Climate thus, it is becoming a powerful driver of

Climate
change influences all regions around the world: More frequent heat waves, forest
fires and droughts happen in southern and central Europe, while places in
northern Europe are getting wetter. The damage from climate change to property
and infrastructure and to human health imposes heavy costs on the economy. In
particular, sectors that rely on specific temperatures such as agriculture,
forestry and tourism are highly affected 1, 2.

Apart
from the negative effects, climate change also brings several positive conversions
to our world. One of the most important ones is the increasing interest in
climate change and thus, it is becoming a powerful driver of the economy. In
2015, The Washington Times reported
the value of the climate change industry was $1.5 trillion 3. According
to the Climate Change Business Journal,
a business research publication launched in 2007, climate change industry
encompasses nine primary segments: 1) Low-carbon power and renewable power, 2) Energy
storage equipment and systems, 3) Energy efficiency and demand response, 4)
Carbon capture and storage, 5) Carbon markets trading, 6) Climate change adaptation,
7) Climate change consulting, 8) Green buildings, and 9) Transportation. Furthermore,
these nine segments can be divided into 38 sub-segments 4. In this
report, we will only focus on introducing the segments 1-7 due to the
constantly increasing scale of these segments.

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Energy
innovations are the biggest branch of the climate change industry: The first
segment, the low-carbon power aims to produce power with lower amounts of
emissions of CO2 than from traditional power generation. Furthermore,
renewable power produces energy from renewable resources, such as sunlight,
wind, hydro and geothermal heat 5. These technologies are usually used
as an entirety. Based on the data from the International Energy Agency, the global
renewable electricity generation grew by about 6 % and represented around 24 %
of all power output in 2016 6. Besides using low-carbon and
renewable power to replace the traditional sources, the development of energy
storage equipment and systems is another innovative approach to meet the
challenges caused by the climate change. For instance, several types of new
battery technologies are getting a charge from venture investors. The third
segment of the climate change industry, energy efficiency, denotes utilizing
less energy by simultaneously providing the same services. For example, people
can take less fuel to heat a home to a given temperature by using an efficient
boiler. Moreover, the demand response is a way of changing the power
consumption to adjust to the demand for power with the supply better. In fact,
the United States Environmental Protection Agency (US EPA) emphasized that
coordinating energy efficiency and demand response can help customers to
understand, manage, and reduce their electricity use 7, 8.

Industries
focusing on carbon, carbon capture and storage (CCS) as well as on carbon
markets trading (CMT) aim to prevent the release of a large number of CO2
into our atmosphere. CCS is the process that we capture waste CO2
from point sources 9. The Global CCS Institute identified 75
large-scale integrated projects until September 201210. CMT is CO2
emissions trading and a common method for different countries to meet
their obligations in Kyoto Protocol. Under CMT, countries can purchase the permit
to emit more CO2 from countries selling their rights. Emission
trading has been steadily increasing in recent years. Especially, China,
as the largest market in the world, opened its own carbon emissions trading
market in 2017.

Climate
change adaptation reduces the vulnerability of social and biological systems to
relatively sudden change. It has been shown that well-planned adaptation approaches
can save money and lives. Examples of adaptation include: using water resources
more efficiently and developing drought-tolerant crops 11. A
report by Environmental Business
International predicted the global market for climate change adaptation
could be as high as $2 billion 12. Thus, the climate change
industry demands a lot of know-how and so, more and more consulting agencies,
such as AT Kearney, McKinsey & Company Consulting, offer consulting
services to help these companies to identify capitalism opportunities 13.

After
all, the climate change industry can be divided into three types: energy,
carbon and service. These rising businesses respond not only to the challenges
from climate change, but also promote the economic development.