, while helping furniture manufacturers and waste collectors contribute to the circular economy.

“New and advanced materials are important green technology innovations in the consumer and manufacturing sectors, as the wood and paper recycling market is projected to reach $34.87 billion by 2030,” she added.

Furthermore, green robots also help mitigate climate change and lead the world to a better future through initiatives such as agricultural automation to improve water conservation and soil health. For example, FarmWise and Bear Flag Robotics, based in the San Francisco Bay Area (USA), are deploying automated robots on farms to perform precision agricultural production guided by AI.

“Businesses using green robotics technology bring financial benefits to the economy while preserving the planet,” she said. “As the world’s population grows and climate change becomes more apparent, the agricultural sector is moving toward automated green technology, projected to reach a global market value of $100 billion by 2030.”

In summary, green technology is a growing and important trend. Businesses, organizations, and individuals are becoming more aware of the importance of using technology to address social and environmental issues. As green technologies continue to develop, they have the potential to play an increasingly significant role in building a sustainable future for our planet.