As of 2017, current consumption of energy for production to meet our economic needs is equivalent of 1.6 planet Earths. If this unsustainable consumption of energy is to be continued to 2050, the world will be needing 3 planet Earths. Despite climate risk and environmental changes, businesses have understood the necessity to source for cheaper and cleaner sources of energy, building infrastructure solutions for cities dealing with rising tides, and constantly innovating to address resources scarcity (Richardson 2017).
As global warming becomes the highest priority for most countries, Green Technology investment and its innovation projects are picking up at a staggering pace. Innovative designs, Research & Development and manufacturing costs have shown significant reduction in the effects of global warming. This is in addition to the recent signing of the Paris Agreement under the UN Framework Convention on Climate Change (UNFCC). Investments and projects of green technology will be accelerating for the next 3-5 years. To put it in context, a total of $287bn was poured into green technology investment and innovation. Traditional energy industry sectors employed just 86,035 people but 370,000 are working in the green technology solar industry. Besides, one of every five dollars invested in the U.S today has gone into sustainable investments (Richardson 2017).
Other than renewable energy, there are also various types of green technology which can be used to meet environmental, social and governance standards. The green building encompasses everything from the choice of building materials to where a building is located. Environmentally preferred purchasing is also a government innovation, using products that have the smallest possible impact on the environment, and which mandates that these be the preferred products for government purchasing. Green chemistry is introduced to reduce the use and generation of hazardous substances. Some scientists also believe that the mastery of green nanotechnology will transform the way that everything in the world is manufactured in the future (Green Technology n.d.)
In 2015, a U.S. Labour department ruling about fiduciary duty stated that financial managers can prudently consider ESG information when making an investment decision. The European Union announced that all pension funds must incorporate environmental risk into their portfolio management. These funds are worth a total of $3.1 trillion, and represent 75 million people (Richardson 2017). China has introduced the world’s biggest investment in clean energy. Each hour, the country erects another wind turbine and installs enough solar panels to cover a soccer field. In 2017, China also announced that it would spend $360 billion on the effort in the next three years (Gardiner 2017).
Nonetheless, the global renewable energy investment spike has been driven by two key energy sources, which are wind and solar. In 2015, both types of energy account for up to US$270 billion in clean energy investment, more than 80% of the US$329 billion total. Besides, the capacity of the newly installed solar and wind energy generators contributed to 50 % (120 Gigawatts) of the new total energy output. The Asia-Pacific saw more clean power going online as compare to any other region. There are 36 GW of solar and 31.GW of wind capacity as compared to 8.9 GW in North America for solar energy, and 15 GW for Europe in 2014.
The Asia-Pacific region is expected to lead in these sectors as supported by numerous catalysts: 1) India’s government target to reach 175 GW of renewable energy capacity by 2022, and US$ 400 million was allocated to finance the goal in its 2015 budget; 2) Indonesia plans to scale its renewable energy to a quarter of the country’s energy mix by 2025; 3) Singapore, who achieved full electrification is scaling up in installing solar energy, with a capacity to reach 350 megawatts (MW) by 2020. Primarily, the growth of the Asia Pacific was driven by an electrification agenda, aiming to provide energy to 615 million people who live without electricity, among the 4.2 billion population in the region (Shah 2016).