1/31/2024 0 Comments Model inshort shorts png![]() These investments will drive the bulk of the value opportunity for machinery makers. Meanwhile, major investments in the grid will be needed to connect new renewable resources, manage distributed and intermittent generation, and harden transmission and distribution networks against more extreme weather. Decarbonizing power generation will require outsized investments in renewables not only to replace existing fossil fuel-based power generation but also to meet increased power demand due to higher rates of home, auto, and industrial electrification. This industry is key to the fight against global warming, given that it emits 34% of total emissions. To meet the challenges, companies in these sectors will look to machinery makers as they seek ways to reinvent their operations. (See Exhibit 1.) Effectively zeroing out the emissions from these sectors will require companies to fundamentally rethink-at a far faster pace than any previous energy transition has required-how they source and use energy. ![]() Global emissions are just under 60 gigatons of CO 2e each year and largely generated by five broad sectors: power generation, industrial processes, agriculture, transportation, and buildings. Assessing the Challenges of Decarbonization In what follows, we examine the role that key technologies will play in helping industries meet their abatement goals, the opportunity for machinery makers, and how they can take action to capture it. However, considering the full range of technologies required and the growing implementation gap, our recent analysis estimates the opportunity will be $27 trillion from 2020 through 2040.Ĭompanies looking to capture their share of the opportunity must act boldly, committing to a thorough yet expeditious reexamination of their businesses and swiftly bringing the next generation of green technologies to market.Įarly movers have historically reaped real economic and strategic advantages during periods of rapid technological change, suggesting just how critical it is for machinery makers to begin now to prepare their businesses for the climate transition. Our earlier analysis of the economic opportunity available to machinery makers uncovered a meaningful prize of $12 trillion. The task at hand will fall in large part to the world’s machinery makers-the companies that provide the equipment, components, and industrial automation systems to industries across the globe. ![]() To achieve these goals will require a fundamental reinvention of the world’s energy and industrial systems in virtually every major industry. To keep global warming to less than 2☌-a critical limit for avoiding the most catastrophic consequences of climate change-accomplishing two goals is a must: reducing greenhouse gas emissions to 45% below 2010 levels by 2030 and reaching net-zero emissions by 2050. Start now.īy Simon Rees, Andrew Alcorta, Georg Kappen, Minjee Kim, Martin Lüers, and Cornelius Pieper Participating in the ongoing fundamental reinvention of the world’s energy and industrial systems requires a full understanding of the business models, technologies, and projected demand across each area under consideration. Develop relationships across the value chain of chosen technologies and identify specific partners to approach with targeted value propositions.Determine a comprehensive go-to-market strategy, given market and competitive dynamics and customer preferences.Survey the full technology landscape and identify priority areas on the basis of current competencies and promising new lines of business.Companies looking to take advantage of this huge market in fields as varied as power generation, transportation, industrial processes, agriculture, and buildings need to move fast and with a clear goal in sight. To keep global warming to within the Paris Agreement limit will require $27 trillion in new machinery and equipment designed to help reduce carbon emissions and mitigate the effects of climate change. Technology, Media, and Telecommunications.
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