Climate change is taken very seriously by the science community yet faces an uphill battle against some companies, public opinion and governments that have short term interests and needs. But the path toward environmental protection has been positive in recent years, particularly with the UN Climate Change Conference in Paris in December 2015. Here are examples of how innovation is the key to combatting climate change while at the same time creating tremendous new business opportunities.

New Directions for Addressing Climate Change

At the Paris Conference 195 nations agreed to update climate change plans every five years. Scientists believe the earth will warm by 2.7 to 3.5 degrees Celsius over the next several decades even if countries meet objectives on transition to renewable energy. This projection should make climate change a top issue among companies, public opinion and policymakers, but instead we often defend the status quo losing an important opportunity to increase energy savings, energy efficiency and clean energy generation.

During the conference Bill Gates introduced the Breakthrough Energy Coalition, a group of upscale sponsors pooling investments in clean energy startups. Another new development was Mission Innovation, which was a funding agreement between 20 nations. China and India joined the U.S. with the goal to raise public funding for clean energy research and development to $20 billion by 2020. That milestone will amount to doubling the funding. More than half this amount is expected to come from the U.S. government’s budget. This funding plus significant venture capital funds generate tremendous opportunities for start ups and technically versed entrepreneurs. 

Moving Toward Cleaner Policies

It is imperative for nations to work together on reducing carbon emissions by setting stricter policies on environmental protection. While solar and other renewable energy systems are being rapidly developed and deployed, they only account for a small percentage of U.S. energy in 2019. However, several state governments are setting aggressive policies for stepping up clean energy and energy efficiency programs. 

Sacramento, California is a test market for Volkswagen’s “Electrify America” project. After the automaker was found to violate EPA requirements, part of its retribution has been to provide funding and initiate a clean energy program in major cities. 

VW’s teamwork with Sacramento’s “Green City” initiative includes electric car sharing programs, new electric vehicle charging stations and shuttle buses with zero emissions. It’s an example of how big corporations can work with state and local governments to move toward cleaner solutions. The state of California recently mandated most new buildings will have to include solar panels starting in 2020.

Delaying innovations and regulations can have a tremendously negative impact on manufacturing. One of the most striking examples are conventional light bulbs. 90% of all light bulbs consumed in Canada, USA and Mexico were manufactured in these countries. When regulations in Europe and Asia started favoring energy saving lamps the new factories were built in those countries. By the time industry in North America allowed the passing of energy saving regulations GE, Philips and OSRAM had already built the new factories in other countries and all conventional light bulb factories were outdated and closed. Newer technology did not even wait for regulators to define standards. Consumers in North America just switched to LEDs because they like them and almost 100% of all purchases of these products now come from China.