How Climate Tech is different from Clean Tech?

ClimateAngels | Feb 02, 2023

Both climate tech and clean tech aim to reduce environmental harm and promote sustainability.

Cleantech is a broader term that encompasses a wide range of environmentally friendly technologies and practices. In contrast, climate tech is more specifically focused on technologies that mitigate the impacts of climate change.

Let’s see the difference in both one by one.

Climate Tech Vs. Clean Tech: What’s The Difference?

Definition of Climate Tech: Climate tech is defined as technologies that are explicitly focused on reducing greenhouse gas (GHG) emissions or addressing the impacts of global warming.

Climate technologies aim to better our ability to mitigate and adapt to the effects of climate change.

For example, renewable energy and carbon capture/storage technologies reduce CO2 in our atmosphere. At the same time, technologies such as sea wall defenses and improved weather warning systems make living with the effects of climate change more manageable.

Definition of Clean Tech: Clean technology, often referred to as cleantech, is any process, product, or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources, or environmental protection activities.

It includes a broad range of technology related to recycling, renewable energy, information technology, green transportation, electric motors, green chemistry, lighting, grey water, and more.

Clean technologies are competitive with, if not superior to, their conventional counterparts. Many also offer significant additional benefits, notably their ability to improve the lives of those in both developed and developing countries.

Here’s the video explaining Climate Tech Vs. Clean Tech:

Source: Eye On Tech – YouTube

Stats About Climate Tech

Climate Tech today focuses not just on decarbonizing energy but also on decarbonizing mobility, agriculture, construction, industries, and everything else under the sun that is carbon intensive.

Climate Tech is at an inflection point. After the scale of solar energy and the growth in electric mobility, other sectors within climate tech (Agriculture and Food Tech, Supply Chain and logistics) are poised to achieve scale in the next decade.

The sectors that are expected to reach the plateau, a stage of growing market share owed to reduced risks and widespread adoption of technology, in the next two years, include electric mobility, biotech inputs in agriculture, solar and wind energy, and Li-Battery storage among others.

Sectors following suit and the same trajectory in the next 5 years include waste to energy, smart grids, alternative packaging, alternative proteins, battery recycling, precision agriculture, Climate Fintech, and battery recycling among others.

Source: SVB. (2022, April) The Future of Climate Tech

Support from governments and Conglomerates

49 countries and 93 Fortune 500 companies have committed to net-zero emissions targets or carbon neutrality. As ambitious net-zero targets are announced the viability and applications of Climate Tech increase manifold.

In India, corporations are already gearing up for the net zero transition. According to a study conducted by BCG, several Indian corporate houses have pledged to become net zero or carbon neutral by 2050 or before, including:

– Vedanta

– JSW Group

– Aditya Birla Group

– Mahindra

Economic Benefits of Climate Tech

Younger climate tech companies are accelerating to unicorns much faster. Globally on average, startups achieve unicorn status in 7 years.

Climate Tech unicorns are also the fastest in the herd, 40% of the Climate Tech unicorns (in 2021) achieved unicorn status in 4 years or less.

Balance 60% of the Climate Tech unicorns (in 2021) achieved unicorn status in 7 years while the industry average is 7 years. These newly minted Climate Tech unicorns had a growth rate of 625% in 2021 outpacing the industry benchmark growth of 287%.

According to an analysis by Deloitte, India could gain $11 trillion in economic value – by limiting rising global temperatures and exporting the climate solutions to the rest of the world.

The Indian economy would suffer loses adding up to $35 Trillion if Global Temperature reach 3°C. The sectors which would be most affected would include services (-$11 Trillion), Manufacturing (-$5 Trillion), Retail and Tourism (-$8 Trillion).

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Where should you invest: Climate Tech or Clean Tech?

Investment in both – clean tech and climate tech – is crucial in achieving a sustainable future.

Governments, businesses, and individuals all have a role to play in supporting the development and deployment of these technologies.

By investing in clean tech and climate tech, we can help reduce our carbon footprint, mitigate the impacts of climate change, achieve net-zero by 2050, and ensure a sustainable future for generations to come.

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References

1. https://www2.deloitte.com/in/en/pages/about-deloitte/articles/turning-point.html

2. https://cdn.careerhub.students.duke.edu/wp-content/uploads/sites/128/2023/06/cleantech-climatetech-difference-2048×1503-1-1536×1127.png

3. Clean technology – Wikipedia.

4. State of Climate Tech 2021 – PwC.

5. Climate Technology: What is it & Why is it Important?

6. Cleantech: Term for Environmentally-Friendly Practices and Tech

7. Cleantech Definition & Meaning – Merriam-Webster.

8. CLEANTECH | English meaning – Cambridge Dictionary

9. What is Climatetech? – Greentown Labs.

10. What is technology development and transfer? | UNFCCC

11. Climate tech vs. cleantech: what’s the difference?