“Green technology” refers to a type of technology that is considered environmentally friendly because of its production process or supply chain. Green technology an abbreviation of “green technology,” can also refer to the production of clean energy, the use of alternative fuels, and technologies that are less harmful to the environment than fossil fuels.
Although the green technology market is relatively young, it has aroused great interest among investors due to the growing awareness of the effects of climate change and the depletion of natural resources.
In a Nutshell
- The application of technology and science to produce environmentally friendly goods and services is referred to as “green technology,” which is a broad word.
- Electric vehicles are getting more and more popular, and alternative energy sources like solar and wind are currently among the least expensive.
- Carbon capture, recycling, and sustainable agriculture are examples of more green technologies.
- Green technology aims to protect biodiversity and conserve Earth’s resources, but there are few ways to accomplish it without also having an impact on the environment.
- One of the most popular green technologies, solar energy is currently more affordable to use than fossil fuels in many nations.
- By purchasing stocks, mutual funds, or bonds that support green technologies, investors may help the environment.
Understanding Green Technology
“Green technology” is a general term that describes the use of technology and science to create environmentally friendly products and services. Green technology is related to “clean technology,” which specifically refers to products or services that improve operational performance while reducing costs, energy consumption, waste, or negative effects on the environment.
The green economy is not a dream, it is a necessity.
Al Gore
The goal of green technology is to protect the environment, repair past damage and conserve the Earth’s natural resources. Green technology has also become a booming industry that has attracted huge amounts of investment capital.The use of green technology may be a stated objective of a business segment or a company. These objectives are typically described in a company’s environmental, sustainability and governance (ESG) statement, or may even be found in a company’s mission statement. Increasingly, socially responsible investors are seeking to limit their potential investments to include only companies that specifically employ or produce green technologies.
The $1.2 trillion Infrastructure Investment and Jobs Act, signed into law by President Joe Biden on November 15, 2021, earmarks significant earmarks for green technology. These include the largest investment in history in clean energy transmission infrastructure and electric vehicles, the electrification of thousands of school and transit buses across the country, and the creation of a new Authority to build a resilient and clean electric grid.
History of Green Techology
Even though green technology is becoming more popular in the modern world, some of these business practices have been used since the Industrial Revolution. Scientists started to notice the effects of industrial coal burning plants on the environment in the early 1800s. Since then, manufacturers have tried to reduce these negative environmental externalities by changing their production processes to make less soot or waste by products.
In the United States, one of the most important milestones was World War II. To reduce consumption and waste, more than 400,000 volunteers began collecting metal, paper, rubber and other materials for the war effort.
Advertisement
After the war, scientists such as Rachel Carson began to warn of the consequences of chemical pesticides, while doctors abroad reported mysterious illnesses associated with nuclear radiation. Many point to this era as the genesis of the environmental movement, which sought to preserve ecosystems and resources while raising awareness of the consequences of runaway technology.
Gradually, government agencies recognized the importance of protecting environmental resources. In the decades that followed, curbside recycling programs became widespread, increasing awareness of household waste. The Environmental Protection Agency, created in 1970, set strong pollution and waste requirements and established mandates for coal fired scrubbers and other clean technologies.
In the United States, the first major recycling program was launched during World War II. Nearly half a million volunteers helped by recycling tens of thousands of tons of waste to support the war effort.
Types of Green Technology
Green technology is a broad category that encompasses various forms of environmental remediation. While climate change and carbon emissions are now considered one of the most pressing global issues, there are also many efforts to address local environmental hazards. Some aim to protect specific ecosystems or endangered species. Others aim to conserve scarce natural resources by finding more sustainable alternatives.
Alternative Energy
In order to provide a viable alternative to fossil fuels, many companies are trying to design alternative energy sources that do not generate atmospheric carbon. Solar and wind power are currently among the cheapest sources of energy, and solar panels are affordable for U.S. homeowners on a consumer scale. Other alternatives, such as geothermal and tidal energy, have not yet been deployed on a large scale.
Electric Vehicles
Nearly one third of U.S. greenhouse gas emissions come from transportation activities, according to the Environmental Protection Agency. Many automakers are looking for ways to reduce pollution from cars, such as making engines use less gas or switching to electric power.
However, electric vehicles require a number of innovations in other areas, such as high capacity rechargeable batteries and charging infrastructure. In addition, the advantages of electric vehicles are limited by the fact that many power grids still rely on fossil fuels.
Sustainable Agriculture
Agriculture and animal husbandry have a significant environmental footprint, from the high costs of land and water use to the ecological consequences of pesticides, fertilizers and animal waste. As a result, there are many opportunities for green technology in agriculture. For example, organic farming techniques can reduce damage due to soil depletion, innovations in livestock feeding can reduce methane emissions, and meat substitutes can reduce livestock consumption.
Recycling
Recycling seeks to conserve scarce resources by reusing materials or finding sustainable substitutes. Although plastic, glass, paper and metal waste are the best known forms of recycling, more sophisticated operations can be used to recover expensive raw materials from electronic waste or automobile parts.
Carbon Sequestration
Carbon capture refers to a group of experimental technologies that aim to remove and sequester greenhouse gases, either at the point of combustion or from the atmosphere. This technology has been heavily promoted by the fossil fuel industry, although it has not yet lived up to those expectations. The largest carbon capture facility can absorb 4,000 tons of carbon dioxide per year, a miniscule amount compared to annual emissions.
