To make the progress needed to hit those 2050 targets - at an acceptable cost - it will take more than changes in policy making and behaviour. We must also have bold new thinking and technological advancements in climate innovation.
Technological innovation is an important part of innovation because by ongoing use, it hardwires emission reductions into society. While increasing the uptake of existing emission reduction technologies, we'd miss a big opportunity if we didn't invest in new technologies - with a considered approach to ensure they are fit for purpose.
Local solutions with global appeal
Callaghan Innovation has identified more than 430 ClimateTech businesses in New Zealand already. They are developing smart solutions that reduce environmental impact across multiple sectors from agriculture and recycling, to industrial waste and consumer apps.
As well as cutting the cost of reducing emissions, these new technologies spark innovation and growth in NZ's R&D centres, further demonstrate our country's innovation capability, and provide the foundations for the next phase of economic growth - one that is fair, equitable, innovative and low-carbon.
Beyond Aotearoa, there is strong demand in our key export markets for innovations that reduce emissions. This offers us the opportunity to supply massive markets with our innovative solutions, while helping fuel high-value economic growth.
LanzaTech, one of NZ's most successful climate innovation businesses, has raised more than US$250 million ($345.7m) over the past 15 years. Its technology turns industrial gas into ethanol that can be used as an energy source, such as jet fuel. However, as Lanzatech's relocation to the US shows, the challenge ahead is not just to grow world-leading climate change innovators, but also to create a supportive environment that keeps those businesses in New Zealand.
Ultimately, investing in the development of new, clean technologies will improve New Zealand's productivity, and create high-value exports and new employment opportunities.
Global ClimateTech trajectories
Post-Covid we know our economy will fall behind that of other countries if we don't take bold and deliberate action to boost high-value opportunities like ClimateTech, to deliver a step change and diversify our current export base.
Internationally, climate innovation is capturing investors' attention. Venture capital (VC) investment in ClimateTech alone is growing three times faster than in artificial intelligence (AI) and five times the average growth in overall VC investment.
The CCC's final report should definitely acknowledge the approach taken by other small, advanced economies. At Callaghan Innovation, we're undertaking a global comparison to identify what New Zealand can do to boost its ClimateTech efforts.
Already we have learned that ClimateTech businesses in other small, advanced countries have raised 1000 times more investment than ClimateTech businesses than New Zealand. Due mid-year, this Callaghan Innovation ClimateTech report will provide some much-needed direction on how we catch up and nail our clear potential.
National strategy
Innovation is about novelty and creativity, but it only has impact if it is applied in the real world - and at scale. Creative thinking and new organisational and individual capabilities are fundamental for New Zealand to set up the right conditions for climate innovation.
The Productivity Commission's view that New Zealand needs a national strategy on climate innovation is right. Callaghan Innovation is working with different parts of government to progress that strategy and ensure a unified approach. The final CCC advice will be an important part of informing this national mission.
Smart policymaking is front and centre for reducing emissions, but can be subject to political and public opinion. Even the very best climate policies have ebbed and flowed in their effectiveness over time as political favour shifts. On the other hand, emissions reducing technologies - transformative or incremental - are here to stay.
Finally, to meet New Zealand's bold emissions reduction targets, we in the Government must ourselves be much more innovative — in our approach and in our ability to support climate technology.
Whatungarongaro te tangata toitū te whenua. As man disappears from sight, the land remains.
• James Muir is the lead for climate innovation at Callaghan Innovation, New Zealand's innovation agency.
