Benjamin Combes and Darius Nassiry explore how emerging and exponential technologies - which characterise the 'fourth industrial revolution' - could open new opportunities for low-carbon development.

As countries from around the world meet at COP23 in Bonn next week to discuss progress towards the Paris Agreement, a range of indicators show the scale of the challenge. The UN Emissions Gap report explains how the world needs to cut a further 25% from predicted 2030 emissions. CDKN partner PwC’s latest Low Carbon Economy Index 2017 illustrates that despite recent efforts, the annual rate of worldwide decarbonisation needs to more than double to stay within a 2°C global carbon budget – let alone a 1.5°C temperature increase. These reports suggest a further step change in global decarbonisation efforts is required to meet global goals, close the emissions gap, and avoid catastrophic climate change.

It is increasingly recognised that climate change could be one of the most disruptive forces to impact the global economy in coming decades. In parallel, there is another disruptive force – technological change – which is moving at a rapid pace and is transforming the ways we live and work more broadly than ever before.

Renewable energy technologies – including solar, wind and battery storage – have already seen rapid declines in prices and exponential rates of deployment. The rapid and penetration of energy system technologies from solar, to wind, to battery storage offer a preview of the virtuous cycle of falling costs and market penetration expected to play out across a broader range of sectors and industries.

A 4th Industrial Revolution

Planning for implementation of the Paris Agreement pledges takes place in the context of a new period of rapid change involving a range of emerging and exponential technologies that will reshape economies and create new opportunities for low carbon development.We can see the potential for an enormous opportunity to harness emerging technologies of the 21st century not only to transform business models and industries, but also to have an equally transformative impact on people and the planet.

Much of the talk of this emerging wave of innovation – the so-called Fourth Industrial Revolution (4IR) as defined by the World Economic Forum – has tended to focus on how innovations ranging from artificial intelligence, blockchain, and the internet of things to advanced materials, synthetic biology, and 3D printing can transform companies and sectors offering potential to accelerate growth and development.

Given that much of the world’s growth in population, urbanisation, and hence energy demand will come from developing and emerging economies, we set ourselves a challenge of looking at the 4IR through a developing country lens. We asked ourselves the question: how can emerging and exponential technologies offer new opportunities for low-carbon development in the global South?

In the accompanying CDKN working paper, we suggest that as emerging 4IR technologies are adopted at scale, prices are expected to follow similar price trajectories to renewable energy over the past decade, creating new opportunities for developing countries to apply new technologies toward economic growth and climate compatible development.

In this working paper, we discuss how new technologies can contribute to climate goals in developing countries, focusing on how emerging and exponential technologies can support, and potentially accelerate, the implementation of Nationally Determined Contributions (NDCs) under the Paris Agreement within the broader context of low-carbon, climate-resilient development.

Moreover, as these new technologies develop they may have significant potential implications for creating new technology options, potentially lowering investment requirements, shifting optimal decision timing as well as opening the possibility of delivering more ambitious emissions reductions across a range of systems – including energy, manufacturing, agriculture, and transportation.

How emerging technologies map to NDCs: case studies

We summarise the current knowledge and experience of a set of new technologies and their emerging applications for climate change mitigation, focusing on NDCs from Bangladesh, Colombia, Ethiopia, India, Indonesia, and Kenya - and highlighting goals and strategies related to 4IR technologies in the energy, transport, production and consumption, land-use and building sectors. Preliminary analysis of NDCs from Bangladesh, Colombia, Ethiopia, India, Indonesia, and Kenya suggest a range of entry points for applications of new technologies to contribute to growth while supporting low-carbon development.

We identify a number of potential uses of emerging technologies that are expected to be applicable in the near future. These range from using advanced materials for solar roof tiles in the energy sector, to using synthetic biology for waste management. In the agriculture sector nano-satellites and drones are increasingly used for various aspects of remote sensing as are sensor-based networks to provide real-time agricultural monitoring. Artificial intelligence could also play an important role over coming years, from energy demand- and supply-side management to AI-enabled building design. Automated electric vehicles could transform the landscape of cities, particularly in countries with new infrastructure.

As for in-country examples, in Bangladesh ME SOLshare’s smart grid technology is widening access to energy in rural communities and turning regular households into solar entrepreneurs, while supporting a reduction in fossil fuel use. Kenya, already a global leader in mobile money transfer technology, are now leading Africa’s charge into the technology-enabled smart city domain with the development of Konza Technopolis.

These findings suggest that many developing countries are already deploying 4IR technologies, though perhaps in view of other goals rather than climate change objectives. There is, therefore, enormous potential to develop and expand opportunity sets to broaden low-carbon development pathways and reach the Sustainable Development Goals. To leverage the value of the next wave of 4IR innovation, policymakers need to understand the positive potential applications of these new technologies even as they also face potential risks involving social and economic dislocation.

Given many 4IR technologies are in their early stage of development, this research represents only an initial step towards helping climate and development policy-makers to engage with the possible implications of these technologies for achieving sustainability and meeting climate change goals. We are at an early stage of this new digital economy. Technologies and processes that we cannot currently envisage – so-called ‘unknown unknowns’ – will also evolve, and may offer potential for structural and other paradigm shifts that are beyond current planning frameworks.

Join our conversation 

CDKN commissioned this this paper to initiate – not conclude – discussion about opportunities that arise as the 4IR evolves and promote engagement among stakeholders. We recognise there will also be risks and disruptive technologies may not always be welcome. However, only by understanding this emerging innovations can the challenges and opportunities be properly assessed and monitored. Policy-makers who grasp the opportunities of the new 4IR technologies will enable their countries to engage with the future global economy and narrow or even leapfrog technology gaps with advanced economies, strengthening long-term growth prospects and increasing options to raise the level of ambition in future NDCs. It is vital, therefore, that developing and emerging economies are part of this conversation as the world, our environment, and the global economy, is reshaped and reimagined.

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Read the full working paper: Emerging and exponential technologies - Opportunities for low-carbon development by Benjamin Combes, Darius Nassiry, Lizzy Fitzgerald and Tarik Moussa.