The amount of new energy capacity from wind and solar power.
Adoption of Green Technologies
Although green technology is a broad and difficult category to define, some types of green technology have experienced widespread adoption. Several countries have launched initiatives to eliminate single use plastics, a goal that would require significant investments in alternatives, such as paper substitutes, bioplastics or recycling technologies. Singapore, for example, has committed to achieving 70% recycling by 2030.Renewable energy is another frontier for green technology adoption, as fossil fuels are recognized as a major driver of climate change. According to the Energy Information Administration, solar and wind together accounted for 70% of new energy capacity added in 2021. Worldwide, global investment in all renewable energy sources exceeded $300 billion in 2020.
Special Considerations
Although green technologies have the common goal of preserving biodiversity and conserving the Earth’s resources, there are few ways to do so without affecting the environment in other ways. In some situations, lowering environmental costs in one area can hurt the environment in another. For example, electric car batteries use lithium, which is often taken from the rainforests of South America. Hydroelectric dams emit little carbon, but greatly affect salmon and other species that depend on those waterways. Solar panels and wind turbines, which are green energy sources, need a lot of rare minerals that can only be mined with diesel powered equipment.
This doesn’t mean that green technology is a lost cause, but it does mean that the benefits need to be carefully weighed against the costs.
Wrap Up
Green technology is an important part of the global effort to cut down on pollution and save the environment. Even though there are still a lot of problems to solve, the fact that green technologies are being used more and more is a good sign that the world is taking climate change seriously. If the right investments are made and the right rules are made, green technology can help us build a more sustainable future.
FAQs
Green technology is the application of technology to lessen the negative effects of human activity on the environment. Utilizing sustainable materials, energy efficient practices, and renewable energy sources are all part of it.
Green technology can help save natural resources, cut down on pollution, and use less energy. Additionally, it may promote economic expansion and job growth.
There are numerous applications for green technology in the house. You can switch to LED lights, utilize energy efficient appliances, and install solar panels. Sustainable materials are also an option for building and insulation.
Cost is the major obstacle for green technology. Installation and upkeep costs for energy efficient equipment and renewable energy sources might be high. Green technology may also necessitate a substantial investment in research and development.
Green technology has a promising future. Renewable energy sources and energy saving gadgets will get cheaper and easier to use as technology develops. Additionally, governments and businesses are investing more money in green technology, which will hasten its advancement.
The cheapest form of alternative energy is solar, according to the International Energy Agency. In its Global Outlook 2020 report, the Agency finds that solar PV is “consistently cheaper than new coal or gas fired power plants in most countries, and solar projects now offer some of the cheapest electricity ever seen.”
The simplest way to invest in green technology is to buy shares of companies that are making big bets on environmentally friendly technologies. Investors can try to identify individual stocks, or simply invest in a mutual fund, index fund or other instrument that tries to reflect the broader market for environmental investments. The advantage of the latter approach is that the investor will gain diversified exposure to the green technology sector, rather than to the fortunes of a single company.
Nuclear power is a highly controversial topic, and many scientists have questioned its benefits. Fission based nuclear power can produce cheap and reliable electricity without releasing greenhouse gases. However, it also makes highly radioactive waste that must be stored for thousands of years. Some activists have argued that nuclear power can never be generated safely, and a series of high profile accidents most notably at Chernobyl and Fukushima have highlighted these concerns. But it should also be said that the total number of people who die in nuclear accidents is far less than the number of people who die each year because of pollution from fossil fuels.
Article sources
At Capital Maniacs, we are committed to providing accurate and reliable information on a wide range of financial topics. In order to achieve this, we rely on the use of primary sources and corroborated secondary sources to support the content of our articles.
Primary sources, such as financial statements and government reports, provide firsthand evidence of financial events and trends. By using primary sources, we are able to directly reference information provided by the organizations and individuals involved in these events.
Secondary sources, such as financial analysis and commentary, interpret and analyze primary sources. While these sources can be useful for providing context and background information, it is important to use corroborated sources in order to ensure the accuracy and reliability of the information we present.
We take pride in properly citing all of our sources, both primary and secondary, in order to give credit to the original authors and to allow our readers to verify the information for themselves. We appreciate your trust in our website and are committed to upholding the highest standards of financial journalism.
- The White House – UPDATED FACT SHEET: Bipartisan Infrastructure Investment and Jobs Act
- Northeast Recycling Council – A Brief History of Recycling
- Environmental Protection Agency – Milestones in EPA and Environmental History
- Environmental Protection Agency – Sources of Greenhouse Gas Emissions
- Bloomberg Green – Chevron’s Carbon Capture Struggle Shows Big Oil’s Climate Hurdle
- The Guardian – World’s Biggest Machine Capturing Carbon From Air Turned on in Iceland
- United Nations Environment Programme – Addressing Single Use Plastics Production Pollution Using a Life Cycle Approach
- BloombergNEF – Energy Transition Investment Hit $500 Billion in 2020—for First Time
- HowStuffWorks – How Green Are Automotive Lithium-Ion Batteries?
- U.S. Energy Information Administration – Hydropower Explained
- World Bank – Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition Page 31.
- International Energy Agency – World Outlook 2020—Executive Summary
- Our World in Data – What Are the Safest and Cleanest Sources of Energy?
