How is green technology changing the economy?

Green technology is shaking up the economy by boosting efficiency, creating jobs, cutting costs, spurring innovation and mitigating the impact of climate change. Therefore, the long-term benefits in terms of economic sustainability, environmental conservation and social well-being make adopting green technology a compelling and compelling proposition.

What is green technology?

Green technology is technology designed to reduce humans' 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 areas, including:

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

Energy saving:Energy efficiency is using less energy to achieve the same result. Energy-saving technologies include LED lighting, smart thermostats, and efficient 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 transport:Sustainable transport is moving around without harming the environment. Sustainable transport options include electric cars, bicycles and public transport.

Green technology has many potential benefits such as:

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

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

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

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

More and more businesses are investing in green technology, allowing 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 this benefits both businesses and consumers by encouraging innovation and creating jobs, further boosting the economy.

Ms. Ellen Caviglia, CEO of digital consulting firm Tonic (USA), said that innovation in green technology is taking place across both business and consumer sectors and the combined impact of each sector will reduce carbon emissions and support positive economic growth in the next decade.

“Renewable energy sources are expected to provide 45% to 50% of global energy output by 2030 and 65% to 85% by 2050,” according to a forecast by global management consulting firm McKinsey & Co (USA).

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

“Overall, growing consumer and business concern about carbon emissions will not hinder economic growth but instead create opportunities to develop more efficient and sustainable products and ways of doing business,” Ms. Caviglia added.

How is green technology changing the economy?

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

Transition to green data centers

Green data center is a term that refers to the conversion of data centers to renewable energy, energy efficiency, and other environmentally friendly technologies. This is becoming increasingly important as businesses and governments around the world look for ways to reduce the environmental impact of their operations.

Between 2017 and 2020, carbon emissions from U.S. data centers doubled, making it a hot topic in the IT industry, according to Cassandra Garber, vice president of environmental sustainability and ESG at Dell Technologies. And with the advent of AI and the expected increase in energy and financial demands, data center sustainability is becoming an economic issue.

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

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

“Data centers are an area where you don’t have to struggle to balance costs with sustainability goals,” says Cassandra Garber. “Greening your data centers results in greater efficiency and productivity, lowers your energy bills, and can lead to less carbon emissions. It’s also better for the environment and the economy, minimizing your data center’s contribution to costly climate change.”

Artificial intelligence (AI)'s support for green technology and the circular economy

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

Green technology includes environmentally friendly technologies that aim to reduce humans' impact on the planet. From renewable energy like solar and wind to electric vehicles and sustainable agriculture, green technology is revolutionizing the way 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 throwing them away, the circular economy encourages designing 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 energy system performance.

Sustainable material development:AI can be used to design new materials that are environmentally friendly and can be easily recycled.

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 fertilizer more efficiently, reducing their environmental impact.

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

“In the near future, AI will play a major role in waste management and reducing the amount of waste going to landfills through recycling, recovery, and reuse,” said Stanton Thomas, Senior Vice President of Sustainability Solutions at o9 Solutions, a provider of supply chain management solutions. “By combining advanced mechanical equipment with AI technology and vision systems, everything that comes to a waste treatment facility can be sorted. The system will identify recyclable waste, such as plastics, metals, and organic materials, to avoid them going to landfills.”

“The ultimate goal is to reduce the amount of material that actually ends up in landfill by 90 percent,” Mr. Thomas notes. “If 90 percent of what we would normally throw away is returned to different supply chains for reuse and recycling, we have essentially created a sustainable circular economy.”

This is important because the circular economy has the potential to boost GDP growth by $4.5 trillion by 2030 through reducing waste, promoting innovation and creating jobs, according to a report from the Boston Consulting Group (USA).

LED Lighting Innovations Are Impacting the Economy

Ms. Fariyal Khanbabi, CEO of industrial LED lighting technology company Dialight (UK) said that LED lighting systems are going through a historic turning point with constant innovation and development, such as integrating power electronics and building automation, expanding applications beyond lighting to include data collection, diagnostics and some advanced safety functions.

“These innovations are creating a ripple effect on the economy,” Ms. Khanbabi shared.

By making green technology more budget-friendly and reducing investment payback periods, organizations are encouraged to explore cost-cutting measures, reduced energy consumption, and more efficient ways to achieve net zero emissions goals.

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

Investing in green technology makes economic sense

According to Ms. 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.

“We now have the opportunity to make positive changes in financial stability and sustainability through targeted investments. It is clear that investing in green technology is not only the right thing to do, but also makes good business sense,” she said.

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

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

Act&Sorb's innovative materials recycling process is creating value from bio-based wood waste, thereby creating industrial potential with significant 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 expected to reach $34.87 billion by 2030,” she added.

Green robots are also helping mitigate climate change and lead the world to a better future through innovations like agricultural automation to improve water conservation and soil health. For example, San Francisco Bay Area-based FarmWise and Bear Flag Robotics are deploying autonomous robots on farms to perform precision agriculture guided by AI.

“Businesses that use green robotics technology are delivering financial benefits to the economy while also protecting the planet,” she said. “As the world’s population grows and climate change becomes more evident, the agricultural industry is moving towards automated green technology, which is expected to reach a global market value of $100 billion by 2030.”

In short, green technology is an important and growing trend. Businesses, organizations and individuals are becoming more aware of the importance of using technology to solve social and environmental problems. As green technology continues to develop, it has the potential to play an increasingly important role in building a sustainable future for our planet.