Exploring CleanTech

Clean technologies like those involved in renewable energy production, energy storage, smart grid implementation, energy efficiency, and pollution-reduction are essential to tackling negative environmental impacts like climate change.

Director of Research, Global X ETFs

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The need to mitigate the negative environmental impacts of human activity is more immediate than ever. 2020 is on the verge of becoming one of the hottest years on record. The effects of such warming could have significant social and economic ramifications:

  • At its 2020 low, sea ice coverage in the Arctic was 40% less than the 1981-2010 average, continuing a trend of rising sea levels that could submerge coastal settlements around the globe and put up to 800 million people at risk.
  • Warmer oceans and more arid climates mean more frequent and powerful natural disasters. Over the past three years, the U.S. faced an average of 15 billion-dollar natural disasters, significantly more than the average 6.2 experienced annually from 1980 through 2017.
  • New models project that 4.0°C of warming above pre-industrial levels by 2100 could result in a 10% reduction of average global economic output.

The link of this warming to human activities is widely accepted. Albeit a distressing existential burden, this connection also means that humans can turn the ship around.

At the centre of climate action plans, the aggressive adoption of clean technologies, or “CleanTech,” is essential to making carbon neutrality a reality and will require significant investment. In the following, we explore CleanTech’s role in tackling negative environmental impacts and investigate its current and future adoption.

Ramping Up the Transition to Renewable Energy

Transitioning to renewable energy sources is a core tenet of climate change mitigation plans. These sources include on/offshore wind, solar photovoltaic (PV), hydropower, geothermal, and the use of renewable hydrogen in fuel cells. Recent years have seen clean energy sources’ share of global electricity production in the power sector gain significantly on that of emissions-producing fossil fuels. At the end of 2019, renewables produced 26% of global electricity, up from 19% at the beginning of the decade. Much of this growth can be attributed to the rapidly decreasing costs of renewables like solar PV and wind, increasing the affordability of expanding renewable capacity. Between now and 2050, investments in wind and solar capacity could reach an average US$1tr per year to effectively scale renewable electricity.

Yet, electricity from the power sector is just a portion of energy consumption. Renewables only represent 11% of the global energy mix on an overall basis, far off from the 28% share by 2030 suggested by emissions-warming models. 

Hydrogen is the most plentiful element on the periodic table and is always bound to other elements like oxygen when found in nature.  While hydrogen’s abundance makes it an extremely attractive source of energy with vast market potential, renewable hydrogen is still in the early innings.

Making More Productive Use of Energy

The way we use energy is almost as important as how we produce it. Drastic improvements to and expansion of electric infrastructure and energy efficiency technologies could reduce emissions by over 40% of what is needed to keeping warming within tolerable levels.

Electric heat pumps in buildings and technologies that enable electric surface transportation, for example, can expand renewables’ ability to meet power demands, reducing emissions in sectors where decarbonisation efforts have been lacklustre.

Increasing long- and short-term energy storage capacity can further support electrification and efficiency efforts. Stationary storage solutions like batteries can store excess energy for future use and greater power system flexibility.

Finally, smart electric grids tie all of these tools together, using technologies like cloud computing, artificial intelligence and the internet of things to dynamically allocate power based on demand and more seamlessly integrate renewables by taking advantage of the flexibility provided by battery technology.

Using Carbon Capture to Limit Emissions

CleanTech also includes technologies that enable carbon capture, use, and storage (CCUS), which captures and repurposes fossil fuel emissions before they enter the atmosphere, and carbon dioxide removal (CDR), which seeks to remove existing atmospheric emissions. Once considered fringe climate change mitigation methods, these processes are seeing wider acceptance as effective complements to conventional interventions.


Clean technologies like those involved in renewable energy production, energy storage, smart grid implementation, energy efficiency, and pollution-reduction are essential to tackling negative environmental impacts like climate change. As the economic and societal implications of these impacts continue to mount, governments and companies are ramping up carbon neutrality efforts by setting aggressive emissions targets and committing to CleanTech adoption. In our view, these commitments should translate to significant investment that should benefit the CleanTech industry moving forward.

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Exploring CleanTech