New research has shown that a zero waste and zero carbon policy can lead to significant wealth creations which will be driven by technology.
Research from Macquarie University has found that an estimated $20 trillion in new wealth could be generated, fuelled by cleantech patents.
Professor Martina Linnenluecke from the university said that investors, asset managers and super funds would drive the clean-energy momentum, motivated by the potential of new wealth.
“Our analysis estimated that the total wealth created by the development of cleantech patents ranges from US$10.16 to US$15.49 trillion dollars and will involve an additional investment stimulus to the economy from US$2.93 to US$3.71 trillion,” she said.
Already cleantech has become a fast-growing patent class said Professor Linnenluecke but further investment in the field would generate more wealth creation.
“Our projections show that there are vast sums of money to be made by investment in cleantech. Estimates of wealth creation of between US$10.16 to US$15.49 trillion mean that there are enormous opportunities for business to create wealth and drive GDP for decades to come,” she said.
Professor Linnenluecke said that history had taught the market that companies with stringent carbon policies had a greater level of cleantech patents.
“Our results show that in the past, countries with more stringent carbon policies, in the form of carbon taxes or emissions trading schemes, as well as greater investments into country-level public R&D and higher human capital had a greater level of cleantech patent intensity,” she said.
The research also made it clear said the professor that firms were forced to innovate due to stronger environmental regulations.
“While environmental policies can introduce additional costs for firms, a more stringent regulatory environment is seen as conducive to the development of environmentally friendly technologies, as it forces firms to innovate,” she said.
Professor Linnenluecke said that a move to clean energy would require a substantial up-front investment that would be paid out over a number of years.
“The research shows for 66 per cent clean energy penetration by 2050, there is a US$170 billion upfront investment at the beginning of the discovery stage and a further US$1.327 trillion investment at the beginning of the seven-year commercialization stage.”
The study found that more research was needed, particularly around how cleantech would receive that initial investment said Professor Linnenluecke.
“In addition, future research can focus on comparing and contrasting the transition to cleantech in countries that have been at the forefront of policy and practical implementation of clean technology (e.g., Denmark, Germany) with a country such as Australia which has largely delayed implementation of cleantech while at the same time extracting and profiting from fossil fuels,” she said.
It was time for business to take charge said Professor Linnenluecke and create wealth while also helping the planet.
“This wealth creation comes with a significant amount of investment requirements and investment risk. Governments, policymakers and grassroots support have got us to this stage in history, now it’s business that will drive the transition to a cleantech future,” she said.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
A coalition of Australian financial services providers, insurers and scientists has rolled out new standards for physical risk assessment fr...